Nordrest Holding AB (publ)

Hi and welcome to today's presentation where Nordrest Concern will present the last quarter and the same period. My name is Thomas Dahlstedt and I am co-founder of the company and head of the company. And with me today is my financial manager.

Hi, my name is Mattias Wikell and I will also be part of today's presentation.

We have an agenda for today's presentation, and it is a short description of what we work with as a company. We will comment on the financial information that we have just left, important highlights during the quarter and the period, and then there will be about five minutes for questions primarily related to the quarter and the period. I started Bordrest in 2014 with the intention of being a pioneer in the Swedish food market. The intention was to make an impression on the target market and therefore expansion has always been important. I have reasoned that it is not an idea to try to mission on something and that you want to be better on a market if it is not someone who sees and hears it. Therefore, we have always had the ambition to be a little better than our competitors and above all contribute to the development of the Swedish target market. Historically in Sweden, but now we have also managed to grow outside of Sweden, where we have one business or several businesses in Finland and one business in Denmark. Otherwise, our concentration in Sweden is mainly in the Södertälje river, where we mainly have a lot of business around the major state regions. Vi är ett renodlat måltidsbolag och det innebär att vi sysslar inte till exempel med städ, vaktmesteri, reception, utan om man lite kort och enkelt ska beskriva vad vi gör så är det något som man stoppar i munnen. Kollar vi då vad som särskiljer oss från våra konkurrenter så har vi ett antal ben. And the most primary leg with Nordest, and when our customers and investors ask what makes the difference between Nordest and all the other operators, apart from the fact that we are clean-cooked within the target service, is that we work with systematic entrepreneurship. And systematic entrepreneurship means that we have very strong local union leaders. A union leader is, for example, a restaurant manager. Henn has a great mandate to make the decisions that are required in their everyday life so that the guests, i.e. those who go out to eat, and the customers, our contractors, for example Volvo Cars or Ericsson, are satisfied with what we do. And the systematization that we have is a pure hygiene factor. To get in and do these affairs with the defence forces or Volvo Cars and so on, they require that we have a number of things that we fill out GDPR policies, IT policies, HR policies and so on. It can sound pretty boring. It is often not that the food becomes much better, but it is something that you have to have. And in it, it is the systematization that the Nordic companies deliver. but we try to have as little systematization as possible in the local implementation and there the boss will decide how and what we deliver because it is she who meets the guests on a daily basis. The second part that we like to talk about, and I will describe a little more in a later slide, is the natural guest flow. A natural guest flow for us is where we do not have to invest in the fact that the guest comes to us. Preferably we should be in some form of local monopoly, that is, it is only we who are in this quarter or only we who are in this company or only this school. Or maybe, as in Arlanda, where it is a bit more of an oligopoly. We have a number of actors, but it is the actors who are in there and we compete on equal terms. That is a natural guest flow for us. On the other hand, if there were a castle in the countryside where you would need a restaurateur, we are not the right operator. Because then we need to invest in getting the guests to come to this place of sale and we are not very strong there. We are strong in implementing where we have natural guest flows. And the third part that we like to talk about is a nice goal-time solution. And there we try to describe our level of ambition and we try to describe the importance of not just working with the food itself as such. And if we start with the level of ambition, we usually describe that we would like to be a 4 on a 5 degree scale. 3.8 is okay, 4.2 is good. We do not want to be 4.8, 4.9, because then the guest will not pay for that guest experience either. And then we will not make money in the business. We have said that we will be a little better than our competitors and we set the level of ambition easy to describe for ourselves on a four degree scale of five possibilities. And then we talk a lot about the goal experience itself. And there we have a model called MSM, where we also focus a lot on the environment itself, that is, the goal environment, but also the sustainable environment. And then we talk a lot about service and customer service. And if we look at the customer groups, these are the six customer groups that we also report. Defense, business, university, university or campus as we call it, school, hospital, elderly care and travel. And if we look at the natural guest flows, they are easy to describe. Defense is mainly self-employed personnel, but also employees who work in these military garrisons. In companies, it is employees or visitors to the workplace, but primarily it is employees who work, for example at Ericsson, Volvo or Toyota in Mjölby. University of Higher Education, then we are often on a campus, Stockholm University, Uppsala, Södertörn, and where we know that there is a natural guest flow in that there are a number of thousands of students enrolled who have lectures, seminars and so on, seminars that come to the schools to meet their friends, if not otherwise. Skola är ju väldigt förutsägbart, det är 178 dagar per år och där får man i stort sett betalt för det antalet inskrivna eleverna som man har på just den här specifika skolan. Samma sak med sjukhus och äldreomsorg. Äldreomsorg är nog egentligen den lättaste, att ha ett naturligt gästflöde, för att nästan alla äldreboende i Sverige är ju alltid max antal boende på. Så har man 100 boende, då har man 100 ätande, frukost, lunch, middag. 365 days. A little bit is the same thing with the health center at the hospital, but where it goes down on the weekends and it mainly goes down in the summer and around Christmas and New Year a little bit. But it is quite easy to predict. And on travel, which is then dinners, roads, restaurants as a natural guest flow. We may not have built up the natural guest flow ourselves, but it has been built up as a brand for a very long time. So we have people who travel by in connection to these links. Or in Arlanda, where we have a number of operations both outside and outside the security control. And there it becomes a natural flow of guests, given that you have 22-23 million travelers via these links. Or this link point in Arlanda. If you look at the contract, we work a lot with both negotiated contracts according to the LHU, but also with contracts that we have with the big companies. And they usually stretch between three to five years, with the possibility of extension for an X number of years. And we have experience and a good track record to actually, in a large way, always get our contracts extended. We have a very small share that runs out that we do not get extended on, and we have a very high share where we get extended on our contracts. Can you tell us about the financial information, Mattias?

Thank you very much. We have four financial goals for the company. One is that we will have an organic growth greater than 10%. We will have a profitability that is between 8-10% on EBITDA level. And then we will share more than 50%. And then we will have a debt, then it is net debt in relation to EBITDA, at less than two times. And these are financial goals in the medium and long term. Welcome to the summary of the quarter and the period. During the quarter, we had a net turnover of SEK 615 million, which is higher than the previous year. Then we ended up at SEK 475 million. This means that we had an increase of 29.6%, each of which was organically worth 21.9%. The non-organic turnover is mainly driven and linked to the two acquisitions we have made in Finland and Denmark. EBITDA reached 67 million, also stronger than the previous year. And we ended up with an EBITDA margin of 11%. The period we had a net investment of 1 billion, 150 million, which also in the period is stronger than the previous year. This corresponds to an increase of 19.7%, only organically 14.7%. EBITDA rose to 117 million, which is also stronger than the previous year at 81 million. And we ended up with an EBITDA margin of 10.2%. Customer growth. We have growth in all customer groups, both in the quarter and in the period. And the three customer groups that have increased the most are companies, defense and travel. And companies increase by about 29%, with about half of the travel of the Finnish restaurant business that was acquired in January this year. The organic growth came mainly from the association that opened in the year 2004, among other things Naturhistoriska and Värmlands museum. Defense increased by 58%, each of 49 percentage units came from organic growth and the remaining 9 percentage units come from the Danish marine industry Orifo, which we acquired in May this year. And the organic increase of 49% mainly depends on MRE, where the turnover within the NSB agreement that we have, that is, the NATO Support and Procurement Agency, varies with the increase between the quarter. On the trip, it increased by over 20% and here the growth refers primarily to businesses that have been developed at Arlanda Airport. The period, even on the period, we have positive growth in all customer groups. And here too, it is the company, defense and travel that affects the most or increases the most. And it is the factors that contribute to growth in the quarter, also what affects the previous period. And we have also won some new customers during the period. Among other things, we have, in addition to the acquisitions, we have the Svalen restaurant in Helsingborg, the Fyrklöven restaurant in Landvetter and so on, as you can see there, and the last one, Bromma Gymnasium in Stockholm. Here we have some key figures, and as mentioned earlier, we generally have a lot of real estate capital and CapEx, which gives a good cash generation. All three key figures, i.e. real estate capital, CapEx and cash generation, are in line with the levels we previously communicated. This shows our financial stability and our ability to generate good cash flows over time.

go through some important highlights during the quarter and the period and we will talk a little bit about the two acquisitions that have been made, among other things, but before I get into that, I just want to comment on the result a little bit that we continue to keep up with our key figures that Mattias went through in the medium-long term, even if we have had a strong quarter and also a period, we assume that a part, which we also commented on after another quarter that was a little weaker here a few years ago, that there is a whole lot of fluctuation in the volumes and they go up and down a bit, but in the medium-long term they are stable according to our perception. Grust är i grund och botten inget förvärvsbolag utan fokus är organisk tillväxt. Däremot förvärvar vi där vi behöver komma in på nya marknader eller skaffa nya kompetenser och det är i praktiken det som dessa två förvärven är. Och kollar vi på den finska marknaden så har det varit en marknad som vi faktiskt har varit intresserad av över väldigt lång tid. We know that when Compass Group bought Fatse Food, they replaced Fatse Food in Finland, a half as big country as Sweden, with about 3 billion Swedish kronor. And since they became the dominant actor in there, also because they had business volume earlier, we have seen that there is a potential and an opportunity to actually step into the Finnish market and be able to grow with a fairly good volume. And therefore, Finland has been a strategically important market for us. And we are therefore very happy that we, with the help of Garam and Vermiglio, or GOV as we call them ourselves, have had the opportunity to step in there since January 1st. And basically it is a platform. When we bought the company, we calculated that we were a little over 30 million and we did not really see that we could grow anything at all during 2025, but we would just establish ourselves, learn to know the market, in order to then from 26 and onwards start the expansion. But if we look at it today, we have a number of new units that we have actually opened, and we have a number of units that are on their way in. So we see that we will have a fairly good growth even under 2025 on the Finnish market. And we now have a base where we, with what Nordre stands for with the systematization and what the entrepreneurship of the Finnish old owners stood for, have the opportunity to actually implement systematized entrepreneurship on the Finnish market. and where we have now laid the foundation for a good and stable growth that we see ahead of us. Our MRE business, or Meals Ready to Eat, in Sweden has consisted of out-meals, where we deliver lunch portions. Everything that a soldier, or it can also be the police or the rescue service, needs during a whole day. Breakfast, lunch, dinner, dinner, energy bars, wet wipes and so on. But we have not been particularly strong on what we ourselves call single products. And that is where a defense force, for example, chooses to actually pick things up themselves. What happens is that you buy the products you have, you put them out in the corridors, you tell the soldiers that tomorrow at 07.30 you will be packed up in the bags and then they will do it after the service is over. Since we have had a very large professional defense, both in Sweden and in Europe, the MRE product has been largely the most in demand. But we see now when we build up friendly armies, not only in Sweden but also in Europe, that this is also a market that will grow a lot with the fact that you have chosen an almost 5% BNP target for your defense equipment for many, many years to come. And since we have not been strong on our own and we have had a long collaboration with Orifo, where we have also bought these single products and packed a part of them in our bags, we were very happy to actually get this acquisition with IB, which the founder is called, and he has been in this industry for about 20 years. We strengthen both the relations with a number of different countries and we get a completely different competence than we have had before in the company. And in this, we also have the same business that we have mentioned earlier, where we are building our own production facility in Skåne, where we will produce part of this dried and dried food ourselves. So we are now ready to be able to manufacture, sell single products and all day long. And we also secure the supply of goods in a completely different way than we have been able to do. And with this, we see that we will be able to be an important player in the European market. Apart from this, we see that we have a whole lot of sales synergies due to the fact that we have, as I mentioned, the same customer base in some countries that we work with, where we can now sell both single products and all the time. But we can also offer single products to customers like Morifa, where we only sold single products, all the time. And in the same way, we believe that there will be a demand for single products from some of the customers where we sell all the time. And in this respect, we have both had a cross-selling and a stronger customer relationship. We have also gone out and pressurized since earlier that we have had an extended contract with the Defence Force. The contract that we had with the Defence Force from the beginning extended for four years and would expire on March 31, 2026. In the contract, it was possible to extend up to three years with 1 plus 1 plus 1. Försvarsmakten valde här rätt nyligen att förlänga till att börja med ytterligare två år. Så nu sträcker sig avtalet till 31 mars 2028. Det finns ytterligare en option kvar för Försvarsmakten att förlänga avtalet ytterligare ett år till 31 mars 2029. Vilket just nu inte har skett, men vi hoppas naturligtvis på detta framgent. It's time for some questions. We have already received a few. We will take about five minutes to answer the questions. One of the questions we have is that we have strong growth in the MRE business, which we have noted. And we want to press on, because there are questions here about whether it is a temporary fluctuation or whether it is a long-term strong trend. And we want to press on, just like when we had a slightly weaker quarter here during the previous year, that there is a high fluctuation in the Maria business. We are completely convinced that in the medium and long term, this business will grow by more than 10%. We also see with simple mathematics, as I mentioned earlier, that the BNP investment in Sweden in 2020 was 1.2%, in 2030 it will be 3.5%, plus that one will put 1.5% on civil readiness, where we also have a business that is being built up through the municipalities. I can mention the municipalities there a little bit. There is a total insurance policy that you should have a readiness level in the municipal business and the regional one, which are the old county councils, but where you have not actually chosen to prioritize this money. We have also addressed the state authorities that this is money that you have to choose between care or preschool and so on, or to build foodstuffs. There will have to be a state budget. There have already been some state budgets through Livetsmedelsverket, where municipalities can apply for money. But we see that this market, or not just the market, but the need, is very large and very in demand. And as it looks right now, in the pace that we are building, it will take a couple of hundred years before we have built up the volumes that we have actually stated that we need. Vi tror att det under något år framgent kommer att ske saker från statsmakten. Men jag bara trycker på att vi ser att det här inte är en verksamhet som passar sig riktigt till kvartalsekonomi. Däremot så ser vi att den kommer att växa med de tal som vi har angett sen tidigare. Sen får man göra sin egen matematik på huruvida man tror att försvarsanslag, vempliktiga och Europas arméer kommer att växa ännu mer. Men vi kommunicerar ingenting annat än våra mål som vi har just nu. Försvarsmaktens kontrakt förlängdes ju också och vi vet att de är nöjda. Man var tvungen att förlänga just nu för det ska meddelas minst två månader i eller nio månader i förväg. Men man hade kunnat att naturligtvis bara ge oss ett år men nu valde man att ge oss två år vilket vi är glada och väldigt nöjda med. Och lönsamhetsmässigt så är det inom ramen för i stort sett all vår verksamhet som vi har idag. Vi tycker väl egentligen att alla våra kundgrupper som vi rapporterar ligger på de lönsamhetsnivåer som vi förväntar oss. Det har varit en fråga kring Arlanda specifikt också. Vi är på rätt gällande sträcket och vi är hyfsat nöjda med Arlanda i dagsläget. Men det finns lite mer att ge där. Det är framförallt utmaningar med när vi nu går in i låg säsong. Det kommer att vara ett lite mindre gästantal än vad det brukat vara innan covid. Resomönstret ser lite annorlunda ut. Orifo, we have been asked about food sales. We have already had that before, or internal sales, where we ourselves buy a part of Orifo. But in general, we have not activated the three legs that we now have within the MRE business, with out-meals, single products, which Orifo stands for, and self-production, which we are also building up right now. And to answer that question, we see that it will start sometime late autumn. Vi har en fråga kring tillväxtföretag, om vi kommer växa omkring 15% organiskt nu när de olönsamma kontrakten är borta och det skulle jag vilja svara på att vi kvarhåller att alla våra kundgrupper över tiden kommer växa mer än 10%. Vi bedriver verksamheten som ett anfall på stor bredd, där vi ibland får genombrott, till exempel på företag eller på MRE, och där då växer vi för stunden mer, medan vi då kanske något år senare inte kommer kunna växa överhuvudtaget och har genombrott kanske på omsorg eller högskolor och universitet och så vidare. Then we have a question about the degree of fluctuation in the NSB agreement. And that is actually almost impossible to answer. The orders from the different countries look so different. Some place very large orders with good prognostication. Some countries place a giant order with maybe four weeks' delay. That's also why we have relatively large warehouses, to be able to produce and deliver this. A little down, a little up, but over time always up. We do not comment on Q3. Yes, but we have questions here about the Amarillo business, if there was anything specific that happened this quarter. No, but it was a good both production and order laying here for this quarter. And we see now that NATO membership and exercise business and above all the attacks on the defense forces, not just Sweden, are increasing and in part increasing demand. We have received a question about whether it is possible to talk about the profitability of unprofitable products, such as Alanda, Försvar, Vexer and so on. But as I said, we see that we are quite satisfied with the profitability in all of our customer groups. Vi har väldigt få, man måste nästan alltid ha några kontrakt ändå, som inte levererar på den nivå som man vill. Men vi har väldigt få sådana kontrakt i dagsläget. De har vi faktiskt i huvudsak antingen att de är klustrade i större avtalssammanhang, eller att de är strategiskt viktiga för oss av andra skäl, till exempel referenser. Därför har vi kvar dem. Uppdatering nya fastigheten och egenproduktion. Som jag nämnde där, vi har ju köpt in all utrustning sedan tidigare för att kunna producera utan vi väntar bara på tillträdda fastigheten. Nu ska den i ordning ställas, det är ju redan en godkänd livsmedelslokal och vi ser framför oss här att sen höst. Kanske kommer vi komma igång, men vi kommer nog inte vara fullt i produktion för en bit i början av nästa år. Men vi har en projektplan för det och just nu så går den in i plan. Säljer Orifet andra länder än Danmark Europa? Ja, det gör de. Det kommer jag inte att svara på. Och ungefär hur mycket de säljer. Ja, men när vi köpte Orifo året 2024, Mattias du får hjälpa mig så omsatte de ungefär 300 miljoner kronor. Svenska kronor. Ja, svenska kronor. Och då var inte Danmark någon del av det alls, vill jag påminna mig. Utan nu har man kommit in och fått Danmark. Men betydande del är ju annan verksamhet. And it's the same thing with Orifo, I just want to emphasize that it is also a business that fluctuates in exactly the same way as OutMills. And they can go a little out of sync with each other, which may also be good. But we have chosen to do this acquisition so that we believe that this market, single products, as I mentioned a little bit in the presentation, where you instead pick it up yourself, is a market that, when we now build weaponry armies, And maybe shorter exercises will also be a market that also grows with more than the goals that we have set ourselves. Yes, then we didn't have so many more questions, Mattias. No. Yes, but I also had one question that I got on the e-mail before, I just want to mention it. And it's about the float. And we got the question about how large owners view the relatively low free float. And of course, it is a challenge. A lot is in the hands of big companies or institutional corners. And over time, I see that we need to solve this in a way that makes Float a little bigger. I don't have a 100% plan for exactly when and how it will happen, but we know that something that has been addressed to us, among other things, by a number of international investors who are interested in joining the company. Yes, Mattias, we have completed more than five minutes.

Yes, but I think we have caught all the questions, so there have not been any more, so I think we are pleased to be thanked for today.

Yes, thank you very much.

Thank you very much. Bye.