Ratos AB (publ)

Good morning, everyone, and welcome to Ratos and the presentation for the first quarter 2025. The day will look like this, or the hour will look like this. We have with us in the studio, we have Jonas Wihlström, our CEO, and our finance director, Mattias Junde, who is stepping in for our CFO, Jonas Ågrupp, who can unfortunately not be with us today. First, we will do the presentation and then we open up for questions. And I should also like to add that the webcast will be available on our website after the presentation. So I think with that, we should get started. Please, Jonas.

Thank you, Katarina. And thank you all for joining this morning where we will present a record quarter for Ratos. We had a strong start of the year. Adjusted EBITDA is up 32%. All business areas actually increased their EBITDA. ROSE is continuing to go up. We have divested Airtime. I think we will close it in mid-May. And we have completed the reconstruction of Plantagen in February and we're showing strong results already in the Q1 for that. Also, we have had strong order intake in construction services and we have a limited direct exposure to US. I will get back to that as well. Also gratifying is that our EBITDA margin continues to grow. If we first take a look at our EBITDA development, we actually have an EBITDA CAGR of 28%. And if we would continue like this, it's over 30%. Report to the EBITDA was even higher, but we had one time positive effects. mainly due to the fact that we paid the composition gains for the reconstruction in Q1. That also affected our cash flow, and the cash flow, if you take that into consideration, was stronger, also that was stronger than Q1 last year. Q1 is a weak cash flow quarter for the Ratos Group. Looking at net sales, the majority of the 4% is due to discontinued operations in Plantagen with all the closed stores and also discontinued operations in Expin Group. We were also affected by a negative calendar effect for industrial services. One year ago, we had 150 million plus in sales because of add-on acquisition. It's very gratifying also that net sales for product solutions are increasing with 9% despite a market that is not at full speed right now. I think for newcomers, maybe we could show the segment companies. I think you've seen them all, Aleido and IT Groups, VTFS and in industrial services and so on. So let's go to next slide here. Here's a summary of both the business area and segments. And starting with industrial services, there is a negative calendar effect, which affected EBITDA with 8 million because of one loss working day. We continue to have challenging markets in clinical trials in TFS. Nitech Group are really creating significant synergies. I'm sure these will be over 50 million actually in cost synergies. Things are going very well there right now. Product solutions, over 13% in EBITDA margin. EBITDA is growing, sales is growing. And actually all companies increased both their revenue and EBITDA. And we also had increased order intake for Diab, HL Display and Lidil. Those three companies, by the way, are those who have exposure to the US market and I'm coming back to that. In construction and services, we continue to show construction, I should say. We continue to have good EBITDA margins, continue to have very strong order intake. It's plus 186%. And the order books are record high. We have very strong order books in Sentia, but we also have strong order books in Able. Last but not least, we divested or we signed a contract of divesting Airtim. We will close that, I think, in mid-May this year. So the Airtim numbers are in the Q1. If we go to critical infrastructure, again, very strong order intake and it was up 20%. Continued strong results in precise infra and able. And X-Bing Group continues to improve their EBITDA, but we are still showing negative numbers, but much smaller than last year. And we will, during this year, make sure that we can have positive results there as well. Consumer reconstruction, I've already mentioned it, shows very positive results. Some 60 million SEK in this small quarter. We have saved OPEX of 400 million plus. Our debts, our financial debts are down 1.5 billion. Also worth to mention is that KVD continues also this quarter to improve their EBITDA like it was a good year for them also last year, but even better this year. Well, I think I mentioned it all here, actually. Reduction of stores went down to 89 in Norway and Sweden, and we discontinued the operations in Finland. 11 stores were closed there as well. Cost reductions I mentioned. We had, of course, a revenue decline in the quarter due to closed stores. It beat up 60 million and decreased lease liabilities 1.5. And don't miss out that Plantagen remains to be the largest and best garden center in the Nordics. Visit them next time. Well, just a few words about the one-time effects we have in Ratos. It's totally positive because of plantation. In Speed Group, we have taken costs to reduce the staff in the staffing business. There are new EU rules around that. So unfortunately, we need to reduce the staffing business in Speed Group. Nitech Group, all is related to the merger of Nitech and Semcon into the Nitech Group and these six millions are directly affecting the cost synergies. And TFS has still a weak market. We have changed CEO during the quarter and we have taken six million for cost and efficiency matters. And I mentioned the positive one-time effects we had. We gained a lot of EBITDA as a one-time effect for the debts taken down from tax and suppliers. It's also gratifying to see, or should you take the cash flows maybe, Mattias? I just mentioned that it's over 100%. Exactly.

Thank you, Jonas. Yeah, as you can see, the cash flow from operating activities was down with about 150 million. in the quarter and this is mainly due to changes in networking capital and the networking capital was affected by the composition dividend that was paid out during the quarter of about 200 million. So adjusting for that it was actually better than last year and the quarterly cash flow. As Jonas mentioned the QN is normally our weakest cash flow quarter due to increased inventory build-up in consumer business and so forth. For the last 12 months, we have a cash flow amounting to 3.3 billion and with a cash conversion of 135%. So still looking very good. If you go over to the bridges, Jonas has mentioned a little bit about it, but in total the net sales were down 4%. We had an acquired growth of 1.9% and this is related to add-on acquisitions in the business area industry. We have negative organic sales growth in the quarter of 2.4%. And all business areas had negative organic sales growth. FXFX is primarily due to NOCSEC in the quarter and amounted to negative 1.2%. And the other column there is due to discontinued operations in XBIN and Plantagen. If we go over to EBITDA, we have an adjusted EBITDA which was up 32%. Acquired EBITDA growth was 5%. And as I mentioned, we post in the business area industry. Organic increase was 13 million. And it's mainly due to EBITDA improvements in consumer and also a larger share of associate company in the quarter. FXFX is negative in the quarter, 3.9%, and it's mainly due to a stronger SEC. Another is the discontinued operations in exponential implantation. If we go over to our financial targets, you can see that EBITDA is the goal to have 3 billion during 2025 and the last 12 months we were up in 2.4 billion. Leverage should be between 1.5 to 2.5 times and we was at 1.5 times in the quarter. Since year end, it has increased with 0.1 times. And from last year, it has increased with 1.1 times. Net debt increased during the quarter with about 800 million. And that's mainly due to a negative cash flow in Q1. Compared to last year, the net debt has increased with 300 million. And the dividend payout should be between 30 to 50%. And then your general meeting approved the board proposal for dividend of 1.35 sec. And the payment was done by April 2nd and amounted to 442 million in total. And with that, I think I leave it over to you again, Jonas, for final comments.