Röko AB (publ)

Thank you. Welcome and good day. This is Johan Blad speaking and Fredrik Olsson is here as well to be able to answer questions. We go to slide number two in our Q1 presentation. When we look at our group, we look at two important metrics for how serial acquirers perform. These are growth in EBITDA and change in leverage, obviously, given the fact that we don't take in any additional capital from shareholders. We grew EBITDA 14% in the first quarter, driven by acquisitions and organic growth, and we managed to reduce our leverage with 0.4 times from 2.3 times EBITDA at the end of Q1 2024 to 1.9 times at the end of Q1 2025. In the 12 months period since the end of Q1 2024, we have invested 556 million Swedish kronor in acquisitions, and as mentioned, have had no injections from shareholders. Continuing to page three, we have the highlights of our group's financial performance with the prior three years providing a bit of full year context. In Q1, we grew sales 9%, of which 3% was organic growth in SEK, 2% in local currency. EBITDA grew 14%, as mentioned, driven by acquisitions and organic growth. Our margins are seasonally stronger in the first quarter, but we also see a margin improvement in the quarter driven both by mix and general margin improvement. We have not mentioned on the slide here, but mentioned in the report, 7% of our net sales in the US of which the majority is goods that are manufactured outside of the US, but some install installations as well. 2% of net sales stem from goods that are manufactured in China. We obviously monitor the situation with the ongoing tariffs closely, and while they certainly pose a threat to individual and specific companies, the risk for our group is not so significant. No acquisitions were completed during the first quarter, so we remain at 28 subsidiaries and have eight people at HQ. Rökos B share was listed on Nasdaq Stockholm in March 2025. Continuing on to next page, we start to zoom in a little bit on cash flow. Our free cash flow declined 20% in Q1, and cash conversion was only 53%. However, we had 39 million of transaction costs relating to the IPO, which impacted the cash flow negatively. Adjusting for this, cash flow declined 5% and cash conversion was 63%. Cash flow can fluctuate a bit between quarters, and in Q1 this year, we paid higher taxes and had a slightly larger buildup of working capital. I should mention that we paid taxes in line with what we did full year last year. So it was actually low taxes paid in Q1 2024. Return on capital employed improved from 13.3% in Q1 2024 to 14.5%. Rose return on capital employed remains relatively low compared to Peers as we are a younger company, but we see that it improves year over year. Return on capital employed excluding intangibles remain at the high level of 177%, evidencing our asset-light group of companies. Summarize a bit on page five, we give a bit of context to our group and revisit some numbers from full year 2024. Since we started in 2019, we have managed to acquire companies and pay less than eight times EBITDA on average, which we think is an important metric to focus on. Our group delivered 9% organic growth in EBITDA in 2024. The best performing companies have since acquisitions grown Ibita three times as much as the three worst performing companies have declined Ibita. And in 2024, we acquired 125 million of Ibita, of which 57 million was consolidated in 2024. And the remaining then will be consolidated throughout of 2025 due to phasing of acquisitions. With that, I will hand back to the operator to see if there are any questions.

To ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Dan Johansen from SEB. Please go ahead.

Hi, Johan. A couple of questions from my side. Starting a bit on organic growth, you reported 3% on sales, but My impression is that it's a slightly higher number if you look at EBITDA instead. Would you agree that organic EBITDA growth is a couple of percent above the 3% organic sales growth in this quarter? Thank you.

Yes. So thanks, Don. I agree that we have had a good improvement in organic EBITDA. We don't report that on a quarterly basis, but you can see that our EBITDA margin is stronger in Q1 this year than it was last year. And we have had organic net sales growth. So I think it's a valid assumption from you.

Okay, excellent. Thank you. And I think you mentioned that 2% of sales in the US comes from manufacturing in China. Is it possible to redirect that production over a couple of quarters or how do you plan to manage it here over the near term at least? And then we'll see what happens, I guess.

Yeah, so I think we work very closely with the companies that are affected. There's a few companies. We are looking at alternative sources for manufacturing. It's not something that will be fixed short term, but we think that, yeah, maybe in I wouldn't say a couple of quarters, but in a few quarters, we think there will be alternative sources where we can direct that production. And in most cases, it's not so that a full business is completely exposed to this. So we have already had this on our radar and set up multiple manufacturing routes for most of them, I would say.

Okay, understood. And maybe a final question from my side from now. If possible, if you could share a few words on your feeling about the M&A pipeline now compared to a year ago and out of interest also, have you experienced any notable increase in the inbounds after going listed or is it pretty much the same for you?

Yeah, so I think The general deal flow, I still believe, is a little bit better here at the start of 2025 than it was at the same period last year. Acquisitions is obviously a bit binary, so plenty of things can happen which cause you to either close a transaction or to lose out on one. And I think to some extent we have been We've fallen a bit short in some here, but I still feel that the deal flow is actually better and we see more qualitative companies coming in. So I'm a bit more hopeful than last year. I wouldn't say that it's driven by marketing efforts due to the listing. It's more sort of general market teams and that the team is doing a very good job staying active across across multiple markets where we are active.

Okay, thank you for that. I think that was all from my side for now, so I'll jump back into the queue for now. Thank you so much, Ivan. Thank you, Don.

Next question comes from Jakob Marken from Danske Bank. Please go ahead.

Hello, guys. So some questions from my side as well. First one on the margin side. So of course, a very strong margin performance here in Q1. And I was just wondering if you can elaborate some of this. Is there some one to three companies performing very well, or is there more like 10 companies performing well? Or how should we see that split in the margin performance? And how much would you say is more of a Q1 related margin performance and how much should be extrapolated throughout the year as Q1 is the strong margin quarter for you?

I think what we can say is that we have a bit of positive mix effects in the group. So a few of the higher margin companies have grown a bit more. The other thing I wanted to say is that many of our companies have actually shown a margin improvement. So how long that will continue and if it's possible to extrapolate, I think it's not something that we can guide on, but we see the good development that has been done by many companies in the group.

Okay, perfect. Thank you. And then on the M&A pipeline as well, Just wondering how we should look, you know, how should we look at it? So no acquisitions here to date. Do you expect that you can grow 10% from acquisitions this year or is there more like a 5% growth or how do you view that, you know, the acquisition potential here in the year?

Yeah, I can just say what I think we have. at the table to look at currently and see no indications that we would not be able to continue to grow through acquisitions in line with what we have guided or what we have said that we aim for. We have plenty of opportunities to assess and evaluate. We need to get there. We need to remain very disciplined on acquiring quality companies and acquire them at fair valuations, but given the inflow opportunities so far this year, I don't see an issue with that.

Okay, perfect. That was all for me, so I'll get back in line.

Thank you.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers. Please go ahead.

Thank you. I think we just want to highlight, we have gotten one question through the chat. How much do you expect the tariffs will affect your companies? And I think the information we have provided that we have 7% of sales in the US of which 2% relate to products manufactured in China. Those 2% will have issues getting unchanged volumes going forward at the new tariffs, we believe. But we think the other companies that are affected with smaller tariffs or lower tariffs as we know it today, they should be able to compensate for that with price increases to safeguard margins. That's our expectation. Long term, it's of course very difficult to say what will happen with margins due to changing consumer behavior and changing consumer confidence in the US economy due to the tariffs. But this is what we know of today. It's early still, so it's difficult to speculate too much on this. I think with that, have no further questions. So we want to thank you all for participating and for the good questions and have a good day.