Storskogen Group AB (publ)

Good morning and welcome to the presentation of Storskogen's third quarter of 2024. I am Chris Bransson and with me today is our CFO Lena Glader. We are overall happy with the performance this quarter and I'm eager to get into the details with you. So let's begin with an overview of Storskogen's before we take a closer look at the quarter's highlight. Storskogen is a diversified international business group with sales of about 34.6 billion SEK over the last 12 months. An adjusted EBITDA of 3.1 billion SEK spread across our three business areas. After a number of completed divestments in the quarter, we now consist of 116 business units with an average sales approaching of about 290 million SEK. Highlights for the quarter. Cash flow, organic EBITDA growth and profitability remain our top priorities. This quarter continues to demonstrate that we are on the right track with organic sales growth in all three business areas and with marginally positive organic EBITDA growth. We reported sales of about 8 billion SEK an adjusted EBITDA of 783 million SEK, and our adjusted EBITDA margin came in at 9.8%. Cash conversion continues to be ahead of our target at 99%, and we are benefiting from the great work that our companies have done over the past years. Our leverage ratio came down slightly and is now 2.6. Our continuous efforts to optimize our balance sheet progresses, And I'm pleased that we have continued to refinance part of our bonds, maturing in 2025. And as of now, we don't have any significant bond maturities before 2027. I'm also pleased that S&P affirmed our credit rating BB with an improved outlook from negative to stable. As we noted in the Q2 report, the third quarter is typically a seasonally weaker quarter and sales was in line with this pattern. Decreased sales can be attributed to divestments explaining 5% of the drop and acquisition FX minus 2%. These were offset by positive organic growth of 3%. And I want to underscore that we saw positive organic sales growth in all business areas. If I may turn your attention to the quarters margin in the right side of the graph, at 9.8% we are inching closer to our target of 10% and significantly higher than the 8.7% in the Q3 of 2023. This meaningful year-on-year improvement can be attributed to divestments and positive organic growth in services and trade. I'm happy to note that our continued margin improvements are in part the result of both the initiatives that we have implemented to drive organic EBITDA and the strategic divestments that we have made. However, there should be no doubt that we will continue to work hard to reach our target margin of 10%. Going into the business areas. services reported lower sales but notably higher profitability in the third quarter the sales decreased of nine percent was driven by divestment that contributed to the decrease with eleven percent however this was offset by positive organic sales growth of three percent we saw underlying improvements in most areas such as digital services logistics and installation while the market for companies exposed to construction remained soft. The dedicated efforts to adapt cost has contributed to maintain profitability throughout the year. Gradually recovering demand also contributed positively to profitability in the quarter. It's also worth noting that divestments completed on August 14th is supporting the margin improvements. overall i want to mention that we are seeing positive signs of improved market sentiment and looking ahead i will conclude and mention that q4 is seasonally stronger quarter looking at trade for trade business area we saw sales decrease with four percent divestments contributed to decreased with six percent which was offset by organic growth of four percent Consumer demand remains subdued. However, we are seeing early signs of recovery in the consumer sentiment. Our operational initiatives are already yielding positive results with the potential for even better profitability as demand gradually improves and as the effects of interest rates cuts materialize. Looking ahead, as with services, we anticipate a seasonally stronger fourth quarter, though we remain mindful of ongoing market uncertainties. Industry's profitability and net sales were in line with last year's figures. Sequential margin development is somewhat impacted by subdued demand in the UK, and as expected, Q3 reflected seasonally softer performance due to the summer holidays. operational focus to offset unsteady demand in some sectors remains central. Overall, market conditions are stable and order books remains at the healthy levels. Consistent with the first half year, companies involved with automation solutions, especially those offering robot integrations, metal processing and infrastructure, continue to see a solid demand. That said, global uncertainties pose potential delays in the broader recovery into 2025, especially for companies exposed to the consumer market and the construction industry. As a result, our commitment to counter these effects and maintain continued solid profitability continues to be highly prioritized. As we look at our short to medium term priorities, I want to revisit an important slide from the past two quarterly presentations. Our main focus today continues to be on driving organic EBITDA growth. We are committed to building on strong cash flows from last year and continue to work to improve our leverage ratio. In the past quarter we finalized divestitures of a group of businesses in order to ensure that every business unit aligns with our strategic goals and financial targets. Achieving satisfactory leverage ratio remains a crucial trigger for our return to a more normalized situation where we will deploy and invest our cash flow towards achieving a combination of organic and acquired EBITDA growth.

In sum, our efforts are moving ahead in the right direction.

To take a look at how we are driving organic growth, I want to turn your attention to some of the initiatives across our four key areas. Sales, pricing, investment and cost control. And here are a few selected examples from our business group of these efforts. Starting with services. Evio, this e-commerce digital agency, has over the years helped many of the Storskogen's portfolio companies in building their e-commerce platforms. As a result, they have developed the Evio Storefront, a plug-and-play solution tailored for trading companies. Dan Boring, this Danish company that offers horizontal drilling services, has begun collaboration with the Swedish business units MDS and Toftagård to strengthen their offering. Currently, they are collaborating on a large wind power project intended to supply electricity to nearly a million households. The companies are supporting each other with resources and expertise. Going into the trade, about two years ago, we conducted a merger of a number of business units active in the distribution of professional hair care products into the business unit by WE. The improved Nordic reach of ByWi recently contributed to winning the global brand Olaplex with retail sales in Sweden, Norway and Denmark. Recently, we also noted the win of the key account Nikita Hair, a chain of hair salons in Norway and Sweden. What we have achieved with ByWi is something that we are now aiming to emulate through having merged five Storskungen companies into Ash Sport. forming a leading Nordic distributor and brand partner in sports and active lifestyle. Ash offers products in areas such as alpine, tennis, paddle, outdoor, and sports fashion with more than 30 global brands like Bubble Up, Nike, and Blizzard. And as a group, Ash will benefit from the scale and achieve several synergies while also meeting external demands to remain an attractive partner for customers and brand owners. In the industry segment, I want to mention Ståler Rörmontage. This is a leading supplier of qualified construction in stainless steel. They are benefiting from the positive macro trends relating to electrification and infrastructure. Among other areas, building bridges and very large carousels for cables. To meet an increased demand, they have invested in an 1,800 square meter facility, building part with internal resources, which will deliver cost efficiency with a fast payoff. Lastly, Brandrup, a manufacturer of various types of trailers, acquired its Norwegian peer, Tysse, approximately two and a half years ago. Since then, Brandrup has achieved multiple synergies, one example one recent example at the time of acquisition to have more advanced offering for the professional segment which was limited to the norwegian market currently brandrup is in the early stages of expanding this offering across europe leveraging its broader european distribution network These are just a few examples of various types of initiatives across our group to provide a flavor of all the different types of initiatives we are pursuing to achieve organic e-habitat growth. With that, I'll now pass over to Lena Gader for a closer look at our financial performance.