Svedbergs i Dalstorp AB (publ)

Good morning and welcome to this presentation of Svedbergs Grupp's quarterly report for Q2. Today I will present Parana Andersson, who is the CEO and head of the group, as well as Ann-Sofie Davisson, CFO of Svedbergs Grupp. Some of you may know a lot about Svedbergs Grupp, but some may be new listeners, so before we go into the results of the previous quarter, I would like to mention some words about Svedbergs Grupp. We are a group that long-term acquires and develops strong brand companies in Europe. Our companies design, develop and sell products for Badrum. In some cases, we also produce these products in our own production units. Currently, we are active in the Nordic, British and Dutch markets. Our ambition is to grow organically and through acquisition. It is important for us to have growth and develop existing companies and expand through the acquisition of well-managed companies, preferably entrepreneurial-driven, that complete our business. Geographically, product-wise and through broad competence. We actively run these companies by being present, supportive and contributing to the development of the company in their growth journey. Our ambition is to contribute to consolidating the northern European market for bathroom and shower solutions. In this geography, we see the possibility of developing our company into an even better group of strong and decentralized, supported brand companies. Today, we have a number of brand companies that have strong positions on the respective market. Svedbergs, Macrodesign, Kasse, RopeRoads and last but not least, Tebalux. The total turnover of the company in the last year of operation, 2023, was approximately 1.8 billion Swedish kronor, but in pieces of 240 million, which is a percentage of 13.2%. In these figures, Tebalux was with only approximately one month. If we had had Tebalux for the entire year 2023, the revenue would have increased to 2,180,000,000 SEK and a share of almost 320,000,000 SEK. If we look at the distribution of sales during quarter two, then we have Europa Roads, the largest segment with 51% of the revenue, followed by Tebalux at 19%, Svedbergs at 18% and Macro Design at 8% and Kassu at 4%. We have started strong in 2024, both in terms of revenue and in terms of results. Our latest acquisition, Tebalux, performed well and in accordance with the plan. Roper Roads continues to perform well with a strong margin and a good result, even in our assessment of the declining British market. The reason for this development is a strong and unwavering focus on launching new products and product development, with continuous launches in combination with the organisators ability to develop the business with new revenues in new customer segments and with new products. Over the quarter, we have launched new products under the brand Roper Roads on the British and Irish market. We have had a decline in sales on the Swedish and Finnish markets, which we consider to be weaker than the rest of the markets in the Nordic countries. In addition to this, the project market has had a major drop, more than half, and this affects the Svedberg segment. MakroDesign performed better results compared to the previous year's quarter two and cash is in line with the previous year. We continue to work with improved efficiency, which, among other things, shows itself in an improved gross margin, while we continuously adjust our costs to the current current situation. Moreover, this contributes to BALUX, which is actually a higher margin. We continue to focus on working with sustainability for all of our businesses, and here it is a pleasure that BALUX has worked safely throughout the entire G&G report in scope 1, 2 and 3. All real estate companies have sustainable activities as an integrated part of the ongoing business in all areas. Our sales per segment and country in Q2 looks like the upper circle diagram, where the UK stands for 48%, Sweden for 19%, the Netherlands for 18%, Norway 5% and Denmark 4%, and Finland 2%. The other markets are 4%. Today, we have in and with the acquisition Avrop Rhoads and Tebalux have changed our geographical sales, where now Norden stands for 30% of the sales. The relevant segment has been commented on in previous pictures, but you can see the distribution on the different segments in the lower circle diagram. The sales distribution for the first six months looks basically like in Q2, but with some minor difference. It can be noted, however, that the Nordic region stands for the same share of sales, 30%, and in this, the Svedberg segment has had a more responsible development, especially in quarter two. If we then move on to the respective segments, we start with Svedbergs. Svedbergs experiences a weaker demand in all sales channels compared to the previous year's quarter two. It gives a turnover in the quarter of 102 million against 128 million in the previous year, which is an index of 80. As a result, Svedbergsen reaches a share of approximately 1 million against the previous year 10.4 in the quarter. And the distribution of the sales unit cycle diagram shows that Sweden is the largest market, followed by Finland. And it is on the Swedish and Finnish markets that we have lower sales. The higher interest rate has affected purchasing power to a higher degree on these markets compared to others. In addition, Svedbergs has been negatively affected by the lower development of new buildings. We have not been able to fully compensate for this, but during the quarter we have made additional cost savings in Svedbergs. Market Design has had a sales in the quarter in line with previous years. Sales during the quarter has risen to 43 million, but is divided by 4 million. Now we can compare it to a part of the previous year of 3 million in Q2 2023. So there, MakroDesign therefore strengthens its revenue margin to 9.3%. And MakroDesign then sells on the Swedish and Norwegian markets, where Sweden is the largest with 64%. MakroDesign now has a well-functioning assembly of bathroom furniture, since you import it from the supplier, and has thus strengthened its margin and at the same time the possibility to increase customer efficiency through consolidated delivery. In addition, this has made it possible to shorten delivery times on parts of the assortment, and this delivery can now take place within 24 to 72 hours, depending on the availability of freight options for customers. Kasse has managed to achieve high efficiency, over 20% per piece, despite the market situation we have, and this is in line with previous years at this continued high level. The sales have risen to 25 million, which is 3 million higher than the previous year, and they only delivered pieces at 5 million. It is very satisfying that the stock exchange continues to deliver results at this high level. Denmark is the largest market that stands for almost the majority of sales with 89% of total sales. RopeRoads is developing in a very positive way. In the quarter, sales increased to 285 million, which is an index of 109. An EBITDA of 49 million, which is approximately 10 million better than last year, and an EBITDA of 17.2%. Our assessment is that we take market share on the British market. This means that we care for our customer relations and we continue to develop our software together with successful sales initiatives. Storbritannia is the largest market, 95%, and the remaining part of the sales is on the Irish market. It is a pleasure to see how we succeed in developing the operations of EuropeRoads together with the team there, and that we improve the solution to this level. Tebalux, which is our latest acquisition, which came in at the end of November last year, where we have explained the differences in comparison. Tebalux is a well-established company with its own design, development and production of bathroom furniture on the Dutch market, but also some exports to the nearby geographies. Through Tebalux, we have added two strong brands, PrimaVard and Tebalux, which have entered our consultancy. In the quarter, the sales go up to 107 million and we deliver in bits for 28 million, which gives a bit percentage of 26.2%, which is very good. We have a higher demand than we have capacity for, so we have decided to invest to increase capacity in the factory in Biddinghalsen to meet this higher demand. We have now worked together for a while with the management and staff at Tebalux and it is going very well beyond expectations and we have had a lot of good cooperation in many areas and they have also made contact with other brand companies to get new ideas and knowledge exchanges. So we look forward to continuing to be a part of Tebalux's development. We will now turn to Ann-Sofie for a more detailed analysis of the figures.

Thank you. Just like in the previous quarter, we see a fine development in sales. The net turnover increased by about 23% to 562 million kronor compared to 456 million kronor in previous years. We see a growth that is acquired with about 23%, but we see a negative organic growth of almost 2%. The currency affects the sale positively with a corresponding about 2%. The acquisition of Tebalux and a profitable development for RopeRoads and Kasse affects the net turnover positively, while the above markets are a more mixed picture. The demand for large parts of the Nordic market has been still weak, which has affected Svebergs and Macro negatively. And just as Per Arne mentioned, this applies above all to Sweden and Finland. The net revenue for the first half of the year, in 2024, rose to 1,134,000,000 SEK compared to 2023 at 931,000,000 SEK. The acquisition of Tevalux has a positive effect on net revenue with about 23%, medan den organiska tillväxten är negativ på minus tre. Valutan påverkar, ackumulerat försäljningen positivt med två och en halv procent. Roperoads och Kasse har fortsatt under året visa motståndskraft trots svaga marknadsutsikter generellt sett. Utvecklingen på de nordiska marknaderna har varit utmanande, precis som tidigare, särskilt för Svedbergs som står för den största andelen av exponeringen mot nybyggnationer. Nästa bild visar försäljningsutvecklingen sedan kvartal 2 2020. Som vi nämnde i förra kvartalsrapporten så ser vi att kurvan för rullande 12 viker av uppåt mot en helhållsomsättning på över 2 miljarder kronor. Som tidigare nämnt har förvärvet av Tevalux, valutan och den starka utvecklingen för RopeRoads och Kasse påverkat försäljningen positivt. If we look at the gross profit in the quarter, it is still at a high and stable level. Compared to the same quarter last year, the gross profit margin increased by about 2%. In the 12th quarter, we are looking at a gross profit margin of up to 45%, which is an improvement compared to last quarter. We still have a good balance between pricing and costs for purchased materials. As a result of a strong gross profit margin and improved sales, increased EBITDA results by about 18 million kronor compared to previous years and was summed up to about 76 million kronor. This corresponds to an EBITDA margin of 13.5% compared to previous years of 12.6% and an increase in rolling numbers by another few points compared to the rolling 12 previous quarter. Bruttoresultatet för första halvåret 2024 uppgick till cirka 504 miljoner kronor att jämföra med samma period föregående år på cirka 390 miljoner kronor. Bruttomarginalen ligger fortsatt på en hög och stabil nivå och förbättrades mot föregående år med 2,6 procentenheter. En stark bruttomarginal i Tebalux, RobRoads och Kasse påverkar resultatet positivt And in addition to this, implemented price adjustments, lower material costs and good control, given that our operational costs have had a good effect. The EBITDA result went up to about 159 kronor in the first half of the year and thus increased by about 38 million kronor compared to the previous year. Just like the quarter, the EBITDA result is positively affected by increased sales, a sharp growth margin and good cost control. During the quarter, the cash flow rose to 112 million kronor compared to the previous year at 100 million kronor. The improvement compared to the same period in the previous year is mainly due to the fact that our retail companies are actively working to optimize stock levels, map customers' payment patterns and seek the best possible payment conditions in relation to our suppliers. For half a year, the free cash flow went up to 53 million kronor compared to 2023 at 89 million kronor. The amount accumulated is still lower compared to previous years, when payments and customer bonuses in the first quarter threw down the free cash flow. This year's investments summed up to about 47 million kronor compared to 14 million kronor previous years. And of the 47 million, about 30 million is available for the new woodworking line in Dalsdorf. And in general, the investments are mainly available for production equipment and product development. If we then look at the balance sheet and the solidity, it rose to about 48% compared to about 43% in the same period last year. Den positiva utvecklingen är främst härförbart till förstärkt eget kapital i samband med företrädesemissionen i början av kvartalet. Avkastning på sysselsatt kapital uppgick till drygt 14%, vilket är nivå med föregående år, och avkastning på eget kapital var något lägre jämfört med föregående år och summerade upp till 11,3%. Resultatet efter skatt has dropped somewhat compared to the same period prior to the year, mainly due to increased costs for interest and higher taxes in the United Kingdom and the Netherlands. What does the financial situation look like? The debt has decreased since the change. In connection with the performance emission, a part of the company's debt was regulated. Nettoskulden per den 30 juni 2024 uppgick till cirka 767 miljoner kronor, att jämföra med föregående år på cirka 639 miljoner kronor. Ökningen är ju då främst härförbar till förvärvet av Tebalux. Nettoskulden inkluderar bedömd tilläggsköpeskillning för RoboRoads och Tebalux på cirka 196 miljoner kronor, att jämföra med samma period föregående år på cirka 172 miljoner kronor. The net debt in relation to EBITDA increases at the end of the quarter to 2.3, which is the same level as the previous year. And the requirement that is formulated by the bank, that is, our components, is 3.5. And finally, we see the development of net debt over time.

Thank you, Ann-Sofie. If we then look a little forward and sum up the first half of October 2, then we start 2024 with a strong first half and we look forward to the rest of 2024. And to handle this in the best possible way, we work continuously to strengthen our market position by proactively focusing on product innovation and proactive sales in the best possible way. We will drive even more engaged efficiency and increased capacity in the supply chain. And our focus and work with sustainability continues with great engagement throughout the company. Tebaluk, as I mentioned earlier, is now in this work and contributes with its knowledge as well as taking part in the knowledge and competence that we have already built up. And we continue our work with finding potential companies to acquire that fit well into our company and our business model. Vi har kommit fram till frågestunden och för att delta i den här så följer ni länken i pressreleasen från 9 juli så ser vi fram emot frågor. Tack för att ni tog tid att lyssna.

In. Vi börjar med de redan insända frågorna.

Du har några där Ann-Sofie.

Ja, då har vi ju fått frågor från Marcus Ramström. Då lyder frågan så här. Finansnettot var i Q2 minus 18,3 miljoner kronor. Hur mycket av detta var rena ränteutgifter? Och i Q2 så var räntekostnaderna minus 14 miljoner ungefär. Har ni en uppfattning av hur finansnettet kommer att bli på helåret 2024? Vi ger inga prognoser, men det vi kan säga är att det beror också såklart på hur valutan går utöver räntekostnaderna. Och sen så om vi kan nämna något om Svedbergs snittränta på lånen i dagsläget. Ja, den är ju också ganska svår att svara på rakt av, men kan väl säga att det är ju runt 5-6 %. Nästa fråga. I Q2-rapporten har majoriteten av tilläggsköpeskillningarna flyttats från långsiktiga till kortsiktiga och posten uppgår till 173,6 miljoner kronor. När ska dessa betalas? Utbetalningar av dessa ska ske i Q1 2025. Nästa fråga är summan av tilläggsköpeskillningen verkar också ha ökat från 190 miljoner kronor till 196 miljoner kronor. Är det en valutaeffekt? Ja, det är en del som är valuta och en annan som är ränteeffekt. Sen har vi ju då också en fråga som då avser poster av engångskaraktär. Om det finns något sådant som har påverkat Q2-utfallet? Egentligen inte, men vi har ju något högre kostnader som är härförbara till förvärvet av Tebalux och integrationen av den samma. Nästa fråga här då, då är det försäljningen inom varumärket Svedbergs att det föll minus 21% trots svagt jämförelsekvartal där försäljningen föll minus 19%. Ser ni några tecken på att marknaden har bottnat ur? Då skulle vi vilja säga att marknadsförutsättningarna på den svenska och den finska marknaden, de är ju fortfarande utmanande. Det känns som att ha avstannat, men det är ju jättesvårt att säga om. Jag vet inte om du har någonting att tillägga där, Per-Arne?

Den är ju svår. Sen ser man ju att nu kommer ju rotdelen, eller det förstärkta rotbidraget, på svenska marknaden. Man har ju förväntat om ett lägre ränteläge, och det är klart, det är allt sammantaget, så borde det ju i alla fall ge mer positiva delar. Sen när den då kommer in och påverkar ju alltid den frågan, In general, it feels like it has become a little longer before it turns upwards. You can see that somewhere we are close to the bottom in this situation. Then we can also move on to the next question that has come in from Benjamin Wahlstedt at ABG. Do you want to appreciate both Tepalux's organic growth and the market's growth in the quarter? Our assessment there is that the organic growth is somewhere around 7-8%. And if we look at the Dutch market, which is the market where Tebalux works in the largest extent, then our assessment and what we get from different sources is a bit difficult to assess, while somewhere the market is down 12-15%, so we do it well in that geography, we can simply say. And then in the video you talk about investments in the Netherlands to meet a strong demand and then they have come to an approximate timing and size for these investments. We already have some parts in the one factory then as I mentioned the bidding house is We will continue with some parts and the size of this somewhere 15-20 million when we are finished. But this is to meet the demand that exists and above all to increase the capacity so that we can reduce delivery time to get a better customer benefit. What is it that drives Svedbergs softer turnover growth compared to Mako Design and Kasse? Is it the difference in project exposure that is the difference? The project market is a large part of this. It affects the Swedenberg segment to a large extent. And it is then on all geographies, one can say, but above all on the Swedish and Finnish markets. So there we see that it is that that has taken. Then you can see in Svedberg we also have then, it always takes a little time before you have full capacity and full operation of the machine line we have. So of course there we also have some costs that we calculate quite simply that they will go down to a significantly lower level in that difference. So you can probably answer that question with those parts. Then we have a question. from Elias Andhult, regarding the financial network. Why is it so much higher than the previous quarter? And then I wonder if you have brought in Q2 costs for cost savings. And I'll hand it over to you, Ann-Sofie, to answer that.

Yes, absolutely. When it comes to the financial network in Q2 and compared to Q1 2024, we had a positive currency effect in Q1 and in Q2 we had a negative effect. It has turned on the currency market in the first half of the year and it may control the picture when you look at the comparison between quarters. Och sen när det gäller just om vi har tagit några kostnader i Q2 för kostnadsbesparingar som genomförs, nej, alltså egentligen inte, av mindre karaktär, men inte som något som sticker ut.

Då lämnar vi över ordet fritt. Finns det några frågor från er som har loggat in på frågestunden?

Jag kanske kan börja om inte någon annan har någon fråga.

Du är välkommen.

Mårna. Exakt, Mårna från Odea här. Och först och främst tack för er presentation, Per-Arne och Ann-Sofie. Och grattis till ett väldigt bra kvartal här, trots det rådande marknadsläget, om man nu ska säga så. Och jag har två frågor från min del. Först tänkte jag kolla, om man ser till Sverberg så har ni haft något påstående i kvartalet, givet den här inkörningen av ny utrustning relaterat till den nya linan nere i Dalstorp. Skulle ni kunna nämna några ord kring hur ni ser att den utvecklingen kommer ske framöver, just den här typen av kostnadspost som vi har sett nu här i Q2?

This is due to the fact that there is outsourced materials since we could not run them internally. Of course, we have had a higher material share. The COGS has been affected in that part. And then of course we have a part in that we have not exploited the personnel capacity in the right way, but have had a lot of costs. We see that this is always a part of these things, it is quite normal in this case. Den här kommer ju alltså bli betydligt effektivare än vad den var från början. Men klart vi har haft en del kostnader. Så de här kommer ju försvinna i Q3, Q4. Tack så mycket.

Och sen så läste jag även att ni har beslutat om ytterligare personalneddragningar. När kan vi förvänta oss en effekt av det och är de endast relaterade till Sverbergs varumärket?

Related to the Svedbergs brand. On the collective side, we have a permitting with 20% from the beginning of August, the 56th. We will get that in Q3. 5-6 employees who are hired and it is when their employment time runs out and it is as long as I think 3 months. In that case, of course, someone will have an effect in Q3, otherwise they will come in Q4.

Great, thank you very much. I think that was all from me.

Thank you. Any further questions?

Hoppas det fungerar så att alla kan komma till tals, annars får ni skriva någonstans i chatten om det skulle vara något problem. Om det inte finns några ytterligare frågor så får jag tacka för ert deltagande och önska er alla en trevlig sommar. Tack så mycket.