Svedbergs i Dalstorp AB (publ)

Hello and welcome to the morning webcast with Svedbergs Group, which will present its report for the first quarter of 2025. After the presentation, a Q&A will be held. If you have joined the meeting and want to ask a question, if you think Svendrik will respond, you will get the word when it's your turn. It is also possible to send questions in the form to the right. With that said, I leave the word to you.

Good morning, we will present me, Per-Arne Andersson, CEO and CEO of Svendbergs Group. Before we start the report for the first quarter, I would like to mention a few words about Svendbergs Group for those who do not know us. We are a company that long-term acquires and develops strong consumer goods companies in Europe. Our company designers, developers and sellers produce products for BADRUM. In some cases, we also produce these products in our own production units. We are currently active in the Nordic, British and Dutch markets. Our strategy is to grow organically and through acquisition of successful, well-off companies that complete our business. This can be through geographical, product-wise and broadening skills. We actively drive these companies by being present, supporting and contributing to the development of the companies on their growth journey. Our plan is to contribute to consolidating Europe's market for BADRUMs furniture and shower solutions. In this biography, we see the possibility of developing our concern for an even better group of strong and decentralized consumer goods companies. We are carefully developing a synergy through collaboration without any confusion. Looking at our history, we have a long tradition in the BADRUM furniture industry that began in 1962 with the launch of the first BADRUM furniture. We are on the journey to lead in a European context. We have acquired a number of companies in recent years. It started in 2016 with MACKEN DESIGN in Sweden, followed by CASSE in Denmark in 2020, the year after 2021, acquired Rope Roads in England, and became twice as big at the time, and the last in 2023 to Balux in the Netherlands. We have taken great strides towards our goal in recent years, partly through these acquisitions and partly through the development of the company organically after the acquisition. We reached a milestone in 2024, passing two billion in turnover, and we are taking further steps towards our financial goal of growth of over 10% annually and, moreover, over 15% in a bit. In the last seven years, we have had a growth of about 23%. Part of our goal is to continually develop the companies we have and those we acquire. We have developed a business model that we call Corporation without Confusion, or in Swedish, collaboration without confusion, where we actively participate, contribute to the development of skills, knowledge sharing through collaboration, through purchase, digitalization, leadership and sustainability, to strengthen customer relations and strengthen our brand companies, and thereby increase the shareholder value. It is a balanced collaboration to ensure that we can make the most of the opportunities through the group to achieve faster and more effective results. If we look at Q1, it is a very strong quarter with growth and good sales, despite the market. It is our strongest quarter in terms of margin since we started our world tour in 2016. We have strong development in England and the Netherlands, where Upper Roads continues to perform very well, and our latest acquisition, Balux in the Netherlands, also performs well and follows the plan we have laid. The Svedberg segment has grown and has a better result compared to the previous quarter. Our plan is that we will reach a bit over 10% in Q4 for the Svedberg segment. Kasse develops well with good results, and Macro Design has a strong development in the quarter and has achieved a good result. This is an effect of effectiveness in the business and a focused sales target. A large part of the explanation for the progress in all our segments is a strong focus on product development, but continuous product launch in combination with a strong and competent sales organization, which develops existing customer sales and has had progress with new customer sales. We can also see that we, through our business model, have managed to improve the collaboration with suppliers through collaboration without coalescence. Our assessment is that we have built out on the Swedish and Finnish markets and that we have a good foundation to stand in for the future. If we look at sales per segment and country in Q1 and in the upper circle diagram, where the UK stands for 49%, Sweden 19%, the Netherlands 18% and Norway and Denmark for 4%, we already have 4% of the market and Finland for 2%. We have, in the case of the Oproos and Tebalux, changed our geographical sales, where the Nordic is now at almost 30% of the sales. The segment is the largest with 51% followed by Tebalux, Sweden 18%, Macro 8% and then Kasse at 4%. We have a strong sales in Oproos, Tebalux and Macro Design, and we also see that we have more product market and more geography from balancing that contributes to stability. If we go over the segment, Svedberg has a weaker demand, especially in the project side compared to the previous year's Q1. It has been through in the quarter of 108 million against 113 previous years, an index of 95. Result-wise, Svedberg has changed to just under 8 million, and that is in line with the previous year's Q1. We continue to work on efficiencies and as we see, we have an effect. Our goal is to work with sales, we see the results and our assessment is that we have planned out at a level from which we can develop the business. What Svedberg has negatively affected is the lower development of the new buildings that has not yet come back fully. Macro Design has had a sales in the quarter compared to the previous year, which is a good result in terms of market conditions. The sales in the quarter have gone up to 44 million, but in pieces of 6 compared to the previous year, the pieces have gone up to 4 million, which is very happy. This means that they have strengthened their pieces to 14% of their pieces. One benefit of this is that they have a well-functioning and effective business that works successfully within sales. Looking at our Danish companies, Kasse, they continue to perform high-efficiency and in the quarter they are over 20%, despite the market conditions, and this is better than the previous year. Sales have gone up to 23 million, which is in line with the previous year, and in pieces in the quarter have gone up to 5 million. Kasse has launched a lighting in the quarter in the kitchen and bathroom, which is a new product segment for the company. Looking at England and Rose, as I mentioned earlier, they have developed in a positive way in a weak British market. In the quarter sales have gone up to 306 million, with a profit of 106 million, with a piece of 6 million in the previous year, and a piece of 18%. We have good sales in the British market, and our assessment is that we continue to take market shares. We have paid a profit difference to the sales in the quarter, which is pleasing, and that means that we have exceeded the goal. We have set up the result, which is very positive. This is a good supply that we have managed to develop in a very positive way, and it is the same as with the organization, and we have then developed certain synergies. Coming to Holland and Tebalux, as our latest sales, 2023 will come, and sales in the quarter will go up to 115 million compared to the previous year's quarter 105 million, and it is in pieces at 30 million or 26.1. We are increasing the turnover and the result, and we have continued to have high demand on the market for Tebalux products. We are working hard to build up the capacity in the Färskäl and Biddinghamsen, where we are now in the production line in Biddinghamsen, and we are starting to get back to normal delivery times. The Färskäl will come to the installations and will be built during the summer. We have had a very good collaboration with the management within many areas, and they have also created a relationship with other commodity companies to get ideas and thoughts for knowledge exchange to develop even more. With this increased capacity, we see positive on Tebalux in the concern. Looking at our sustainability work, it is the joy that our climate goal for Net Zero is officially approved by ScienceBase Targets. This approved underlines our strong commitment to reduce greenhouse gas emissions to achieve Net Zero by 2050. Approved by our scientific target, it marks an important milestone in our concern's sustainability journey. We have implemented reporting of ESRS data, and this is a step towards compliance or CSRD reporting in the future. With that, I leave it up to Alsofif for a little more details and numbers. Thank you

very much. If we start with sales and growth, during the first quarter of the year, net sales increased by .3% to 596 million kronor, compared to 572 million kronor the previous year. We see a positive organic growth of 3.5%. The value affects sales positively with .8% in the quarter. In principle, all segments make up a good quarter, where we see an organic growth for macro, cash, RopeRoads and Tebalux. Svedbergs continues to be affected by low volumes, mainly in the Swedish and Danish markets. And just as Karana mentioned, we see a continued strong development in England and the Netherlands, where RopeRoads and Tebalux perform well in sales. But also macro in the Swedish and Norwegian markets and cash in the Danish markets contributes to the increase in sales in a nice way. In the next picture, we show the sales development over time, where we have increased the net sales every quarter since 2020, with a number of growths in 2023, when Sweden and other Europe entered the growth category. Trends show that in the spring, the rolling number of net sales at a gross 2.2 billion kronor per year, we are still in an uncertain market, even if some indicators point to a recovery in the second half of 2025. The next picture shows that our gross margin increases in the quarter to about 46% and remains at a high and stable level. All segments have strengthened their gross margin compared to the same quarter last year, which we see again the effect of lower material costs, better efficiency in our producing companies and the implementation of price adjustments. If we look at the EBITDA margin specifically, it will increase to .7% in the first quarter, which is a result of the strong gross margin, together with good cost control, when it comes to good operational costs. The EBITDA result in the first quarter was summed up to 94 million kronor, which is 10 million kronor better compared to the same quarter last year. If we look at the cash flow and our balance, the cash flow for the running business, as well as the free cash flow, was improved in the first quarter compared to the same quarter last year, where the free cash flow rose to 51 million kronor, compared to last year at minus 58 million kronor. The cash flow from the running business and better management of our moving capital has had a positive effect on the cash flow during the quarter. The investment in the quarter increased to about 6 million kronor compared to 40 million kronor the same quarter last year. In the previous year, the investment of the edge processing line was stopped, which included a balance of about 30 million kronor, which was financed through loans. The rest of the investment is mainly related to product development, production equipment and IT. The solidity remains at a stable level, with an increase of 51% compared to about 49% the same quarter last year. The capital waste is .1% and we see a positive development since 2021. It shows that we use our capital effectively year after year to generate profit. The waste of our own capital is at the same level as the same quarter last year, but is slightly lower compared to the previous balance in 2024, and is summed up to 11.4%. The result after tax in relation to our own capital is slightly lower compared to the previous year, which is a result of slightly higher financial costs in the quarter and a higher tax level. If we look at the financial situation, we see that the debt has decreased. In the end of the quarter, the net debt was spent to 629 million kronor, compared to the previous year at 855 million kronor. Of a total of 629 million kronor, about 23 million kronor is the additional purchase difference for Tebalux. During the quarter, the additional purchase difference of 185 million kronor is the amount of the purchase of RopeRoads. The net debt in relation to EBITDA increases by .6% compared to .7% last year. The net debt is still at a stable level over time. In relation to our assets, the net debt has increased, but in time with the assets, the company consolidates in our business and our results are thus strengthened and the net debt decreases and our financial situation is strengthened. I leave over to Per-An again.

Thank you, Anne-Sophie. If we sum up the first quarter, we have an organic growth of 3.5%, which is the result of a good methodical distribution of all companies. We have historically delivered good results of .7% in EBITDA marginals. And the whole segment makes an improvement compared to the previous quarter, and I think that is very positive and happy in these market conditions. We have very good employees, well motivated, who do a fantastic job every day. At the same time, we have a robust business model with high degree of decentralization and decision-making, while we also draw on each other's competence and knowledge, and it effectively gives more. We have a great focus on sustainability, that it should be integrated into everything we do. We actively work with M&A and meet potential companies to expand our business with new companies that fit into our business model, something in new geographies or product categories. With that, I would like to thank you for listening and leave over to you, Ludvig.

Thank you so much for the presentation here, and now we will move on to Q&A. But first, Per and Anselmi will answer questions that have been sent beforehand before we let in the questioner.

Yes, then I can start here and start with a question from Markus Ramström. The question is, it moves the financial network, and in the quarter it went up to minus 18.6 million SEK. Markus wants an explanation and quantifies the effects of the difference in the currency. The negative difference in the currency was about SEK 7 million. The difference in the currency can be positive or negative, and then they change over time. For our part, it is dependent on the current situation in the pound against the Swedish crown and Euro against the Swedish crown. The interest rate difference is a sign of a expected future interest rate. When it comes to the first quarter of 2025, it has been negative, and then it has affected our financial costs with SEK 7 million. Then Markus asks how much interest the net worth was in the quarter, and then it was SEK 10 million. Then Markus wants an estimate of what the interest rate can be estimated in 2025, and as I said earlier, we do not give any predictions. In the rest, we have not received any more questions.

Thank you so much for that. We will now move on to the questioner who has called in and connected. If you want to ask a question, you press react and raise your hand or send a point in the chat. The first questioner we will let in is Benjamin. Here you go, you have the

word. Thank you so much. It was good that you reminded me of how to raise your hand in Zoom. First, I thought that the macro design provides a very strong margin, 4% is better year over year. I thought you could give a little more color on that. Is it an sustainable level from here or is there any big order or something that is disturbing in that number? No,

it is a sustainable level given the volumes we get in. This has been done a good job with cost effectiveness, order and management, continuously and at the same time to strengthen the market position with both price adjustments, adjustments of purchase prices, so there are many parts. So what we are waiting for is to get a little better sales on top line, so it can get even better.

Great, thank you very much. Then I have another question, this is more of a clarifying question. You write in the report that you take certain costs in connection with the VD exchange in Swedbergs brand at 2.5 million, but just to clarify that, that is not something you adjust for in the reported exchange at 94 million?

No, you should read it as if the costs are taken in the result presented.

Yes, that's good. Then I wonder two things about Swedbergs brand and evaluate. The first, what signals do you get from customers in Swedbergs brand specifically in the project of the business?

From the market situation, you mean?

Yes, exactly.

What we see is that there are activities in progress. Then it is so that it creates an uncertainty in the long run with what is happening in the environment and of course there will be some dilution in the decision-making, but there are things in progress and certain parts are set in motion. I have had the question a few times about bottom and north, bottom and north and it points a little upwards, then when it comes to full effect, will there be a dilution with what is happening now or will it be so? And how long will it be in that case? But it looks more positive than a quarter or a half year ago.

Okay, better outlook in the project. That sounds positive. Another question on Swedbergs, what are the most important drivers against 10% margin in the Swedbergs brand in Q4? Is it mainly the demand on OPEX or how?

Yes, partly because we have a good order of efficiency and work in the right way. And then it is that we get some help from Topline, a little on the margin issue as well. And that is in our plan, it is not easy to arrange, but that is where we have to go back. And we believe in that.

One last question, then I will let you in. You write that a weak dollar has a positive effect on the margin. Do you want to develop that? Maybe put some numbers on it? And then, are there mainly changes in the dollar pound, so to speak, you refer to here through RopeRoads or is it the whole group?

I can answer a little short when it comes to the quantification, we don't give any numbers there, but it is primarily the pound in relation to the

dollar. Top?

Yes.

Thank you very much, I leave it to you.

Thank you very much for the questions, then we go on and leave the floor to Adrian Elmlund.

Yes, hello to you, can you hear me?

Yes, yes, loud and clear. Top,

top, good morning, I have a couple of questions. First, did you see any kind of volume growth or demand after the government announced these increased root contracts, have you seen any effect on that at all?

Nothing that we can see in the current situation, but we don't see it. And with what I have said, it is not negative, it is difficult, so I think it will come to the marginals, it will be more positive for us, but then how much is it, that is a question. There is a general uncertainty in general, which I think affects the decision-making too, but of course there is some help, but I don't think you should count a huge part of it.

And then in terms of growth, can you mention something about how the second quarter has started, do you see some similar trends as Q1, or if you can answer that, where in Q1 did the growth come from, was it front-load heavy in January or did it end positively in March, can you give a call on that? I

can say that it is going well, but I can say that it is a bit difficult to say how it works, we have very short order logs, and that means that we follow very well what is happening on the market, and of course there is some news every morning, and of course that affects decision-making. But of course, the companies, all of them, are doing better than last year, so it has gone well, and we read the CPA report, Construction Product Association in the UK came out with a report, and it is some growth in 2025 and some strong in 2026. I think we see that it is towards the end of 2025, Q3, Q4, that is when you see that it will perhaps take off, but as I said, we live in an uncertain environment that is changing a bit from day to day, and we will navigate that in our task.

And if you can talk a little about how much we can extrapolate the marginals, given that nothing special happens during the year, can we expect -for-like improvements that we have seen in Q1 in the coming quarter?

Do you think about the result marginals? That is the marginals. We have a financial goal of 15% and we strive to get over it, and then we are just as you see in Tammal Macro as an example, if we increase the turnover by 10% then it will be a very good effect in the last round, so we are volume dependent in all segments.

And if we look at the marginals you have there, how many quarters a day can you be above the marginals before you increase the goal in sight? What do you think about a goal? We

have said that it should be above the marginals, 15%, so we should be above it and then I think it should be at a stable level. And then we have acquired good companies and managed to develop them to a high and good loneliness, and it may be that we acquire a company that is very good, but we do not have it at these high levels, like T-Balux, which was at 25%, and then you should balance that goal in that case, in that context, so we have to weigh in if we are going to change our goals in that case, but we should make sure that we are stabilized on this one in a stable way.

And now that the net debt has come down a bit, do you dare to get a timeline on whether we will grow in the future, can we expect anything during the coming year or how do you see that?

I am the one who decided on the simple question, it is a good opportunity to think about this, that we want to buy good companies, we want to get the entrepreneurs and companies with us on the journey, so that they stay and we have continuous dialogues all the time with interesting companies and I have no stress in that regard, we are going to land well with the opponents, but we are very active in that case, and then I can not just break on me, it would have been quite easy, but the opponent should also be aware of their decision.

I understand, great, thank you very much, have a good day. Thank

you. Thank you so much for the questions there, and just to repeat, if you want to ask a question, you press on react to reach out, or you can send a point in the chat so that you can get the word. There is nothing that is enough now, but we give a few seconds so that people have time to reach out if they want to ask a question. Thank you. Thank you for the questions, and have a nice day tomorrow.