Systemair AB (publ)

Good morning everyone and very welcome to our presentation of our third quarter report for 2024-25. We intend to start up with a rather short summary of the third quarter in our 50th business year and then we will open up for questions at the end. Presentation you will find as usual then on our start page of our Investor Relations website. And by that I hand over to Roland to start off with the presentation. Thank you very much and good morning, ladies and gentlemen.

My name is Roland Kasper and I'm the CEO of Systemair. Let's directly go into slide number two, which is then the agenda. I'll start with a short brief summary of Systemair. Then we look, as Anders said, in the third quarter summary. We dive into some of the Q3 financials. And I'll conclude that with some sustainability highlights and some project highlights, followed by the Q&A. Let's go directly into system air in brief. As you know, ladies and gentlemen, we are operating based on our core values of simplicity and reliability. We manufacture and market energy-efficient, high-quality ventilation products. With our customers in focus, our emphasis is always on delivery reliability, availability, sustainability, and quality. As you know, the company was established in Skinskatteberg in 1974 by our chairman and founder, Mr. Gerhard Engström. In our last fiscal year, we achieved a total turnover of around 1.1 billion euros. And Systemera was listed on the Nasdaq Nordic Stock Exchange Market in October 2007. Today, we proudly operate our own sales companies in 51 countries, together with 26 factories in 18 countries, with more than 350,000 square meters of production area and a total book value of more than 1.3 billion Swedish kronors. With our about 6,600 employees in Systemera, we are present and sell to more than 135 countries around the world. Switching to next slide, slide number four. Let's look at some recent highlights in the quarter and starting with a strategic update for the third quarter. In the quarter, we had organic growth in all reported regions except Eastern Europe. In India, we have finalized the preparations in our new facilities in Hyderabad of total 19,000 square meters, where we will start production actually next week. In the quarter, we also finalized our machinery capacity investments in Canada and Italy, as well as some building projects in Norway and Germany. And we see ourselves now being really well prepared for further strengthened M&A activities. On the public affairs side, in March this year, we have prepared for the last six months, but now in March, we're participating on the ISH fair in Frankfurt in Germany. ISH is the leading international fair in the HVAC industry with more than 150,000 visitors coming. So we're looking forward to interact with our customers and partners here in two weeks. In December, we also concluded in System Air North America the full conversion to the new low-GVP refrigerants in our production, which is a little bit ahead of the local market, but according to our sustainability standards. And we are also participating on all the Eurovent Association meetings on the ISH, where Systemair is taking a leading part on trainings and educational parts on, for example, EDP, the European Declaration of the Product. And also in the quarter, we were awarded several strategic orders, retrofits in the UK, for example, that was a press release, infrastructure projects in Saudi, and package ventilation systems in Italy. I'll come back to that later on in the presentation. Next slide, slide number five. Let's have a look at our market in the quarter. As you know, we have a global and diversified customer base which provides us with a solid foundation for profitable growth. Looking at the different regions, starting with the Nordic region, which represents 17% of our total turnover in the quarter, same share as last year, same quarter. Western Europe has 43% share and is thereby compared to the same quarter last year in a slight decrease from 45 to 43%. Eastern Europe stable, 12% share, and North America staying 12% share in the current quarter. Other markets, which, as you know, incorporates North Africa, Turkey, Middle East, and Asia, is continuing its growth path and increases from 14% to 16% of our total sales in the quarter. By that, we continue with a closer look at the financial outcome in the third quarter, and I hand over to Anders. I'm shifting to slide number six now.

Thank you very much Roland. To start off with net sales that amounted to 3.042 billion compared to 2.827 billion last year. An increase of 7.6%. Organic growth was also positive with 5.4%. We conclude that we for the second quarter in a row are reporting organic growth with a positive ongoing trend in several of our markets. Slide number seven. To give a bit more details behind the net sales development, we saw organic growth in all regions except for Eastern Europe. We will provide more details about the regions on the next slide, but the growth was especially good in our faraway markets as North America, Middle East Asia, Australia, and Africa. The acquisition of FEM in Malaysia had a minor effect and contributed to sales by 0.6%. And then finally currency effects, smaller positive effect by 1.6% coming from several of our main currencies. Slide number eight. Then we come into the geographic breakdown, and I will focus on the organic growth rates for each region. Starting off with the Nordics, then where we saw a decline on the Norwegian market, but on the Danish, Finnish, and also to some extent the Swedish market increased during the quarter. All in all, positive organic growth in this region was in the current quarter of 7.1%. In Western Europe, we saw smaller growth in the quarter of 3.4%. Within the region, we experienced positive development in Italy, Switzerland, and the Netherlands. Unfortunately, the German market is still struggling, and the sales decreased in the quarter along with countries as France and Spain. are although happy to yet again see a positive organic growth in the region of the four quarters with a negative outcome in eastern europe the organic sales decline was minus 9.8 percent sales declined in poland slovenia and estonia while growing in czech slovakia and lithuania some of you might recall that we had an organic growth of 8.2 percent in our q2 report But that nice growth then was mainly due to some larger project deliveries in the region. In North America, the organic growth rate was 12.8%, which was related to a considerable growth in Canada. U.S. sales contracted slightly in the period. The Canadian growth relates mainly to our residential products. Certainly, the implementation of tariffs is creating a volatile market situation in this region. In Middle East, Asia, Australia, and Africa, we had a good growth of 15.2% organically. This growth was mainly driven by markets as India, Morocco, and Australia. All in all, the organic growth then was totaled to 5.4%. Slide number nine. Our gross margin in the quarter was again strong and amounted to 35.3% compared to 33.9% in the previous year. We're happy to see this development, especially when we noted that December 2024 was a month with less working days than the previous year. Overall, we can conclude that the positive trend in our gross margin continues. The positive effect is due to high utilization in several of our factories, but also the contribution from implemented cost reductions and efficiency measures in general. Our adjusted operating profit amounted to 213 million, or an operating profit margin of 7.0%, which is exactly in line with the previous year. Adjustments relates to the impairment of goodwill in our operations in South Africa of 11.8 million. In the previous year, you might recall that we had an adjustment of 125 million coming from the relocation of the Maneriga production to Slovenia. Selling and admin expenses in comparable units increased by 58.9 million, including a loss from bad debts of 4.8 million. Then we go to slide number 10. Profit after tax amounted to 135 million compared to minus 24 million last year. Big difference is mainly related to the adjustment just described. We had negative effects from net financials of minus 17.3 million compared to minus 62.3 last year, where currency effects on loans and bank balances amounted to minus 3.2 million, and the interest expenses amounted to minus 15.8 million. Interest expenses for previous year amounted to minus 20.8 million. Tax rate for the period. amounted to 26.8%, corresponding to 49.4 million SEK. And then we head into slide number 11. Cash flow for the quarter. Our working capital increased, leading to a decrease in the cash flow by 34.2 million, mainly due to decreased trade payables and increased inventory. Investments in the quarter was rather high at 151.7 million due to finalizing the machinery investments that has been ongoing in Canada, Italy, and Spain. This leads to a free cash flow of 54.6 million compared to 381.2 last year. The net debts are lower than last year and amounts to 981 million compared to 1,079,000,000 one year ago. And the net debt to EBITDA amounts to very low, 0.62. And we have plenty of headroom for strategic M&A and continued investments. And I hand over to you, Roland, again.