Troax Group AB (publ)

Hi everyone and welcome to the second quarter interim report for the Trowax group. My name is Martin Nyström and I'm president and CEO of the group and together with me I'll have Anders Jeklöf and together we will present the second quarter results and after the presentation we'll open up for a Q&A. So without further ado let's dive into some news and of course the quarter.

Here we go.

So the second quarter offered a very interesting macro environment, and in total we reported a minus 6% order intake growth. Europe continued pretty slowly as well as Americas, while APAC was more stable in the first quarter. If we look to North Europe, we continue to develop weekly driven by the automotive as well as the warehousing segments. Southern Europe grew in the quarter and we saw this being driven by general industry as well as the process segment. We had a good run in Americas in the first quarter, but we saw from the beginning of April that our customers have become a bit more hesitant during the quarter when figuring out and analyzing what the potential tariffs and so forth would mean. And I'll come back to this in the next slide. APAC had a very strong quarter in the first quarter, as you know, so very strong start of the year. In the second quarter, we were more flattish when we report in euros. If we look into local currencies, we also have a small single digit growth also in the APAC region. Moving over to the profitability, we came in at 14.4 EBITDA margin in the quarter, mainly driven by lower volumes in Europe, but also due to FX effects. We had a solid gross margin in line with our informal target of around 40%. We initiated a cost reduction program to get to a sustainably better place. And I'll have a slide in a few slides from here going into what that entails. And last but not least, we also had FX headwind and FX losses, which impacted the result by roughly 70 bps. Our working capital continued to work disciplinely with this, and we kept, I think, our cash flow on a reasonable level, as well as with a stable net debt. And I do think that discipline on inventory management in terms of accounts receivable, as well as accounts payable were all in good shape in the quarter and continue to be so. Which means that our balance sheet with the net debt to EBITDA of 1.1 means that we have room for further both acquisitions as well as organic investments where we think that's appropriate. During the quarter we've also made progress on some of our strategic priorities and I've decided to highlight what we have now decided to do in Europe and that comes very much back to simplifying our supply chain as well as simplifying our racking portfolio. If I then move over to I think the big news in the quarter we towards the end of June we we're released that we are taking action on our cost side and optimizing our organization a bit. And this pretty much entails three things or contains three things. During the second quarter, we have had to say goodbye to roughly 100 employees. And this is, you could say, an adjustment based on the fact that we have lower volumes, mainly in Europe as well as in the US. We have areas where we've seen SDNA efficiency potential, and of course, we've also taken our strategic priorities into account. So, based on the first part of this cost reduction program, we will see a run rate saving of roughly 5 million euros a year, which will then come into effect in the third quarter this year. The second part of the program is to streamline the manufacturing footprint in Europe. And here we think that and see that we will have plenty of benefits by moving the warehousing products and the racking products. So we will move those from Poland and move those to existing facilities in Sweden. This also means that we can manage the racking portfolio, so shelves, dividers, anti-collapse systems, in a better and more effective way. This also means that our factory in Poland will be closed, and as an impact of this, we will have additional 125 employees being affected in Poland. This will also mean that we will have a few new recruitments in Sweden. The run rate savings from the second stream of this is roughly €5 million a year, and we aim to have our Polish facility closed and have the move done by the end of this year, which means that the run rate savings will come into effect in the first quarter of 2026. So, in total, we have €10 million a year of full run rate savings coming from these two. and in the second quarter we have then booked and as reported as one offs in the second quarter we have restructuring costs including severance pay but also moving costs and some asset write downs which amount to 6 million euros the third part of optimizing our supply chain comes back to what we disclosed a few quarters back which is our investment into the north american manufacturing And we've decided to build a new factory in Tennessee. And this will do both because we need higher capacity due to the growth we have had and will have. But also we see that there is a gap in efficiency where our American operations are not as effective and as efficient as we are as we're running in Europe, which means that we have both the ability to produce more, but also to higher efficiency. And I think we're doing really good progress here according to the plan, and we will ramp up during the beginning and mid of 2026. This will also add additional savings on top of the first and the second stream of this program. But we're not yet in a position where we want or could quantify what that means in terms of money. I would also like to welcome you to our, in fact, first capital markets day. So this is more of a heads up or an early welcoming. So on the 5th of November, we will have a capital markets day in Hillestorp, where we will talk about our future vision, our business and future ambitions. You'll get the chance to hear presentations, meet a few of the group Management members will walk you through our factory and of course we'll hopefully have a lot of good discussion and dialogue throughout the day. So there will be more information and invitations coming out after the summer period during Q3. And there will of course as always be more information available at our homepage. So then let's dive a little bit more into the market and what we are seeing. And I'd say if we start with the lens through how we view the world, we are looking at this through the lens of geography as well as end market segments. So if we start with Northern Europe, we were down in total by 13% ordering take change year on year. This decline is driven by automotive, but mainly from warehousing. I'd say this, though, that we have had a general demand in Northern Europe that has been somewhat muted. And I would say, and we could already in Q2 see that there is some more light at the end of the tunnel. And I'd say that goes for general industry where we've seen growth in the quarter as well as in process. And from process, I'm very happy to see that we have a green arrow because it's also one of our strategic growth priorities where we can gain share also in this very tough market. Moving over to southern Europe which was down or which was up five percent also here automotive declined a bit as well as warehousing but also here we saw good growth coming from the process as well as the other segment so all in all we are in fact up a bit more than five percent so from that point of view I'm pretty pleased with the development in the quarter. Then moving over to Americas, where we were down 14%, and here we clearly see a shift in how the market and the market temperature has changed between quarter one and quarter two. Quarter one, we saw we were a bit more positive. Now, I think in the US, we see that customers are, generally speaking, a little bit more hesitant. A lot of our products come together with investments, and those investments, so machinery, equipment, robots, etc., are usually manufactured outside of the US, which means that they are also then very much impacted by whatever the tariff policy will be. So, I think from that point of view, it's probably not super strange we saw automotive continuing roughly on the same level warehousing on its way down where process and others were down respect and flat respectively but down all in all in Americas in APAC we reported flat when reporting in Euros if we continue or if we look at local currencies we were up roughly seven eight percent in local currency. So there is underlying growth in APAC, but due to currency, we're reporting flattish. Now, that being said, I do think that APAC, if we consider the full first half of the year, is up 40% year on year. So I still think that we have a good growth momentum in the APAC region. if we then look at this more from a product point of view I think we have a stable slightly growing machine guarding business in the quarter so a lot of this drop really comes from the racking products and the storage products which might be good to know and all in all we then reported a minus six including currency for the quarter so I'd say there are some lights at the end of the tunnel when it comes to general industry. And I'd also say that we now start to see more activity in the pre-sales on the warehousing side. So this is a segment which has been very, very slow and continue to be slowing too. But we do think that there is more activity, which then bodes well for the development towards the end of the year, as well as going into 2026. And with that, I'll hand over to Anders to run us through some numbers. So please, Anders, go ahead.