Vestum AB (publ)

Welcome to the Vestim Q1 2026 report presentation. During the questions and answer session, participants are able to ask questions by dialing star 5 on their telephone keypad. Now I will hand the conference over to the speakers. CEO Simon Gothberg, CFO Olaf Andersson, please go ahead.

Hello everyone and welcome to our presentation of Vestim's Q1 report for 2026. My name is Simon Gothberg, CEO of Vestum, and together with me also our CFO, Olof Andersson. Let's start with some highlights from the quarter. It's great to see that we continue to deliver growth in adjusted EBITDA cash flows and again with an increase in adjusted EBITDA margin. this time up from 8.7% to 11.7%. Cash flow was, as expected, solid with cash flow from operating activities of 79 million in comparison to 20 million last year. Two acquisitions were completed in the quarter, but since cash flows were strong, we still managed to reduce leverage as measured by financial net debt in relation to reported EBITDA to 3.2%. Now let's have a look at the segments, starting with the flow tech segments. We're seeing great development with high profit growth and increased margins. EBITDA grew by 59%, while the EBITDA margin increased from 18.1% to 23.9%, driven by both organic development and acquisitions. We generated double-digit organic profit growth in both the UK and Nordics in the quarter. We implemented several organic growth initiatives by end of last year that have emerged through increased collaboration between the companies, mainly in the UK. And we're now seeing the results of this, not least in our pump hire business, where we achieved all-time higher sales in both February and March. And we are beginning to see some positive impact from the new UK investment plan, AMP8. And as for M&A, we completed two add-on acquisitions in the UK during the quarter. And the M&A pipeline remains strong. And as with previous quarters, the market outlook for the segment remains very favorable. And we expect solid development going forward. Moving on to the niche product segment. As announced in the year-end report for 2025, we have divested a low margin business in this segment, meaning lower sales for Q1 compared to last year. This has had a positive impact, however, on profitability, leading to an increased EBITDA margin from 10.0% to 13.3%. And our focus continues to be on strengthening profitability and growing volumes in the segment. Lastly, let's have a look at the solution segment. As announced in the year-end report for 2025, we have carried out several divestments in Q4, 2025 and Q126. This has led to significantly lower volumes in the segment. And the decrease in profitability is driven by divestitures, the winter weather in Sweden in January and February, along with completion of low margin projects, one in 2025. And we have made several moves to improve profitability in the segment going forward, not least the divestitures and ongoing operational activities to organically improve margins. And we expect to see the positive effects of these activities gradually throughout 2026. Now over to Olof.

Thank you, Simon. Let's continue to have a look at the net sales and EBITDA development over the past couple of quarters and We'll begin with the chart on the left showing net sales, where we saw a decrease compared to the same period last year, driven by divestments in the solutions segment. However, this decrease was to some extent offset by the acquisitions of Nortec and DFS. Moving on to the chart in the middle showing adjusted EBITDA development, we see an increase driven by the flow technology and niche products segment, as Simon commented on previously. And finally, in the chart to the right, the EBITDA margin also decreased compared to the same period last year, again driven by the flow technology and niche product segments. We move on to the net sales development. And in total, net sales in the first quarter decreased by 8% compared to last year. And if we break down that decrease, the divestments in the solutions segment put pressure on net sales in the quarter. But as mentioned previously, this was to some extent offset by the acquisitions of Nortec and DFS. We had a slight negative effect from FX. And finally, we saw a slight negative organic growth of 2% in the quarter. So let's look at free cash flow. And we define free cash flow as cash flow from operating activities. So that is including interest and taxes paid and changing net revenue capital. And then we subtract capex spending, i.e. investments in fixed assets. And we also subtract leasing amortization. So free cash flow is basically cash that can be used for dividends, acquisitions and or repayment of debt. And the LTM free cash flow was 170 million SEK, an increase from 111 million in the previous quarter. And this was mostly due to stronger cash flow from operating activities. This increase was to some extent offset by higher capex spending as we continue to do some important investments in our growing businesses. And if we move on then to net debt and leverage, the net debt is represented by the pink bars in this chart and amounted to 1.9 billion SEK. The leverage decreased, as Simon mentioned, in the first quarter from 3.4 in Q4 to 3.2 due to our cash generation and expanding EBITDA. It is worth highlighting that this is reported leverage, i.e. we don't include any performer figures from the acquisitions that were completed in March. So they are expected to contribute to lowering leverage going forward. And finally, Bestem's earn-out debt was 30 million SEK at period end. And by that, I hand it back to you, Samir.

All right. Thank you. Okay. So in summary, we... We deliver a strong quarter and again, growth in adjusted EBITDA and cash flows and significantly higher margin. The FloatTech segment continues to do very well. We're expecting this to continue as the market outlook looks very promising. We see mixed performance in the niche products and solution segment with organic growth and margin improvement in niche products. and the opposite in solutions. And that said, we expect both to gradually improve throughout 2026. The structural change announced last quarter is progressing well and developing according to plan. And with that, we open up for any potential questions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. There are no phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Okay. No written questions. Everything crystal clear. Good to know. Perfect. So we thank everyone for listening in. Have a great day. Bye-bye.