Volati AB

Good morning everyone and welcome to today's presentation with Volati. With us presenting today we have the CEO Andrea Stenbäck and CFO Martin Ahrensson presenting today. We'll open up for a Q&A after the presentation and if you're calling in or like to ask a question please press star 9 to raise your hand and star 6 to mute yourself when you get the word. You can also use the form located to the right and with that said please go ahead with your presentation.

Thank you, and also thank you everyone for listening in today. Let's get into the presentation. We'll start with, let's see. Just a sec. Ah, here we are. so uh yeah so let's start with the presentation so looking at this slide sales increased by six percent in the quarter uh to 2.3 um billion uh sick uh it's uh we do see a trend shift a slight trend shift in the quarter with organic sales growth of minus one percent and uh The graph on the right, we've shown you the last couple of quarters. We did see a trend shift late last year with organic growth. However, we've had a slight setback with regards to that in this quarter. It's driven by a slowdown in organic growth in solids, but we do still show positive numbers, even though low in solids. So the main reason for the negative number is some of the platforms within the business area industry. However, I want to point out that we do see a totally other market environment now compared to a year ago. If you look at this slide, you know, we have had minus 15 and minus 11% in Q1 and Q2 2024. So, yes, it was a slight slowdown in the first quarter this year, second quarter this year, but still the market demand is significantly better and improved. EBITDA came in last year, and two of the business areas, Solix and Etiquette, they're showing a strong growth, 20%, around 20% EBITDA growth, while the reason for... us just meeting last year is the industry. And it's two platforms within the industry that are lagging. It's Corventa and it's simply tough comparables for them. They had a really good last year while we still see a challenging market in Tornum. And they're also meeting somewhat tougher comparables compared to last year in the second quarter. 2024 was decently good for them. If you take a step back, or if we take a step back, I think the first half of the year of 2025 is still okay. We've had a sales increase of 10%. We do see an organic growth in the first half of the year, and EBITDA growth is 13%, so close to our financial target. I want to talk a bit about the structural measures that we've done and that we're now really seeing effect of what we've done the last couple of years. And we can see that in platforms such as SOLIX, Sancterix and communication, where we have stronger margins, even when we see low or negative organic growth. And for me, that's a strength, proof of strength that we really also now see in the numbers that we've had good actions in the platforms. We've had some additional structural improvements in the quarter, and we had, because of that, negative EU extraordinary costs of roughly seven million crowns. And what does this mean? This means that we see a good opportunity for further modern improvements, and especially once we see the organic growth coming back, I think that will be accelerated. Also, when we came into the last year's more challenging market environment, we had a low net debt to EBITDA. I think we were also even slightly below our financial target with regards to that. And that has enabled us to continue making acquisitions. And that has, of course, led to increased debt levels. In the last quarter, Solix did the acquisition of Hans Egge Strand. But if we look into the last 12 months, we've now acquired a little more than 750 million of annual sales. That puts us in a net debt to EBITDA position of 3.0. So that's within our targets. And it's very much expected because of the cash flow profiles that we have over the year and the acquisition that we did in Q2. And also during the second half of the year, that's where we have our strong cash flow. Historically, we've showed that every year. So that provides a solid basis for continue doing acquisitions. That's going to give us acquisition room also for the rest of the year. And if we find the need to do the leverage, we also have the possibility to that. So basically what this means with the strong margins that we see and the structural measures that were taken and the accelerated organic growth that we expect once the market returns, that means we will also gradually be able to reduce the net debt going forward and still maintain you very good acquisition pace. So looking a bit into the numbers, net sales up 6%, as I already said, a bit down in line with last year, and that do then include some EU costs linked to structural measures. Operating cash flow strong in the quarter, 27% up compared to the same quarter last year, and net debt at 3.0, as I already mentioned. Taking a step back and looking at the annualized numbers, we're now at 8.2 billion Swedish grams of net sales and 700 billion of EBITDA. As said, that implies a 10% net sales growth the first half of the year and a 13% EBITDA growth the first half of the year. Also, looking at the long-term profile, we're still ahead of our financial goals. That basically means that we've doubled the last five years. However, as everyone can see on this slide, the growth pace went down from 2021 going forward. And that has created a growth gap, meaning that we do see that we will close that growth gap once the market returns. With that, I leave the word to Mark.

Thank you, Andreas. So let's look at our performance in relation to our SE financial targets. And let's start with the EBITDA growth for ordinary share during the last 12 months, which is now at 6%, which is an improvement from the last quarter, so quarter one. However, this is still below our financial target, but it's worth noting that our target is over business cycles, and our five-year average growth, IPTA growth per ordinary share, is 15%. So moving over to our second financial target, our return on adjusted equity, which came in at roughly 17% versus our financial target of 20%. So it's below our financial targets, but it's driven by a lower EBITDA growth. However, during the past five years, we have delivered on average 33% return on adjusted equity. And our last financial target is our capital structure, where our net EBITDA ratio came in at 3.0, which is within the range of our financial target ratio between two and three times. And we now also put half year one behind us, which is seasonally the lowest regarding cash flow for Volati. And we now have quarter three and quarter four in front of us where Volati normally generates a strong cash flow. And this, as Andreas mentioned, gives us the potential to do further acquisitions and also a potential to deliver if need be. So let's also talk a bit about our business areas and let's start with the Solix Group. And Solix Group saw a total net sales growth of roughly 10%, which mainly came through acquisitions, but also through organic growth. EBITDA increased with 20% compared to last year and the margin increased with roughly one percentage point in the quarter. And this is really showcasing the great work that Solid Group has done with working with cost control and synergies on the coordination benefits. And we also saw some market improvement in the quarter. However, at a slower pace compared to previous quarter, showing that the improvement rarely is linear. But we're confident that Salix Group is well positioned to capture the growth once the market returns. We completed the acquisition of Hans Eggestrand in the quarter, and we also see significant potential to grow further through acquisitions in the business area of Salix Group. So let's move over to Etiketto Group, who continues to deliver another strong quarter. Sales increased with 36% in the quarter, mainly through the effects of the acquisition of Clever, but also through the continued trend of strong organic growth. EBITDA in nominal terms increased with 19%, which is mainly driven by organic improvements. Jone Peter Reistadler, But that said, the modern decline in the quarter and with two percentage points, but this is as expected, as the newly acquired they care at the captain contributes with roughly 20% 25% of the total let's get the group says. but at the low margin. An integration of Clever is progressing well, and the work with extracting synergies and operational improvements has started. And the ambition long term is to lift the margins to the same level as the rest of the Etiquette Group. And also with Clever as a new home market platform to grow from in Central Europe, we see a significant potential to continue acquiring labeling companies in several geographies. And lastly, business area industry, who concludes a tough quarter. Revenue declined with a 7% in the quarter, and the EBITDA margin declined with one percentage point, where the development is mainly explained by Toner Group and Coroventa. And as previous quarters, Toner Group is still facing a historically weak market, but is meeting softer comparables in the second half of 2025. And our platform Coruventa did not see any significant effects from floodings in the quarter and was also facing strong comparables from last year's second quarter. St. Eric's faces a similar market situation as previous quarters with a weak demand in the construction segment, while the demand in the infrastructure segment is stable. And lastly, communications who performed well in the quarter, increasing the pay compared to last year. And that said, this is despite the lower deliveries to the US market. With that, I leave the word to you Andreas.