Presentation of the report of the first quarter of 2024 from SP Group that was published yesterday. My name is Rasmus Køjborg, and I have the pleasure of welcoming CEO of SP Group, that's Frank Gad. We also have CFO, Tilde Kejlhof, with us today. They promised to take us through the quarterly numbers and the highlights. So a warm welcome to you. Thank you very much, and thank you for joining us. We have had a good beginning of the new year. We have increased the top line. We have got a better product mix, so we have sold more of our proprietary products, and that has helped us to achieve a higher EBITDA and a better bottom line. But we have also created a strong cash flow from the operation, and we have increased the equity, and we have reduced our net interest bank debt. And Tilde, will you take us through the figures? Yes. Maybe before I switch slides, I can also say that if you have any questions, you're welcome to send them through the chat during the presentation here, and I will publish them as we go along. And I might take some of the questions during the presentation, or otherwise, we'll take them when we finalize. But I can switch the slides here. So first, the management group, and then we have sort of like a SP Group in brief. I think we'll skip those ones and then jump to the highlights of the Q1 2024. Yes. In Q1, we increased the revenue by 2.2% to DKK 723 million. Revenue from own brands increased by 25% to DKK 205 million. We increased the EBITDA by 16.2% to almost DKK 150 million, and due to a good product mix, including own brands, we increased the EBITDA margin by 2.4 percentage point to 20.5%. Profit before tax increased by almost 24% to DKK 85 million. Earnings per share also increased 24% to DKK 5.74. End of March, net bearing debt fell by DKK 84 million - DKK 946 million. The equity increased by DKK 72 million -D KK 1.5 billion. And here you see some products from Dan-Hill. And if you take the next one, here you can see an overview over the last seven years. It has been an increase in almost all figures, but in 2023, we had a decrease in the revenue, in the EBITDA, and EBIT, and the profit before tax. We believe that is because most of our customers have been de-stocking, so they have been bringing down the inventory level from a very high level, which they built up during the COVID period, where it was difficult to get stuff, and we think we have that behind us now. Now we are ready for growth again, and we have now had two quarters with growth. Luckily, the equity increased by almost DKK 200 million, and we had a nice cash flow from operation of DKK 360 million. If you go to the next one, here, the revenues increase are shown during the years. We have a average increase of 10%, but in the years 2014 to 2017, we increased by 16%. We acquired the companies, Ulstrup Plast, MedicoPack, Plexx, Opido, and MM Composite. In 2023, we had a small dip in the revenue of 2.2%, and luckily, in Q1, we increased the revenue again by 2.2%. The EBITDA have increased during the years and ended up in a level of DKK 450 million. We decreased by in 2023. That is also due to the product mix, and in Q4—in Q1, we increased by 16%. The next one now shows the development in the EBITDA margin. We have gone from 11 to around 10% and increased during the years, so we're up to 18%. Due to the mix, we fell to 17% in 2023, and now again, up to almost 18%. If you go to the next one, the profit before tax has increased during the year. We had some dip during some, what's it called? The exchange rate or... but, due to the high interest rate to the depreciation, we had a big decrease in 2023. Luckily, we in Q1 got up to with an increase on 23%. And the next one shows, the gearing, which was on 11.7, went down to, 4%. No, not 4%, four in gearing during the years, and then we dropped to 2, and, we have gone on that level. In 2019, we got all the IFRS 16, debt on the balance sheet. End of 2023, we was on 2.3, and then we, in Q1, are on 2. And you go to the next one. Here's a short summary of the result in Q1. We had a growth in revenue on 2.2%. The EBITDA had an increase on 16%, the EBIT on 26%. Profit before tax increased from DKK 68 million to almost DKK 85 million, increase on 24%, and the equity also increased by 15%. We had a nice cash flow from operation of DKK 121 million. We invested DKK 30 million and spent around DKK 84 million on debt. Net, the debt was almost DKK 950 million, and we had equity ratio of 50%. You can see we have reduced the debt with DKK 84 million from the beginning of the year, and we have increased the equity with almost DKK 200 million in the last 12 months. Good. Let's look at your revenue from own brands then. Own brands, that is, ergonomics, it's housing, animal housing, ventilation, and guide wires, medical packaging, and standard components. In Q1, we had 28.6% of the revenue was own brands, and that is an increase compared to 2023. The split by product area, we have a steady revenue in cleantech. We ended up with a revenue on DKK 214 million in Q1. We have a nice increase in the revenue of healthcare products, ended up in DKK 286 million, and a decrease in the other demanding industry and food-related industries. You can see in Q1, we had an increase on 22% in healthcare. After 2023, there was a small decrease. Cleantech is up by 3.2%, after in 2023, had an increase in 8%. Food-related is down, and automotive is also down, but automotive is on a relatively small revenue. Other demanding industries are also down, so it's a bit, up and down in the industries. Own brands is 25% up, and in 2023, it was 12% down. We are back, in the first quarter to the high level we had in 2021 on own brands, and that is helping us on the profitability and on the margins. Good. Let's look at the revenue here by the customer groups. 40% of the sales came from healthcare, and that is medical devices and ergonomics, 30% from cleantech, and 12% from food-related industries, and automotive is now down to 3% of sales. It is not cars, but it is vans and anything on wheel. So it's also buses, trains, bicycle trailers, and many other nice things. And then all the other industries are 15%. And the largest customer during 2023 accounted for 12.6% of sales, and the ten largest accounts for 46% of the sales, and the twenty largest customers account for 56%. That is a little bit, you can say, diluted compared to the year before on the top 10 and the top 20, despite the number one customer was growing rapidly during 2023, and we are not publishing these figures on a quarterly basis, so the figures here are from the full 12-month period during 2023. The global footprint from here? The global footprint from here is that we are soon going to Atlanta, to United States, to take over a new factory we currently are building, and we expect that the building will be completed in June. And then we will start to put machines in, and then we will start production in the second half of this year. And then we have maintained our global platform and global footprint, as you can see it here. So we have a factory in Iowa and a factory in Cleveland, in Ohio, in the United States. And then we open a new one that making injection molding and also clean room injection molding. And then in Asia, we are in Tianjin, in China, and in Suzhou, in China, with vacuum forming, rotational molding, polyurethane, and injection molding. We are in Thailand, in Bangkok, and then we are in Europe, with manufacturing in Finland, in Latvia, in Sweden, in Denmark, in Poland, in Slovakia. Then we have sales offices in Sweden, Norway, and the Netherlands, and in Canada. In total, we are 2,350 committed colleagues. The blue figures here shows how much we are selling in each region in the world. So 14% of the sales last year was invoiced to customers in North and South America, 8% in Asia Pacific, 49% in Europe, and 29% to customers in Denmark. During the first quarter, we were growing with 10%, internationally, and we had a decrease to the sales in to Danish customers, and I think that is mainly related to that in, in Denmark, we have almost one week off due to the Easter, and this year, the Easter is in the first quarter. Last year, the Easter was affecting our figures in the second quarter. Very good. Let's have a look at sort of the acquisitions in the past. You haven't added that much here- No ... this year. We've been drinking a lot of coffee, but we have not added any new companies during 2023 and 2024 so far. But we have, during the last decade, acquired a number of companies, and that is good companies with a strong management team, exciting technologies, fantastic customers, and that has helped us to get a more global footprint and get many new technologies into the group we can offer to our other customers. And therefore, we have been able to increase the cross-selling, and that has all helped us to increase the margin. And as Tilde pointed out early on, we have moved from an EBITDA margin around 10%, 10 years ago to now actually 20% in the first quarter of this year. But if you take on the full year, then we are between 17% and 18% on a 12-month rolling, but the last quarter is 20 in margin, and that's pretty good, we think, compared to what we've been able to do in the past. Very good. And perhaps we should take one of the questions here in relation to the M&A strategy. There's a question here that goes: Can you talk about your M&A strategy in light of the net interest-bearing debt to EBITDA now nearing the low end of your target range, as we saw on one of the previous slides? Is the number of dialogues with potential targets increasing? So basically, are you drinking more coffee at the moment than you have done in the past or yeah? We are drinking more coffee, more coffee now than we did in most part of 2023. Most part of 2023, I think people were pretty unrealistic on what's the prices on companies. We have seen our own company go 50% down in value from end of 2021 to end of March in 2024, so we have decreased to 50%. So the conclusion is we have not been able to buy new companies which we like to buy at reasonable prices. We have a strong balance sheet, so we can do it. We have also noticed that the interest level is higher now than it was back in 2021 and 2020, and the years before, where we acquired these companies, basically in an environment where the interest rate was zero. Now, the interest rate is higher. We hope the interest rate will come down again, and we also hope that we can find good companies to buy. And in the meantime, we are busy repaying debt to the banks, and we have repaid DKK 85 million in the first quarter and take the gearing down from 2.3 to 2.0. And, we will soon, if we don't buy anything, then we will soon be lower than 2, despite we have paid dividend during April this year. Yes, and also on the valuation, the question goes here: Have they become more realistic on valuation, the sellers? Or what has perhaps been the obstacles, if any, sort of in the past? Each case has its own story. But hopefully people will become more realistic. Okay, good. And the last one here is, if you're not able to make acquisitions, would you expect higher share buybacks or dividends? Yes, but we will prefer to take the debt down because we are not happy paying all this money in interest charges to the banks, as we are paying right now. So, we are looking at the share buyback, if we cannot find new acquisition candidates at reasonable prices. But we will- Very good ... we will look on this quarter by quarter. Good. Let's jump one slide ahead here on the internationalization. Here you can see, we have been increasing the sales internationally in the first quarter of this year, and therefore, the shares, and we decreased in Denmark. So the international sales is now 74%, and I hope we can reach 75% during the year. We will open a new factory in the U.S., and that will help us, not a lot this year, but in the years to come. So the aim is to become more international. And we have 70% of the colleagues outside Denmark. We have now 17 factories around the world, and we're going to open one more this year, and that will take us to 18 by the year-end, and then this is without acquisitions, and we are not planning to close down any factories. I expect that we will add the new factory in Atlanta, and then keep what we have and try to improve the utilization of our current assets. Very good. And then a couple of slides on the share price performance and the shareholders afterwards. The share price has been developing very nice during a 10-year period from 2010 to the end of 2021 to the 11 years, and then it has been a nightmare from during 2022, 2023, and the first quarter of 2024. Now we hope that when we get top line growing again and EBITDA growing again and bottom line growing again, the people will get more confidence to the share price. Very good. And looking at the shareholders here? Yes, we have seen the number of shareholders increase over the years, and actually, during the difficult time in 2023, we got almost 1,000 new shareholders. In the first four months of this year, we have lost some of them again, so there are 100 people or so who has left us. But we have got more shareholders internationally, and we have now more than 100 shareholders who are not living in Denmark. And the international shareholders owns approximately one third of the shares. shares. The management team owns approximately one third of the shares, and all of the other Danish investors own the last third of the shares. And among the largest shareholders, we have Lannebo in Sweden, Odin in Norway, and ATP in Denmark. Our largest shareholder is our chairman, Hans W. Schur, and his family, and the company Schur Finance. I'm the second largest shareholder. Good. The management team has bought more shares during the open windows in the last year. Good. And the market conditions? Market conditions are tough. Customers want better and cheaper products, and we help them to get that. So we help them to get rid of wood, and metal, and glass, and substitute with plastic and composite. We manufacture globally with a powerful team, the right equipment, and the right technology, and soon we will open up injection molding in Atlanta, so we can give local service in North America to our customers there. Customers focus on the core business and outsource plastic production to specialists, and we are happy to take over the production and use our skills and our scale to give them, better products, lower CapEx, lower OpEx, delivery on time, high quality. Customers want fewer and better suppliers, and it is our ambition to be the preferred supplier. When they cut down from 300 suppliers to 100 suppliers, then it is important for us to be among the 100 they continue doing business with. Then we are focusing on industries with strong growth, and we believe that is healthcare, clean tech, and the food industries, and they account for approximately three quarters of our total sales. The structural growth come from we are getting a bigger and bigger population, we have a longer life, we want a better life, we want a healthier life, we want to get rid of pain or prevent we get pain. And to do all that, you need our advanced products. Same in clean tech to do the green transition, and in the food industry to get better and healthier food, and less waste of food. Very good. And then the outlook, but maybe a question first when we have this picture, because there was actually a question coming up. Let me just find it here. What kind of product solutions are you offering within the clean tech industry, and how are customers characterized? Are they large or small? Yeah. They are, they are large, and they are small. Some are global, some are local. We produce products in reaction injection molding, and injection molding, and blow molding, in rotational molding, in extrusion, for the clean tech industries. And, what do we mean by clean tech? Clean tech is renewable energy, it is clean water, it is clean air, it is meters that measure how much energy and water you consume. It is insulation, and it is devices that help you to reduce the consumption of energy. Okay, but very good. But let's have a look then on expectations for the rest of twenty- There is no growth in Europe. Very little growth, but most of the estimates we see now talks about zero growth in Europe this year. We have a war going on in Ukraine and in Gaza, and there's still a lot of volatility in various areas of the market. Despite that, we hope that we can grow the top line somewhere between 5% and 15%, and in the first quarter, we only saw 2.8% organic growth, and the currencies was a bit against us, so it was 2.2% of the top line, you can see. In Danish kroner, we believe that the growth will accelerate so we can get into this range during the year with an EBITDA margin between 16% and 19%. Here we've got a good start, so we're actually a little bit about the range here in the first quarter, and the bottom line between DKK 9 and DKK 12, and here we are in the very high end of the range also. We have maintained our guidance for the year, and we still believe this is realistic. Very good. There's a few slides here on sustainability, CSR, ESG. Do you have a few things to add there? We have a couple of minutes, and then we can take a lot of questions. As we mentioned in our annual report, we got the municipality's approval of the local plan to establish a new solar park in Juelsminde, together with two partners. Unfortunately, there has been citizens who are objecting against this, you can say, approval. So at the moment, the whole project is on ice. We hope that soon we can get back on track with that one. And then we got 82% of our electricity last year was green electricity, and we expect it will be more this year. Our aim is to go to 100% green electricity before 2030. Part of that we produce ourselves, and that will be a bigger and bigger portion over the years. Now we have solar panels in Slovakia, in Poland, in Finland, and soon we will also have it in Denmark. Very good. But let's take a few last questions before we conclude for today. There was one here on the U.S. factory. Will the new factory in the U.S. provide some tax benefits, i.e., will your clients avoid any imports, import tax with the local production facility? I think that is two different things. We will not enjoy any tax benefits, and we have not received any subsidy, and we have not applied for any subsidy. I think import duties into the U.S. are low between Europe and the U.S., but it can change in the future. And what we can offer people is that they get a lower CO2 footprint when they are going to use our products in the U.S. So instead of producing in Europe and shipping it to the U.S., or producing it in Asia and shipping it to the U.S., we can produce locally. Very good. And then there was a question that came in very early, and I think you addressed it somehow, in on the different slides, but could you perhaps give us a little bit more flavor on what is driving the EBITDA improvement? Um- Perhaps I should- There are three drivers here. A better top line. 25% increase in sales of own products, and then we have adjusted the cost base, so we are 100 people fewer than we were first quarter last year. That are the two main drivers. What is in the pipeline? In the pipeline is that we have never been as busy as we are right now with new projects for our customers. So there's a lot of innovation, and there's a lot of development work going on, and that is, I think, also moving the top line and the EBITDA going forward. Very good. And then, a last question, and perhaps we should move back to, because I think it relates to sort of this slides with your different customer groups here. Because the question goes here that, where do you sort of see the best opportunities further into 2024 with the current start of the year? In all the red boxes. Okay. Also in automotive, we can ask? Yes, yes, yes, yes, yes. Okay, uh- At the moment it is very low, but it will pick up again. Yeah. This is, this is not a structural crisis, it is a temporary crisis. Okay. It is a small number for us, luckily. We are not in diesel auto, diesel cars or in AdBlue solutions to diesel cars and other stuff that will become obsolete. People will still need vans, they will still need construction equipment, tractors, harvesting machines, bicycle trailers, and all, and trains and buses and all the other stuff we make on wheels. Very good. And momentum seems very good in healthcare at the moment. Yes. Perhaps you could also add a little bit to that. Momentum in healthcare is driven by a number of things, innovation, new products, but also that we are getting a bigger and bigger population, and we're getting older and older, and we all want to have all our pain and all our other issues solved in the hospital or by the doctors. And then there's a lot of focus on, in, you can say, the ergonomical aspect, so to prevent damages on your body. So people invest, again now in ergonomic solutions, to make safe workplaces for the employees, and that's good. And in the long run, it is a good payback case for the companies and for society. Very good. We will conclude by that. Okay. Thank you very much to all of those of you listening in, and thank you very much to you, Frank and Tilde, for the presentation here today. Thank you, and thank you for joining, and thank you for all the good questions. Have a nice day. Same from here. Thank you. Bye. Bye.