Welcome to the Bergman & Beving Q1 2026 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. If you are listening to the presentation via webcast, you can ask written questions using the form below. Now, I will hand the conference over to speakers CEO Magnus Söderlind and CFO Peter Schön. Please go ahead. Good morning, everyone, and welcome to the presentation here of our financial report for the first quarter fiscal year 2026/2027. I'm Magnus Söderlind, and I have also Peter Schön here on the side. Hi, everyone. Just to give you some highlights from the quarter. On the underlying market, the key things are two, I would say. We see some effect of the Iran conflict in rising raw material cost and energy prices and also in freight costs. That is something that we had great focus to manage during the quarter. I would say all the companies that are affected of these kind of increases have proactively worked with price adjustments. On a group level, I would say we have been successful in doing so. We don't currently see that we should have any negative effect of this, at least on the short-term perspective. If we look at the market, we are 40% exposed to the construction industry, mainly in the Nordic and the U.K., and then 60% of revenue is to the industry segments. Both of them are current that we feel are cautious. We don't see they are declining, but they're not increasing in a big term anyway. We had some positive signs in end last calendar year. Our kind of hypothesis is that the Iran conflict has partly put some damp on the recovery of the industries. There are some good signs in the construction area, but we don't see those kind of investment increases yet in the business we are running. Hopefully we should see that in the coming quarters. Still, we are able to increase earnings, increase margins and returns, and also earnings per share. If we look at the turnover, we had 1% organic growth. This is the third consecutive quarters with some organic growth, even if there are small numbers. That I think is a good kind of sign that we have reached a kind of bottom of the kind of underlying market development, and we hope then to see a continued growth going forward, but still in low numbers. We increased the EBITA with 9%, and we now had 26 consecutive quarters with improved profits. Also we continue to improve the EBITA margin. It's now 10.7% above 10%, and that is an improvement with 0.8% units compared with last fiscal year same period. We also continue to work on improving the returns, measured as profit or working capital as one KPI, and we continue to increase that and we reached 37% this quarter, and this is a rolling 12 number. Underlying, if we look at the three-month figure, it's even higher than that. We have a positive momentum in the profit or working capital ratio, and I expect that to continue going forward. We had an earnings per share rolling 12 improvement from SEK 8.2 to SEK 8.5. All our key parameters is moving in the right direction, and that I think is very positive, despite that the market is still quite cautious. If we look at acquisition, this is the rolling 12 situation. We acquired one company in the Q1 quarter, All-Coating. It's a Swedish company. As you see, we have been quite active in the U.K. during the last 12 months. This was the first acquisition in Sweden from some time, and this is actually an add-on acquisition to Uveco, one of our platforms, working then in the coating segments. If we look at overall the acquisition situation, we still have the ambitions to acquire in the range of SEK 50 million- SEK 80 million EBIT per annum. That is something we aim for doing this year as well. Even if this acquisition was quite small, it's a SEK 25 million, but the profit is very, very good. Still of course we need to do additional acquisitions going forward to keep up that path. That is still in the target to do so. I showed this before, and this give you the historical perspective. As you can see, we had this positive EBITA growth. We also have this positive trend in the EBITA margin. As said earlier, we are aiming to continue improving both the profit and the profit margin over time, even if some specific quarters may not have an increase. Over time, we should see a continued development like we see on this picture in both margins and profit in absolute terms. The net sales, as said earlier, we had 1% organic turnover growth. We didn't have any currency effect in this quarter. You who has been following us for some time know that we made some divestments. The biggest one was the Skydda Nordic operations, but we also divested Luna Baltic. We also earlier than that, divested the fastest development in Asia, even if that is not a part of this comparable period. It's here you see the Skydda and the Luna Baltic effect that then the combined acquisition and divestment had a negative effect of 1%. On the total, it was a zero quarter compared with previous year. The gross margin, we had a steady positive development, as you can see on this slide over time in the gross margin. I said it before, it's mainly organic driven. Even if we only acquire highly profitable companies, it's not per definition that they have a gross margin above 50%. This improvement that you see is mainly organic driven, and that's also the case in the last quarter here. We now have three consecutive quarters with a margin around 50%. I said it before this is also positive effect of the divestment we done. It's not per definition that new acquisition will enhance this development over time. Still, we are not happy really with this level, I expect some improvement over time. Even also, it's not big numbers, and you should see that as a development over time more than as in the specific quarters. The divestment and also the acquisition, as you can see on the right part of this, has brought us to 82% our own product companies compared with 72% some years ago here, two years ago. We had had a positive development also in the mix that is partly then the explanation for the gross margin trend. If we look at the group level, we set the target to reach P/WC of 45%, an EBIT of SEK 500 million, and an EBIT margin of 10%. We continue to improve and work towards those targets. As said before, we had hoped only to be at least on the EBIT and EBIT margin on those levels. That then we had expected the underlying market to be stronger than it has been during the last quarters. We expect to have a positive effect when the underlying market starts to pick up because we have now a higher gross margin on a group level. Also, we have lowered costs organically, costs that we don't see we need to rebuild when the market pick up. We should have good leverage with the good and higher gross margin levels in combination with a more cost-effective operations. The top line then will be a very good contribution to the margins and to the EBIT in absolute terms and also then, of course, to the P/WC measurements. We are still having those targets at sight, we continue to work on that. We need to get some help on the underlying market to get there in the coming quarters. I will hand over to Peter to talk about the earnings per share development and some other topics. Thank you, Magnus. Earnings per share continues to improve. Rolling 12, it's increased from SEK 845 to SEK 850, there is a slight reduction in the quarterly EPS, and that's mainly caused by slightly higher interest costs and currency revaluation. Still, we're on an EPS growth path going forward. If we look at the inventory levels, we do have a lower organic reduction, as we said, for a few quarters now. We had a quite high organic reduction rate going back a few quarters, but now it's a bit slower. The organic inventory decrease is SEK 18 million in the quarter, and it's affected partly that some of our companies have decided to increase their safety stock. As Magnus said before, it's a bit turbulent in the wake of the Iran crisis, they have decided to increase their safety stock somewhat. That, of course, also makes the reduction rate a bit slower as well. That also reflects on the ITO. It's relatively flat, and it's negatively impacted also from the divestments that we've made. Both divestments and the increased safety stock has influenced that one. The work still continues. We do have some stock to reduce going forward, but we'll see how it plays out with the safety stock. It's not on the level that we had in COVID or so. It's just a slight bump up in the safety stock. The cash flow was more or less according to plan. It's normally a quite strong quarter. It was this quarter as well, not much to say. As I normally say, it's the Q4, we have quite a bad cash flow, it's based mainly due to ESSVE Spring order that they get paid now in this quarter and the coming quarter. This is a normal seasonality pattern. As we acquire more and more companies, of course, this seasonality pattern will be more spread out, I think. Yeah, according to plan. We decreased the net debt, mainly due, of course, to the good cash flow. We decreased the net debt by SEK 100 million in the quarter. The net debt EBITA is back on the same level as it was a year ago, 2.5x. From that point one year ago, we made acquisitions of SEK 550 million and divestments of SEK 280 million. As Magnus said, we just made a smaller acquisition in this quarter, the acquisition target remains intact, we have a good pipeline as well. We will continue on that path going forward. I think back to you, Magnus. Let's get into the different divisions' performance. The Core Solutions continued to have a very strong development. They had a revenue increase of 11% in the quarter, half of that were organically driven, half of that was due to acquisitions. This is the division with the biggest exposure, I would say, on the aggregate label to this construction sector, with ESSVE being a company with a turnover roughly SEK 1 billion. They faced quite a flat quarter, there are companies in this division exposed to the public property sector as well as the infrastructure, they faced a good demand actually in this quarter. The EBITA increased by 30%, the EBITA margin is now 14.7%. You can see on the slides here on the lower end that we have had a good EBITA development rolling 12, as well as the EBITA margin here rolling 12. Partly due to increased revenues, also strengthening the margins and the profit levels organically as well. I'm happy with this division, they also have a profit to working capital well above the 45%. It's a good cash conversion in this division. The next division is Safety Technology. Here the revenue increased 27%, actually had some growth across the majority of all companies. This is partly facing the industry segment as well as the construction segments. They also had a very positive EBITA increase by 29% in the quarters. That is also a combination of organic development as well as successful acquisitions. The latest acquisition in this division was A1S, this fire curtain company based in the U.K. They have come in in a very good way in the group and performed even a little bit better than expected in the first month here. Overall, we had a strong contribution in the fire segment, safety segment, as well as safety signage and safety equipments. Also here, the margin increased to 16.8%, that was previously on 16.4%, still a very good development. Also you can see on the lower end here, a strong revenue development, mainly through acquisition, also some organic growth. We also have some improvement in the EBITA margin, despite they are already on a good level. The foremost, we have a strong development here in the EBITA in absolute terms. I'm very satisfied with this division as well. The Machinery & Equipment was a disappointment in this quarter. This is a division and a cluster of companies that has performed on a much higher level historically. They have been, as you can see here on the EBITA margin, well above 10%. They are actually now, in this quarter, only at 4.2% compared with 11.6% last fiscal year. We also had a decline in EBITA here, and that is mainly due to a less favorable business mix and also that we have some one-off cost here. We also have a flat revenue here in the group. I think if we look at the revenue development, one of the reason is that this is more of investment products, machineries, typically, investments taking over the customer's investment budgets. We feel there are some hesitations due to the uncertainties, partly due to the Iran conflict and maybe some other uncertainties, but they have prolonged the order time for some machineries, some that the company's expected to come in this quarter. They are needed by the customers, but maybe we will see them in the quarter we are currently or the quarter after that. There are some needs out in the customers that they need to fulfill, and we hope and expect them to come here in the coming quarters. I assume and expect this to be a temporary dip, and I expect them to be back on a much more healthier level in this Q2 quarter. This was the division, Uveco, they made the add-on acquisition of All-Coating, and they have come in in a very good way as well, even if they only been here since April 1. I would say they are also a little bit above the expectation we've had in terms of performance. That is promising for the future. Once again, a big disappointment, but my expectation is that this will bounce back already in this current quarter. We have the PPE & Utilities divisions, and this is, I would say, more of the traditional, old Bergman & Beving products, and the Luna Group, who is the big wholesalers in this group. If you look here, the revenue total is SEK 360 million, compared with SEK 485 million last fiscal year. If you adjust for the divestments, it's more or less a flat revenue development in this division. That is also the case for the profit. The EBITA is SEK 9 million compared with SEK 90 million, but if you would make the adjustments for the divestments, the EBITA level is on the same level as last fiscal year. Here we still have some work to be done, and we are continuously working to improve the efficiency and the margins and also look into if we need to make some other activities to get this division on a better level. This is not a quick fix. You shouldn't expect this division to bounce up back on a high level in the next quarter and the next coming quarters. This is more a long-term task to improve the performance of this division. There are good improvement opportunities, and there are a lot of good activities going on. I expect also that we should see some improvements here. As said, it will be a much slower improvement path in this division compared with the Machinery & Equipment division. What are our priorities going forward? The underlying market is still a little bit uncertain and difficult to predict. We have these emerging cost increases that I said in the beginning that we have addressed and I think is under control and shouldn't affect our gross margin here in near term, at least. I think that is under control. I don't expect a big underlying market growth in this current quarter, but hopefully we will see that in the end of this calendar year, but that is still uncertain, I would say. As you know, there is an increased conflict again in the Iran area. It's very difficult to predict what type of effect that will have on the global economy and ultimately on our companies. We will continue to do what we've always been doing, to focus on profit expansion over revenue growth, even if we hope and expect to get some support from the underlying market going forward. We continue to allocate capital in line with the Focus Model, and we continue to support our companies with the B&B toolbox. Here is a very hot topic, AI. We had really encouraged our companies and supporting them to approach AI and really look into how that could support their businesses. We have some good traction, I would say, across many companies currently. Companies that have been able to leverage AI increase their service level, increase their cost efficiency, and also enhance their sales performance. We see some positive effect already now, and I expect to see some positive effect on that going forward as well. If you're interested, we have a separate section in our annual report we released some weeks ago about some case examples and some more in-depth details on what we are doing within the group and our companies in the AI space. Last but not least, acquisition is part of our DNA. As Peter was saying, and I earlier also mentioned, we continue to work on acquisitions, and we expect to deliver on the acquisition target that we have set during this fiscal year as well. We have some group theme, Peter showed the ITO and also mentioned that some companies are now building some extra safety stock. It is not on the magnitude that we had during the corona, and I don't hope and expect we should need to go there. This is, of course, monitoring on a daily basis based on what's happening with the logistics flows and so forth. Inventory turnover is a key KPI. We measure and follow up on all our companies, and that is a focus that all our companies are working on. We had some good development in this, and we are close to being back on the pre-corona level, and we expect to have our companies to continue to work on that going forward. As said, we're very focused on the gross margin, making sure our companies are focused on the value add, the highly value add business that they have, and that is the business they are focusing on. Also to make sure that we proactively address the price adjustment triggered by the emerging cost increases that we have seen in raw material and freight and also in production costs. Last but not least, we are still, as said earlier, we had work on the gross margin improvements across the group. We have worked on the cost efficiency, taking out some SEK 100 millions in cost during the last quarters. We are, I think, in a much stronger position when the underlying market starts to pick up. Hopefully we will see that in the next coming quarter, then we expect to have a good leverage in the position that we have. With that said, I think we're ready to open up for the Q&A. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Anton Ingves from Nordea. Please go ahead. Thanks, good morning, Magnus and Peter. Thanks for taking my questions. Maybe starting off on the rising input cost that you allude to. Would you say that how much worse has the situation become here sequentially since Q4? It has been very volatile. For example, some plastic components, they peaked at 50% price increases. They are now down to 30%. But of course, if this situation in the Strait of Hormuz will escalate, maybe we will some additional price increases on those plastic components. This is something that we're actually monitoring more or less on a daily basis, actually partly support by AI. Some companies has built agents following in real-time the freight and raw material cost development, making them to take tactical decisions on when to order, but also to monitoring and make sure that they can make some compensation for those increases that they are facing. Still, it's very uncertain what kind of an escalation of the conflict will result in terms of price increases on both freight and energy and raw material cost. It needs to be monitored very closely, going forward. I don't know if that was an answer on your question. Yep It is measured and a follow-up on a daily basis currently. Yep. Maybe a follow-up on that as well. You said that you sort of put some price hikes to mitigate this quite successfully. Looking at the 1% organic growth, how much is volume versus price in that? That seems fair to assume that volume is a bit down given the price increases. It's very few of our companies that can change the pricing overnight. It also takes time before the price increases actually affects the cost of goods sold in our companies, because then you need to consider the current stock levels and the delivery times and so forth. You don't really see the effects, neither of the cost increases or the price adjustment in this quarter. That is effect that have some delays, and partly you will see some effects in this current quarter, the Q2 quarter. As said, it takes some time before those two factors actually influence the margins and the costs. When they come through, you think you're quite well prepared with price hikes to mitigate this? Yes. Yes. Great, understood. In Core Solutions, obviously very impressive margins here in the quarter. Is there any temporary effects driving this? How much is organic versus acquired in this margin uplift? No, I would say this is the result of the work we have been doing organically in combination with good acquisitions. There is no kind of temporary effects in this division that you see. This is a result of the work that has been done over time. That's also relevant for the Safety Technology division. Perfect. Understood. That's all from me for now. I get back in queue. Thanks a lot. Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Emanuel Jansson from Danske Bank. Please go ahead. Hey, good morning, Magnus and Peter. Just two questions from my side. Obviously, strong development within Safety Technology and Core Solutions, which are currently carrying the group forward, looking at earnings. How are you thinking about the capital allocation between the divisions going forward? Should we expect acquisitions to be concentrated into these high performers, or are you willing to deploy capital into Machinery & Equipment and PPE & Utilities to accelerate their turnaround? Yes, we have said that we currently have the four divisions. The PPE & Utilities division, you shouldn't expect acquisitions within that division in the coming quarters. This division is focusing on getting improved performance in the current portfolio of companies. The acquisition activities will then be round across the three remaining divisions, including Machinery & Equipment. If you look at the turnover of that division, it's much significantly smaller than both the Core Solutions and Safety Technology division. With that said, they have some capacity to be active within the acquisition space. You should also expect to have some acquisition within the Machinery & Equipment division going forward. Understood. Thank you. Also looking at operational leverage and obviously able to improve the gross margin in a very impressive way. I know that the Luna business, which does not have the same margin profile, if that company will start to turn around and grow again, will you be able to maintain a gross margin around 50%, do you think? Luna has quite a broad exposure, including the industrial sector as well as the construction sector. If they would have some underlying market increase, I expect that effect also to take place across the group. I think that the portion of the Luna business will not increase on a group level. Yes, I expect us to be able to maintain the margin level that we have, if Luna starts to grow their business. Perfect. That sounds promising. If possible, is it possible to help us to quantify the leverage that you expect once the volumes are returning? If you were to see 5% organic volume increase, what kind of EBITA margin expansion would you expect to flow through given the current cost structure? I don't know, Peter, if you would like to. No, we don't really devolve figures like that. I think I'll pause on that answer. Of course we will get some positive effects for sure, but we don't want to quantify that. I totally understand, I could just imagine it should be quite good then. Yeah, it should be. Yeah. Perfect. Well, I think that was all my questions for now, Magnus and Peter. Thank you very much. Thank you. Thank you. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions or closing comments. The next question comes from Anton Ingves, from Nordea. Please go ahead. Yeah. Hi again. Just a couple of follow-ups here. You mentioned here in the Machinery & Equipment business that you see a bounce back already in Q2. How good of visibility do you have here for the coming quarters? Obviously quite volatile on a quarterly basis here. Yeah. As mentioned in the report, we had some extra cost in this division during this quarter that we don't foresee to have in this current quarter. We also have some reactions in terms of revenues and margins in our companies. Some of the companies, for example, A.T.E. Solutions, is quite project-oriented business. They had a little bit weaker result in the Q1. We know already now that the Q2 will be much stronger for them. We also have the Polartherm business, the company doing mobile heaters that we also have quite a good forecast on where they will land in this current quarter. Yes, we have already now indications that we will have improvements in this division in this quarter. Okay. Sounds good. On the extra cost, can you quantify that a bit more? The main reason for the division not to deliver according to expectation in the Q1 is a product mix component. The majority of the discrepancy is related to increased costs. A lot of that cost is of a more temporary characteristic. Okay. Perfect. I think that's all for me now. Thanks again. Thank you. Thank you. There are no more phone questions at this time. I hand the conference back to the speakers for any written questions or closing comments. Yeah. We have one written question, it's the Machinery & Equipment EBITA trend is clearly negative. Many of these companies are acquired recent years such as Polartherm, Tema Norge, Maskinab, and Labsense. Have these acquisitions performed worse than expected? What has gone wrong? We are a long-term owner to our companies. If we take some concrete example, the Polartherm we have owned them for, is it four years roughly, I think? Yeah. They have performed very well during the last two and a half years. The first two and a half, yeah. The first two and a half years. They were hit by the tariffs because the U.S. is quite a big market for Polartherm, so that stopped a lot of the sales temporarily. They also deliver quite big volumes to the U.S. Air Force. There was a lot of uncertainties around the tariffs and the ordering also within the defense segment. That has loosened up partly now but still. They have some firm orders that they expect to deliver out in near terms, but they haven't materialized yet. They also were quite exposed to the rental market because they were selling to renters, Cramo and similar companies, and some companies in the German market. When the construction demand weakened, the renters didn't buy anything for some period. If we look at the Polartherm order book situation now, it's improving significantly. I'm confident that Polartherm over time will deliver according to the expectations and maybe even better. I would say the A.T.E., I said earlier, that's very project-based business. They have volatile invoicing, but they perform better still currently than expected when we acquired the companies. You get some volatility in some quarters, and this Q1 quarter was affected by that volatility in A.T.E. Labsense, for example, that's another example. They are more stable. On a general level, I would say the company selling machineries and equipment have some negative effect of the underlying market situation. Over time, in a more normal market, I expect all of them to pick up to get to the level they have been before or even better. Yes, if you take a very short perspective, some single quarters, if you look at this division and the performance, yes, I agree they haven't performed according to the expectation. Over time, I'm still confident that they will be at least on the level that we expected when acquired. It's not the situation that the companies have shown to be something different than expected when we made acquisitions. It's more a reflection of the underlying market situation as such. Peter, do we have any other written questions? No, that's all the questions. I think if there's nothing else. Thank you very much for listening. As said earlier, we now have a quarter with improved margins, improved returns, improved profit levels. We have the aim to continue on that path going forward as well. As said before, the Core Solutions division and Safety Technology, there are no extraordinary effects in those divisions, and I expect them to continue to perform on a very good level. I expect the Machinery & Equipment to perform better in Q2 compared with Q1. We will continue the steady work within the PPE & Utilities division to steadily improve the performance of those companies, even if that performance not will be enhanced by acquisitions. With that said, thank you very much for listening once again, and have a really nice summer when that period at least I will start now to slow down a little bit and get hopefully two weeks of some vacation. If you are getting some vacation now, I really wish you a very nice summer vacation. Thank you. Thank you, everyone.