Alimak Group AB (publ) ($ALIG)

Welcome to the Alimak Group Q1 2026 Report Presentation. [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Ole Kristian Jodahl; and CFO, Sylvain Grange. Please go ahead.

Thank you, and welcome to this quarter 1 2026 call. And yes, as always, I have with me Sylvain here. Turning page and a short recap of the group first, a global industrial company focusing on vertical access solution, working safely at height, moving people and materials. We have some fundamental drivers for our success in the group and global trends like urbanization, health and safety, the regionalization trend that we are seeing, electrification trend, but also now robotization trend that we can facilitate the usage of robotization and automation at height. We do have a leading market position in the niches, where we operate, strong global footprint, which is giving us a fantastic base for our service business, which is a fundamental piece of each division and also a capital-light operation, giving us a strong balance sheet and opportunity to invest. Turning page. Our strategy, the New Heights has been with us since 2020, and it's something that has served us very well. And we now made a step up to 2.0 end of last year. So this will continue to be with us, as the foundation for the group activities. Turning page. We updated also last year some key financial metrics and most important maybe to highlight is to have an average annual revenue growth of 8% to 12% and also an adjusted EBITA margin of 20% reached by 2028. Turning page. We dive into Q1. And yes, overall, it's a result that we are not fully satisfied with given our ambitions, as you can also understand, even though it's -- I would qualify it as a resilient performance in a continued challenging market. Organically, we went down 4% on order intake, but we were up 3% on revenue in the quarter and a good book-to-bill ratio of 1.08, supporting also a good backlog growth. We continue to see a challenging construction market, and this is affecting Construction division, as you understand, but also partly HSPS and Facade Access. Also to note in the quarter, a heavy winter season in North America affecting new sales product sales for HSPS in the quarter, but also the service business for several divisions. We continue also to see a significant currency -- negative currency impact, and it was 8% in the quarter on order intake, giving effect of SEK 168 million and also a negative impact on adjusted EBITA of SEK 24 million. This -- as long as the currency more or less stabilizes where we are now, we will also see the same effects in Q2, but then it should be more on the year-over-year level. Adjusted EBITA margin of 16.7%, down from 17.3% Construction market and also some temporary negative effects in the Industrial division that we will come back to. Cash flow, SEK 75 million, giving a leverage of SEK 1.85. And normally, Q1 is somewhat lower. Last year, we also had a one-off of SEK 28 million. Then this quarter, we had a slow January and February with more invoicing in March, which is then tickling into accounts receivable and something we will collect now in Q2, plus an additional tax payment. So multiple effects also affecting this, but nothing fundamentally changed, and it will come back. Turning next page, some more details about Q1. Order intake was SEK 1.788 billion, down 11% or 4% organically. We saw an organic increase in Industrial, Wind and Facade Access, while we had a lower order intake in Construction and HSPS division. And if you look at Construction, we will see now that we have had 4 quarters, more or less stable on order intake and somewhat lower level than also the previous year. Revenue was SEK 1.653 billion, down 5% or up 3% organically, and we saw growth in Wind, Industrial and HSPS. It was flat in Facade Access and organic decrease then in Construction division. Adjusted EBITA at SEK 275 million, down from the SEK 300 million, and it's an 8% decline year-over-year and also 8% is also coming from the currency impact. Turning page into service. Key components in all divisions and the service order intake was SEK 749 million in the quarter, down 9% or 1% down at constant rates. We saw an increase in Facade Access and HSPS. Revenue was SEK 626 million, down 3%, up 6% at constant rates with positive contribution from Facade Access, Construction, HSPS and Wind. The long winter season in North America affected order intake and revenue in the beginning of the quarter for multiple divisions then. And as you know, this is a fundamental piece of our business. It creates resilience, it creates opportunities, and we see -- continue to see growth opportunities in all divisions, which we are actively driving. Turning page and diving into divisions. Facade Access continuing on its improvement journey. Order intake was SEK 460 million, down 7%, but up 3% at constant rates. Book-to-bill above 1 now for the second consecutive quarter, which is a good trend. Strong order intake in the Middle East ahead of the war. Refurbishment and replacement orders continue to be important, and we also had some nice growth in France in the quarter on this topic. We continue to see mixed market conditions in North America now with strong momentum in also California, along with Florida, while New York market remained soft. Revenue was SEK 431 million, down 11% or 1% at constant rates and reflecting the lower backlog, but also service revenue was affected by this extensive winter season in North America. EBITA at SEK 52 million, up from SEK 46 million, giving a margin of 12%, up from the 9.5% and it's coming from our continued focus on more efficient processes, better order backlog and disciplined project execution. Turning page. Integrated Design Services continues to be an important part of this group and one of the initiatives, as you [indiscernible] here and it's in all divisions on how to take more control of our destiny and growth. And we continue to see positive momentum here in North America and the U.K., where this were started. But also now we start to see more orders coming in the rest of the world because we drive focus on this. We also overall drive geographical activities and develop our presence in Malaysia and Indonesia, important markets, we believe, going forward, overall Asia, but also, of course, focusing heavily on infrastructure, not only in North America, but now also in Europe and Middle East. Middle East is an important piece for Facade Access, not neglectable. We have quite a lot of people there. But what we have seen so far is that our projects, they are continuing as planned, more or less. However, some new investments are delayed, primarily smaller projects, while the longer, bigger, more strategic projects are remaining active. So short term, not a lot of impact. And then it depends on what happens going forward, of course, whether we will see more impact or not. But if the war now seems like to be ending and tourism are coming back, then we feel also very sure that investments will also continue there. Turning page, Industrial continued to grow nicely. Order intake was SEK 440 million, up 2% or 6% organically. solid equipment order intake in Europe, Asia Pacific and also stable performance in Americas. Ports, power, infrastructure, especially strong for us and also aftermarket here was somewhat slow in January and February, but back to speed in March. Revenue was SEK 367 million, up 4% or 10% organically, but still impacted by project delays and lower aftermarket activity early in the quarter. But here, we have, as you know, a good backlog to support both on the product and the service side going forward. EBITA at SEK 83 million, down from SEK 90 million, giving yes, a somewhat disappointing margin of 22.5% versus 25.3%. And so it's lower than the 25% mark that we've been used now for multiple quarters. but driven by temporary mix effects like more service and even though it was less service in the beginning of the quarter, but also less spare parts sales, but also there is effect of the project delays that we saw in the quarter. Turning page, we continue to invest into our key segments, and there's a lot of investments also in general into STS ship to shore cranes. It's also new actors coming into this market, and we are staying close and we are getting our share here. We see the power segment, especially in North America, is very strong, driven by data centers, also reigniting all the coal-fired power plants and more gas-fired power plants. So a lot of focus on the energy, which is a strong segment for us. So that's also good. But then we're also driving out of the box or new type of growth initiatives in also this division, utilizing our technology in rack-and-pinion. So we have facilitated to move a robot, which is then inspecting and also welding and maintaining the tower, which have this flare tip on oil rigs. So a new segment or a new opportunity and yes, an example of things we drive in all divisions. Turning page to Construction. Order intake was SEK 369 million, down 25% or 18% down at constant rates. And it's the hoist market specifically that continues to be very weak in Europe and North America. Rental business showed some signs of recovery in Europe, but was partly also offset by some project delays in Canada, and this is driven by the tariff situation between U.S. and Canada, but also we had a very strong comparable in Australia last year. Revenue was SEK 346 million, down 16% or 9% at constant rates. Revenue was impacted by the lower order intake for new equipment in previous quarters, of course, and also the strong performance in parts and service, partly offset the lower revenue then from new equipment. EBITA at SEK 40 million, down from SEK 66 million, giving a margin of 11.4% versus 16.1%. Last year, we had a good margin. But still this 11.4% is a good sequential improvement from the previous quarter and supported by our cost initiatives and activities to drive both volume and profit in the division. But the division is, of course, as I said, in a challenging situation with a very tough construction market. Turning page, Karin Baathe is now the new Head of this division. So she started beginning April. We're very happy to have her in place, but also happy that David is then taking the responsibility for Asia Pacific in Construction division going forward. Here also, we work on product expansion and looking everywhere to find growth when the traditional hoist market is weak, and we have been focusing for a long time on mass climbing work platforms. We believe this is a technology that has huge potential. And we start to see that this is also turning into lots of opportunities, but also concrete sales. So we had some examples of a nice order in Denmark, the rental project in Frankfurt, but also a very strong pipeline of new projects in Australia and India that I hopefully can come back to later. Geographical expansion is also important, of course, to find growth and Adelaide, which has been an area we haven't focused much on or not been so much present, we have some very nice projects coming in the quarter. Turning page, HSPS. Order intake was SEK 315 million, down 18% or 13% organically. And also important to note, they have a somewhat high comparable. Suspended Access and guardrail business in North America was then negatively impacted by the weather conditions in the beginning of the year, January and February. And also the general construction market in Europe is also impacting this business as it has been doing for a while. Revenue was SEK 336 million, down 4% or up 2% organically and supported by strong elevator business, while North America was soft overall. EBITA SEK 63 million, down from SEK 70 million, but still giving a good margin of 18.9% versus a relatively high one of 20% last year and a strong sequential improvement. to what we saw in the previous quarter, which is what we also expected. Turning page, a business update on HSPS. So it's a division, where we have a lot of things ongoing to really ensure that we can deliver sustainable profitable growth. It used to be a division with good margins, but not so much growth. So this is why we are changing. And again, because we have high ambitions, and we want to see this something fundamentally different than what we have seen. So that means that we are changing how we work with R&D. We are changing how we work with marketing and all support functions, manufacturing. We are changing how we work in the front end with the sales organization, much closer to our end users, different with our dealers. And we're also focusing on more geographical expansions to move to areas, where we haven't been before. as well as integration of Interlift. So lots of activities inside this division, but again, the long-term good investments that we are committed to.. We have been doing this for a while now. So we also start to see effect from this product development and R&D projects. So here, we have some nice examples of projects or products launched in the previous quarter, and it's more to come in the pipe. Turning page, Wind, another very strong quarter. Order intake, SEK 214 million, down 2%, but up 6% at constant rates. That's a high level. Order intake increased mainly in North America, India and America, and we have strong customer engagement through all regions basically. Revenue was SEK 186 million, up 22% or 32% in constant rates. And here, we continue to have a solid backlog across all markets, and we see growth in lifts, ladders, safety devices and parts of basically the full portfolio. EBITA was SEK 38 million, up from SEK 28 million, giving very solid margin of 20.3% versus 18.2%, and it's driven by discipline in all parts of the business. Turning page, the wind market continues to look strong. It's an improved growth outlook. And I think as many also read and talk about due to this war in the Middle East and the closing of the Hormuz Strait, it's creating even more focus on regionalized energy production and more green electricity. So the outlook will most likely continue to be upgraded, we believe And we also work very good in this division, as we have talked about many times to offset raw material, this is a very automotive-driven type of business. So you really need to be on top of everything and excel in everything and this division continues to do that, both on the cost side, manufacturing, sales. We're focused on India, it's an important growing market. South America is coming more back again after a couple of years more quiet and of course, the service and the aftermarket focus. So with that, we turn page into profit and loss, and then I leave for Sylvain.

Thank you, Ole, and hello to everybody on this call. I will be starting with adjusted EBITA, which decreased by 8% versus Q1 2025, 1% organically, whilst revenue decreased by 5% and grew 4% organically. This obviously implies an adjusted EBITA margin contraction, which primarily comes from a slightly lower gross margin, and I will come to that on the next slide. There were no items affecting comparability in the quarter. In Q1 2025, the SEK 28 million profit was related to the Mammendorf Capital Day. Mammendorf was the former Facade Access site, which we sold. The quarterly amortization of SEK 34 million was in line with our expectations and should stay stable throughout 2026. The financial net charge decreased in the quarter despite around SEK 10 million of one-off costs, which related to the refinancing, which we executed in the quarter. This refinancing is good news for the group, and it will lead to lower margins looking forward. And if the base interest rates don't go up too strongly, we would expect a quarterly financial net charge of around SEK 30 million in the next few quarters. Taxation rate was up in the quarter from 25.5% to 27% due to changes in the country mix, in particular, less earnings in Sweden, and we -- and that's due to the lower utilization in our Swedish facility. So in the quarter, net earnings came down by SEK 37 million, that is minus 20%. And the main contributor to that decrease is IAC as obviously, we did not replicate the one-off capital gain related to the Mammendorf site. So now moving to gross margin and operating expenses. As I said, gross margin went slightly down from 42.1% to 41.7%. Facade Access expanded its gross margin in the quarter. Wind was flat. Construction and HSPS were slight minus. And Industrial basically drove most of the group margin contraction with a temporary decrease in particular due to unfavorable mix effects. One comment regarding the potential effects of the war in the Middle East. We have recently seen cost increases, including freight, energy, but those increases had a negligible impact in the quarter. Looking into the future, we will be protecting our profit the way we have done it in similar circumstances when we have faced inflationary pressures, including due to tariffs, and that will be a combination of sourcing optimization and sales price increases if need be. As a percentage of revenue, operating expenses, excluding IAC went very slightly up in the quarter, but they were down in absolute value despite some cost inflation, typically salaries. And as you know, we have taken actions to contain our cost base. In particular, we have significantly decreased cost in Facade Access in anticipation of the lower revenue. So we will continue to [ pursue ways ] to allow us to keep and when we can increase the allocation of expenses fueling future growth, typically R&D, sales and marketing.. Result for the period was SEK 147 million versus SEK 184 million. That's a 20% decrease 13% organically. Excluding IAC, the result SEK 147 million versus SEK 156 million in Q1 2025. So that's a 6% increase. And once again, you see the impact of IAC in Q1 2025. EPS was SEK 1.39 in the quarter versus SEK 1.74. It's a 20% decrease. We had a stable number of shares. Adjusted for IAC and acquisition-related amortization, EPS was SEK 1.62 versus SEK 1.79 and that is a 9% decrease. Moving to operating cash flows, and that was on a low level this quarter. Comparing with Q1 2025, we saw 3 drivers for the reduced cash flow. First, the lower earnings, primarily coming from IAC. Second, the phasing of the corporate tax payments. We made more tax payments in Q1 2026. And third, the phasing of the revenue within the quarter leading to temporary higher accounts receivables. The revenue of March would typically be bigger than the average of January and February. But this year, the share of the March revenue in the quarter was even higher than in 2025 or in the prior years. But with our continuous focus on cash flows, we are definitely confident the working capital increase of the quarter will be reversed in the next few quarters. Net debt was stable at SEK 2.4 billion. And as I said earlier, we successfully refinanced the group with two 3 plus 1 plus 1 facilities maturing at the earliest in 2029 and at the latest in 2031, if we do exercise the 2 extension options. Leverage was 1.85, slightly up versus Q4 2025 due to the lower earnings, once again primarily coming from IAC. The leverage ratio remains well within our target of being below 2.5x. And as I said, we will continue to focus on operating cash flows, which will contribute to future deleveraging. Our capital allocation priorities are the same. We will invest in organic profitable growth, implying a growing share of sales and marketing and R&D expenses. We continue to actively and selectively work on acquisition opportunities, which are allowed by our low leverage. And we are committed to delivering our dividend policy, which is 40% to 60% of our net earnings, knowing that, of course, this is ultimately an [ AGM ] decision. And finally, one comment on ROCE, which decreased to 23.4%, excluding goodwill versus 24.7% in Q4 2025. That was 9.5%, including goodwill versus 10% in Q4 2025. And that decrease is driven by the lower EBIT, once again impacted by IAC. And on that comment, I will be handing over to Ole.

Thank you, Sylvain. And we turn to the summary page. So resilient performance in a challenging market, even though, as I say, we have higher ambitions, so not fully happy with the result in the quarter. But we have a very solid book-to-bill, important. The strong -- the decentralized divisional structure that we are having are securing that we are close to our customers and making decisions, where the decision should be taken. And I feel also very confident that the right things are ongoing inside each of this division to secure that we continue to develop on our strong New Heights journey, Quick look into the divisions, Facade Access continue to show progress and that I feel confident we will continue to do. Industrial division, strong growth has been there for a long, long time, small dip in the [ result ] now, but that will be back. Construction facing a very challenging market. It's difficult in the short term to see that, that will fundamentally change. So I think we should expect a similar type of trend also here that they are facing the same market, but we do have a lot of activities to both strengthen the result, but also to find new growth. In HSPS, we have a lot of things ongoing, a lot of turbulence, but a lot of change all for the better, but that also means that it's a little bit more uncertain and uncertainty around this business is also part of that business with a lot of dealers and the presence we have in the market. So a little bit more day-to-day and more difficult to predict. While the Wind remains very solid and the prospects are just growing, we believe, for this division. So the focus is to continue to drive New Heights, product development, sales, operational excellence, and ensuring that our people, the most important asset we have, have the support and the means to both enjoy and excel and continue to take the group to new heights. And we do have the means, and we are working also very diligently with our M&A funnel and opportunities. And as I said before also, I do expect that we will see some nice M&As every year also this year. But it needs to be the right ones. And with that, we turn to Q&A.

[Operator Instructions] The next question comes from Andreas Koski from BNP Paribas.

Just one question on the relatively weak margin in the Industrials. How confident are you that the margin will recover already in the coming quarter or in the quarters? Or is this mix effect, is that something that might persist for several quarters and that we will see somewhat lower industrial margins for the full year?

No, we feel -- maybe we should try to kill the echo now that's gone, it seems like. So that's good.

It's my line, sorry about that.

No, no worries. We feel quite confident, absolutely that this was some sort of, as we say, very clearly, a temporary mix effect in the quarter and that we should be back to the level we have more than used to in the next quarter or the quarter we are in. So we don't see any fundamental change in that business at all. We continue to grow. We continue to have solid gross margins on the order intake that we are having. So we feel confident.

Understood. And then on Construction and the weak demand there. I mean, for some time, I would say you have sort of been supported, maybe yes, of course, it depends which quarter we look at, but by a backlog, and that's maybe not true only for construction, but also for Facade Access, how does the backlog look like today, say, compared to a year ago? And will there be a lot of backlog deliveries for the rest of this year? Or are you now much more dependent on new orders?

Yes. The Construction business, it has never been so that we have long-term order book. It's more 6 plus/minus 3 to 9 months, maybe the order book and the visibility there. So we don't see a risk of dropping. But if you look into the curves of our order book, the last 4 quarters has been now relatively stable on this level that we are seeing. And the previous [indiscernible] quarters, they were somewhat higher. So we are on that level now, you would say. So I don't see any risk in the order book per se that you might be [ able to do ].

[Operator Instructions] The next question comes from Anna Widstrom from DNB Carnegie.

Just 2 questions from my side. Firstly on the Construction division. So could you maybe give some details again on how the sort of ongoing margin improvement initiatives are looking and going and if you're sort of accelerating these initiatives as you said, there is no clear signs of order activity picking up clearly in the near term?

No. These -- it's a good question because this is a division, which has been under strain for quite a long time. So we have done a lot on the cost side all the way and it starts to be a little bit more limited, as I've also been saying for quite a while until you start to destroy things that you don't want to destroy. But there's always things that we can do, and we are doing things in manufacturing, and it's to balance because things are also moving in different parts of the world and what we are seeing. So it's nothing really fundamentally bigger type of cost initiatives. It's this trimming and finding things and being very, very prudent on -- and stopping everything that is absolutely not necessary, but still investing in growth because this has also been fundamental to us. If we would have been exposed like we were 5, 6 years ago that this business would have been in very big problems. We have many competitors and players in this market focusing on the construction market, which have either gone bankrupt or are making losses or have big issues. We still made 14% EBITA in the last 2 years. And this is because we are very, as I said, on the cost, but also that we are investing in the business to find new growth. And one of the areas that I talked about now, which we have talked about for a while, mass climbing work platforms, we see a lot of opportunities. We see also the funnel now start to increase, and we have also seen some concrete results of our activities. So it's paying off. So it's to find this balance between investing and stop spending, where we don't need to. So you shouldn't expect big cost savings. But I'm just highlighting that we are very diligent in the management of this balance of cost and investing.

Perfect. That's very clear. And then just a final one on the HSPS, maybe a bit similar here on like how the order decrease, how you're navigating volumes ahead, but also how we should think about the quarterly improvement perhaps seen in the margin? Should we view this as a sort of solely an impact from slightly better volumes?

Yes, we had lower volumes last quarter, which also took down margins, plus we had ones off. So the whole plan with this division is that we shouldn't drop margins too much. We should -- but we should, at the same time, also reset, where we are more turning maybe bad spending into really active growth type of spending. So here also, we try to do this thing that you take out whatever costs that you should take out, that you change the things you should change to instill growth and the right focus and so forth. And that's not meaning that everything was wrong before, but it means that to get change, you need to change. So it's a target in itself to drive change. It's always been a resilient, very good, high-performing profit-wise business, but it's not been growing, and that's what we are trying to achieve. So -- and we couldn't do that the first 2 years part of the group because we felt we needed to have the arms around it very well first. So this is what we're driving now. So that means it's turmoil, it's turbulence, some people leaving, unfortunately. And -- but it's multiple things, but it's all good things happening still, but painful. And then it's a market exposure that also this division is having towards construction, which is very weak. Then you have distributors, partners. The nature of this business is very short cycles. So it's more book-to-bill. So it's difficult -- more difficult to have that type of visibility long term into that business also. So that's why I'm a little bit more cautious also on saying exactly what will happen. But -- but still, we are convinced we are doing the right things, and we are convinced that we are also managing it relatively well and that you should see more of what you have been seeing.

Just one additional question from my side, sorry. Could you maybe give us some more color on what you saw in improving activity towards the end of the quarter? Was this sort of solely an impact from the weather condition in North America improving? Or was there other changes as well?

Sorry, I didn't understand. What -- the question is related to HSPS or no to.

No, sorry, just in terms of on the whole group per region or per sector or whatever, just on -- it sounded like January and February was much weaker in activity and then a pickup in March. And I'm just wanting to clarify if that's only relating to the weather conditions in the U.S. or if it's more broad-based?

That was the main effect that we had, but it was also a little bit broader in general, a little bit -- it seemed like a little bit longer Christmas break. The Chinese New Year was a little bit longer, and it was multiple effects that seemed like it was a slow moving start in the beginning of the year. So it was a little bit wider than just the weather, even though that had, I think, a significant impact on the North American business in the first 2 months.

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.

Yes. Thank you. So if no questions on the screen here for now, so I'll give it some seconds to see if someone starts typing. No, we are not getting anything on the web. So that means that we round off. And with that, I would like to say thank you to all our dedicated employees, partners and also shareholders, investors and you listening in here and asking good questions. Thank you all. And yes, [ see you all ] next time.