Beijer Alma AB (publ) ($BEIAB)

Welcome to the Beijer Alma Q1 Report Presentation. [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Johnny Alvarsson; and CFO, Peter Forslund. Please go ahead.

Thank you. Hello, everybody. Good morning, everybody. We will start -- I will start now talking about the general market demand as we have seen it during the first quarter of 2026. And if we start in the United States, where we have 4 companies working, we can see an improvement in the market compared to last quarter in 2025. The general market has improved, and that goes more or less all over our customers for the U.S. And then if we move to Europe, excluding the Nordic, the market has been very stable demand compared to last quarter. And then if we continue East to Asia, same story, stable market. And finally, if we go to the Nordic region, it's been an improved market and that depending on the large customers we have in the Nordic has also improved their sales and the request from components from us. Then in Beijer Components, finally, the aftermarket business has been rather stable, a little bit lower turnover, but basically about the same level as same period last year. Then if we move to Beijer Tech, we have niche companies and some of them are doing extremely well. And generally, I should say that it's a mix in those companies. Some have received orders for -- maybe for the whole year more or less. And the development is very good. So overall, it has been a good quarter for our business. And we have improved our margin according to what we promised a 15% increase in EBITA, and that's where we are the first quarter at least. And -- so I think that we are on the right track for the future. What we did not have done is any acquisitions in the quarter. And we have projects going on in Beijer Tech, and we started up new resources in end of this quarter for Beijer Components. So we expect there will come acquisitions later on this year and hopefully also in Q2. And by this, I think I'll leave over to Peter to talk about the financial performance.

Yes. Thank you. A short comment then on the Beijer Components side. Then if you look at the net revenue, we have an effect from the action plan that we had last year, meaning that we have a drop in the top line based on that we have ceased some of the nonprofitable or less profitable deals affecting top line in Beijer Components in the quarter with around SEK 50 million. Johnny has talked around the demand. I think it's good to point out the profitability that we are now at 19.4% on the EBITA level. I will comment a little bit on where that comes from a little bit later. Moving over to the Beijer Tech side. So here, we see a stable quarter with good demand coming from several companies. If you look at the Industrial Products, it's a little bit cautious still on the industrial demand side, but both Fluid and Niche are performing on a high level. We have a backlog effect that we have talked about a little bit in the Beijer Tech coming from that we have done investment in some of the companies within Niche Technologies, and they delivered very strongly, but that effect is still there in Q1. It's smaller than in Q4, and it will decrease sequentially over the remainder of the year from that. Going in and commenting a little bit more on the financial performance. If we look at the order booking side, it's -- we have an increase in the order booking side. We have talked about this a little bit in the calls that we have had previously that in Beijer Tech, the order booking can vary a little bit from quarter-to-quarter. This quarter, we have an organic growth in order bookings in Beijer Tech with around 8%. And that is partly done because we have had one of these positive swings where one of the companies have got a large bulk order during the quarter, driving up the organic growth within the order bookings. So underlying order booking is more according to the organic growth in net revenue rather than the one in order bookings. But these effects will continue to have from quarter-to-quarter, a little bit here and there. Looking at the EPS or earnings per share, we see a very solid growth from SEK 2.60 up to SEK 3.40. It's coming, of course, from the profitability going through, but it also comes from lower interest rates and better financing conditions as we renegotiated terms last year, and that was also a onetime item affecting comparability in Q1 '25. Let's then move over to the financial results a little bit more in detail. If you look at the profitability in Beijer Components, you have a little bit of a positive mix effect coming from Chassis, if you look at sequentially from Q4. We have a higher portion of the revenues in the Chassis area this time. We also see within Beijer Components that we have a profitability improvement compared to last year in all geographical areas, meaning that it's not, so to say, directed only to 1 or 2 regions, but it's a broad-based increase in profitability. We have talked about the action plan measures. Important to remember that we expect a similar effect in the second quarter compared to the second quarter last year. Alcomex has been a topic on these calls for a longer time. We say that Alcomex is developing according to plan after the actions taken in the action plan last year. Profitability has sequentially improved. On the Beijer Tech side, we have commented on that specifically, but I think worth just mentioning is that the quarter is affected by lower transaction costs in Q1 this year compared to last year, as Johnny said, that we have not closed any acquisitions. So great. That was a little bit more on the in-depth financial side. Let's move over to a little bit on the cash flow and capital efficiency. On the cash flow in the first quarter, the seasonal pattern repeats as we have expected. This is following the trend from the last couple of years based on yearly rebates in the Chassis Springs, but also that we -- say sales build up in the first quarter compared to the fourth quarter. Looking at the capital efficiency, one of our 2 financial targets where we've set a target level of 50%. Here, we are then showing an increase based mainly then on a solid EBITA growth. Going into a little bit on the financial position. We see that we have a financial strength to continue to invest and achieve the targets we've set. There is headroom for acquisitions when the time is right. And the net debt to EBITDA, we have a fairly stable ratio there. So that was what I had in mind on the financial position. Johnny, I hand back to you if you want to say something more about acquisitions.

Yes. We are -- as I say, Beijer Tech, as you know, have been doing a number of acquisitions every year, and same procedures last year. Now we didn't have anything during this first quarter, but we have projects going on. And we have started up this model where we try to use Beijer Components organization to find acquisitions out in first time -- firstly in Europe. And that work started actually 1st of March. So I expect that we will have some result of that during the year, but it will take a time before you build up the relations with people around in Europe and also with our own people, so they start to look for acquisition targets. The work is going on. And as I said, I hope something will materialize during this year in that area. But -- and we have the financial positions to do probably more than we can find of nice acquisitions.

Great. So, Johnny, summarize the quarter shortly.

Yes. It's -- January and February was slow, but then it was really like a boom in March. And that is what we can see more or less all over our markets. And we have not seen any effects of the turmoil in the general environment so far. And nobody knows what's going to happen in the coming quarters. So we have to wait and see and adapt the situation. We have seen some kind of mentions that there will be some price increases in some materials, but we don't know yet. And -- but we will try to follow that and we adapt to price increases from our suppliers and transfer that to our customers. And by that, I think it's time for Q&A.

Yes, let's go to Q&A.

[Operator Instructions] The next question comes from Max Bacco from SEB.

Well done in the quarter. Just 3 quite short questions from my side. First, the strength here in March, have you seen that it has spilled over or continued in April as well, if you could comment on that?

To be honest, we don't know really. It's too early to say.

Okay. I understand. And then I noted in the report, and I think you, Peter highlighted as well that net financials clearly down here year-over-year. And in the report, you said it was explained by lower market interest rates and improved financing terms as well. Is there anything else in that number that explains the decrease, which is more perhaps of a nonrecurring nature?

No. At some point, you could have, sort of say, a little bit of revaluation effect on cash sitting in different locations affecting it SEK 1 million or SEK 2 million at each direction. But there is no other sort of say, onetime effect really in that number, no.

Okay. Perfect. And then the final one, you mentioned it here in the report and the presentation that some SEK 50 million has been lost within Beijer Components due to actively phasing out low-margin businesses and activities. Is it a similar impact on the order intake as well, SEK 50 million?

Both yes and no. I mean in the quarter, that's the picture. But if you look at the order intake in the second quarter, then, of course, a part of it is not -- has already come if you take the comparison figure. But roughly, you have a timing effect, of course, from the order to the delivery. So the longer we get -- you lose a little bit of the similarity.

The next question comes from Anton Ingves from Nordea.

Anton here from Nordea. Starting off here, you mentioned the pickup in demand for heavy vehicles in the quarter within the Industrial segment. Is there any other end markets here that stands out in either way?

No. I should say it's in United States, it's a general market has improved. We noticed that in Q4, it seems like many customers were waiting to place orders depending on -- they were unsecure about the political situation in the United States. And now in Q1, they actually have put the orders to us. And I think it's -- I don't know, but my conclusion could be we have to continue with the industry regardless what happens politically. That's kind of trend. I mean we cannot sit and wait what's the next words coming from U.S. around what's happening in the world. Industry has to continue.

Perfect. Very clear. And then going a bit over here to Alcomex, which you mentioned here. But kind of how close are you to a margin level where you are satisfied in relative terms, could you give some flavor of how much have you done and how much is still expected here going forward?

We still have some -- we are closing businesses still in that area. So we will see the full effect end of this year. But it's positive now. It's going in the right direction, but we are not on a double-digit level yet.

And if we look a bit longer term to perhaps a 20% margin level in Beijer Components. Is that one of the key things here? Or what's the other main drivers here to get up to 20%?

Well, it's -- I mean, the market. And of course, when we have removed nonprofitable businesses as we have done, I mean, we are very close to that 20% already now. So if the market continues and the actions we are doing, then I think we will be there at some time.

Perfect. And then just one final, if I may, here. The strong margin here in Beijer Tech, what's the main driver? Is it Niche Technologies? Or is it just a broad improvement in all segments here year-over-year?

I would say it's a broad improvement. Yes, of course, that the Niche is doing fine is, of course, helping in that sense. And also the lower transaction cost is also helping on the margin on that side. So you have a little bit of mix. But of course, some of the bigger companies are performing well, that helps, yes.

The next question comes from Carl Korsheden from DNB Carnegie.

Just a few follow-ups here from my side. If we look a bit into M&A, you talked a little bit about Beijer Components here, hopefully contributing with some deals later on throughout the year. But can you say anything about the M&A pipeline currently in Beijer Tech?

Yes, we have one. And I expect that we will see some closing during second quarter.

Yes. That's very clear. And how would you say the comparisons for Chassis Springs are here going into Q2?

Fairly normal. Yes.

I think so. Fairly normal.

Chassis had 2 good years in '24 and '25. I think that's good to bring with you that they had 2 good years. And so from that perspective, over the full time cycle, the comparisons are fairly tough, but there's nothing that stands out in the second quarter.

That's clear. And on Beijer Tech, you mentioned that you had received sort of larger bulk orders there, partly driving that strong, I guess, organic order intake. Is it possible to specify, I guess, the sort of duration of that order intake? Should we expect that to hit the P&L already in Q2? Or are those longer-term projects?

It's longer term. So here it's more over a year. I mean some of the companies are fairly small, sometimes they get the full yearly order at one point in time more or less when they open up books and so forth. So you should look at not for next quarter but over time.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

We are reading the questions right now.

Exactly. Yes. So we have a question on the organic growth in Beijer Tech, that it's evaluated for various reasons. This quarter, we posted an organic growth of the 6%. And from that, around 2% comes from, so to say, the capacity increases. We have a question on our best view on the inventory levels on the Chassis Springs side. Johnny, do you want to take that?

Well, the inventory levels on -- if we talk about on customer, we know that the Meca business, they have actually reducing their inventory of economical reasons. So we -- that affects us. That's a problem. Why it's very hard to make a forecast about sales every quarter. In spite of that, we had a pretty okay quarter in aftermarket. Then we have a question about Alcomex, solid performance. The margin, as I said, is not double digit yet, but very close to. And it's hard to say about the future, but I think that we will -- I expect a growth in the business also for the remaining part of the year. And the material prices increases well, we will try to transfer them to the clients as fast as possible, but that will be adapted to each case depending on what material prices are increasing or not.

It's very difficult to give a general view, but this is, of course, an important topics that we follow and execute on, probably an effect, probably something that will come in the second quarter here. All right.

No further questions?

No further questions.

Thank you for listening to us and meet you in a quarter again in July, and have a good time until then.

Thank you.

Bye-bye.