Beijer Alma AB (publ) (BEIAB) Earnings Call Transcript & Summary

Welcome to the Beijer Alma Q2 2026 Report Presentation. [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Johnny Alvarsson, and CFO, Peter Forslund. Please go ahead.

Ladies and gentlemen, welcome to this presentation of the Alma Second quarter 2026. If you hear some strange -- noises around me because I'm sitting in the [indiscernible] door in the middle of the Baltic Sea. It's only waves but no wind. That's why there are some strange noises. Together with me is Peter Forslund, who is the CFO of Beijer Alma. Now I will present the financial figures. Good morning, everybody. On this agenda, I will talk a little bit of highlights from Q2. And then we talk about financial performance, then acquisitions and finally, Q&A. And we increased our net revenue by 5% in this quarter and we have an adjusted EBITDA of 14%. If you look at the market, and we are working in many areas of the world, and we start in United States where we are with components. It's been a good quarter, and we see a strong market in the United States. And we -- as we are manufacturing springs, we are many, many different customer segments. But it seems like in the first half year, has been a strong market in the United States, and it seems to continue that way. If you go to Europe, that means excluding Nordic, it's been a much weaker market. It's been stable, but really no increase in the market. And we have also still some problems to solve that we work with and will be probably before end of this year. In the Nordic region, we have seen a smaller growth, stable market and also a slight growth in general for the components and actually a nice growth organically for Beijer Tech. If you go to Asia, where we have the spring business, it's been a stable business over the period. Then we talk [indiscernible], we talk about Beijer Tech. It has been a very good quarter where we have made acquisitions. We have had organic growth, and we'll come back to that later on. But it's been a good quarter, and I have some hope for the coming quarters in this year that will continue to be strong quarters for 2026. And by that, I give the word to Peter.

Thank you, Johnny. We will now go into a little bit more detail for both Components and Tech, but also a little bit on the general. As Johnny mentioned, we see a continued profitability improvement, both in Components and Tech. We have a strong EBITDA growth coming up to 14% year-over-year. We see a stable demand during the quarter, not reaching really the heights of late March in the first quarter, but overall stable and we are satisfied with the performance. Johnny mentioned also U.S. specifically and U.S. is the market together with Niche within Beijer Tech that has the highest demand. We have also seen a very limited effect from the geopolitical turmoil on the Q2 numbers. And what happens in the future, that let's see. But so far, not much of an impact. Great. We will go further. If we look a little bit on the sales development, if you look at the sales development, we have a slightly organic growth within the quarter and -- but still some currency headwind. If we look at the components, we have more currency headwind than we have in tech that is fairly neutral. If you look at the organic growth a little bit more specifically, there are still effects from the action plan. We're saying that we're losing around SEK 50 million on top line based on the deals that we have decided to not to do in the action plan. So the underlying organic growth is a little bit stronger than the 1%. Acquisitions are contributing 5%. And please remember that the acquisition -- the 5 acquisitions we made this year is fairly late in the quarter. So you will see the full impact. during the third quarter rather than here in the second quarter. Moving on to a little bit more details on [indiscernible] Components. If you look at the Chassi Spring business, we see a slightly lower demand in the quarter compared to last year. Specifically, this comes from Germany and from U.K. On the demand side, we see better demand in Eastern Europe. But we see that the business is stable. It's not that much as a change. It's just the demand moving a little bit sideways and a little bit lower, nothing dramatically in Chassi Springs, still good profitability in Chassi Industry, we have talked about a little bit on the regions. U.S. is the strongest in fact, as Johnny mentioned around Europe that we see Europe is stable, but it's not improving and becoming better. So the industrial demand is moving sideways in Europe rather than improving. We have the effects from the action plan as we discussed earlier. What creates a broad improvement over the different regions, not only in 1 or 2, but it is a broad improvement on profitability. Looking at Alcomex. So Alcomex delivers a stable Q2 results. profitability moving sideways. We are still -- we are very close to double digit, but still not really there. But Alcomex is stabilizing and the performance is solid here in the second quarter. Moving then to Beijer Tech. So Beijer Tech has a very strong quarter, 8% organic growth and then 5 acquisitions. So Beijer Tech is really performing on a high level. If you look at the demand side, specifically in the different segments in Beijer Tech, then we see that Industrial Products, there is still a little bit of cautious demand when it comes to industrial products, but not bad in any way, but a little bit cautious. Fluid with a solid organic growth. There is a wide range of businesses there in the valves that are performing on a good level. Niche Technologies has had a very, very good year that continues. Several companies are contributing in a good way. If you look at the profitability improvement that we've seen in Beijer Tech, so that is driven by both demand, but also a little bit of mix where we have, so to say, more revenue in the Niche technologies [indiscernible], which tend to have a little bit of a higher margin. Looking at Beijer Tech as a whole, we now have a period of 12 months behind us with a very solid organic growth. I think we have had 8% in Q3 last year, 8% in Q4, 6% in Q1 and now 8% here again in Q2. So it's a very solid delivery here over time from Beijer Tech. Looking at the cash flow side, we come out with a strong cash flow in the quarter, driven first and foremost by the profit growth, but also that we in the quarter see a positive working capital development. meaning that last year, in the second quarter, we had a negative working capital development and now we have a positive, meaning that the swing gets fairly significant between second quarter last year and second quarter this year. Looking at capital efficiency, which is one of our financial targets, we are catching up soon to reach the 50%. We see a good development in the capital efficiency, both in sort of adoption internally, but also in the development in the numbers. So solid performance in capital efficiency, very much driven by the EBITDA growth. Moving over to the financial position. Net debt stayed at SEK 1.7 billion despite us doing 5 acquisitions and paying dividend. That's, of course, helped by the strong cash flow. We see that we have a good financial strength to continue to invest and to reach the debt target that we have. So from a leverage perspective, it's a solid delivery. With those comments, I will hand back to you, Johnny, to talk a little bit about the acquisitions that we have done in the quarter.

Thank you. As we -- this is a picture showing the acquisitions we've done since 2010. And as you've seen, it varied over the years, but I think now we have -- our ambition is to continue to grow the acquisitions, and we have 2 teams now, one team since many years working with Beijer Tech, but also new team working with Beijer Components. And we are waiting now for them to be able to make their first deal. If we look at the acquisitions done second quarter, it's in Beijer Tech. The first is a Swedish company in Uppsala, who is an add-on to one company we have. They're working with service piping service. We made our first acquisition outside the Nordic, and that is a fluid company because we have a lot of fluid competence. So it's by contacts and knowledge, we ended up this business. KICAB is actually a company doing sludge screw presses is adding to a product program that we have earlier in this area with processing sludge. JR-Wood Oy is a [ Finnish ] company with very special business who is an intermediator between supplier of material for refurbishing houses and refurbishers. They make kits of what is needed when you refurbish a house. So the companies doing the refurbishment make a specification what they want and JR-Wood Oy manufacture this, make a package of it and deliver to the house that's supposed to be refurbished. The business I haven't seen in Sweden is very special for [ Finland ], but they have been very solid in the market for a long time and have a nice profit. And finally is Ulinco is a company in Norway working to the oil sector in Norway. And then will -- I know there will come a few more acquisitions in Beijer Tech in Q3 as well. So the summary is that it's a stable industrial demand, and we continue to improve our profitability, and we are aiming at a higher level than we are today. We have so far not been impacted by the geopolitical turmoil in the quarter. A few price increases on some material, but not any major in that area and not what we have seen with our customers as well. By that, we go over to the Q&A.

[Operator Instructions] The next question comes from Johan Dahl from Danske Bank.

Just, Johnny, if you could expand a little bit on the components that the team you talked about on M&A, how that -- how those working processes are progressing and when you think they can start to deliver on sort of growth would be interesting.

Yes. We hired one person from -- I think it was 1st of February, 1st of March and experienced person. We have also now released one person in the European organization. So we have now building up a number of cases. But it takes time to get relations with different people out in the organization, but I hope there will be something in this autumn, but you never know until the deal is done.