Fasadgruppen Group AB (publ) ($FG)

Good morning all, and welcome to this presentation of our results for the first quarter here at Fasadgruppen. In the room, we have our CEO, Martin Jacobsson; and our CFO, Casper Tamm; and myself, Magnus Blomberg. With that being said, I hand over the word to Martin. Please go ahead.

Thank you, Magnus, and good morning also from me. Thank you all for joining this 2026 Q1 results call. So let me start with the headline. Q1 2026 was a cold quarter. In the Nordics, we saw some of the coldest weather in, I would say, several decades, which, of course, materially restricted our production. And in the U.K., we saw continued regulatory delays as we have spoken about several times now from the building safety regulator, which we denominate BSR. And the adjusted EBITDA came in at roughly SEK 5 million against SEK 77 million a year ago. That said, the underlying business is in a stronger position than these headline numbers suggest, I would like to say. Our organic order backlog grew by almost 15%, mainly driven by the U.K. and Norway. And we've also successfully completed our rights issue, and we have gotten roughly SEK 488 million of net proceeds. It was oversubscribed as well to roughly 142%. And we take that as a very strong vote of confidence from our shareholders. So a tough quarter on the P&L. But however, on the leading indicators such as the backlog and the balance sheet, we are going the right way. Then taking a look on the rolling 12 months here for the Q1 numbers, we see an increase in both sales and the adjusted EBITDA levels as well on the margin. Backlog is also significantly higher than the same period last year as well as cash flow and cash conversion. So even though Q1 was cold, we see improvements in the last 12 months. Then taking a look on the net sales here in the first quarter, we saw a total sales of SEK 994 million, which was a decrease by roughly 15% compared to the same period last year. And on an organic growth level that came in at roughly 12% below organically. As I mentioned, it's mainly the cold that has struck hard in the Nordics and that, of course, affected our productivity on these kind of projects that we do, mainly on the outside of building. And regarding BSR, we will talk about Clear Line separately in the coming slide. I would also like to highlight here that in a market where new production is lower, which mainly has been in the last couple of years, we have been more tilted to renovation. And I would like to say that renovation is more seasonal in that sense that most of the renovation projects are done during the warmer months. So with the lower new production levels, we've become more seasonally effective. Then taking a look on different segments, we see here the total solutions decreased by roughly 10%, down to SEK 519 million compared to SEK 574 million last year. On the Specialist Solutions, we saw the sales go down by roughly 15% to SEK 361 million compared to SEK 425 million last year. And then Clear Line in our U.K. business decreased by roughly 34% in Q1, down to SEK 150 million compared to SEK 174 million last year. Here, the BSR effects lose. Next slide, please. As we mentioned, the adjusted EBITDA was significantly lower compared to last year. Taking a look on the various segments, we can see that we are down compared to last year in all segments. But of course, both Total Solutions and Specialist Solutions are negative in the quarter. And to remind people about the last year, the conditions temperature-wise and also on the weather side was much more beneficial for us compared to this year. Then looking on Clear Line, we also saw that the result was down there. The margin came in at roughly 30% compared to 35% a year ago. This is, of course, as I mentioned now several times, mainly connected to the delays that we will talk about. We saw some adjustments of roughly SEK 10 million in the quarter, mainly comprising of earn-out revisions. Then on the order backlog side, we came in at SEK 4.5 billion here at the end of the quarter, and we saw total 12.4% growth compared to last year. Organically, the increase was roughly 15%, as I mentioned, where the majority of this, of course, comes from Clear Line, which you see have almost 80% higher order backlog compared to last year. So it's partially good demand, but also, of course, driven by the delays. If you just look on the Total Solutions and Specialist Solutions, it's no major changes in those 2 order backlogs. But I want to highlight here that our customers are signing our contracts. They trust us to deliver. The work is there. And the question for 2026 is execution, not demand, I would like to say. Next slide, please. Then on cash flow, we see business ramping up following the seasonal pattern and the working capital improvements that we do continues. And if you just take a look on the 12-month basis, as I mentioned prior compared to a 1 year ago, it's roughly SEK 200 million increase compared to last year. Next slide, please. Now then on the Clear Line situation, I'd like to spend a moment here because I know this is on a lot of your minds regarding BSR Gateway 2, which is for -- just for you to understand regarding this kind of gateways, what this means is there are 3 gateways. It's the first gateway 1 is regarding to planning. Gateway 2 is when the project actually starts and then project 3 is in the finalization. And it's been statutory that in the renovation projects, the time for these projects should take at maximum 8 weeks. But now on average, they are 36 weeks. to get the approval. However, we -- as you remember, in December, we sent out a press release stating we've gotten some approvals. I would say most of them will start in Q2 this year. And regarding BSR, they also sent out a statement here in April with an action plan where they target to decrease this average processing time from 36 weeks to 12 weeks by December 2026. So that is, of course, very good news for us. And they have also then mentioned concrete measures, these are -- they have this dedicated multidisciplinary team with account managers and doing a recruitment drive and they're also doing something what they call a mechanism approval with requirements that allows projects to start safely, but still remaining having some technical questions to be resolved. But it's very important for you to understand that no projects have been canceled and the underlying demand is strong. I would like to highlight here that Clear Line is very well positioned for when these processing times normalize. And we have more visibility forward, I would like to say, than we had, let's say, 6 months ago. Next slide, please. Some concluding remarks then before we open up for questions. First, then about Q1. It was a cold quarter and BSR delays continued. Secondly, underlying business is intact and the order backlog is growing. That means that the fundamentals in our operations work. Thirdly, I would like to highlight here that our balance sheet is stronger than prior to the rights issue. This gives us room to act long term to say yes to the right projects and not to the wrong ones and to be ready when the right M&A opportunities comes along. And that's how we've built Fasadgruppen since 2016. This is our 10-year anniversary and how we continue to -- we intend to continue going forward. And then lastly, now we're in the middle of the peak season, I would say, here in production. And we are doing that with a more agile organization that was implemented last year. I'm pleased with the performance of that so far. And we have a platform model that has proven itself across borders here. With that said, I'd like to give a special thanks to our employees who delivered quality and reliability to our customers during these difficult conditions. And I'd also like to thank our shareholders for their broad support behind the rights issue. With that, I think we open up for questions.

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

So a few questions from my side. Perhaps starting with the order backlog in the Nordics, it was down 5% year-over-year. Of course, I guess you have some currency headwinds in that number and also the divestment, but still pretty much unchanged organically. Why is that basically?

So it varies a lot in the different countries. And why that it's also a timing effect to some extent. Of course, if you take, as an example, Norway, they stand out, which have had during 2025, been working on a lot of big projects, and they have come into our new order backlog here in the quarter. So the order backlog for Norway is up roughly 50% compared to last year in Q1. So that's a significant change. They had some quite low levels prior to that. Then if you take, let's say, Sweden as an example, which are down maybe 10% to 15% compared to the same period last year. Of course, there's also a timing effect in when you sign the previous large orders. So that's, I would say, more of a timing effect than that the demand has weakened. I would say it doesn't really reflect the demand situation, especially in Sweden, which I think is absolutely on the right path. Then if you continue with Denmark, that I've mentioned it historically, I think to you, Max, that we had one of our largest orders ever in the order backlog that has been -- we have been producing on that for the whole of 2025. So that's a distortion figure. Should you exclude that, I would say that Denmark is more or less flat, but now it's in the same area as same as the Swedish order backlog. And then on the Finnish side, there we have a significant increase by more than 20% on the order backlog side. So it paints a different picture if you put it like that. And I wouldn't say that if you just take the whole Nordics and say that it's flat, that it would be some kind of indicator that it's lower demand out there. I would -- as I try to say now that it varies across the countries. And in general, we are quite pleased with the development.

Okay. And then turning to Clear Line, as highlighted, very, very strong growth in order backlog, up 80% year-over-year, now standing at SEK 1.5 billion. Could you remind us and update us on how much of that is approved by BSR and how much is expected to be executed on during the remainder of 2026? I think the last time in connection with Q4 2025, so a couple of months ago, I think you said that roughly SEK 750 million in order backlog for Clear Line were to be executed on during 2026. Is it still the same number? Or has anything changed there?

Yes, it's roughly the same number. It's -- when -- let's put it like this, even if we get all the approvals at the same time, we wouldn't have the capacity to execute that at the same time. So we want to be it to be spread out. We are looking into orders for 2028 now and 2029 in Clear Line. So it's also connected to, let's say, our capacity in that sense. And yes, so if you just -- a reminder, the Clear Line's sales was roughly GBP 47 million, 2025. And if you compare to the number just stated here on the roughly SEK 750 million there should be possibilities for growth for Clear Line in 2026.

On a full year basis or for the remaining quarters?

For -- yes, it's both, but for '26 compared to '25 was what I was aiming at.

Okay. Okay. Understood. And then if you could potentially -- I mean, Q1 was, of course, I mean, a very weak quarter, but at the same time, it should be pretty much isolated to Q1 given weather and to some extent and the regulatory delays perhaps easing here in Q2. So could you comment anything here on Q2, how it has started? I mean we have passed April and pretty soon we are past May as well. Have you seen the uptick that you expected in terms of activity?

Well, we don't give any prognosis on that level, Max, as you know. But what I can say is, of course, that the weather conditions have been better as expected in that sense. What happens when you have a very cold start to the year is that after when the weather improves in, let's say, February or so, we can start up full production in March. now that there's been a delay, there's there is also some lag to the start-up in that sense. But we are doing everything we can to speed up production in that sense because when these kind of orders are postponed during the colder period, of course, all of the other projects that were supposed to start in, let's say, April or so, they still need to start. But with that said, it's a bottleneck in that sense where you are connected to, let's say, the number of craftsmen you have and the number of subcontractors that you can employ in that sense. But with that said, of course, we are eager to start and doing everything we can to catch up as good as possible during the rest of the year here. And as a reminder, we have not lost any projects or something like that. It's just that there's been a postponement due to weather conditions.

The next question comes from Lucas Matson from Indius.

I have a couple of questions as well. I was wondering, are you seeing any effects from the conflict in the Middle East that are currently impacting your business, both in terms of demand, but also on the cost side due to higher energy prices?

If we start with the Iran, Hormuz situation, then I wouldn't say that we had a significant impact on demand in that sense. Of course, there's always some hesitancy, but renovation projects, the buildings are still in as poor conditions. It doesn't matter what kind of conflicts that is around the world. So I wouldn't say that it's been a significant impact there. But on the other side, take a look on the oil-based materials that we use such as flat roof materials, we've seen significant upticks in the prices there. However, as a reminder, it's a pass-through effect in that sense to the customers. But still, it's a significant impact there. We're talking about maybe more than 15%, 20% increase on these kind of materials. And often, the suppliers can be quite quick to raise prices, but they're not as quick to lower them if it goes the other way. So that's the most significant impact that we've seen on that situation, I would say.

Okay. Yes, that's very clear. I was also wondering, how do you currently view the competitive landscape in the market? Are you seeing any easing when it comes to pricing pressure?

Yes, it varies on the different regions, I would say. In Sweden, we have seen some easing, I would like to say. And of course, it would ease even more if new production would start even more. But I think there's been a lot of -- I know that there has been a lot of bankruptcies around the sector, construction industry as general. And that have had an impact on us for us. And if you take a look on Norway, which I would say is the country that stands out mostly negatively for us at the moment, they are still seeing price pressure in that sense in a tough market. Then going to Denmark, I wouldn't say that there's any significant change there quite as say as prior. It depends on various segments or type of services. But I would say on the balcony side in Denmark, it's a bit tougher situation. Then in Finland, as you know, that our company there is more European based. So they have a very broad spectrum of competitors all around Europe, but I wouldn't say that, that has had any significant change. And then in the U.K., I wouldn't say that there's any -- on the -- you can say on the contrary in the U.K. that we've seen actually bankruptcies connected to the BSR situation. So companies are really struggling with BSR in the U.K., not only us. And it has actually opened up some doors for us there to gain some more projects. But as you know, the order backlog is quite full at Clear Line. So yes, that -- I hope that gives some flavor for you.

The next question comes from Elvin Rolder from DNB Carnegie.

A lot of questions have already been asked, but I can maybe continue a bit on the U.K. and Clear Line. If we look at the order backlog, it's 15% up organically year-over-year, which seems to be, of course, driven by Clear Line. But I guess a lot of that is also coming from the fact that you cannot kind of deliver on projects as you wish considering the BSR delays. Is it possible to split the kind of order backlog increase in how much is actually coming from accelerating order intake and actually underlying improvement and how much is the fact that the actual kind of conversion from backlog is much lower than what is -- can be considered normal?

Yes, I think I can answer the question in this way, what kind of -- in a normal situation, what kind of activity level could Clear Line handle? I think that's more like what you're asking in that sense. And of course, now I'm thinking mostly in GBP 1 million, but if you compare them to the GBP 47 million they had in sales in 2025 and compared to, let's say, what we talked about in the vicinity of -- we mentioned GBP 750 million on that kind of activity level, that's roughly GBP 6 million or so. There's that kind of range, I think Clear Line can handle up to closer to GBP 100 million as well. But then we need to have more, let's say, better planning around when we get the BSR projects finalized. So there's ample of capacity still in Clear Line. But of course, it coincides with let's say, approval rates. So even though there's potential for growth in Clear Line, I think with the current organization, if you have kind of the right projects in that sense, I think there's ample growth opportunities as well on top of that. So yes, I think that -- does that give some table for you, Elvin?

Yes, yes, it does. And then perhaps kind of continuing a bit on the backlog if we pivot towards the Nordics, I guess, Max highlighted it was down here and there's some effect, I guess, in Q1 as well. But it was also down in Q4, if I remember correctly. And I think Q3 was somewhere around flattish for the Nordic kind of backlog. And I respect that there is some effect from the Danish business. But how should we view kind of volume-based part for the Nordics on an underlying basis on the backlog given that it's kind of 3 quarters with this one included, doesn't really point to a very optimistic scenario for the Nordic backlog. And is there any price year-over-year effect as well in that, that we should be aware of that kind of distorts the picture in either direction? Or can you give some more flavor that we kind of understand the dynamics there?

Yes. It's I think the Nordic region as a whole. I think it's important to understand that when you compare to the historic levels, there's always you take a look on the order backlog, but the order backlog doesn't give the full picture. I would say, especially in the Nordics compared to, let's say, Clear Line because Clear Line have much larger projects and it's more planning around it. In the Nordics, there's much more smaller projects. And they could be -- you can't really see them in the order backlog because they're executed so quickly. It could be -- could you start in 2 weeks' time if you get that order in May that's executed directly, you don't really see it. So in that regard, that also affects kind of the situation for Nordics. And of course, it makes it hard for you to model that. But I think when I went through all of the different regions here on the order backlog side. And the one that stood out was Norway, which was roughly, as I mentioned, up 50% -- now there's someone on the line, I think maybe I can in the Norwegian market as an example, even if the order backlog is up roughly 50%, a lot of the execution on that is connected to various reasons on when to start. Often, when you do our kind of larger renovations and it's in, say, residential building, often, it's -- you have scaffold on the facade, and it gets some say quite inhospitable in that sense where you can't see out and if you have a balcony or you can -- during the summertime, you can see out through your windows, like that to be as little as possible during summertime when the when the residents are, let's say, there, they don't like to be in that kind of residential area during the time of the summertime. So that's -- with that said, if you just take Norway as an example, a lot of the projects are prone to start after the summer. So that's when you paint a bigger picture around, let's say, first half year is maybe somewhat, let's say, on a lower activity level compared to probably the second half of the year.

There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Thank you. Well, I can only summarize what I mentioned earlier. It was a cold Q1 and -- we have some written questions, okay, sorry.

Yes. So we have a written question here that are being asked that we haven't completed any acquisitions over the past year, which is unusual for Sol Gruppen. Is this a strategic shift? Or is it mainly driven by the balance sheet and the financing commissions margin?

Yes. So last year, we finalized one acquisition, Liab in Stockholm. But of course, it's been a strategic decision around the kind of activity level acquisition-wise and improving the conditions for our current companies, which we think is going the right way. And with that said, of course, with the rights issue now strengthening our order backlog or our balance sheet, there is more possibilities going forward in that sense. But one shouldn't expect any high activity level during 2026.

And you point out the weather as the main explanation for the downturn in the Nordics. How much of the development do you see as purely weather related and how much reflects a still weak renovation and construction market in countries such as Denmark?

I would say that the majority is connected to the weather. And of course, with the -- if you take Denmark as an example, we know that it's a tough situation, and it was also last year. But that's what gladdens me a lot is that Denmark actually had its best year ever for us in Porsolrpp and in 2025, even though the market conditions was tough. So that's a proof of that the model in Denmark is strong and healthy. And I can say some words about Denmark because I'm very proud of what they've done there. They are truly helping each other in collaborating around the projects. So I think that ends up to a better customer experience, if we put it like that. And also, we see that in the profitability levels. So I'm very glad that Denmark has performed that well during 2025. And of course, Q1 in Denmark is connected to -- or also affected by the weather, but quite decent performance even though that kind of performance of the weather. So positive numbers from Denmark in Q1.

And one last question here. Could you give us some flavor regarding the pro forma EBITDA?

Okay. Yes. So that was, of course, the rights issue, I think, if that's included, which it should be because it's finalized, but that was like on the 1st of April or something like that. But if you take that into consideration, it was around 3x.

Great. Thank you for that. And yes, no more questions, so any final remarks, Martin?

No. As I said now, a cold quarter, but we are very confident in the future and a strong order backlog going forward. So we are very eager to prove ourselves in the coming quarters.