Nimbus Group AB (Publ) (BOAT) Earnings Call Transcript & Summary

Welcome to the Nimbus Q2 2026 presentation. [Operator Instructions] Now I will hand the conference over to the CEO, Johan Inden; CFO, Christian Johansson; and Head of Investor Relations, Gunilla Öhman. Please go ahead.

Welcome to the Nimbus Group Quarter 2 Report for 2026. This is Johan Inden, CEO speaking. And together with me, I have Christian Johansson, our CFO. If we start by framing the quarter, we continue navigating a cautious market, resulting in lower volumes. However, we are able to compensate these lower volumes by improved performance across the company, and I'll come to that when we disclose the numbers. And I would say that we're navigating these rough waters with a steady hand on the wheel and making sure that we keep a good heading. If we look at the numbers then, to summarize the quarter, net sales amounted to SEK 479 million. That is 16% lower than last year, and that's consistent also across the first half. So we see a market that is then trending for us 16% lower. If we look at the order book, that's also consistent with the numbers. It's 15% lower than last year. So we see a market that is kind of stabilizing on that level. And I'll come back to the details on the order book with a split between commercial and retail on the next slide. Then coming to the compensation, we see gross profit coming in at the same level as last year and percentage-wise or margin-wise, of course, that is an improvement. This is driven by improved mix between our brands and also when it comes to size of products, we're selling more of the Nimbus brands. We're selling more or larger average size of the products, which improves our profitability. And it's also driven by efficiency across our production system. And there, I'd like to highlight the work in our Mariestad factory in Sweden, where we are producing the Nimbus Coupé, so the biggest boat, the 495 as an example. They've run a really good job on the efficiency and are reaching productivity levels we haven't seen for quite some time for that factory, contributing then to a good gross margin. We maintain the compensation in the P&L down to the EBITA level, where we come in at SEK 26 million as compared to SEK 25 million last year. And of course, that means an improvement of the margin up to 5.3% over 4.5%. And what I'm really proud to see and coming back on the performance activities that we are running is that we're coming in with a strong cash flow amounting to SEK 139 million as compared to SEK 90 million for the last year, and this is a result of the very strong focus on driving cash flow also in this market that is actually reducing the volumes. So I'm happy to see that we are able to drive the cash flow. And the available cash in the business amounted to SEK 279 million out of the quarter, which is just shy of SEK 20 million as compared to last year. If we take just a look at the long-term trends, it's very consistent with what I just reported for the quarter. We see a market that is reducing quarter-to-quarter over the last 9 quarters. And of course, the game for us is to work with our improvement activities and make sure that we are able to compensate this. And as mentioned, and if we look at the EBITA level, we are starting to flatten out. We are producing a result in line with last year as a result of these activities. And we see also the longer-term trend of cash flow is in the right direction, and we are able to improve that, I would say, quite significantly over last year. And we'll come back later in the presentation to look at the full net working capital and how we are reducing the balance sheet for the company. Looking at the order book and the market environment. I've already said that market sentiment is still characterized by, I would say, uncertainty and that drives a cautious behavior. Our business model is driven by selling to dealers, which in turn are selling to end customers. And we see cautious behavior both across the end customers -- the way we see that is that, so to say, order horizons are pretty short. You see a customer who takes a late decision or waits a long time to make the buying decision. And that influences also the dealer behavior who is careful in building stock and careful in replenishing stock. So it slows down the sales process. That's how we see this cautious behavior translating into the business reality. And in our judgment and as per our data, we see that the overall marine market, so not only the Nimbus Group sales are reduced across the globe, both when it comes to North America and Europe and Nordic. So we feel that we are navigating in the same way as the overall market. We also see that dealer stock, both in Europe and across the U.S. is on low levels, but also, as I already mentioned, replenishment levels or pace is fairly slow, underpinning this cautious behavior. Then if we look at the order book and we split it into the commercial sales side of our business, that is when we sell to independent dealers and the retail sales side is when we sell through our own retail channels. We see a bit of a difference in the market. The commercial side, the independent dealers, we see a stronger drop of sales influenced by this careful behavior. Independent dealers seem to have a slower pace of refilling their stock, whilst our retail sales are actually coming in at par with last year, which is a very strong sign of our own capacity to drive our commercial activities, attract the customers and come to close. I'm really proud to see how our retail sales are performing through this tougher market. And when it comes to the actual order books then for the commercial order book, we have a reduction of roughly 15%. And we should say that we have included now part of the contract for the workboat for the Swedish defense, and we have added -- it consists of SEK 95 million related to this order, and that's the next year delivery, so the 2027 deliveries that we have included of the full order value of SEK 260 million, which goes over 3 years. And retail sales order book as it comes with the season in the Nordic is on a low level as during Q2, we deliver much of the retail sales order book and now we come into the period of building for next season. If we take a step back, I already mentioned the results of our performance improvement activities. And this slide you saw last time for those of you who joined, it's a summary of the initiatives that we are driving across the group. It comes to strengthening the Nimbus brand. I've put a lot of emphasis on the strength of Nimbus and the importance of the Nimbus brand in the Nimbus Group portfolio. We're talking and have updated on the trend -- turning the trend in North America, where we've had a negative trend, specifically with Edgewater. We're talking about improving our commercial capacity and performance across our independent as well as our own dealer business expand our business in workboats and defense and then on the cost side, improve operational excellence and cost efficiency. And as I mentioned, for example, the Mariestad factory is an example of the last activity here, how we are improving our operational excellence in that factory significantly and then positively contributing to the gross margins. Today, I will update on 3 of those, and I will start on the Nimbus brand. The Nimbus brand, I usually say that stronger -- the brand is stronger than the size of the business right now. And our ambition is, of course, to grow the business now to fit a very strong brand. It's a brand that dates back to 1968 when it was started here in Sweden and it has established as a global strong premium brand in the boating industry. And our job right now is to make sure that we, so to say, communicate and we polish the Nimbus brand in a way that it can shine in the global market. And that comes, of course, through the work with our storylining, our graphic representation, how we build our digital presence. And of course, those are all packaging things, but then it's about defending and living up to the brand values and showing product that lives the brand values. And I will come on the next slide to our latest product that we are just in the process of launching. And I think it represents the future of the Nimbus brand in an excellent way. What we have coming on the brand building side is the launch of the Sport Tender 35, which is a completely new boat in the in the Sport Cruiser family. And we will now launch it to dealers in the end of August, and we will then showcase it live at Cannes Yachting Festival in the beginning of September. And if you click on the next slide, I couldn't help, but to bring a few pictures and be able to talk you through quickly what does it mean then to bring a new product and what is our focus? Well, the Nimbus Sport Tender 35. And by the way, we've -- as you might have seen in press releases, we're bringing back the heritage naming of our boats, the Sport Tender, the Sport Cruisers as compared to the Coupé Cruisers are the traditional way of naming the Nimbus product. So it's also a way of revitalizing the brand. The Sport Tender 35 crafted for life on the water. Well, one thing is to drive the boat. And of course, this boat handles extremely well in the water. But I would say it's just a short percentage of the time you spend on the water that you're actually driving the boat or navigating. Boats today are built as an experience platform. You spend time with friends, with family, it's social gatherings on the boat, you lay moored, you stay overnight. So the boat is built as a social platform with the onboard experience really at the center. It gives ample social spaces in our design process. We look at all the different way you want to engage on the boat, where you want to stay for shade, where you want to stay for sun, where you want to have your meals. But we also look at the flow of the boat to be able to accommodate a larger party on the boat of 1 or 2 families. We look at the flow, how do you make sure that you can move with comfort, sit with comfort, et cetera. So this is what we put focus on in our design process, and that gives life to the boat and will provide an extremely nice onboard experience. We're out test driving the boat right now, taking photos over the last few days, and it's now soon packed for the launch. And if we make it in summary, it's a Sport Cruiser with a Coupé comfort. And I would say it's more Nimbus than ever this boat. It really represents the brand in a good way. If we continue on the improvement activities, turning the trend in North America, we updated on this last time. We see a challenging market in North America for the Nimbus brand and for Edgewater. We have somewhat lower sales than last year. But when it comes to the dealer activation around the Nimbus brand, I'm happy to see how they are engaging on a very strong level. We have, as an example, delivered more than five 495 Fly over to North America and only the last month, we delivered 2 of those. We've also made the first deliveries of our Sport Cruiser 42, so the bigger version to North America. It was launched as an updated product in January in Düsseldorf. So it's good to see that we have traction on the U.S. market as well. And we've worked through our cost savings with consolidation of marketing and finance resources. For Edgewater, we have lower sales than last year, and we continue having a negative result. We are very hands-on with the Edgewater business, working through a new product launch, but also a complete review of cost and pricing structures to make sure we do everything we can to improve the margins of the business. And we have also, as part of this, reduced our production capacity further in the business. And finally then, final update on the initiatives is our workboat and governmental sales opportunities. First of all, I already mentioned our order now. Under the frame agreement of 100 boats, we've now received the first order of 60 boats and the order value is SEK 260 million for delivery from 2027 to 2029. And we are really proud now to put this in production after the validation process together with the Swedish Defense Materiel Authority (sic) [Swedish Defence Materiel Administration]. We were also able to showcase the MSMB200, which is the designated name of the boat in Almedalen, Visby, which is a good place where decision-makers in the industry as well as the political sphere are gathering. And we had quite some attendance of policymakers and decision-makers on the boat and discussing also the so to say, wider opportunities of being a Nimbus group with Swedish boat production capable of handling both glass fiber, and aluminum. So I think we have good leverage from our visit in Almedalen. And then we are, of course, mapping additional marketing opportunities across not only Sweden, but Nordic and Europe and strengthening the team to be able to push forward on this important and interesting segment for us. That was a long update from my side, Christian.

yes.

Now you will take us through some of the more details in the numbers.

Yes, I will, Johan. Thank you very much. Yes, returning to the numbers, some more comments, although Johan has covered it all quite well, as you heard already. The EBITDA result was SEK 26 million for the second quarter, SEK 1 million better than last year. Gross margins improved by 2.4% to 14.3%, resulting in a gross profit of SEK 68 million for the quarter, which was unchanged versus last year despite the lower sales, as you heard. Johan also commented that the gross margin improvement came from several sources, production efficiency in Lugnås, in Mariestad, we heard, also overhead costs have been reduced in the group, which gave lower allocated cost of production. Price and mix in sales improved versus last year, and this is, as we've talked about before, net of lower margins than on sales of stock boats. Partially mix improvements came from the sales of smaller boats and used boats with lower margins decreased more as a share of the total sales decrease. In total, price and mix contributed positively year-over-year by SEK 13 million to the gross profit. And the lower sales volume versus last year impacted negatively, obviously, by with SEK 11. The impact from currency to the gross profit was negative SEK 1 million in the quarter versus last year. Some comments to the finance net that amounted to negative SEK 1 million compared to negative SEK 27 million last year. And this is primarily coming from currency effects on intercompany balances, which was positive by SEK 5 million, while it was negative by SEK 19 million last year. And the reason for this is the positive change is that the dollar has strengthened during the second quarter this year, while, as you might remember, the dollar was strong -- was weakening versus the SEK in the second quarter last year. Interest net was minus SEK 6 million versus a negative SEK 5 million last year. And additionally, the company Stream Propulsion was divested with a loss of SEK 3 million last year with no such transaction this year, which then also impacted the year-over-year comparison positive. Sales already well commented. Commercial sales, which is the dealer -- independent dealer sales was lower by SEK 96 million or 31% organic decline. Sales decreased in all regions, except for other markets where we are happy to have sales increasing with deliveries to Asia. And as you heard, market conditions remain challenging in the quarter. North American market remained weak. However, there are certain signs of stabilization in the market. The sales decreased in North America, both for the Edgewater and the Nimbus brand. However, the sales activities, as you have heard already that for the Nimbus brand have increased and are yielding results, which is promising for the future. Sales decreased in the Nordics and Europe and we still experience long sales cycles among the end customers and our dealers maintain a short-term order horizon. Some dealer stock replenishment occurred during the quarter, but inventory levels across the dealer network remained historically low. The order intake of SEK 238 million increased from SEK 208 million last year, but that includes then for the quarter, SEK 75 million related to the orders for boats placed by the Swedish Armed Forces. And the order book in total of -- reflect the cautious market and declined to SEK 321 million from SEK 381 million last year. Retail sales was overall stable in the quarter, which is the second quarter is the dominating quarter on an annual basis when it comes to sales, SEK 276 million in sales versus SEK 274 million last year. And it's very encouraging to see that the sales of own brands increased to SEK 145 million versus SEK 130 million last year, and we see growth in sales of the Nimbus and the Alukin brands. Order intake improved to SEK 157 million from SEK 148 million, where we also see an increase in the Nimbus Group branded programs in the quarter of SEK 10 million versus last year. Order book SEK 27 million versus SEK 28 million, and it's normal in retail with a low stock level at this time of the year since, as you know, Nimbus retail business is to a large extent the Nordic business. where we have deliveries a lot of deliveries in the second quarter ahead of the boating season. Cash flow. Operating cash flow continued to improve in the second quarter and was SEK 139 million versus SEK 90 million last year. And it's not on the slide, but if you will take the 6 months, operating cash flow was SEK 110 million positive compared to negative SEK 37 million last year, so an improvement of SEK 147 million year-over-year. And we are very pleased with the cash management activities so far in 2026. The cash flow from the operating results in the quarter was positive SEK 44 million compared to SEK 34 million last year, while interest and tax paid, negative SEK 11 million, unchanged versus last year. Further on the details there, in the second quarter, as already mentioned, we normally deliver more boats than we produce and inventories decreased by SEK 103 million. And in the second quarter, we also reduced receivables, payables and other working capital items, which combined released cash of SEK 10 million compared to a negative cash flow of SEK 53 million last year from these items. Investments -- cash flow from investments, negative SEK 10 million versus SEK 9 million last year. If you look at the net working capital development in the graph to the right, we see in the end of quarter 2, we were at SEK 502 million compared to SEK 664 million in the end of second quarter last year. And in the -- as in relation to the last 12 months sales, -- we ended the second quarter at 41%, reduced from 47% in the end of first quarter and the same level of 47% in the end of the second quarter last year. So definitely a positive development, but we do still see potential to reduce the working capital further. Yes. Back to you then, Johan. I'm completed there.

Excellent. Thank you, Christian. And then just concluding, this slide you've seen before, we remain with our financial targets of growth above 10%, EBITDA margin of 10%, a capital structure with no financial debt and the dividend policy. And this remains. And then on the next slide, we open up for Q&A. And just a reminder that our quarter 3 report will be published on October 27. And to keep the 27 then the Q4 quarter 4 report will be published on January 27. With that, let's open up for questions, and I hand it to Gunilla to facilitate.

First, let's see if we have any phone questions.

[Operator Instructions] 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.

So yes, we have a few written comments or questions from George at Gratitude Capital. And the first is about sales in Europe were weak, while order intake remained strong, which given the short order to sales cycle you are referring to, appears to bode well for Q3. Should the apparent postponement of sales be interpreted as indicative of a broader market trend? Or does it simply reflect the normal timing effects during the peak season with some transactions closing in June and others slipping into July. What do you say, Johan?

I would say, if I take so to say, one step back on the question, I take it that the underlying question is what is the market trend. And I would say it's difficult to say what [Technical Difficulty] trend right now. As I mentioned,[Technical Difficulty] minus 16% for the first half.[Technical Difficulty] in the question, there is a stronger intake in Europe, but it's -- I would say it's not at so significant level that we can call it the break of a trend. The market is short term, it is a bit difficult to predict. And the shorter, so to say, order behavior that is mentioned in the question as well, makes us cautious in terms of making any forward judgment. We navigate on the basis of a weaker market, and that's how we drive our initiatives right now.

Yes. Very well, Johan. Another question is, in Q1, you said that the [lower] share of the sales decrease in North America was due to lower Edgewater sales. What was the year-on-year decrease in Edgewater versus rest of Nimbus Group in North America more evenly split in Q2?

But I would say when it comes to Edgewater and that's compared to last year, Edgewater had a relatively good quarter 1 and quarter 2 last year, whilst for this year, as we reported in Q1, a significantly lower production pace and thereby sales, and that goes for Q2 as well. So the relative, so to say, performance of Edgewater remains to be overweighted, so to say, or the relative part of the lower performance is overweighted towards Edgewater as they had a fairly strong Q2 last year as well. So the production volume, if you look at the capacity that we run in Edgewater in Q2 this year as compared to the capacity in Edgewater last year is significantly reduced.

The follow-up was more if you could elaborate further on what makes you cautiously optimistic about the Nimbus brand sales in North America. Are the dealers signaling increased interest?

As I mentioned, we see increased activation. And I think one of the good indicators is the number of 495 Flys that we have now delivered to North America. I mentioned in the last quarter call that we had 18 boats on the, so to say, produced and delivered and 5 of those has gone to North America, and we started the sales in North America around the Fort Lauderdale show, which is late October last year. So strong trend on the 495. We also see strong activation on the brand, the spring tour that we mentioned that I had a poster from the spring tour as part of the presentation shows that the dealers are prepared to spend time and money to engage their customers. That is the additional sign that we see good dealer engagement. Now we all want to see that translate into sales. And that's, of course, our next expectation. But that's why we say that we are positive to the development for the brand.

Thank you and another question is more broadly on the geographical markets and regions where we see encouraging progress? Or are there any where we are gaining market share? Could you mention any regions that are more interesting?