Good afternoon and welcome to this live video interview with CINCINO following the Q2 2026 report. My name is Niklas Elmhammer from Carlsberg Equity Research and we're very pleased to join today by the CEO of CINCINO, Dag Bergen-Petersen. And as usual we welcome questions from the audience so please use the chat function and submit as many questions as you like and we'll try to address them as many of them as possible. But now, without further ado, welcome Dag. It's great to have you with us here again.
Thank you for having me and thank you for being here.
So, you released the Q2 2026 report today. So, why don't we just dive into that? You showed 18% sales growth, 23% in local currencies. Despite somewhat slower growth compared to previous periods, the operating leverage seems to improve, with reaching almost record margin at 16% and the EBTA itself doubled almost. So, what are your general remarks about this quarter?
It's kind of the numbers is talking a little bit for themselves. So you summed it up pretty well. What last year when we were having like I call it a hyper growth of approximately 50 percentage, it's hard to sustain that kind of growth. We've slowed down this year a little bit on on acquiring companies so we did i've done one real acquisition this year and then another one came in late last year and the last six months we have consolidated and put a lot of effort into to make sure that most of the functions internally and at Zeno is working so i'm quite pleased with the growth in itself if you say 23 percentage and local currencies It's still kind of a high growth and also remembering that we are coming from higher kind of targets to hit on. So in itself, the growth, it's good. It's going to be tougher and tougher to reach those kind of growth. All that said, we still are very positive when it comes to the next three years. So we still believe that we will have an average growth of 20 percentage over the next three years and maybe pushing for even more. So that in itself is good. And then on the margins, of course, it's quite much above what we have talked to and promised the market. And that is a really, really good thing. We see that the cash flow is really strong. We see that the margins are strong. We have cut some losses. We had some losses in the last two quarters previous year, which we are comparing against. So we've done some smart moves, I would say, and we have some scale advantages on top of that, which is really, really coming through here in the numbers. I don't see a lot of dark or any dark clouds on our sky, but it's going to be tough to retain a growth margin. So that's going to be a focus. And then the margins will be following the growth patterns. then if we do have a good cost control which we are aiming to do and have and then increasing uh the numbers of new customers and new partners then i believe we're gonna have a really good year ahead of us so so very pleased i would say on on most of the things and we've done a lot of investments which i'm probably gonna speak about a little bit later in this interview uh thank you for that uh so the first half growth was 22 so in line with your your target so we have a question from the audience here how confident are you about 20 growth in 2026 well i cannot promise anything but i will keep all my promises um so so i i i strongly believe in 20 percentage growth um we are in them in them i mean the high season for us when it comes to sales um so august september in october but it's hard because we compare the numbers from last year so we need to up it up at a game and that is always a little bit of tricky but but i strongly believe it's going to be um a good good year uh in total and and i strongly believe we're gonna to keep the 20 percentage when the end of this year so i'm pretty confident in that and if it's 19 then it's 19 if it's 22 it's 22 so we're going to be around that level i'm pretty sure about that when i'm calculating the numbers of clients and everything that we do for sure so a follow-up on that uh in the short term what are the uh sort of drivers for uh that could help drive growth in uh the second half against the backdrop as you mentioned the very strong comparison so we have um we have some uh i would say new markets coming up so i would say that we with some of the acquisitions that we did last year we have much higher numbers in the latin American market. So Mexico is now probably the fifth largest market that we have within Sinceno. And that floats over to the American border. So you will see a growth both in U.S. and Mexico, which is super strong. So the American market are really definitely giving a lot of, I would say, it's a good trend. Then we are still very strong in Europe, led by Germany, with Austria and Switzerland around. We have good growth in the French market and in the Spanish market. So we have those, I would say, big markets that are leading towards growth. Then we have some new markets that we didn't compare our numbers against last year. That is Korea, South Korea and Japan. and and in korea we we just did a relaunch recently and remember we started up in south korea in november last year so we we um and this year in july and this next quarters we we have we see a good trend on those markets so my belief is that most of the markets will will be really really increasing their numbers and then we have some addition to that and that is new markets on top of that i would say that our products we also have we are relaunching and you're launching us a couple of new products that will be in addition to to the growth of of only the market grow in itself and new customers okay thank you that's that's very very helpful and regarding asia pacific as you mentioned uh it was down in q2 and in the first half but strong performance in july could you please elaborate a little bit on on the uh sort of up and down development seeing in this region yeah I think one of the things that we've seen we've been we've been around for 21 years so we've learned like with the phases of every five year we learn something and in between as well for sure but one of the things that we've learned is that it takes a little bit time to stabilize a market so we've been aggressive in opening a lot of markets like super aggressive i mean if you look at the numbers of markets that we are in asia it's quite significant and good the same in latin america we have opened two new markets peru and colombia and and it takes a little bit time to stabilize those markets sometimes you can have a little bit of a growth to begin with and then maybe it could fall down a little bit and we saw that like in india last year we had a significant growth but it was not sustainable and we even lost money on that revenue and the reason for that is that the products were sold a little bit too on the low end so and that is also basically one of the reasons why you have higher profitability today We have a better mix of where the growth comes in and towards the margins. So Asia are probably going to be the biggest region five years from now. That's my, if I'm going to really, really think about where we're going to have a significant growth, Asia is going to be there. Japan, Korea, the e-commerce shopping in China is going to be significant. We are very strong in Taiwan. Malaysia is a very good market on our products. So all of these markets will be really, really significant for Sincino. But we need to invest. We need to be patient. We need to build it strongly and strong fundaments over time. So this is going to be one of those focus areas for Sincino. We put a lot of effort into them. So even though the quarter two and quarter one didn't give like an increase, I can see the signs of greatness moving forward, for sure.
Okay, that sounds exciting. And another market that has been perhaps a bit challenging is Eastern Europe, down again in this quarter. when do you expect stabilization in this region?
That's a good question. What I can say is that we are working hard to change a couple of things. We have invested in some small tools. We have had some issues that we are solving um without going too deeply into that we we have some webshop sales and copies of our products a little bit so we we are bandaging those negative things so so i'm thinking that we are ready for for a growth with that said it takes a little bit time to recover when you have a little bit of a decline but we are on it and we're working hard and it's a lot of activity and a lot of customers that are super happy with our products but um yeah i i believe we're gonna hit back again
this year and next year okay and the question about the margins i mean you have a 11 target target and in the first half you are almost 16 percent so do you expect any significant cost headwinds ahead a little bit depending on what you mean i think that when we are establishing our goals we are a little bit cautious i had a board meeting yesterday and we were talking about this and then and then our long term target would for sure be to be over 11
percentage and it's up I think we can we have shown that we can have a higher margins although we don't wanna we want to over deliver on our promises so you can say that we are over over delivering on the margins levels but we also show that this is a kind of level that we can stabilize on so if you look forward we We will do some investments, depending on how big those investments will come. That might be buying some companies M&As, that could be investing in some markets or in some products or in factories. So all of these things could cost some money, I would say. But I think we need to stabilize ourselves and have high expectations on our margins moving forward. And I think that's an internal overview of this internally as well. But if you balance growth and margins, we've been pretty good at this. If I remind the audience or those who are listening here, we have been paying out dividend for 13 years. So we can balance growth and margins pretty well and paying out dividend. And we would like to be a sustainable growth company, which are profitable and paying out dividends. So let's say that we have some struggles in the next half a year. Maybe we need to put a little bit more gas on the pedal for keeping the growth on 20. Then the margins might go a little bit down, which would be OK. if we don't need to put too much gas on the pedal and we keep a 20 percentage then the margins will be kept on this level what we have shown now for some quarters is that we can keep up with pretty good numbers and margins i think also quarter four quarter one and quarter two just shows that yes thank you and and a question related to that the cash flow uh you have 800 million plus cash position what is the plan for that cash well we are we are paying back money to to the shareholders so we have a sentence in in our report page six saying that the dividend policy shall be at least 50 percent of the group's nets earnings as long as liquidity and equity ratio allow that meaning that we are paying back to the shareholders we are doing a lot of investments yesterday we just approved the new machinery to the factory one interesting detail in july i flew down to our factory in the north of spain to look at our new facility on algae this is in a locked system this is going to be the new era of how you're creating and making omega-3s so today you most of the omega-3s in the world comes from fisheries fish but the future probably would be in creating and making uh omega-3s and and and we do a lot of investments so we have invested quite heavily in that production facility as we speak over the next years lots of money will be used to that the second area is that we're using a lot of money on technology we just launched a new technology system for all our support globally and the fantastic thing with that is that all the members who are working and helping out customers they can answer now in writing on their own language and it translates to the language that the person is connecting to us. We are answering probably 35 different languages very easily globally. We are putting a lot of effort into AI. I would say no coder in Zinceno do code anymore. We use cloud or Anthropic or other tools to do coding, and then the coders are reviewing the code. So we're very up to date on technology. We are using AI tools as we speak on lots of different things, which will speed up the company and increase the speed of everything that we do. So time to market is extremely slow. And we've been ready for this for years because we have a lot of talented people within our company. So I'm super happy to see all of these things. And a note on this, every customer now 30% of all the customers inquiries to the support system today is answered 30% is answered by machine learning, meaning AI without and we monitoring it, which makes a huge difference on speed and also to help customers. So there's a lot of investments. We do a lot of investments in studies, in product development and also in ingredients in development. So we need that money to make sure that we have enough goods in our storage and warehouses as well. It was a long answer to the cash flow, but I hope everyone got what I said.
Absolutely, I think so too. And another part of growth investment is, of course, acquisitions. You made a significant acquisition in January, but you mentioned also a continued focus area. Should we expect acquisitions for the rest of the year?
Well, I think we have said quite vocally that we look into companies that could improve Cencino, could help us with growing product side or ingredient side. So we will be searching for candidates that fits our culture. but it it is a lot of effort bringing those companies into the system so what we're doing is that we are taking most of those companies and then we put them into our system and that needs to be played a little bit for a while before it's really really um are playing the tunes that we want them to play so so we've been using that time well we are having a lot of different other projects on tech side and product side that has been good for us to focus on so but we are ready for for more acquisitions but it has to be the right ones yes and regarding this year's largest acquisition it works do you have any updated target for the revenue you expect to this unit to contribute with i think they will contribute with around well this is a hard question to answer because parts of that will be physically i mean directly and then you have indirectly organic growth but maybe around 400 million swedish kroner or something about that in total if you add everything to it.
Okay, thank you. That's very clear. And on that note, I believe it's time to wrap things up. Do you have any final remarks, Dag, that you would like us to have?
No, I'm not sure if I need to do that, but it's always a pleasure to be here. Thank you for listening and i hope that everyone if there is question then please send them to you so i can be well prepared for next time so that's that's a good thing and thank you for having me okay thank you dawg for taking the time with us today and thanks to all the viewers for and all the questions coming in and I hope to see you all soon again thank you
