Welcome to all to our second Q conference call. Please go to the first slide. Let me provide a brief update on our key strategic priorities and the progress we have made during the period. Starting with Norway, we successfully completed the integration of Sonepar Norway in the second quarter of 2026. The integration has proceeded according to plan and represents an important milestone for the whole solar group. Our focus is now on realizing the operational benefits from the combination, strengthening our market position and ensuring that customers and employees continue to experience a seamless transition. Turning to Kumla, the logistics center has now been commissionized and is fully operational more broadly KUMLA marks the completion of a significant investment cycles or our logistics network in the core business that have taken some years and we have heavily invested and expanded and modernized our automation of our warehouses facilities across our Nordic markets with these projects now largely completed we have established a modern and scalable logistic platform that supports both future growth and hopefully also improved customer service as we move forward the focus shift from construction and implementation to capturing the benefits through higher productivity greater efficiency and stronger return on the huge investments we have made on the digital side we have initiated the rollout of a new customer-facing platform. The platform has successfully been launched in our smallest entity and that is on the Faroe Islands just to experience all things equal and we have so far seen a valuable experience and the feedback we got from the customers has been very promising. We are also progressing the next phase of integration including the implementation of a new search engine on the existing platform. These initiatives are aimed at improving the customer experience, increase our digital engagement which are already high and making it easier for customers to do business with solar. Finally a few comments on what we see in the market at the moment. We are seeing early signs of improvement in installation activities which is encouraging. However market conditions remain soft across much of the industry and visible on timing of a broader recovery remains a little bit unclear and limited. The main expectation continues to be max 45 where activity levels remain relatively robust. At the same time trade continues to show positive momentum supported by several large-scale projects of opportunities across the region. Overall, while we remain cautious about the near-term market outlook, we continue to execute on strategic initiatives within our control. Last but not least, I will tell we have now strengthened our rational platform, advanced our digital capabilities and completed several important investments that position us very well in the market and the coming years. I will now give the word to Michael for some financial highlights and our guidance. Please Michael. Thank you Jens.
Please turn to page number 5. If we take one step back and look at the period we've been in. In 2024 we were on an upward trend that gradually moved us into positive territory and this continued into Q1 2025 which you can show in the figure, which you can see in figure where we hit plus 6.5 in organic growth the remaining part of 2025 was headwind with minus 6.1 in q4 this gradually turned in q1 with minus 4.2 partly due to the harsh winter condition which mainly was an issue in norway and denmark the turning point was the start of march and this has continued throughout q2 as expected which now delivered strong organic growth of 6.1 percent when adjusted for a number of working days this resulted in a revenue of 3.4 billion versus 3 billion the previous year now please notice that the acquisition of sonapa in norway added almost 200 million in revenue in the quarter if you look at the growth we saw positive growth in all main segments and in all main markets. Installation, particularly Sweden and Poland, delivered strong growth with the latter delivering strong double-digit growth. Within industry, Denmark was the only one who was below last year. So if we take a closer look at this, infrastructure remains challenged, whereas, as expected, MOU and OM were more stagnant. We still believe that over time infrastructure will improve but currently the main part of the investments are within high voltage which to a very large extent is direct business between the grid owner and the manufacturer of cables as we gradually move on we will also benefit from the huge investments that are coming through in Norway we also saw a stagnant development with infrastructure and marine offshore Mach 45 as Jens hinted return to growth actually slightly earlier than we initially expected and we can see that the order pipeline continues to increase which gives us confidence that the growth will continue throughout H2 now please turn to page number six now the Nibida of 85 million 84 sorry Q2 was in line with our expectation integration and restructuring cost amounted to 38 which million which was also as expected so if we compare the underlying EBITDA it's 122 million which is slightly above what we saw last year if you look at the figure you can see that Cox had a decrease of 1.2 percent on the margin compared to last year and this is despite the cyclic inventory gains of approximately 20 million of the 1.2 percent approximately one approximately 25 percent can be explained by increasing cost to freight due to the increasing fuel cost and we have not been able as expected to pass this fully on to the market the drop we see spread across market segments and sub-segments it is our assessment therefore that there is a fierce competition in the market but we also see a minor negative effect from the mix with more low margin customers particularly also within projects coming through cost initiatives the last couple of years of course combined with the growth has ensured that staff cost actually had a positive impact on the margin as in previous quarters we can see that laws on trade receivables remains well under control now please turn to page seven if we take a short look at H1 then underlying EBITDA of 212 came out slightly below last year 243 a substantial part of this can be explained by the harsh winter conditions we saw in Q1 where particularly Norway and Denmark were very hard hit the loss of gross margin was also on the half year substantial as we announced when we gave our guidance despite these additional cyclic inventory gains that we've seen here in Q2. Now despite the headwind we saw in Q1 we managed to catch up in Q2 enabled us to deliver a total organic growth of 0.8 percent however we've not been able quite to catch up with the earnings that were lost in Q1 meaning that if you look at H2 we remain slightly below the mid-range of our guidance as regards earning now please turn to page number eight now operating activities came out with minus two hundred and sixty seven million if we take a closer look at it can see that there is an increase inventory meaning that we're not normalized the inventory now this is as announced due to the fact that we did additional purchases in Q2 in order to counter the price increases that we saw we decided to accelerate this further compared to our initial expectations we see the benefit from this that we have been able to know a raise our expectations from 20 to 40 million in cyclic inventory gains we of course expect the inventory to normalize during h2 if we look at the receivables we also see an increase and it's simply due to they had a very strong June compared to March short on the investing activities we spent 79 million of which the 39 million is PPE of this the main part 26 million relates to cum laude meaning that there remains between 20 to 25 million and then we are done with the investments in CUMLA. Now please turn to page number nine. If you look at the network in capital we also seen trend shift and it started to increase here in Q4. We think this is temporary we ended on 17.7 versus 15.1 last year. The inventory being a main part of the explanation which is approximately 250 million higher and again in mind this is not a coincidence it is based on the decision that we have made in order to counter the price increases if you look at the gearing consequence of this combined with the investment is that we now see a increase to 5.1 this is still with in our covenants but of course it's outside our range this was expected and the drivers being networking capital which will normalize over the year that with the h2 and similar investments we expect investments to come down substantially here in h2 now to a normal level and thereby the game will start to reduce from now on please turn to page number 10 now normally we deal with macroeconomic uncertainty but the environment we operate you know also contains geopolitical uncertainty and we've not really seen any relief of this during 2026. In our most likely scenario, meaning the mid-range, we still expect all our markets to post stagnant growth, with installation being slightly more positive and industry slightly more negative, MAC being excluded from this. So our outlook reflects a continued declining gross margin, mainly driven by the pressure of sales prices so despite the cyclic inventory gains which we have increased now to 40 million we do not expect this to wear off we expect the development we saw in Q2 to continue meaning that the gains are offset by the competition within the market we reconfirm our revenue gains between 12.9 and 13.4 which is equal to an organic growth in the range of approximately minus 1.5 to plus 3.5 and also our EBITDA we reconfirm to the gain a range of 400 to 480 and still approximately 75 million in restructuring and integration costs. As said before this is a transition year mainly in Norway and since we know in all material aspects are done with the integration We'll gradually, here during H2, start to see the benefits of the acquisition that we did in Norway, where we expect that it will strengthen the margin for the group. Thank you.
Thank you, Michael. So now it's time for questions. So please, if you have any.
Operator
We will now begin the question and answer session. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now take the first question from the line of Christian Tone from SEB. Please go ahead.
Yes, thank you. A couple of questions from me. So it seems that your key headache here is the gross margin and this price pressure you refer to. However, I cannot help thinking that now that you're showing decent growth and continued gross margin pressure, that you might contribute to this price pressure yourself. Is there an element of that, that you are accepting lower prices to gain volumes?
I think it's a fair point that we are part of the problem, but hopefully also a part of the solution. In all aspects, we also have a lot of projects going on at the moment, and that, of course, also put a pressure on the margin, but meanwhile also that the flight costs are really a heavy burden. I think that goes for all in our industry at the moment. It's a fair point that we are part of the problem, at least for a moment.
And you said you're also part of the solution, So how will you get the gross margin up? And maybe firstly, am I correct in interpreting your guidance that you don't expect the gross margin to improve in the second half of the year? And then longer term, how should we expect that you can improve this?
Short term, Christian, we don't expect any substantial improvement on the margin. And what we can see is also that the price increases that we see from the suppliers, it takes some time to put them into the market. I think if we compare to the situation in 2022, where we also had substantially gains on our inventory, the situation was different. There was simply a shortage then and a high demand that drove up the price increases. What we see is the drive of the price increases here is cost, it's energy basically, and at the same time the demand is much softer. So there seems to be, and at least that's what we've seen so far, is that people, including us, tend to sell out what we have on the shelves at the old prices that we bought to basically. And first when you kind of run out of it, then you start to increase prices. This is also why these gains kind of end up in the market to a large extent. So I would say I would still expect gradually improvement of the margin, but don't expect any miracles, not short term at least.
Fair enough. And then just some clarification. So the 38 million in non-recurring items in the quarter they all sit in the non-allocated segment is that correct yes fully correctly understood if you look at the segment yeah so so if i take 38 million out of that uh segment you are at 215 is that the the real underlying number is that i mean what we should then work with going forward to some extent it's a bit more tricky than that because you have all the costs from SONEPA coming in and the integration didn't happen overnight.
It's a gradual process where we are reducing the number of people in total, not just SONEPA, so a lot of people goes without saying. And here we're talking about people who are in other lines in the segment reporting. People at the central warehouse, for instance, we closed down but these people were reported as handling costs, but they are out now and they've been there since I think the cleanup was. So it's not completely true as such. So you have to wait until you get to H2 actually. Yeah, you have the Fourier effect. Then you start to see a more correct picture of the running rate.
But just to clarify, so what you're alluding to, that's the synergies, essentially, the savings. Will they also impact the non-allocated segment, or will they be...
So, to some extent, because you also have overhead that has been reduced, that warrants on the pub. It's clear when you add two companies together, merge them, you don't need two of everything, which also goes to the overhead cost, so they are also impacted by it.
Fair enough. And then, And just the initiative on this customer-facing platform, you've launched it in the Faroe Islands, which is obviously a fairly small market, so when you sort of go to the next phase and roll this out in larger markets, should we expect that to sort of drive the elevated cost again, or can you maybe just help me, I mean, put perspective on the cost of that initiative?
I think it's more a question of bringing us on par or above where our competitors are. It holds some clear advantages compared to where we are today, but I think it's difficult to put an exact figure on it, what we benefit from it. It gives us some opportunities, but it will be early days and regardless, you will not see any impact this year. that's not at all. If we might have some more data we can disclose when it come up next year but right now it's simply too early days and we cannot use the Faroe Islands as you clearly pointed out it's a very small area but there are some good impacts from it but the figures are simply too small for that we dare use them as a basis. So we need more transparency before we can share anything with you.
Fair enough. I was equally thinking sort of implementation costs, so should you roll this out and say that the Danish market should we expect a quarter or two with elevated cost as a consequence?
No. We already are taking a part of it, so I don't expect that.
Okay, fair enough. So obviously what I'm with several questions trying to get at is that that Q3 should be a fairly clean sheet and then going forward as well.
Close to, close to. Yeah, Q4 should be. Yeah, Q4 should be. In Q3 we still have a minor pig cleanup activities in Norway, and also we need to clean up the old Örbro central warehouse, so that's gone back, but it's...
But within a few months it's it's done. Yeah, very. All right, sounds good.
And then just my last question here goes to your networking capital and financial gearing. Where do you expect that to go at the end of the year?
If we do a 10,000 foot, we take a 10,000 foot look at this, we have like, I think it's 2.3 billion in debt right now. We expect inventory to normalize that you bring in at least 250 million you'll have a seasonal effect between 300 to 400 million say for the sake of the rest or 350 the P&L will bring in but there's some money as well but there's also going to be some investment still it's not that it's going to be zero so that's going to bring in I don't know 100 150 I would say ish and that'll bring the debt down to around 1.6 which is something like that so we're still a little bit above a little slightly above but I think I mean this is a very high-level guesstimate based on what we have disclosed and what you know if you've been looking at so long sometimes that you'll end up around 3.5 I think it's a fair guess that makes sense and then I guess that that also means that in terms of you to start sort of increasing the payout the shareholders we probably need to wait another year. It's a board decision and this will be based of course not only on the historic development but also on the expectations for 2027 so it's way too early to make any clear assessments but of course you will not see payout rates in what you saw in 22, 23 and 24 but let's see excellent that was all for me thank you very much thank you thank you i would now like to hand over to dennis callison from any written questions thank you we have received two written questions so far the first one goes you are maintaining the
bidda guidance of dkk 400 to 480 million despite the bidda of only dkk 143 million in h1 what specifically gives you confidence that the underlying business can deliver the significant step up in EBITDA in H2 and how much of that improvement is volume driven versus margin driven?
Yeah again if you do a 10,000 foot calculation from 10,000 foot distance you can see yes it's true we ended at 143 but first half were affected by one off of 69 million we had very harsh winter condition that cost of those between 20 to 30 million and meaning that the underlying performance was like 240 ish not taking into consideration the ramp downing costs of of Sonnepa so leave that out now if you take 143 and you add 240 million to that that brings you in the 300 and right that's still a way to go then you know there is seasonality in the costs and staff cost mainly the main driver being holiday provision for holiday basically maybe a bit too simple but when people take leave in H2 we release the money from the provision for holiday whereas when they have on when they are on leave in H1 it's a lot to a large extent it's holy days which means it's paid by solar. Traditional this brings in 40 to 50 million and that's the delta so if you add these figures together you actually end up around 425 to 440 million. It is all other things equal, I know the world never is that, but that gives you an idea about why we feel fairly comfortable that this is within.
Second question. Q2 showed a 6.1% adjusted organic growth, which is a significant improvement from Q1. How much of this reflects a genuine improvement in underlying demand and how much is simply a recovery from the weak winter conditions?
I would say the weak winter conditions hit us very hard in the first half year and I don't believe that we will see that you'll catch that up we have to to understand that then people at least should should do overtime and they don't at least not in the Nordics so I think it's postponed more or less forever or it's in front of us so we need to catch up in other ways and then what we see as as michael also stated that we saw a pretty okay catch up from or pick up in in march and and so far we have seen the same patterns so so don't expect that what we left in the first queue that we will get that for free because i think simply we are pushing that in front of us so to to say if understand what I mean no further written questions okay then I think we will say have a nice day to you all and thanks for listening in and if there's any other questions you always free to call one of us so bye-bye
