Thank you, good morning and welcome to Hansa's Q2 2026 presentation and thank you for joining us in the middle of summer. Well, every quarter tells its own story about the company and the story of Q2 is that Hansa is growing with quality while we are taking the first steps in Hansa 2028. So in this presentation, Lars and I will look at Hansa from two perspectives. How we are performing today and how we are building for tomorrow. Presentation will follow a very simple sequence. I will begin with a progress report Q2 and then explain these first two steps in Hansa 2028 Verizon and the Fortaco acquisition. Lars will then take us through sustainability and the financial development. I will return four conclusions and outlook, and in the end, we open the line for your questions. But let's then begin with the numbers that best describe this quarter. And when I say that Hansa is growing with quality, I mean three things. We have an organic growth, 9% in the quarter. We have an improved margin, up from 7% last year to 9.3% for comparable units. we have a strong cash flow 273 million second quarter almost 700 million for the first half year and this this strong cash conversion is what strengthen our financial position you see that the net depth versus our adjusted dbda is down to 1.4 our target is maximum 2.5 and we also see that the chart to the right it shows our step up in sales over the years and you see also the net depth versus adjusted dbd to the right it's clear that our growth has been delivered with financial discipline that's something we're very proud of because growth without margin is not enough and margin without cash is not enough in q2 and previously we have delivered on all three if we look at the market i would say rather even demand through our segments in electrification energy system we see a stable sales but also very long term good long-term demand we opened the factory in the beginning of the year for for cmsc energy for instance defensive security our smallest segment but also the largest opportunity so i will come back to this we have new orders already secured and new orders is coming in and equipment strong sales and a very strong demand from different sectors especially mining industrial and professional products also stable and we have an increased order intake which will move this segment in 2027 industrial machinery and systems this this segment had lower sales but it is a project driven segment normally fluctuates with customers installation schedules and we see on ordering take that this suggestion a recovery it's not a trend so the picture is rather the same between the segments and overall it indicates a continued healthy demand then we all heard about the situation in electronics certain electronic components mainly pcbas and memory circuits has been tighter availability we have a very good central sourcing with an office in china working together with a also strong local sourcing they have been able to really manage the situation without any material impact on operations in q2 the situation remains uncertain So our mitigating work will continue during the second half of the year, but so far so good. Let's now turn to B&K. I had the privilege of serving as interim manager, managing director, and Geschäftsführer during the spring. So I've been seeing the business at close range. I expected the technical level to be high, but I was wrong. It was even higher. So it's been a pleasure. but from a commercial standpoint however there is room for improvement and we already began with some actions we see that the the company came in with a margin at 7.3 percent we are already increasing that to 7.5 in q2 and this is just the first step in a margin improvements so we expect to continue also ordering tech increased compared to q1 and pmk secured its first major defensive to security orders this is important for the continuing development this is a new area for bmk and a huge area so it's really good and integration progressing well we call it the purple rain when we put on our signs and stickers but uh it's working well and it should be completed normally have one year for integration this should be completed during 2026 and you see the picture to the right, Marcus Ernst, who took over as Managing Director from the 1st of June. And I, with some regret, have returned to the much quieter rule as being only Group CEO. First steps of Hansa 2028. We launched this strategic phase at the Capital Markets Day in March this year. And if you look back, every phase is about working on the customer demand in In the previous phase, ANSAL 2025, we strengthened the capacity of our manufacturing clusters. In ANSAL 2028, we are strengthening the manufacturing technologies. And then we have the two first steps, Horizon, it's a program where we are making our manufacturing platform more efficient. And we did an acquisition last week, Fortaco. and there's a special audio cost you can watch for more details here i'll just give you a brief overview but these are two complementary steps and let me then begin with horizon and to understand horizon it's important to understand our industrial logic our main focus our main focus is manufacturing in europe for europe this is where we build our manufacturing clusters and outside europe we have select factories we call them gateways serving specific customer needs. Horizon is then designed to make our manufacturing platform more efficient and easier to manage. That's important for the other steps to strengthen the technologies. In Finland, we have two smaller units in Nivala and Seve. We have been concentrating some of the orders and machinery to our largest units in Ulainen. You see it on this picture. It was 23,000 square meters in this building and we just bought an adjacent building of 10,000 square meters more. So this is a large unit and the remaining finished operation in Niva Lancievi will now be transferred through a management buyout. Gateway China, manufacturing will be discontinued by the end of 26. So this is a smaller unit, 60 people. of course we've been working together with our customers and developed manufacturing solutions so they can continue to produce and of course also very important we are committed to supporting our people in china the growth has made it to do some changes also in central europe we had a cluster we are now separating this into two clusters poland and czechia this is in line with a hansa model we would like to have one cluster per country several advantages same language same culture same holiday same labor law so this is the idea now we are in a stage where we can finally do this the measures in china and the finland will reduce our sales with approximately 15 million euro sales matter but profitability and cash flow matters more and we see that the result of this will be better capacity utilization and and hence improved profitability. So this is the first step. The second step, the Fortaco acquisition. We signed the deal on the 15th of July to acquire five selected factories from Fortaco. It's a carve out. The background, heavy mechanics, it's our smallest technology area. And at the same time, we see a very clear long-term demand, particularly in defense, but also mining, agriculture, forestry, material handling of vehicles. And this is important that making acquisitions is not our strategy. It's our strategy that leads to these carefully selected acquisitions. We always begin with the customer needs. So that's why we do this deal. And I think that this map illustrates the industrial logic clearly. Similarly, we see the factories in Finland, Estonia and Poland, together five of them represent about 1,300 people, substantial manufacturing capacity, and we are talking about established sites with experienced local management. So five factories, three countries and one industrial logic. And that all of these factories are located in geographies where we already have a presence, It means that we're not just adding five dots on the map. We are connecting these five sites to an existing industrial system. And that's the strength of our cluster model. That's what creates synergies. Furthermore, this acquisition, so this is a carve out. They will still keep cabin business. They are doing cabins and we are carving out the heavy mechanics and complex assembly. But we will also get a strong new customer base. it's a very limited overlap to our existing customers and we all know that new customers is not just today's revenue it's tomorrow's opportunity so we do expect sales synergy on this new customer base and with that i will hand over to you Lars for sustainability and financial development thank you eric um starting with sustainability and the main activities in in q2 um i'm glad to be able to present this slide with the pmk included so now we only
have melectria outside these kpis there are no major changes in the kpis i'm glad to see that But the accidents, incidents reporting is going down. Otherwise, we're working with DMA, updating that for the coming CSRD report. And we also are preparing for the annual employee survey that we do on a yearly basis. And of course, we include the acquired companies as well. We have compliance requirements adding to the operation, and we work with adopting to the new compliance requirements with internal processes, also including the newly acquired companies. Looking into the financials, we see a stable company, a stable group reporting Q2 on a clear way towards the financial targets for 2028. We see a sales growth of 70%, we have an organic growth of 9%, slightly lower than the 20% we had in Q1, but it is a little bit seasonal, but it's still a strong organic growth. Erik talked about the shortage of components. We do not see more than a minor effect on the sales in Q2. So the 9% in organic growth is not depending on the increased prices on components. We have an operating margin for the comparable units of 9.3% compared to 7 a year ago. As Eric mentioned, we have BMK on 7.5%, a couple of percentage points, or up to percentage points higher than in Q1. and in line with what they had in 2025. And here we expect the margin to continue to increase quarter by quarter. We have an effect on the Horizon project and in order to increase the profitability over time, we have taken one-time cost. we have reduced employees mainly in BMK and we have decided to wind down the operations in China and also done an MBO or decided on an MBO in Finland and this will as Erik also mentioned be approximately 160 employees that will be reduced within the group and approximately 160 million SEC in sales that will be reduced when these actions are done in the end of the year. And this leads to that the group's adjusted operational margin is on a stable level on on eight and a half percent seven percent a year ago and when we see the the comparable units of nine point three percent and we compare it to the nine point seven percent in q1 i'd like to remind you that ledan is now part of of the comparable units for the full quarter it was only one month out of three in in q1 so that's one of the reasons for the slightly reduction in in profitability margin for comparable units eric spoke about the cash conversion and the financial discipline and we can this quarter also report a strong balance sheet and strong cash flow 273 million sec in in operational cash flow net depth compared to ebta on 1.4 and quite good cash position of 773 million sec and equity to assets ratio which is also strong 45 percent and this is important and we have said this many times that having a strong balance sheet gives us the possibility to continue to invest to expand and also what we announced last week to acquisitions uh like the the forteco carve out deal and without increasing the number of shares we can do this with our own financial resources and new credits um looking into to the segments um and we see the segments main markets and other markets they are fluctuating depending on the type of products the customer what customers are increasing and decreasing but we also see strong stable development of both these segments and remember that we will adjust the reporting into the new organization of regions starting from the beginning of 2027 we have main markets being more or less on the same sales net sales level as in q1 and the stable margin on on eight and a half percent and for comparable units a really strong margin of 9.7 percent segment other markets slightly down from q1 but still on this on a stable margin eight and a half percent and for comparable units eight point nine percent looking into the acquisition that we announced last last week of the selected factories from Fortaco. We will pay initially on the enterprise value of 144 million euros. It's a net debt or debt-free and we'd normalize working capital, this 144 million euros. And that is approximately eight times the rolling 12 months EBTA that we pay on the initial consideration. There is an additional purchase price cap to 56 million euros, so the total payment for this acquisition is 200 million euros, and it's based on organic growth in sales in 2026 and 2027. So, we will pay in two tranches in the beginning of 2027 and the beginning of 2028. Both the initial payment and the earn out will be paid with existing funds and the credit facilities. There are no financial conditions and the closing expected to be, I would guess, early in Q4. And it's subject to normal regulatory approvals and also approval from certain Fortaco financial stakeholders. And this is how Q or first half year would look if we make in Proforma and include the Fortaco factories. We would increase from 5.2 billion to approximately 6.2 billion. So quite big company and well on the way to the 14 billion SEC that we have as financial target for Hansa 2028. The Fortaco factories we expect to, as a start, deliver on approximately 9% on EBITDA margin. We expect this to have a positive contribution on the EPS from the beginning, from the acquisition. and we will integrate this as we normally do into the Hansa cluster model and expect to increase the margin not only in the acquired companies but also in total Hansa and the effect on the Hansa balance sheet and cash flow So we expect the net debt to continue to be below our financial target or two and a half times the EBTA. We expect the equity to asset ratio to still be above our financial target of 30%. And just to remind you, the Hansa 28 targets net sales of 14 billion sec an EBTA margin of at least 9% and equity to assets ratio of 30% and again net debt to EBTA of maximum 2.5%. Looking into the shareholder, shareholding structure, no major changes from end of Q1. What we have seen in Q2 is that both Eric, the chairman, Francesco Francia, and the board member Lars-Ola Lundqvist have increased their holding in Q2. And by that, I'll leave back to you, Eric.
Thank you, Lars. And let me conclude by bringing the different parts together. Q2, we delivered 9% organic growth, 9.3% operating margin in comparable units, and 273 million sec in cash flow operations. EMK improved its margin, and we see an increased order intake, also secured the important first defense and security orders. horizon will improve efficiency in our manufacturing platform and portaco acquisition will strengthen the technologies and if there are three things to remember from today and i think it was interesting with large pointed out that we will still have a strong financial situation after this large acquisition so it's it's really good so if there are three things to remember i would say that we are growing with equality That creates financial freedom and we're using that freedom to put Hansa 2028 into action. And with that, we are happy to take your questions.
Operator
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Anton Ingves from Nordia. Please go ahead.
Yes, hi and good morning Erik and Lars. Thanks for taking my questions. Starting off maybe on the defense orders here and the sort of first major order in BMK.
Are you able to sort of quantify this a bit more and maybe elaborate a bit more of of your expectations here in this segment for for 2027 the challenge we have is that everything is secret um the only thing we can say is that we have from um well known defense company a new defense company for hamsa so we are working with of course with solve and Patria but the new defense company a substantial order and an entrance for more orders I wish I could tell you more it has to be revealed by the segments our customer segments later on sorry about that. That's fair but seems to be quite a good opportunity then and sort of on the defense order intake in in remaining of Hans so you still see a sort of pickup here for stronger even stronger deliveries in in 27 yes yes of course um defense is here to stay for sad reasons but but still and what they need is of course uh mechanics so this uh this support acquisition is really something that comes really well and also having units in poland the important area for the defense industry so we expect the orders to to increase and we have already very good relations with the
companies as i said in scandinavia and now we are moving on in germany so we expect this to grow okay perfect that's clear and on the horizon program obviously taking taking some measures here with closing of the the site in china and the the two factories of the management buyout in finland and i understand you cannot give sort of an exact answer here but but are you planning any further actions going forward in this program?
Of course, that's something we cannot reveal, but I would say that we have done the major steps. For us, it's important now that we're able to focus investments, resources, capacity to larger units and also take on larger customer orders coming in. It's a very important step this horizon, but we have done a lot of actions already and also things which are not on the dimension that we should report in Q2. I wouldn't expect any more large activities.
Okay, that's very clear. And on the CAPEX side, I know you had some 100 million sick here in tangible CAPEX during the quarter, quite a big pickup compared to last year. what is this mainly related to and what do you expect here for the full year 26 we did an acquisition of strategic factory in in Finland Joensu factory that was the main activity in Q2 and the CapEx
goes a little bit up and down between the quarters um but on a longer perspective we do not see any increased need of of capex it will be on on the same level as as we have seen before and of course increasing when we have an organic growth we also see that the the acquisition of the Fortaco factories will actually decrease the need of CapEx going forward since we will have be buying companies that are well invested.
Okay, perfect. And sort of on the demand here during the quarter, obviously strong organic growth here, but did you see any change in momentum during during the quarter and sort of related to that, the momentum here heading into Q3.
No, no, so we have a good momentum. The only thing I said was regarding this industrial machinery and systems where it fluctuates between the quarter. Other than that, we have a strong demand, so you're in a good position. And that's also why it's so important, coming back to your previous question, that we have this strong cash conversion because it makes it possible for us to increase capacity either through acquisitions or through expanding our current facility like rosh pointed out and you also okay understood very clear and i'll get back in in line for now thanks a lot thank you thank you the next question comes from marcus develius from dnb carnegie please go ahead report a few components could you give some more call on this would you say that it's more of a problem now versus sort of the beginning of the quarter and maybe going into is this more a bmk type of problem if you could shed some light there yes um so um first of all yes like you state this is an area for electronic components that's the shortest area and more directed to these specific areas we have been able to navigate through the second quarter without any material impact on operations also in BMK so so far so good we have a really good sourcing team both centrally and locally the uncertainty remains so we need to continue with this work but we haven't had any major impact and I think that in this kind of shortages is always in the beginning it's hardest and you find ways to work and find alternatives and so forth so I can not promise anything but we have been really good on working with this software.
Are there any other types of shortages that you've noticed?
Not really, we are not restricted by shortages, no. Okay.
And then just looking at the margin sort of recovery story for BMK, the main market underlying is strong at 9.7, if I remember correctly. Could you go into this sort of recovery story?
Because if you compare it to Leiden, for example, if I remember correctly, it was a lot of sort of capacity constraint driven what should we expect sort of the year-end margin wise when we look at dmk may i start i'm sure you like to comment this but i think it's really important that this is something you should have an attention on and we have acquired a company called lead and we acquired a company called orbit one both of them came in with margins much lower than the hamsa and they were inside these comparable units now so with this acquisition that came in below a margin we have restored the margin now we have 9.3 including these units now the margin is downloaded by the next acquisition vmk but the previous acquisition has done really well that's the conclusion you can see from the seven to the 9.3 percent margin increase from last year to this year that we have been able to to restore the margins in the acquisitions and i think that is one of the skills we have and also we see that on the modern side but also on the sales side we have talked about many times that when Leren came into to Hansa the sales almost exploded we see also that PMK inside Hansa we have sales synergy so there is an advantage the company we are acquiring performs better inside Hansa than it did as a standalone company and now over to you Lars.
No I think you answered in a good way I actually do not have anything to to add and of course we cannot give you any forecast on on on the coming quarters what what we said in the in the report is that we expect um bmk to continue to to increase the profitability uh from this seven and a half percent coming from 7.2 last year uh so that an ongoing work in line with what eric said that we have been uh been able to to increase the margin in the the companies that we have acquired is there any structural reasons why bnk shouldn't
be able to sort of reach this strong underlying margins no no i say it's a fantastic company that serves a much higher margin it's maybe a it's a family-owned company maybe without the care focus on the commercial side more the technical side so i think that's what we're adding to this fantastic company okay thank you very much thank you as a reminder if you wish to ask a question please dial pound key five on your telephone keypad the next question comes from thomas blixted from pareto securities please go ahead good morning eric and large three quick questions
I'll take them one by one first on the working capital development again very good in Q2 given the growth I guess some of it was related to factoring and just wondering if you could give some color on the impact here and whether these this working capital level is sustainable going forward you know that our cfo large as a black belt in working capital absolutely good morning thomas i saw your your you mentioned uh that the 30 million in in in positive change in working capital you expected that to be from factoring um actually this time
you were wrong it's not any effect from from the factoring or so it's it's just good working with reducing the working capital.
Any particularly particular drivers what I should keep in mind going forward?
No I would say that 30 million with the size of the balance sheet that we have, it's not a major figure.
We normally see in Q3 that we need to increase the working capital a little bit due to the vacation period, but otherwise I wouldn't say that there is any sort of sustainable driver for for for this okay okay thank you and then uh the second a bit technical question but i saw that the cost from business development decreased uh to just one million in q2 uh which explains i guess a few basis points of the underlying margin expansion is this a new sustainable cost level do you think?
The third segment that we report shall be close to zero or not have any major cost unless there are any special projects. We distribute it the the all the the normal operational costs for central function they are distributed out to the to the main market and and other markets um but of course next quarter can be that it it a few costs that we are not distributing but i i expect you based on the size of hansa that the third operational or non-operational segment shall be not important at all for for the total view Hansa that's good thank you and I'm just the last question a follow-up on the capex you mentioned that Fortico will not need a lot of investments now is that because utilization is currently low and you can quickly ramp up or did I or did I misunderstand I what I maybe I was not clear but the fact that we do this acquisition of the Fortaco sites will lead to that the investments in our current business within Hansa will be reduced and also what we see is that the factors that we take over have good standard, they are well invested but on the other hand this heavy mechanic industry is more heavy on machinery and equipment and has a higher percentage of depreciation compared to what we see in other parts of Hansa.
That's very clear. Thank you. That's all for me.
Operator
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Okay. Thank you for your questions and for joining us today. i also like to thank all our colleagues who continue to support our customers throughout the holiday season and to those of you taking some time off i wish you a restful and enjoyable summer look forward to speaking to you soon again and thank you have a great summer
