Earnings call transcript: Vogtle Group Q1 2025 sees record order intake

Vogtle Group reported a robust order intake for Q1 2025, reaching an all-time high of 2.23 billion SEK, marking a 5.9% organic growth. However, net sales declined by 11% organically to 1.94 billion SEK, following a broader trend reflected in the company’s -3% revenue growth over the last twelve months. The company also reduced its net debt significantly over the past few years, maintaining a moderate debt level with a healthy debt-to-capital ratio of 0.36. Despite the challenging market conditions, Vogtle’s stock showed resilience, reflecting investor confidence in its strategic initiatives and cost reduction efforts. According to InvestingPro analysis, the company maintains a strong financial health score, with additional insights available through their comprehensive Pro Research Report.

Key Takeaways

• Record order intake of 2.23 billion SEK, a 5.9% organic growth.
• Net sales declined by 11% organically to 1.94 billion SEK.
• Continued focus on cost reduction, targeting 160 million SEK savings in 2025.
• Acquisition of Charter TLV in France to boost market presence.
• Positive cash flow for 12 consecutive quarters.

Company Performance

Vogtle Group’s Q1 2025 performance was characterized by a record order intake, highlighting strong demand despite an 11% decline in net sales. With an EBITDA of $193.23 million and a gross profit margin of 11.46%, the company has strategically positioned itself in the renovation market, driven by a ban on fluorescent lighting, and is expanding its footprint in smart lighting and sustainable solutions. The acquisition of Charter TLV in France is expected to strengthen its market position significantly. InvestingPro data reveals the company has maintained consistent profitability, with positive earnings expected this year.

Financial Highlights

• Order Intake: 2.23 billion SEK (5.9% organic growth)
• Net Sales: 1.94 billion SEK (11% organic decline)
• EBIT before EAC: 145 million SEK (7.5% margin)
• Earnings Per Share: 0.43 SEK
• Net Debt: Reduced from 3-3.5 billion SEK to just over 2 billion SEK over 3-4 years

Market Reaction

Vogtle Group’s stock experienced a decline of 2.58%, closing at 42.7 SEK, which is within its 52-week range. The market reaction reflects a cautious sentiment, with the stock showing a -7.21% return over the past six months. Based on InvestingPro Fair Value analysis, the stock appears undervalued at current levels. The stock remains resilient with a moderate beta of 0.67, indicating investor confidence in the company’s strategic direction and cost reduction efforts. Investors can access detailed valuation metrics and 7 additional ProTips through InvestingPro’s comprehensive analysis tools.

Outlook & Guidance

Vogtle Group remains optimistic about the future, with expectations of further cost base reductions in Q1 and Q2 2025. The company anticipates a market uplift and is focusing on large infrastructure projects, including potential expansions in the King Salman Park project. The acquisition of Charter TLV is seen as a strategic move to bolster its market presence.

Executive Commentary

CEO Borje Sonne stated, "We are not happy with the net sales and EBIT results at the start of the year, but it is also a clear positive sign in our record order intake." CFO Michael Wood added, "Whilst market conditions remain difficult, we do focus on gross profitability and cost base reduction." These comments underscore the company’s commitment to improving financial performance despite market challenges.

Risks and Challenges

• Declining new build construction industry for 11 consecutive quarters.
• Volatile global macroeconomic conditions impacting demand.
• Potential integration challenges with Charter TLV acquisition.
• Continued focus on cost reduction amidst rising operational costs.
• Dependence on renovation and infrastructure projects for growth.

Q&A

During the earnings call, analysts focused on the potential of the King Salman Park and Vastlankan projects. Questions also addressed the company’s cost reduction strategy and the integration of TLV BioLume healthcare equipment. Executives provided clarity on these topics, reinforcing their strategic focus areas for future growth.

Full transcript - Fagerhult AB (FAG) Q1 2025:

Conference Operator: Welcome to Foggyhalt Group Q1 Report 2025. Now I’ll hand the conference over to Magnus Hagemarck, Head of M and A. Please go ahead.

Magnus Hagemak, Head of M and A, Vogtle Group: Thank you, and hello, everyone. Welcome to the presentation of Faubrut Group’s First Quarter Results for 2025. I am Magnus Hagemak, Head of M and A here at Vogtle Group. And on the call today, we have our President and CEO, Borje Sonne Sonne and our CFO, Michael Wood. The presentation will start with Borje giving us a brief update of our results for the first quarter, and Budi will then continue to update us on some highlights.

Today, focused on the professional business area, which should also be the business area for Tratto TAV. After that, Michael will follow with more details about the performance of the group. And finally, Bodhi will conclude with a recap, and then we will open up for questions. First, we will take questions from the conference call, and then we will open up for questions from the webcast. You can post questions in the chat window on on your screen.

I will read them up for Bodil and Mikael here. Before we start, let me also remind you that today’s session is recorded, and we will be available on our website later today. With that, I hand over to you, Bodil. Please go ahead.

Borje Sonne, President and CEO, Vogtle Group: Thank you, Magnus, and welcome, everyone, to our Q1 twenty twenty five webcast. So I would like to start today with a positive organic order intake growth of 5.9% in the quarter. In absolute numbers, it was an all time high on order intake, and we also again delivered an all time high on gross profit margin. We also start to see the impact of the hard work we’ve been doing on the cost reduction side, and the cost base has started to decrease compared to last year. As previously communicated, we we we expect to see further impact from these actions during 2025.

As I’ve said many times before, our presence in many geographical markets and in many segments help us to spread the risk, and that continues very much to be valid. And what we currently see in the market and that we continue to see is that the swings in order intake between between the quarters and the business areas continued. The whole unstable global macroeconomic situation has, of course, as you all know, increased with the tariff uncertainty. We are also, however, as you know, very strong in Europe, so the direct consequences for us are limited. We have 5.7% of our revenue in The US.

Having said that, we have already navigated the subdued construction market levels for the last few years, and the all time high order intake this quarter is a sign that we remain good at securing big investment projects on the market. We see them more in big infrastructure projects than in traditional commercial buildings, and it’s a wide range of and strong capabilities in custom oriented solution that helps us to win. We also start to see some more positive signs from the renovation market that is triggered by the fluorescent ban, and this is helping us to compensate for the lower new build activity. As you know, government starts to plan for the national legislation of the European’s performance of building directive that should be implemented by May 2026, so in a year from now. And if we take Sweden as an example, the the in Swedish, which is the authority looking into this, has been done very concrete plans for the number of buildings that needs to be renovated by the latest in 2030 and 2033.

And in Sweden only, the number of buildings that do not live up to the standards and needs to be renovated are above 30,000 buildings in professional segments. And, also, as you know, the EPPD is also a key driver for smart smart lighting lighting as this is mandatory for large and nonresidential buildings. I’m also, of course, very happy to speak about the intended acquisition of Charter TLE, where we signed an agreement on April. We’ve said in the last couple of quarters that we’ve been working hard on the M and A agenda, and it’s nice to show you the results. And we believe that Charter TLE fits perfectly into our strategic agenda, and it gives us a very strong foothold in the French market.

That is and and France is the third biggest lighting market in Europe. And with this acquisition, we become the second biggest player in France. So let’s have a look at the numbers for the quarter. So as I said, order intake in q one was SEK 2,227,000,000.000, which represents an organic growth of 5.9%, and that is an all time high. The more disappointing net sales was at SEK1.94 billion, and it showed an organic decline of 11%.

And this net sales was a direct consequence of the lower order intake levels that we saw during the end of last year, and this, unfortunately, also has a negative impact on the EBIT results. So the EBIT before EAC was SEK 145,000,000 Swedish crowns with a 7.5 EBIT margin, and the EPS before AAC was 0.43 Swedish crowns per share. So moving to the strategic key focus areas for this call. I want to give you a better understanding of our position in the market and why we stand out from other lighting providers. And last quarter, I gave you an overview of business area collection, and this was highly appreciated.

So, therefore, I will follow-up by introducing you to our second of our business area, professional. And when we did the new organization in 2020, the working name for Business Area Professional was National Champions. And that already already gives you an indication that all of the businesses are strong in their local markets. So very different from our global brands that I presented last time for collection. I will, as said, also give you some more information about Charter TLB.

The intention is that the business will be part of Business Area Professional where it makes a perfect fit and brings new corporation opportunities for future growth. So if we dive into Professional, it accounts for 12% of the group’s revenue and focuses on local brands. You will hear the word local many times here, which makes them particularly strong on their home market. So they have local production, product development, and extensive relationships on their markets. And that enables them to develop and deliver bespoke solutions tailored to specific market needs and with very short lead times.

So these brands, they know their customers very well, and they deliver complete solution. And they are seen as trusted partners in many local prestigious projects. I’ll give you a few examples, which span over both private and public sector. So this business area is interesting with the benefit from the current near sharing near shoring and the deglobalization trend that we are experiencing. So we see an increasing interest in local brands where they can with with this preferred of a global sourcing alternative.

So the label of being either made in UK or in Australia or made in France is today a differentiator. So let’s have a look at the three businesses that are part of the business area currently. First one is Allites. They were founded in 1991 in Ankara. It has its root in being a customer oriented organization, creating solutions to meet demands tied to the Turkish markets and its neighboring countries.

It joined the group in 02/2014, and it’s known for its high quality products, customization capabilities, and also has a fully accredited lighting laboratory for testing and certification. And we moved to a brand new factory at the beginning of 2024. And the main focus that you will hear with all of the brands in Business Area Professional is segments office, education, health care, and Allied also do selected outdoor applications. They have delivered significant procedures in large projects such as providing lighting for the Turkish parliament, Istanbul Airport, and also Microsoft IT Academy in Baku. And R Light is also working on OEM say sales to some of the other group brands, for example, in delivering lead modules.

And then moving down under, we have our Australian brand, Eagle Lighting, that was founded in 1972 in Melbourne. And they be part they became part of the group in 02/2007, And they have also benefited from being located in the same city as our smart lighting brand, Organic Response, making them another of our leading brands in smart lighting. And Eagle is a strong brand both in Australia and New Zealand. And, of course, due to very long transportation lead times, local production has an advantage as well as the knowledge of the specific Australian demands on lighting. And besides, again, developing the best solutions for office education and health care, there are also presence with other group brands locally.

So for example, DesignPLAN, who has a focus on the custodial market where they work very closely together. And here again, some examples of projects. We have Brisbane Commonwealth Law Courts. We have Melbourne City, and we also have the Volvo flagship showroom in Australia. Then we moved to The UK.

So and to Whitecroft that was founded in 1945 in Manchester and today is one of UK’s largest manufacturer of commercial lighting solutions. So, again, we come back to they’re working with the same segments, office, education, and health care, where they’re considered a strong market leader. And they joined the group in 02/2005, and it’s also one of the brands that has integrated us the furthest with regards smart solution, and they have successfully adapted our smart agenda throughout the business and is working very closely with key stakeholders to help them save energy and gain better insight of the utilization of their buildings. So Whitecroft is also particularly known for very large projects, and we’ve mentioned many of them during the years. And I’ll give you a few example.

One is the nuclear power plant Hinkley Point. They work very closely to the Department of Works and Pension. And I think you remember I mentioned also in one webcast the new project in London in Bond Street, and then we also have the Manchester Heritage Town Hall. So to summarize, the business area professional had and the companies in the business area have a strong position in their local markets, which gives them an edge in renovation markets and dealing with complex local projects. They’re also working closer to the construction companies than any other business area, and they’re all very, very strong in health care business as well in office and education.

So that ends the current companies and business area professional, and we moved over and take the opportunity to say a few words about the intended acquisition of Charter TUV that we announced in early April. We are working and progressing through the regulatory approvals, and I think we will know the decision by the end of the month. And if they are successful, this will be the first lighting acquisition we did since EUCINE in 02/2019. And the strategy has been intentional from our side in order to make sure we take care of our brands, integrate them well into the group, and also reduce our debt ratio, which we now have done. So looking at charter TLV, you can see in this picture, you can see some examples of the luminos here here for retail to the left for retail and industry application.

And Trader is a well known brand within retail in France, and it has high quality and cost efficient productions. And its luminaires can be found in many different kinds of store from large big box warehouses to the most common grocery chain, but also in luxury brand stores. And if you know France, you know that the Northern part of France has a very high concentration of headquarters for retail companies. And to the right, you see the examples of products from TLV and Beolume arm of the business that is showing medical supply units and patient room interiors. You find medical supply units in almost hospital care rooms today, and the role is to integrate power, gas supply and lighting necessary for conducting patient care.

And also, I think it’s worth mentioning is that many of the health care products within EU require an MDR class two b certification, hence, pose a decent barrier of entry, and TLV has such certifications. We see large opportunities for cross selling both charter TLV’s retail and health care products and other markets, and you can see that’s a common denominator within business area professional. And, well, we also see possibilities in offering our current brand portfolio through Trouto TLV’s extensive network in France. So good mutual opportunities. Let’s look a little bit more at the company.

As I said, they’re based in the northern part of France in Lille. They have two major brands. Charter founded in 1947, and that’s the retail brand, and TLV, which is added to Charter in 1980, and they are specialized on health care applications. Both brands have the majority of sales in France and are considered clear market leaders. The Tratu brand has a strong retail offering with innovative solutions, very customer oriented with long term relationships with large and small retail chains in France.

And in addition to the retail business, we also have this product range for industry application, including transportation and infrastructure projects. And then TV, as we said, specialists of highly customized health care solutions working very close to architect on the specification side, including medical supply units and room interiors often with integrated lighting. I want to highlight also what really caught our intention with Trouta TLV was not only their strong position in France, but their impressive customer driven culture, something we find well aligned with our group core values. Although Charter TLV main market is France, we see a great potential for offering their health care and retail products and other markets as well as benefit from their deep network in France to provide other group brand solutions. So we look forward to welcoming Charter TLV and their teams to the group within the near future.

And with that, time for some more numbers. So I will hand over to Michael and the financial summary.

Michael Wood, CFO, Vogtle Group: Thank you, Bodul, and good morning to all of our guests from myself as well. We are we are at finally, we are delighted with the very high order intake in the first quarter. ’2 point ’2 ’2 ’7 billion Swedish crowns is is an all time high for Faroe Group. Less delighted do we find in the net sales decline that Bodle has already commented on, and this stems from the lower order intake levels towards the, Q3, Q4 of ’20 ’20 ’4. Market conditions remain volatile with some external headwinds.

And like many other businesses, we await the uplift from the returning markets. Meanwhile, we focus on gross profit development and cost base reductions. The enhanced cost focus I spoke of last quarter, including the restructuring in three entities, remains. But as Bodle already mentions, we need to work harder at increased levels of cost reduction on a wider scale as we are not pleased with the result so far. The increased focus on cost reduction initiated during the fourth quarter of last year is now beginning to have a positive impact, and we see this with the reduction in costs and expenses in the first quarter.

I remain confident that there will be further impacts from additional and increased cost base reductions during the first and second quarters of twenty twenty five. Operating cash was a little lower during the quarter mainly due to the lower EBIT level and an increase in the accounts receivable, and that was driven by higher net sales towards the end of the first quarter. Let’s have a look at the rolling twelve month sales development. And as a result of the frequently reported new build construction industry decline, I want to try and I wanna try and explain a point that’s going on here. Now for eleven consecutive quarters is the new build construction industry decline, and the accumulated impact of this is seen in the chart.

In the early days, our continued growth in the renovation market, which Bodo has mentioned, remains positive, and this continues to remain positive today. But after eleven quarters of new build construction industry decline, the growth in renovation is difficult to overcome, the new build, reduction. There do remain, many opportunities almost everywhere on the market, and the megatrends remain favorable. And very importantly, our success in winning large orders demonstrated in the quarter by King Salman Park in Saudi Arabia and Vastalankan here in Gothenburg will be a key as we see more larger projects nearing the decision process. Turning to margin development.

For the fourth quarter twenty twenty four and the first quarter twenty twenty five, the margin has been impacted by the lower activity on the market, clear to see over on the right hand side. Our ability to continue to improve the gross profit margin, now combined with the positive impacts of the reducing cost base, will help support the margin until the activity levels improve. As mentioned, I remain confident of increased positive impacts from the focus on cost base reduction activities. As usual now, we’ll take a quick run through each of the business area performances, starting as we normally do with with collection. For the first quarter, the performance in collection is summarized by a record order intake, lower net sales due to prior levels of lower order intake the resulting impact on profitability.

That’s the summary for collection in q one. During q two, there will be a lower cost base reduction in collection where we see the plans from the businesses being initiated, and this will improve the operating margin. During the quarter, VF, worthy of note, won the first part of the King Solomon Park project for a hundred and 23,000,000 Swedish crowns, and deliveries start this very week. We look forward to v f securing the balanced parts of this high value project. Round the corner now to premium.

In flat market conditions where order intake is only 0.4% variance from last year, business area premium continues to to deliver very solid levels of profitability. The operating margin before IAC of 14.6, almost 15% for the quarter, is the second highest in the last four quarters. And this is very impressive in q one, where traditionally, it takes on a little bit of a lower volume contribution. The two businesses are working on cost reduction activities, both Foggle and LTS, and this will provide further benefit during the second and subsequent quarters. The project to close the UAE based operation for Farguld remains on track, and this will be completed by the end of this quarter, providing SEK 18,000,000 of further cost base reduction.

The restructuring program at LCS in Germany continues to take a little longer to execute. Some of the savings have started to materialize from this program, it will not be until the second half year before the majority are delivered. Let’s go back to professional. So you’ve had the descriptions from Bodle about the businesses and the business area. Last quarter, I reported that business area professional closed out the year with a very strong order intake growth of plus 22%.

And during the first quarter of twenty twenty five, the order intake growth was a further impressive plus 18%. The first quarter has been very tough from a net sales and resulting profitability perspective, however, and this is due to project delivery schedules being delayed. However, with the very high order intake growth for the last six months, we are confident that the high order backlog position that this trading result in the first quarter is a short term temporary blip. All three businesses have now completed their cost reduction programs with a total of approximately 20 to 25,000,000 Swedish crowns annualized lower cost base as a result. The business area expects decent order intake in the current quarter as well.

Coming to infrastructure. In the business area infrastructure, order intake levels have remained flat. The order backlog is at a higher level due to recent due to decent order intake levels in late q late twenty twenty four. But similar to Professional, the delivery demand schedules are extended. We see a consistent level of net sales for each of the last four quarters and a steadily improving operating margin, which is thanks to the vehicle cost reduction program that was initiated in q three and closed out in the back end of twenty twenty four.

That’s now positively impacting operating margin in infrastructure. Cash flow, of course, is something very close to my heart. And on the cash flow side, we continue to we continue in a positive way. Now with twelve quarters of generating a positive cash flow, I’ll take even the slight SEK 26,000,000 in the quarter as a positive. For the first quarter, the cash flow of SEK 26,000,000 was impacted, as I’ve said earlier, by lower profitability and an increase in working capital.

Inventory levels did further reduce in the quarter, and accounts receivables have given rise to the increase in net working capital. The debt continues to reduce, but this will take a temporary pause in net debt reduction during q two and three due to dividends and the Trato acquisition, of course. Looking a little bit more at the net debt development. During the last three years, just picking up on what Bola commented earlier on, purposeful action on the m and a side. During the last three to four years, our strategy of reducing the net debt has been very successful.

It has reduced from between 3 to 3 and a half billion Swedish crowns to now just over 2,000,000,000 Swedish crowns. And I keep saying this includes approximately 700,000,000 SEK for IFRS 16 adjustments. So this is in new money, not going back ten years ago to old money excluding IFRS 16 adjustments. The net debt is the lowest the group has carried for over seven years. We repeat the message about not being pleased with the earnings per share level at 0.43 SEK for the quarter.

Cost savings are now delivering a positive impact, and we expect this to increase and continue. The gross profit margin is a key performance indicator. And when volumes return, the net margin will accelerate. Last quarter, I stated that the interest expense will reduce in future quarters, and this is now happening, and the tax rate has also fallen in the quarter compared to q four twenty twenty four. Before handing back to Bodle for closing and q and a, just a short summary message from myself.

Whilst market conditions remain difficult, we do focus on gross profitability and cost base reduction, and we see success on both topics. We further demonstrate our ability for winning large projects with more to come, and and our balance sheet strength remains at a good level. Thank you for listening, and I hand back to Bodil.

Borje Sonne, President and CEO, Vogtle Group: So a short conclusion on my side as well. And and, I mean, repeating a little bit what Michael was saying that we don’t we don’t see any major change in the start of 2025 with regards to the markets. But we are navigating through it, and we’re doing it with focus. And one of the focuses is our efforts and segments where we see investments decision happening, and we can see the result of that in our positive order intake for the quarter. We also know all of us know in terms of that the global trade situation is not good for the general investment climate, although direct consequences are limited on us.

We are monitoring the effects of the tariffs, and we’re taking action where needed and within collection business area, so where we take actions on the sourcing side to minimize the effect in the short term. We saw the cost decreases compared to last year, so we’ve seen the start of it. And we will continue to see actions and effects during 2025 as it’s still a very high focus for us. And then we stay convinced that our decentralized organization with its strong local footprint today shared by what I was presenting in in Business Area Professional and also very strong customer focus is actually an even stronger advantage in the current market conditions. And also, we see on the renovation market where we’re working with many focused growth initiatives in new markets and segments, And I’m also seeing an increased collaboration between the brands, which I’m really positive about.

And then, of course, good to see the work on the AM and A side is paying off and that we were able to sign the intention to acquire Tralford TOB. And also, of course, the good strategic match is will help us and give us a very strong position in France, and it also gives some very good energy to the organization. And with that, I’ll hand over to Magnus and any questions you may have.

Magnus Hagemak, Head of M and A, Vogtle Group: Thank you very much, Borje and Michael. And with that, I ask the operator to open for questions from those on the telephone line, please.

Conference Operator: The first question is from Nikola Kalanowski from ABG Sundal Collier. Please go ahead.

Nikola Kalanowski, Analyst, ABG Sundal Collier: Hi, and thank you very much all for the presentation. Firstly, I just thought to ask regarding some of the larger orders that you won in the quarter, specifically the King Salman Park 1 in Saudi Arabia as well as the Swedish one for West Lankan. Could you perhaps provide us with some flavor on the upside that you indicate could be generated from additional wins related to those projects, please?

Borje Sonne, President and CEO, Vogtle Group: It’s always difficult to speak about the future side of things. But if you look into if you take West Lincoln, we have delivered a big part of that. And there is a second second side to the West Lincoln, which is approximately the same that we will have happening here during the year. So it’s a completely special project. They’ve been working hard in the factory during Q1 to deliver the majority part of it.

So that I think we will see happening here during the year. For King Salomon Park, I would I don’t know if you have looked at the projects, but but for the curious ones, I would go in and have a look at the website of King Solomon Park because I’m what they’re doing in Saudi Arabia currently is, I mean, they’re trying to replicate what they’ve done in Dubai, but there is a much higher focus on the green side of it. So therefore, a lot of parks. And and and you can see if you look at at that part that there is different parts of the park. And what Michael was saying, we’re currently starting to deliver this week for the first part of it, and and it’s the smaller side of the park still.

So there is potential, but it’s always and it’s potential which is there for this year. But I don’t think I want to say any more about it because it’s a sensitive side of it as well, and there is still competitors on the market. So but there is good potential into it if we if we are able to to also win a bigger part of the park. And we what we’ve done is it’s a completely special project or product, which is developed for the King Solomon Park. So it looks very nice from from a design perspective, but it also, I would say, the pillar of the infrastructure in the park because you integrate everything else you have there.

So the the wireless infrastructure, but also cameras, cameras, for example. So it becomes it becomes a vital part of the infrastructure for the farm. I don’t I don’t know if that gave you some more flavors to it. I don’t know if you want to add anything, Michael.

Michael Wood, CFO, Vogtle Group: Yeah. I I can just add a little bit around the edges regarding KSP, King Salmon Park, not not not the Gothenburg, Vaster Lincoln project. I think it’s safe to say that the part that we’ve received so small so far is the smaller part. Still in competition for the remaining parts. But I would remain hopeful from our gaining the first part, then the park authorities decide to be to be common across the whole park is what I would hope for and go for a consistent look is my ambition there.

So we we we’re holding our fingers crossed, Nicola, that that what we’ve done so far will will remain for the remainder part of the project.

Nikola Kalanowski, Analyst, ABG Sundal Collier: Yes. I certainly appreciate that. Thank you very much. And I agree, Bundle. I just googled the project.

Looks very impressive. You mentioned also in the CEO highlights, Google, that you will continue to reduce the cost base, and you mentioned that during the call here. Could you help clarify what this relates to and to what extent you aim to do this? And moreover, when do you know when to stop, so to speak, in order to have sufficient capacity for when construction activity

Borje Sonne, President and CEO, Vogtle Group: think when you look at it, I mean, we’ve been working on this for some time, as you know. And we are comparing and we’re comparing back also to see in terms of volume where we were at the end of twenty twenty three. We have done some estimations. And if you look into that, the estimation is that compared to last year, on the full year, we will be SEK160 million lower in 2025 compared to 2024. And that’s not the entire full effect of that because we still haven’t reached the full effect.

So it’s somewhere around €180,000,000 on the full effect if you would compare apples to apples. So it’s consequential.

Nikola Kalanowski, Analyst, ABG Sundal Collier: Yes, I appreciate that. Thank you. And then the final question is on the Tratso TLV acquisition. There is this part of the business called TLV BioLume that you mentioned that you say focuses on healthcare equipment among other things. Could you please shed some light on how this is consistent with your main business and cross selling opportunities, please?

Borje Sonne, President and CEO, Vogtle Group: If you look at it, we actually have a little bit of similar product ranges, but much smaller in the other businesses who work with health care, both in Fargold and in Whitecroft, what you call bed heads. And and it’s been used for us in the past more as a way to get into the health care sector as an entry level as an entry point, as something catching the eye for the health care side of things. What what TLV Beuloom has done is they’ve been taking that much further, and I think that’s also where we see the market going, so to more total complete solutions. And so they are much, much stronger in this area than we’ve ever been. And I think we we see it as an advantage because we see it as an adjacent business that we could also do more with in the future.

Maybe we can look for specific lighting solutions within the hospital sector in into operation rooms, etcetera. That’s a possibility for us. But, also, we see it very complementary. So if we just as an example, we go back to Business Area Professional and you look at Whitecroft, which is very close geographically from from Trouto TLV. They are very strong in health care lighting, but they don’t have this full offering on on for the patient room side of it.

And TroutoTLV doesn’t have the health care lighting that WhiteCraft have. So we see obvious possibilities for combining the two and being able for WhiteCraft to sell the solutions in The UK and for Trotto Tilvi under the name of of of Trotto Tilvi to sell the health care lighting in in France. That that will, of course, take some time. It doesn’t happen overnight, but but we it will give us a more full complete solution, and we can see that the market is going more towards that. So I think we see some some good possibilities there.

And and you heard me mentioning the word health care many times in the presentation of the business area professional. So I mean, it’s very much in sync with the strong segment focus that we have. Do you think that gives you an overview?

Nikola Kalanowski, Analyst, ABG Sundal Collier: Certainly. Certainly. Thank you very much. I think that was very clear. Thank you.

That’s all for me.

Michael Wood, CFO, Vogtle Group: Just Nicola, just before you go, just just to clarify a little bit, just going back on to the cost base topic. So let’s just be clear there. We are targeting roughly SEK 160 Swedish crowns lower this year than last year. And, also, we have to remember that when we’ve completed these programs in our businesses, we should not see the repeating instance of the items affecting comparability. So if you look forward to 2026, it should be a double impact for us.

Nikola Kalanowski, Analyst, ABG Sundal Collier: Perfect. Thank you for the clarification, Michael. Thank you. And

Conference Operator: there are no more questions from the Telco at this time. So I hand the word back to you, Magnus, Boudel and Michael, for closing comments.

Magnus Hagemak, Head of M and A, Vogtle Group: Thank you, Einar. Yeah. And there are no more questions from the online webcast as well. So with that, we are done with questions for today. But before we end, any last comments from Yes.

Borje Sonne, President and CEO, Vogtle Group: I I would end saying, of course, we are not happy with the net sales and EBIT results at the start of the year, but it is also a clear positive sign in our record order intake and also that we are capable of navigating in uncertain market conditions. And also the strong local footprint in the many markets is an asset both in current geopolitical conditions and with a focus on renovation market where the closeness to the customer is essential. And we can also see that the combination of sustainability and smart is a winning formula in renovation projects, and you know that is a strong focus from us, and where the customer is clearly looking for modern future proof solutions. And then I’d like to end by welcoming the Charter TOV team and all their customers into the group. And I will end by saying in French, And I think with that, we’ll say thank you for today.

No?

Magnus Hagemak, Head of M and A, Vogtle Group: Yes. Thank you, everyone, for joining today’s conference call. Next, we will publish our q ’2 results on 07/18/2025, and we will host a webcast on the same day. Have a nice day, everyone.

Conference Operator: This concludes today’s call. You may disconnect your lines. Have a nice day.

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