Welcome to the Bergman & Beving Q2 2026 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. If you are listening to the presentation via webcast, you can ask written questions using the form below. Now, I will hand the conference over to speakers, CEO Magnus Söderlind and CFO Peter Schön. Please go ahead.
Good morning, everyone, and welcome to our financial report for April-September 2026. My name is Magnus Söderlind, I am the CEO, and on my side here, I have Peter Schön, our CFO.
Hello, everyone.
Let us dig into the highlight of the quarter. Starting with the market conditions, we perceived still that the market within the construction and industry is recovering, but it is not in a kind of exponential way. It goes slowly but surely upwards. However, the summer was actually quite slow for many of our companies, but we had a visible pickup in September. Overall, it was an increase in the quarter, but despite a very tough start of the quarter as such. We talked about it in the previous quarter, and that is also affecting this quarter. We have still increased costs in many of our companies in terms of raw material, energy, and freight, and also one quite new component, the CBAM, that is affecting some of our companies.
It's not cost that is cash out, but we have made a reservation for the expected cost in the CBAM area in the coming future. We have been able to compensate for the cost increases, both in terms of the CBAM and other costs. As you can see on the gross margin, we have maintained the current level as such. I don't expect any impact on the gross margin going forward based on this, as we have been able to compensate for the price increases. Financially, we continue to increase earnings, margins, and returns, and also the earnings per share. The turnover increase for this quarter was 8%, whereas the organic growth adjusted for currency change was 0%. I'll come back to that.
The adjusted EBITA was up 9%, and we now have 27 consecutive quarters with improved profits, and we also increased the EBITA margin 0.1% units to 11.9%. We continue to improve our working capital efficiency in combination with profit expansion. So we increased our profit over working capital with 2%. It's now 38%, and actually, this is an increase from the previous quarter. If we look at the Q2 last year, it's an improvement of 5% units. The earnings per share adjusted improved to SEK 8.85 compared with SEK 8.30 after dilution. Overall, I think it was a decent quarter. Acquisition is an integrated part of our business model. This is the five acquisitions we made the last 12 months. We made one acquisition in the Q2 quarter, Håva-Skyltar.
That is an add-on acquisition to a company within the Safety Technology Division named Collinder, and that's part of our signage cluster. As you can see on the right slide, we continue acquiring highly profitable companies with good returns. This is a company well above 15% profit margin and well above a profit over working capital of 45%. If we look at the fiscal year, this is the second acquisition we have done, and both of those acquisitions have been quite small companies, and both of them are add-on acquisitions. You shouldn't see this as a sign that we have lowered our ambition in terms of acquisitions going forward. It is more a result that we really focus to make sure we buy high-quality companies within the multiple range we have set.
The main reason for not having more than those two add-on acquisition is that we've not been able to close high-quality deals within the multiple range that we have set. I mentioned initially, we now have 27 consecutive quarters with increased EBITA, and as you can see also, the red line here is the EBITA margin is also going upwards. Our ambition is of course to continue this path in the next coming quarters. The net sales, I briefly talked that organically it was a zero. However, all our divisions had an organic growth except one of the divisions, the PPE & Utilities, that actually had a decline, and I will come back to that later on in the presentation. Overall, we had an 8% growth in top line, whereas 6% was then acquisition-related growth. The gross margin remains on a good level.
We are now around the 50%. I communicated earlier that we had done a lot of work, as you can see historically, to increase the gross margin. It is close to 10% units since Q1 2021/2022. The main reason for this improvement is that we have phased out low margin businesses in terms of low margin products, low margin customers. The majority of that work has been concluded. Acquisition has been a minor contributor to the improved gross margin as even if all the companies we acquired had a profit margin above 15%, per definition, that does not imply that they actually have a gross margin above 50%, and by that help to increase the average margin on the group level. We are quite happy with remaining this 50% gross margin level on a group level, despite all the cost increases that our companies have been facing during the last quarters.
If we look at the key target levels, we continue to improve in all these areas. The profit working capital, as mentioned, is heading for the 45%, even if I had hoped and expected the path to be a little bit more higher speed than we have. However, the rolling three figure is higher than this rolling 12 figure, so we have a positive momentum in the improvement of profit working capital. The EBIT in absolute terms to SEK 500 million. We are now just around SEK 430 million rolling 12, so we continue to aim for the SEK 500 million. The EBIT margin is improving. We are still behind the 10%, but we are moving towards that target as well. We have not changed anything in the targets. I will then hand over to Peter talking about the earnings per share and some other topics.
Thank you, Magnus. If we look at earnings per share, it has been a steady improvement and also in this quarter. So, quite a large improvement even though we were a bit helped by lower financial costs. So according to plan, more or less. When it comes to inventory level, we do have some organic increase in inventory levels. It is around SEK 50 million, and it is mainly within companies that are starting to see a market upturn. So, trying to make sure that they can take advantage of a stronger market going forward. As you see, the ITO are still increasing. So, that is a good sign as well. The cash flow from operating activity was slightly above plan. So it was a very good cash flow.
Next quarter will, however, be a bit slower, partly due to the increase in inventory and also some other supplier payments that we have to do. So a bit slower cash flow for the next quarter. But, on the long term, it is a good cash flow situation. The net debt increased mainly due to the dividend, of course, and we had some small acquisitions in the quarter as well. So it is now SEK 1.6 billion. Net debt to EBITA is 2.6. So it is steady around that level. Important to say the acquisition target remains intact here as well, even though we have not made any acquisitions this quarter. It has been more like Magnus said, it is a timing question. Good. Back to Magnus.
We have since October last year, four divisions. If you look into the figures, you can see that three of those divisions have some common themes. They are all increasing revenue, including organically. They are increasing profit margin, and returns. I would say we have three divisions now that perform on a good level. Then we have one division that has some strugglings. If we then start with the Core Solutions divisions, we have a revenue increase of 5% here. Six out of eight is then improving revenues. We can see if we look at the different geographies they are operating, that the Nordic region is typically picking up in terms of revenue, whereas some of our companies, this has a kind of sluggish market in the U.K.
As an example, Spraylat that is very exposed to the construction sectors is affected by this slow construction market in the U.K. currently. Overall, on the top, we have a good revenue increase here with the 5%. The profit is improving even more, so we have 16% profit growth in this division. Here, ESSVE is a very strong contributor to profit growth. ESSVE has started to feel a bit stronger market, but also the activities with improving the margins, phasing out low margins, customers, and products, and also improve the efficiency in the organization has contributed to this profit improvement that we had in ESSVE during the quarter. The EBITA margin continued to increase. We are now close to 16% compared with 14.2% comparable period. Here in the division, we have six companies that actually have EBITA margin above the group level as such.
If you look on the lower end of the slide, you can see here that we had a very good, steady EBITA development rolling 12 in this division, and the margin has increased over time. Also the revenue has increased. The revenue increase historically has been mainly driven by acquisitions, but we hope and expect we should see some better organic growth in the next coming quarter based on what I said about the underlying market development. If we look at the Safety Technology Division, once again, they also increased revenue including organically, and they increased profit margin, and returns. Revenue increased 25% in this division, is driven primarily by acquisition. The organic performance is a little bit mixed in the division as such, but the fire safety, the signage cluster, and the safety equipment had a double-digit growth in this quarter.
10 out of 12 companies had revenue growth. Overall, there is a kind of pick up here in the companies in the Safety Technology Division. The EBITA increased 38%, so that is quite a significant high number. Seven out of nine had a double-digit profit growth in this quarter. All the three latest acquisition we made in this division is performing according to expectation or even above expectation. That is positive. Cresto is the biggest organic profit growth contributor in this quarter, so that is organic driven. Also here we have a margin increase, also close to 15%, up from the 13.2% with the comparable quarter. As already said, the Collinder subsidiary with the signage cluster here acquired Håva-Skyltar during the quarter.
On the lower end here, you can see we had a steady revenue improvement here, mainly driven through acquisition, and that has also been a big contributor to good profit development. You can see on the very right side here of the EBITA, this is a rolling 12 figure number. The EBITA margin has increased from 12% now to close to 15% over a period of two years, mainly driven also through acquisitions. I would say a very strong performance. If we look at the Machinery & Equipment, that division has been a disappointment during the last two quarters. I have said that my expectation is that this division is to start to pick up, and that is something that we can see in this quarter.
This is also a division that improved the revenue, including organic growth and profit margin and returns, even if it's coming from a lower level. Here we have a revenue increase of 13%, and that is a recovery from a weak first quarter. Here the sheet metal, the heat and welding, and measuring equipment had some good growth in the quarter. But the building equipment segment is here not having any organic growth, and that is, I would say, mainly a reflection on the construction market as such. The EBITA increased to 44% here. All companies are now profitable in this division. This is a division that have equipment and machineries, so that's investment products. This division has faced the kind of slow investment kind of path at their customers. We see some signals now that they start to invest, start to willing to make investments.
That has now turned all the companies in this division profitable. We had some companies here actually showing minus results for some quarters. That's very positive that they're all on the right side now, sort of. The EBITA margin has increased to 11.3%. Here, the majority of the companies in this division is still below the group margin level. But there are opportunities and expectation that that margin should improve over time in the next coming quarters. You can see the development in this division during the last quarters on the low end here with the graphs. The revenue has kind of been quite steady. No acquisition made in this division in the last fiscal year, a rolling 12 month. We had had a declining EBITA margin and also an EBITA trend.
My expectation is, as said before, that this should kind of level out now and we should see a pickup in this division in the next coming quarters. So we have three divisions performing in making improvement in all our KPIs during this quarter. But the PPE & Utilities is still lacking with lower earnings, lower margins, and lower returns. This is actually 180 degrees compared with other divisions. Here we had a decline in revenue, not a big number, SEK 6 million, but if you look and compensate for the divestment we made, it's flat. Luna and TengTools is held back by weak demand, and particularly in Norway.
We perceive generally on a high level, as said initially, the interest rates has gone up in Norway and the customer is a little bit less willing to buy things currently in the Norway customer base, and that has partly reflected Luna and TengTools. When we sold off Skydda in summertime last year, we temporarily kept the stock in our warehouse within the group at our company, Logistikpartner. The acquirer of Skydda then for a period had stock in our facilities as well in their facilities. When those was merged, they have moved all the stocks to their facilities now. They had overstock in some products, so they have made some sell-off and reduced stock as a result of this, that has been affecting some of our PPE sales, personal protection equipment sales.
On the other hand, the PPE product companies has recruited new direct customers that long term will beneficial for our companies within that space. But we had some temporary effect of this reduction of warehouses at the acquirer of Skydda that we don't expect any future effect of that in the next coming quarters. The EBITA was here down from SEK 30 million to SEK 18 million. But still, most of our PPE product companies continue to perform well. We also had, goi ng back to this transaction, we had some restructuring costs in the Skydda business, it is now named BB Safety, of SEK 7 million in this quarter. That is some cost we will have in the next coming quarter as well, some restructuring cost, but after that we should have concluded on that restructuring as well. The EBITA margin was down from 8.6% to 5.2%.
Luna is still profitable, but it's a low single-digit margin here we are talking about. The majority of division companies are at or above the group level in terms of margins. So here, of course, Luna is a big portion revenue-wise on the group level, and that is then reflected in the performance level on the division. As you can see on the lower end here, we have had a steady revenue going down. It's mainly due to phase out of low margin businesses, and that has kept up the EBITA margin despite this rapid decrease in revenue. But we had an EBITA going down here, rolling 12. This is not a quick fix, I said it before. We have some challenges within this division. We are working with that on a continuous basis, but shouldn't expect any rapid kind of change in this division in the next coming quarter.
We will have some improvement long term. We will see some improvements over time. But once again, it will take some quarters to have this division on a high level. So overall, we continue to aim for the SEK 500 million, 10%, and 45% targets. The underlying market is still uncertain, unpredictable, even if we see some good kind of indications. My expectation is, as I said earlier, that we should see a slow pickup in our underlying markets, but we don't expect any rapid recovery here. I talked about the increased cost that we had, and as it looks now, we are able to compensate for that, so that shouldn't have any negative effect on the margin going forward. We will continue to do what we will be doing, focus on profit expansion over revenue growth.
We continue to allocate capital based on our capital allocation model that we call Focus Model. It is really company by company approach, dependent on where we would like to allocate growth capital. We continue to support our companies with our B&B Toolbox. One very important and focus theme we have now is around AI. We have resources and knowledge available for our companies to drive AI activities across the group. We, I would say, had a lot of progress in many of our companies on that topic, improving efficiency, but also enhance our product offerings to our customers using AI as a tool to change the way we are operating things. That is one very important topic for the group going forward as well. We will continue to acquire companies. We talked about it before.
We are focused to acquire companies with profit margin above 15%, and of course a profit over working capital above 45%, and companies having a leading position in a growth niche. We also have some current themes except for the AI theme I mentioned earlier. We will continue to work on improving the ITO, the inventory turnover rate, to get back to the pre-COVID level that was 2.5 in ITO. We continue to focus on the profit expansion. Gross margin is on a healthy level, but it is a lot of work required to keep up that, both on the keep up the price levels towards customers, but also to work on the supply base. That is a theme that is very important now, also based on the price increases that we are facing based on the things that is happening in the market mentioned before.
Of course, we aim to capitalize on the now hopefully stronger underlying market that we are facing in the next coming quarters. Overall, we have now three divisions that is performing on a very good level, I think. They are improving in all the dimensions. We have one division, the PPE & Utilities, that are still struggling. We have a lot of activities going there to improve the performance on the divisions. As I said before, it is not a quick fix. You should expect, over time, some improvements in that division as well. With that said, we hand over to some Q&A.
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 Nordea. Please go ahead.
Hi, good morning, Magnus and Peter. Thanks for taking my questions. If we start off on the organic growth, you have said that we will see some price increases here in the last couple of quarters. How much did that affect the organic growth here in this quarter?
I do not have that number, but it is a few percent units. It is not a big number.
Okay. Volumes are down by roughly the same amount then?
Yeah.
Yep. Okay. That is clear. On the price hikes going forward, is that still a few percent in terms of organic growth, or should we expect a more price driven growth going ahead?
If we look at our portfolio, we have different companies having different type of ability to change prices. I would say the majority of our companies is able to adjust prices as immediately as they quote new offerings, but some companies have windows where they can create prices, and some of them even have only two times per year they can increase or change the prices. It is not an immediate effect. You will have some companies that have some price increases that will be affected in the next coming month, and some of the companies having immediate effect as of last month. With that said, I do not have an exact number of this, but yes, you could expect maybe some percent units price effect in the next coming quarter as well as an effect of price adjustments.
Yep. Okay. That is very clear. On the inventory dynamic in PPE that you mentioned of the acquired inventory, are you able to quantify this negative effect in the quarter in terms of growth?
Could you rephrase that? I am not sure I followed.
You mentioned in the report, and you also mentioned here during the call that sales from your PPE purchase have temporarily-
Aha.
held back by the integration of Skydda. Are you able to quantify this effect-
No.
a bit more?
No, we don't get that detail. As said, it's a result of merging two inventory locations and to sort out what is the effect of a sell-off of overstock and underlying market. It's even impossible for the company who acquired Skydda to sort out. Sorry, we don't have that information.
Yep. Okay. One final one from me here. You flagged some restructuring costs here in the remaining part of Skydda. Are we looking for similar levels in the coming quarters as seen here in this quarter, i.e., SEK 7 million, roughly?
Yeah. I think the cost is mainly related to the discontinuing of one of the brands that Skydda had at Bauhaus in Germany. It is a lot of inventory write-offs. I think we expect that we still have one quarter left of that job, so to say, and roughly the same amount. I do not think any higher. So one more quarter, I think.
Yep. Okay. That is very clear. That is all for me. Thanks a lot.
No, thanks.
The next question comes from Emanuel Jansson from Danske Bank. Please go ahead.
Good morning, Magnus and Peter. Hope you can hear me.
Yes. Good morning.
Morning.
Good morning. If we start off with demand, you mentioned a visible pickup in September and around SEK 50 million of organic inventory build. How much of that inventory is backed by firm orders and how much reflects an expected recovery from your side?
Normally, the companies that have increased the inventories do not have firm orders in that sense. They have a more, not next day delivery, but very short times between order and delivery. It is more an expectation going forward. ESSVE is one of those companies, for example.
I understand. What gives you the confidence that September was more than a catch after a slow summer?
If we look at September, it is the revenue figures that picked up.
Yeah. The revenue picked up at later stage of September, so September was fairly strong.
Perfect. Thank you. That is good to hear. Also looking at then the margins, very solid execution on the gross margin per se. You also said that most of the work to exit low margin business is now complete. Are you comfortable with the gross margin around 50% going forward? What are the main drivers of further margin improvement from here? Is it acquisition made or? Yeah.
If we look at profit margin, acquisition will continue to be a driver for improving the profit margin over time, as we only acquire companies above 15% margins. I also expect a profit margin increase organically as the volume starts to pick up. As said, we have now a much higher gross margin level in most of our companies, and we are also more efficient in terms of what type of cost base we have. We do not need to rebuild that cost base when the volume picks up to the level it was before. That will also be an enhancement of the profit margin going forward. In terms of the gross margin then, you should not expect, as said before, that future acquisition will help to improve that margin. Also organically, you should not expect a gross margin improvement over time. That is the frame that we can give.
Perfectly. That is very clear. On the M&A side here, obviously you have not changed your acquisition ambition, but have you been able to close enough deals with high-quality deals within your valuation range? Is that the main reason behind the slow development for M&A pace?
Yes, I would say so. That is the main reason. I think it is very important running the business model that we are doing to not acquire company for the sake. You need to make sure that you acquire high-quality company, you do not overpay. That is a criteria that you have to have to have this model to run long term. We have the target to acquire SEK 50 million -SEK 80 million in profit per annum. But I am not willing to do that at any cost. So I am very occupied with maintaining to the acquisitions the criterias that we have set to make sure we acquire quality within the valuation range that we have set. There have been some, I would say, less high-quality cases available in the market during the last quarters. I recognize this pattern since it has been a slow economy for many quarters now.
I think many of those high-quality company owners wait to sell up until the market start to pick up. So I perceive that there are fewer high-quality cases in the market. The few that has been, we have lost many of those in the bidding because we have perceived that the valuation has been higher than in the range that we are willing to pay.
Would you say there is a risk that the same valuation discipline means a lower acquisition pace for a longer period?
I've been in this industry for 20 years. I've experienced this type of pattern historically as well. I'm quite confident when the market starts to pick up, the deal flow will be significantly better than we have today.
Okay.
I'm still confident that over time, maybe not this fiscal year, but over time, we will be able to deliver on the target level we've set in terms of acquisitions.
Perfect. That's clear, and given at least my feeling is that you have been quite positive on the gradual improvement of demand and potential pickup, and also we're likely to see some price increases also affecting top line and earnings growth at the coming quarters. You think that the organic growth story and pricing could potentially offset a potential slower M&A agenda in the near term?
Yeah. We had an organic decline for many quarters. Some of this by purpose, phasing out low-margin businesses. I perceive that we are in a very good shape now to leverage a top-line improvement here in our companies. For example, I mentioned ESSVE that is a great profit contributor in this quarter, profit increase contributor as well as profit contributor. They have not had a very strong market, but still they are performing very well. When we get bigger volumes, we will have a very good bottom-line effect of that. That could actually compensate for a slower acquisition path.
Perfect. Sounds very interesting. Thank you so much, Magnus and Peter.
Thank you.
That was all my questions now.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.
Yeah. We received one written question only, and it was about the SEK 7 million restructuring cost that we, I think covered here in the questions as well. The SEK 7 million restructuring in the Skydda business is a discontinuing of one of the Skydda brands that we now don't own anymore within the Bauhaus chain in Germany. So it's inventory write-offs, you can say. So it's not a cash-out restructuring. Good.
Okay. With that said, if we don't have any further questions, thank you very much for listening, and looking forward to present the Q3 quarter here. When is that? That is in?
In February.
February. Thank you very much.