Welcome to VBG Group Q1 Report 2026 presentation. During the Q&A session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to the speakers, CEO Anders Erkén and CFO Fredrik Jignéus. Please go ahead.
Very welcome to the presentation of VBG Group, quarter one 2026. I will make a short summary of quarter one, the highlights, and Fredrik will give you all the details, and then we will make a short summary in the end on the direction that we are going in. So, please, Fred. So, if we conclude the quarter one highlights, we can say that it was a stable quarter from our side. Revenue increased by 2%, compared to the first quarter 2025, and adjusted for currency and acquired volume, sales increased by 5.3%.
I think it's important also that we understand the three divisions and our geographic spread, and it's comforting and comfortable that all three divisions grow organically and also that we grow organically on the three main geographic areas: Europe, North America, and the rest of the world. We will dive in a little bit on the next slide to see our market segmentation split, but it's interesting to note that the drivers here, that is, price adjustments and one of the most important segments within Mobile Thermal Solutions, the side-by-side segment grew by 24%. Of course, both defense segment for Truck & Trailer Equipment and Ringfeder Power Transmission had a good quarter when it comes to that.
For Truck & Trailer Equipment, the growth was 24% in quarter one. As Martin Lundstedt confirmed last week on Friday, we see the same picture when it comes to the truck suppliers in Europe, we see increased volumes here. When it comes to the result, we managed to maintain our gross margins and the group delivered a solid EBITDA margin of 12.7%. I think Fredrik will come into details, but it's worth mentioning that the currency had a SEK 22 million negative effect on the operating result. Order intake was flat compared to quarter one 2021, but currency adjusted, it was +8%, and the book-to-bill ratio increased to 111%.
Last but not least, our operational cash flow reached SEK 92 million. You can flip to the next one. I think this is a nice picture to understand we are not just the drawbar coupling company from Vänersborg. We have three divisions as we see, and we are working in many industrial verticals. Of course, the drawbar and truck business is important for Truck & Trailer Equipment, but as mentioned, the defense segment is now in double digits. As you can see on the Mobile Thermal Solutions, it's a one-third split of these sides, and we had a positive trend within the side-by-side business. On the contrary, we had a slowdown on the bus side in Mobile Thermal Solutions.
As mentioned many times, Ringfeder Power Transmission is present in a lot of industrial segments or verticals. This time, the machine building segment, aerospace, was growing together with energy and process technology. You can continue with the details, Fred.
Thank you, Anders. Okay, the first quarter sales increased by 1.9%. Adjusted for currency and acquired sales, the growth rate was 5.3%. FX headwind is about 9% for the group as a whole. EBITDA amount to SEK 175 million in the quarter, and our EBITDA margin declined from 13.1% in the first quarter of 2025 to 12.7% in the first quarter of 2026. The SEK strengthened during the quarter compared to the comparison quarter, and we have an impact on the group in all divisions. The FX effect on EBITDA was -SEK 22 million in the quarter, but most likely we have now seen the peak of the FX effects.
During the first quarter, we took a restructuring cost within MTS, so SEK 2.1 million. The operating margin was also affected by increased prices for raw materials such as copper and aluminum. We have a lag compared to our price increases. Operating cash flow was strong and stable and amounted to SEK 92 million before CapEx in the first quarter, compared to SEK 28 million in the comparison quarter of 2025. Earnings per share amounted to SEK 4.53 compared to SEK 4.58 last year. We'll go through the first quarter with some touch points on each division. Truck & Trailer Equipment to start with.
Sales for the quarter increased by 3.3% compared to the quarter last year, which amounts to SEK 448 million compared to SEK 433 million. Adjusted for FX and acquired volumes, organic growth amounted to 1.4%. Demand for coupling products has continued to be high with a continued good market in Australia. Defense segment has grown by 24% in the quarter. Like Anders said before, the market for trailer components in Europe developed slightly positively from a low level in the first quarter. EBITDA for Truck & Trailer Equipment increased in the first quarter compared to the previous year to SEK 95 million, with an EBITA margin of 21.5%. Truck & Trailer Equipment delivers growing revenues with a stable high margin, EBITDA margin.
Going over to Mobile Thermal Solutions. Sales for the quarter decreased by 4.6% compared to the previous year and amounts to SEK 671 million. Adjusted for FX and then acquired volumes, organic growth increased by 5.7%. EBITDA for Mobile Thermal Solutions amounted to SEK 58 million with an EBITDA margin of 8.7%. The quarter was affected by FX headwind, SEK strengthening against US dollars and CAD, which has an impact on EBITA of almost SEK 14 million, but also increased cost for raw materials, primarily copper and aluminum, as well as a less favorable product mix. During the quarter, restructuring costs of SEK 2.1 million were taken to adopt the organization, which we expect to strengthen profitability going forward.
This has contributed to a lower operating profit, EBITDA, and a lower operating margin EBITDA compared to 2025. Going over to Ringfeder Power Transmission. Sales for the quarter increased by 20.1% compared to the previous year and amounts to SEK 258 million. Newly acquired Malmedie contributes according to plan. Adjusted for FX, organic growth amounted to 12.1%. Sales in the comparison quarter was very low last year. EBITDA for Ringfeder Power Transmission increased to SEK 29 million, and the EBITA margin amounted to 11.2%. During the period, a cost of SEK 4.4 million was incorrectly recognized in the wrong period. It was relating to 2025 and was recognized in the Indian subsidiary.
Given recent acquisitions in Europe, the proportion of European sales has increased over the last quarters and now amounts to 39%. Please note, we have an average of the market business of 23% in the group. Rolling 12 months is almost in line with the full year 2025, not adjusted for currency. FX plays still a large role both in sales and EBITDA. EBITDA was negatively affected by approximately 22 million in FX effect between the quarters. For the first quarter, the cash flow before CapEx came in higher than comparable year or quarter. After 2025, we have a net debt position if we adjust for pension liabilities and leasing commitment on SEK 580 million.
During 2025, we had lower cash flow from operations due to lower underlying results and higher working capital tied up in accounts receivables. We made three acquisitions and started to build our new production facility in Toronto, which explains the change in cash position. VBG Group has still a strong financial position that can be used to develop the group going forward. ROC amounts to 28.8%. The decrease during 2025 is relating to the acquisition of the land and building in Toronto, which increases the balance sheet, but does not give a positive EBITDA effect or contribution before consolidating the three facilities that we have today. This KPI is also affected by somewhat lower EBITDA. Thank you, and over to you again, Anders.
Thank you. If we look at our sustainability agenda. We published for the first time an audited sustainability report in the beginning of April, and we are very much focusing on three areas. It's the reduction of CO2 emissions, it's reduction of waste, and reductions of accidents in our factories. Future focus, and I might kick in open doors, but looking ahead, I do anticipate continued market volatility and new political tension. We have an organization that is agile and responsive to changing conditions. Overall, while tariffs remain a challenge, their net impact on our operations is marginal. We have done a tremendous job in offsetting these changes. The largest impact was the commodity price increases for Mobile Thermal Solutions that Fredrik already have mentioned, and especially copper and aluminum.
We are committed to offset these cost increases with price adjustments during the first half of 2026. We have so far reached roughly 75% of the target, and it will be delivered the rest in quarter two. We are also positive and we are committed to capitalizing the strong order book going forward. As mentioned, order intake adjusted for currency during the quarter was +8%. We can also mention that sales and order intake gradually improved during the quarter, and we really can't see any indications of lost business or any lost orders or canceled orders because of this new political tension.
We will also continue to finalize our building in Toronto, and we expect to have that in end of quarter three, beginning of quarter four, and fully operational in the first half of the year of 2027. We also announced this morning that we will consolidate Ringfeder Power Transmission's production facilities in German Neunkirchen with a Czech facility and build a brand-new building in Dobrány, Czech Republic.
This is part of our strategy to be more efficient, to increase capacity, and strengthen our long-term competitive edge. As Fredrik has said, with our financial strength and our decentralized organization, we are prepared for what lies ahead. Through our cash-generating divisions, we are committed to complementary acquisitions as well as investing in organic growth. This will lead to continued sustainable profitability. By that, we are finished with our presentation, and we are open for questions at this point.
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 Gustav Berneblad from Nordea. Please go ahead.
Yes, good morning. It's Gustav here from Nordea.
Good morning.
I thought maybe.
Good morning.
Yeah, good morning. Good morning. I thought maybe if we could start off with the MTS margin, which is down 100 basis points year-over-year. Of course, I mean, it has its natural explanations here with raw material, et cetera. Is it possible to quantify how much of these 200 basis points is related to the raw material impact versus the negative mix effect?
I would say that the majority of this is related to the material cost increase, but we have a negative effect also on the product mix, and this is on the bus side, where we see that the ratio of electrified school buses is declining, which has an impact both on revenue and the result. The majority comes from the cost increase on materials.
That's very clear. If we see sort of the full price increases that you have implemented being finalized here end of Q2, I mean, is it fair to assume that the MTS margin will sort of gradually raise up to 11%, 12% here in H2, or anything that speaks against this?
I mean, we are committed to have agreements with to mitigate these cost increases during quarter two. Of course, you have to look at the order book also. What is orders that are committed to a certain price? Definitely during quarter three it will be fully implemented, but we should already see signs in quarter two about this.
Yeah. Okay. That's very clear. If we take the bus side of the business, you comment on it being slightly soft, partially due to EVs, but is it soft across both school buses and transit buses?
No. As commented before, maybe I should make a longer story about this. We saw since I would say 2024 that we were losing volume due to Nova pulling out of the U.S., so the transit bus volumes has deteriorated over time. Now we can see even in Swedish money that we are stabilizing the transit segment now, and even in local money that we are gaining back. Last year we put a lot of effort in product development in order to come out with and come out to the market with competitive products, and we start to see result on the transit side.
On the school bus side, we can see that there is a clear product mix change, and that means that the number of electrified school bus solutions are decreasing. The volumes in itself are the same, but we can see a clear change in the ratio of electrified drivelines on school buses. If this is just a quarter at certain accounts, I can't tell you, but we monitor the situation and it has a clear impact on quarter one revenue and the result from MTS.
Let me also comment, we shouldn't discuss the currency too much, but the school bus business is a 100% business in the U.S. and of course that the headwind is much greater than 9% in the bus business for us. Currency has a larger impact.
That's very clear. Thank you. If we jump over to Truck & Trailer Equipment, I mean, you commented on the semi-trailer market bottoming out here for a couple of quarters. It looks like the coupler business is holding up well, defense is growing strongly, and I guess you have some general annual price increases. Just wondering if there is anything, you know, holding back the organic growth in Truck & Trailer Equipment here in Q1, that could potentially, you know, accelerate going forward?
No, I think we see a good positive trend within Truck & Trailer Equipment. As you saw on the chart, the major impact for us is the truck business. We can see since the end of quarter four 2025 that volumes are steadily growing within the seven big truck OEMs in Europe, which is positive. By history, we see that the volumes at the OEMs really pull the market conditions for our largest customer base when it comes to first installation, and that is the body builders who build the gravel truck, the distribution truck, or the timber truck, or whatever. It usually starts like a quarter or two quarters after the truck OEMs going forward. No, we see a good plan going forward.
That's very clear. Sorry, just one last question here on your announcement this morning of the new facility for Ringfeder Power Transmission. Is there anything you can say regarding either payback calculations or cost savings that you are expecting here?
No, not at the moment, Gustav, but I mean, this is a long-term investment for us. We see the consolidation within the German production unit where we have been working in roughly one shift, and now we consolidated to get a more efficient output, and we get a state-of-the-art building to build efficiency and productivity for the future. This is a long-term commitment that we want to stay really competitive in these small niches that we are acting.
That's perfect. Thank you very much for taking my questions. Thank you.
Thank you.
The next question comes from Jonny Jin from SEB. Please go ahead.
Yes. Good morning, Anders and Fredrik. I also have a couple of questions. I think I will start with the organic growth. I mean, all divisions show organic growth in the quarter, which is good. Could you give an estimation of the split between price and volume contribution in the quarter? I mean, what is a fair assumption of price impact in the quarter?
Thanks for the question, Jonny. Yes, we can see that the price adjustments they stand for about 25% of the increase and the rest is organic then.
Okay. Yeah, that's clear. Entering Q2, could we expect similar price magnitude or will it be even higher in Q2 or?
It will be basically the same impact.
Okay. That's clear. Coming to MTS. I mean; I guess the price impact here mainly relates to the MTS side. I mean, despite higher price contribution in this quarter compared to Q4, it seems like your organic growth is somewhat slower compared to Q4 MTS. What is sort of driving that? And how is your visibility entering Q2 within MTS, would you say?
I would say it's connected to Gösta's question as well. Number one, when it comes to product mix, we can see that in quarter one 2026 there is a clear product mix change compared to the previous quarters 2025. We have a much lower volume of HVAC systems to electrified drivelines within school buses. That is the main product mix change.
As mentioned earlier, we had a multiple of 3x up to 4 x for each system delivered when it comes to electrified drivelines. On top of that, without knowing exactly details, but we can see that the currency impact, especially in North America with the U.S. dollars, were in relation to SEK, it was the peak during quarter one 2026. That are the two main drivers for not increasing the organic growth to the same level as quarter four, which was roughly 9%, and now we are talking about 5%.
Yeah, that's fair. I understand that. I think, I mean, the mix impact, I think you had similar reasoning in your Q4. I mean, is the mix effect even more elevated now or I also want to tie this to your comment about higher price increases. I mean, have you seen any response among customers that they have been more hesitant, which affects volumes, or how should we read that?
No, we can't see it. It comes back to the order intake figures as well. We can't see any cancellations. Of course, there is deep discussions when you compensate prices in the market. But I mean, it's necessary for us to compensate, and I think, it's a general trend to see what has happened to copper and aluminum in the last nine months.
Okay. Yeah. Just one final from my side. I mean, coming back to orders, if you exclude the acquisitions, what was sort of the book-to-bill in the quarter? And also, could you give the split among the divisions? I mean, the organic book-to-bill in trucks at MTS, for instance.
Jonny, the book-to-bill ratio was 111% in the quarter for the group. I can't go in detail about it. What was your second question around?
Organic growth in order intake.
Order intake. We split the organic and the acquired volume. The order intake related or organically, that was 3.3%, and the rest was acquired volume.
Okay. Yeah, that's clear. Is it fair to assume that orders is above sales in both truck and trailers and MTS?
You can answer.
Yes, it's above sales.
Okay. That's clear. Thank you. That was all for me. Have a great day.
Thank you.
Thank you.
There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.
Thank you very much for all of you participating. We appreciate that you are listening to us and hopefully have a better picture of VBG Group going forward. Thank you very much for your participation.
Thank you very much.