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Good morning, everyone, and warm welcome to this Q2 presentation from Dustin Group. As you heard, Julian and I are here to present the result to you. I think we can have a look at Slide two and what we will go through today. We will, of course, go through the Q2 results, but we will also talk a little bit about our strategic focus and the way forward as well as the announced rights issue. If we then move on to slide three to the q two result. In last quarter's sales was affected by a weak market with continued general cautiousness by the customers in many of our customer groups. However, we saw some positive developments in both LCP and SMB. Sales in the quarter was SEK 408,005,000 or 4.5% above last year. In SMB, organic growth was negative 2.6%, while LCP was up by 6.4%. In LCP, we were recovering some of the delayed volumes from Q1 as a result of the IT platform implementation but we also won new contracts. In SMB, we saw some stabilization of the market and the negative market development was slowing down. Gross profit ended at 7,000,000 compared to last year's NOK856 as a result of lower gross margins.

Gross margin was 13.9% compared to last year's SEK 16.3 We will talk a little bit more about that in the next slide. Adjusted EBITDA came in at 110,000,000 compared to last 02/2001 Items affecting comparability for the quarter was SEK 55,000,000, I was totally referring to the efficiency program that we have implemented during the quarter. Have also made a non cash impairment of primarily goodwill of SEK2.5 billion will talk a little bit more about that later in the presentation. EBIT ended at negative SEK 503,002,000 mainly as a result of the impairment effect. Cash flow from operating activities was $180,000,000 positive compared to last year's negative $2.00 2,000,000 And leverage at the end of the quarter was six times compared to four times last year. Leading up to the announced rights issue. This, we will talk more about later If we then have a look at the gross margin on Slide four, As said before, gross margin this quarter was 13.9% compared to last year's 16.3 The majority of the difference was explained by a very strong margin last year coming from some really high margin rollouts in The Netherlands. If we instead compare with the average margin for the last ten quarters, that average would end up at 14.6%.

And the difference this quarter margin would be 0.7 The negative effect compared to the average is mainly explained by the high share of new contracts with lower margins and the general price pressure in the market coming from the slow volume development. Moving to Slide five and the segments in some more detail, where Julia will give us some more insights.

Yes. Thank you, Johan. We then move to Page five, where we look at the SMB segment. Where sales landed at SEK1.5 billion. Which was 2.2% below last year. The organic growth was minus 2.6%. As Johan mentioned, in this quarter, we do see some signs of stabilization And specifically, we see that the demand among small customers and for our B2C segment was slightly improving. But overall market remained cautious due to the ongoing economic uncertainty. Looking at product mix, we see that the share of software and services declined somewhat mainly due to the stronger focus on standardizations. Standardized service portfolio, and flat hardware sales. Gross margin declined slightly in the quarter which together with the lower sales led to lower segment result. Even though it was partially protected by a bit of lower cost base. All in all, the segment margin ended at 3% compared to 4.2% last year. The total segment result was €46,000,000 compared to last year's 66,000,000 If we then go on to Page six, we look at the LCP segment. And sales in LCP was SEK3.9 billion in the quarter, plus 7.3% growth versus last year. Organic growth was plus 6.4%. And sequentially, we also saw strong growth versus the poor Q1 sales.

And the sales growth was mainly driven by the public through both recovered sales in the Benelux disrelating then to the delayed order from Q1 where we did our IT platform implementation.

But also to the several new frame agreements that Johan mentioned. On the opposite, we still continue the cautious development for our large corporate business. From a geographic standpoint, all the Nordic countries, except Finland delivered growth, while Finland was still challenged by budgetary constraints as in previous quarters. As said before, we do see a large volatility in sales between quarters in LCP. As we just reviewed, the gross margin dropped in the quarter compared to last year. As you saw, the last year was a high comparison quarter driven then by high one off high high margin rollouts. And the large share of new framework agreement with initially lower margins had a negative impact on the overall gross margin. In addition, we saw a negative mix effect of having a lower share than our low corporate customers which have a higher average margin. This also had a negative impact on the results. We do continue to see an increase in the take back, which had a positive impact on both margin and EBITDA. Overall, this led to segment result of SEK99 million versus SEK 164,000,000 last year. And the margin ended at 2.5% compared to 4% last year.

Still a large improvement versus the previous poor quarter. Moving on to the cash flow and CapEx on slide seven. We see that cash flow for the period was SEK89 million. Looking at the details, we see that the cash flow from operating activities before change in net working capital was SEK94 million compared to last year's SEK165 million. And the difference is mainly driven by the lower operational results. Cash flow from change in net working capital was plus million compared to last year's negative SEK367 million. This quarter was mainly affected by improved inventory after very high levels in Q1. We will look more at net working capital on the next slide. In total, the operating cash flow was plus SEK180 million in the quarter. Cash flow from investing activities was minus SEK 41,000,000 compared to SEK 58,580,000.00 last year. More on this in just a few seconds. And the cash flow from finance activities was minus SEK50 million versus plus DKK 40,000,000 last year. Well, last year had a positive effect from the proceeds of the rights issue carried out in December 23. Moving to CapEx. The total investment in the quarter was 127,000,000 of which only SEK41 million in the cash flow is and the majority of the 41,000,000 was related to IT development.

Investment intangible and intangible assets was $63,000,000 this year, of which only SEK 2,000,000 affected cash flow. The non cash items are mainly related to lease contracts. Investments related to services was €25,000,000 compared to €29,000,000 year, none of it affecting cash flow.

Coming then to Page eight, we look at the net working capital development. Net working capital landed at 60,000,000 plus which was lower than last year at CLP 90,000,000 and also a clear decrease versus the previous quarter. Inventory levels increased versus previous year, but as said, decreased versus the previous high quarter as we expected. We're still a bit above our target levels and we'll work to further decrease this. Account payables and accounts receivables were both high in the quarter, mainly due to timing effects and also improved payment terms towards suppliers. Other payables also increased due to goods received but not invoiced. Overall, the quarter landed at more normalized levels than we've had in the last two quarters. As said before, we always have some timing effects in individual quarters. But our long term target for the drilling capital remains to be around minus 100,000,000. And with that, I hand back the word to Johan. Yes.

Let's then move to Slide nine and have a look On this slide, we've tried to list the most important activities that we're working on in order to get back on track with the result. And these ongoing activities are the move of managed services portfolio to standard in all markets and to all customers. We truly believe that the standardized services is the future. For us, it gives opportunities for scalability, for our customers, it gives security and predictability. Then the implementing of the new organization structure, focused on the key parts of value chain, which means offering sales channels and delivery supported by functions enabling functions like people and culture and finance. This new structure give focus to the development of service, software and hardware offerings targeting our core customer groups. It also put customer in the center with various sales channels to use. Moving to the efficiency program where we have implemented most of the activities during the quarter. According to plan and we see the full effect of the 100,000,000 to SEK200 million coming through by the end of this financial year. Further to that, we have now implemented the new IT platform in the Benelux and we are targeting further automation and process improvement in these markets coming from the implementation of that new platform.

And as you've heard, in addition to that, we have, as a result, of the more focused service strategy and the higher uncertainty of the future in the macro perspective decided to make a non cash impairment of primarily goodwill SEK 2,500,000,000.0 in the quarter. If we then move to Slide 10 and the rights issue. As said in the information, before, the rights issue of 1,250,000,000.00 is fully guaranteed and will be used to repay debt. The improved financial stability can be used to focus the organization on continuing delivering on the implementation of the strategic plan and hence, improve the business result long term. You can see to the right on the slide, the debt level goes down from approximately SEK 3,200,000,000.0 to 2,000,000,000 as a result of the issue. With that, leverage is coming down from 6x to 3.7x based on Q2 numbers. With the current plans, we expect to come down in our financial target grid of two to three in the coming quarters. Moving to Slide 11, where you can see an overview of the key activities. With the timing for the rights issue. And a general extra general meeting will be held on the May, approve the issue.

The annex nine will be published on May 6. And the subscription period will open up on the May 9 last to the twenty third. The outcome of the rights issue will be announced on the May 27. With that said, let's move to Slide 12 and a summary of the quarter. In summary, Q2 was a quarter where we sequentially improved from poor Q1 Q4 and Q1 but was still challenging from a market perspective. Net sales was up by 4.5% with LCP leading the way. Gross margin at 13.9% affected by high competitiveness due to slow market and new framework agreements in LCP. Resulting in an adjusted EBITDA at SEK 110,000,000, down from NOK $2.00 1,000,000 mainly as a result of the lower gross margins. Board of Directors have resolved on a fully guaranteed rights issue of approximately billion 250,000,000 to strengthen the financial position to ensure high pace of change to improve profitability. And the efficiency measures announced in the last quarter is proceeding according to plan. We are also continuing strengthen the strategic focus on standardized managed services. We look forward, we can see that Gartner, IDC and Catalyst are expected global peace market to grow in 2025.

Fueled by the ending support for Windows 10, the AI PCs and the post pandemic replacement cycle. This will be an opportunity for us as we are prepared to take on a more positive market sentiment. And I think with that said, we can the presentation part of this meeting, and we open up for questions.

If you wish to ask a question, please dial 5, on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial 6. On your telephone keypad. The next question comes from Jesper Stugamo from Handelsbanken. Please go ahead.

Yes. Good morning, Johan and Julia.

You for taking my questions. So I was wondering a bit around the outlook in the PC cycle here reading into what Dell and HP have communicated, it looks like it could be more of a back end loaded 2025. Do you have any indications and some more color you have to share?

Yeah. We we share that view. It's if you take the the parts of it, yeah, and say that the the underlying let's say, volume drivers in the market I think, are the same and the strength of them are the same. What is hard at the moment is to predict, let's say, the macro economy instability. And how big effect that will have on the demand going forward. But given the level of instability at the moment, it's, of course, a little bit boring.

All right. And on the price pressure here and margin dilution, so we have seen a similar pattern from one of your peers. But when do you think this dilution effect from the initial contract here will fade and start to normalize Will it be as long as the market remains this week? Or how should we view on view the gross margin going forward?

Yeah. I think in a situation like this, primarily then if you look at the large corporate and public side, what happens is that the the contracts that you have will generate a little bit less demand. So you need in order to keep up with sales, you need to win new contracts. So you have a little bit higher share of new contracts in your mix when the market is slow. And that is why we are seeing this the last couple of quarters. As as soon as demand is coming back, then then you will see a less pressure on that.

Yep. Alright. And and and the effect with saw in LCP and Public Care, should we view it as a kind of a one time effect [indiscernible] more rollouts this quarter? Or is this actually an improving trend, so to say, in the LCP? I mean, when you talk to the customers that you're having higher activity there or I think we have we don't see any great change in activity level in in that sense. I think the situation we have now is likely to remain for some time. Then again, as we talked about before, as soon as sentiment is better and demand is coming back, then then that situation will change.

Okay. Thank you.

Thank you.

The next question comes from Daniel Thorson from ABG Sundal Collier. Please go ahead.

Yes. Hi, thank you very much. I missed the first minute or two of the call, but if you did not answer it, how much of the organic growth in the quarter was a catch up effect from the weak Q1 report versus actual improvement in either execution or market? Is there any risk that the 4% organic growth here could could come down a little bit in the coming quarter due to this?

I think we said that part of this is coming from, let's say, the delayed from the last quarter. It's really hard to quantify exactly how much that is. But I I would say that on a reasonable basis, it would be half half of it coming from previous quarter and the other being in this generated in this quarter.

Okay. That's very clear. Thank you. And then on the goodwill write down here, how much is related to Central Point? Also what are the other assets being included here? It seems to be quite broad based.

Yeah. And we don't measure it on country by country basis or on a let's say, acquisition by acquisition basis. We measure it on the two segments. [indiscernible] So and the major share was in the LCP segment. But it was not directly related to a specific acquisition. Okay. Okay.

Yeah. I saw in the report eight to 20. Yeah.

Exactly. Exactly.

So that's why why I asked. Yes. Okay. Then the final one on the cost side here. Of the SEK 150,000,000 to 200,000,000 savings with effect three quarters out. Now how much did we see this quarter roughly? Of that?

We saw some of it coming through this quarter, but as the activities are reducing staff and reducing, let's say, office space and facilities, we you kind of have to carry out the activities during this quarter and you will see gradual change of cost levels coming through in the next three quarters, let's say. Right? It was a small part this quarter.

Yep.

Okay. That's clear. Thank you very much. Thank you.

The next question comes from Lassine from Carnegie Investment Bank. Please go ahead.

Yes, good morning. Good morning. You mentioned that the strategic shift towards standardized services is a part of the impairment rationale. And can you clarify what this entails in more detail? What does it mean for your practice ahead for your products and services offering? This pivot?

Yeah. You you could say that you know that we we started, let's say, the the service journey by by doing smaller acquisitions And that, we we got competence and we got, let's say, offerings in the services side. But some of these companies were delivering a very customized offerings to their customers. So they they basically did everything the customer wanted. This is not the way we think that the service business should be done and we don't believe that we are so good in delivering services in that way. So we are converting customers into standard offerings rather than customized offering. In in in doing that, you will have a few customers that are not willing to make that change. And these customer contracts are then either closed or moved to or given to someone else, let's say, or taken over by someone else. Because we we don't wanna serve these customers. And that that is for us, this gives us a much clearer focus on what we are selling when it comes to services. And for us, we believe that that is really the future. So we can scale on it. We can we have a much higher customer service on these contracts because we know exactly what we deliver.

And the customer get predictability and security. When they buy these offerings from us. So our strategy is clear here.

Okay. But but you have talked about this for a very long time. And I'm just wondering what made you do this impairment right now, of course, the markets, but market is cyclical phenomenon.

Yeah. Course. Yeah. From And where are you in this transition towards the standardized services?

We we are we are far, and that's one of the reasons why it's it's has been going on for a long time because it takes a long time to convert the customer's stroke from a customized solution to a standard. And we have done it now in in four markets in The Nordics and that where we are basically on on standard with all customers now. There are a few exceptions, but very few. And and we're now doing this in same thing in The Netherlands where where it's which is a lost market where we are doing the transition.

Okay. So how is this impacting the margins in the Nordic region? Can you isolate that and see positive effects that you're scaling on it Yes. It it does. It makes us less volume sensitive when it comes to services because we are producing it in a more in a more standardized and machine wise way. And we can also outsource part of the production. So it's it's been stabilizing the margins. I think it when when customized services are at scale, they are quite profitable as well. But it it's just not our way of doing it. So this, I think, is more from a quality we do this more from a quality perspective. And from know, how we would like the how we believe that the future service will be delivered. Rather than increasing the margin percentage as such. We have good margins on [indiscernible] in both of these, let's say, service categories. Okay.

Can you talk about the journey ahead? Any in the Nordic region? When you do this, fully implemented in the Benelux region, What is the vision? And why are you transitioning towards? And what will happen when you are there, when you have implemented these initiatives fully?

I think that we mean that that a high share of our customers in the, let's say, mid market, and I would call mid market somewhere around a hundred to 2,000 employee companies. That they will buy standardized services from us in combination with hardware and software.

So we are able to to supply basically the the the basic services that the company of of 250 employees need. From a service perspective. And also, of course, the hardware and software associated with that. And with that, we will have a higher share of wallet in these customers and also a higher value add to the customers, we will solve a bigger problem of their IT challenges. And with that, we can improve our margins.

Okay. And and the okay. How long time does it take to take you there? Did that I mean, vision and where you want to be? Compared to where you are today?

To get there where we really would like to be, I think it will take many years. But there will be a gradual change of that as we are increasing the number of customers with managed services contracts. So that change is already happening in the Nordic markets. And will continue to happen also in Netherlands and Belgium. So it's a gradual change over the next you know, five years. At least.

And then this change or this changes that you're doing, so how we kind of think about the margins for the two segments? Going forward? Has this changed anything that you're maybe going more towards being a more distributor? Or and that we don't see really see the effects of this change yet.

No. I don't think so. I think we're going towards higher share of let's say, product life focused services as added to the hardware products. And by that, we will, over time, improve margins. That's clearly the ambition. If you look at you take the example of take back or circularity offerings, That is a good example of how we can add value to hardware deal. And that that development is is fantastic. It's going really well. And and I think there is a in some of the larger contract, there is, of course, a thin line between reseller and distributor. In many cases. But I would say that we are still on the ability of delivering smaller orders to a much more specialized customer rather than the distributors can do. But as you say, there is a thin line sometimes between the two.

Okay.

Got it. Final one, if I may. I'm just wondering if you can comment on the gross margin here and how much control you still you have over the gross margin performance? [indiscernible] is dictated by the external factors? Mix related issues?

Yeah. I I think we have we have good control over the the gross margin in each of the contracts. The challenge is that to steer how much each customer buys and what kind of level of new contracts you need to kind of hunt to reach your volume targets that you have in the company. As we see now, in a slow market and with some let's say, budget challenges in some of the markets, public public contracts yielding less volume ones you have, then you need to hunt for new ones. And that's why we get this high share of new contracts constantly over the last couple of quarters because you just need to hunt for more volumes at lower and in the beginning, they will be margins. So it's it's I think from a contract by contract perspective, gross margin is quite well controlled. But the mix of the different contracts is hard to predict.

Okay. Yeah. Fair enough. And just a clarification. I mean, I think you mentioned and suggested that this mix will continue in the SMB segment also in in the coming couple of quarters maybe? Because you have a high share of new contracts?

I think it will it there is a likelihood that it will continue until the market and budgets in the large corporate and public side becomes better. Because that means we have to hunt for new contracts to reach our volume targets.

Okay. That's clear. Thanks.

Thank you.

The next question comes from Thomas Nilsen from Nordea. Please go ahead.

Okay. Thank you for taking my question. The cost savings measures are expected to yield 1,000,000 to SEK200 million in impact by Q1 in the fiscal year twenty twenty fivetwenty six? You provide an update on the time line and key initiatives within these efficiency measures? And how confident are you in achieving the upper range? Upper end of this range? Thank you.

Thank you. And the time line is, as we said, it's a gradual implementation over period. In terms of how confident we are to reach a higher level at the top level, We are fairly confident in doing that. That's what the plan is indicating. Then, of course, when comparing to last year's numbers, for example, there has always been other factors impacting the numbers. But reaching the saving of €200,000,000 that is still in our plan.

Okay. Thank you.

Next question comes from from Handelsbanken. Please go ahead.

Thank you. Thank you for taking my question. As well. I have two ones. In terms of Benelux, you say you have complete your IT platform transformation. Can you sort of describe a little bit what sort of costs that momentarily will sort of disappear from if you have consultants that are now leaving and are done with that work and if you have old licenses that are closed falling off like that. So that would be one And then the second one is you will, in combination with the rights issue, get to a gearing or [indiscernible] Have the target of two to three times in gearing. If we get sort of a positive market direction, the coming two, three years, what are the items that will take you to the two to three in gearing? What are the predominant items you're looking for that will help you there? Thank you.

Let's take the last question first. I think the gearing on the gearing side, I think the components of our plan is is obviously improved margins coming from the service side and the better, let's say, better market conditions. Cost price, we are continuing to reduce cost during this year. And as we have also said that there are plenty of opportunities to further improve efficiency coming from the new platform in the Benelux that we can use in the coming quarters to further improve that. I think these are the main components of us taking us to a better business result. That will take gearing down. If you look at the cost for the IT platform, it's the majority of that is CapEx. So you will see it in lower CapEx going forward. We will continue to roll out the platform Let's say, upgrade the platform in other countries throughout this year. But that is of much less impact than this first rollout because what happens is that the effect is the biggest when you go from a legacy to a standard system, which we have done now in the Benelux. In The Nordics, we will do more of a version upgrade.

Where we are already on a standard platform. So the impact there will be much less.

Okay. Perfect.

You.

You.

As a reminder, if you wish to ask a question, please dial 5 on your telephone keypad. There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you very much for listening in to the Dustin Q2 report. And we wish you all a nice day. Thank you.