Slide 1: AQ Group Investor Presentation
AQ Group + Investor Ei
Slide 2: Why invest in AQ Group
Why invest in AQ Group EPS CAGR +15% over the past 10 years Profit every quarter since foundation in 1994 Exposure to industrial market segments with underlying growth; JIT Mech Electrification Railway Marine Long history of acquistions. 2-4 factories/year Strong balance sheet 2
Slide 3: AQ Group key facts
Production 8000 9bSEK 7 Business 15+ Market in 16 Employees Turnover areas segments countries Profit every 2-4 UN Global Deliveries 15% EPS quarter for acquisitions compact globally CAGR 29 years / year since 2012 3
Slide 4: Second Quarter, Apr-Jun 2024 in brief
=30= Second Quarter, Apr-Jun 2024 in brief — aq Net sales decreased by 4% to SEK 2,254 million (2,345) e Goal 15% growth Operating profit (EBIT) increased by 9% to SEK 222 million (203) Profit after financial items (EBT) increased by 11% to SEK 218 million (195) Profit margin before tax (EBT %) was
Slide 5: First six months, Jan-June 2024 in brief
=30= First six months, Jan-June 2024 in brief — fe fe] BH Net sales decreased by 3% to SEK 4,479 million (4,598) e Goal 15% growth B Operating profit (EBIT) increased by 12% to SEK 445 million (398) B Profit after financial items (EBT) increased by 16% to SEK 438 million (380) B Profit margin before
Slide 6: EPS Growth
EPS Growth 15% CAGR EPS 2015-2024Q2LTM CAGR 15% EPS growth of 6% vs Q2 2023 and -2% vs. Q1 2024. 6
Slide 7: Net sales
Net sales Lower turnover vs Q2 2023. Growth -4% vs Q2 2023, whereof +0.5% was currency and +1.7% was aqcuired. High activity in sales with many nice projects in progress. At the same time we see a decrease in demand from our market segments in construction equipment and trucks, particularly in Europ
Slide 8: Organic growth
Organic growth Organic growth was -6%, below our target of 10%. Lost business for battery systems approx SEK 100 m in Q2. Target 10%/ year Decrease in inductors for frequency drives and components for construction vehicles and trucks. Increases in the quarter mainly in electrification, defence indus
Slide 9: Acquired Growth
Acquired Growth JIT Mech only 2 full months in the quarter gives 1.8% organic growth. Rockford will increase growth with 1% from Q3 Target 5%/ year onwards. We have more prospects in the pipeline but are as always very strict in what we pay and what we buy. 9
Slide 10: EBT Margin
EBT Margin Happy with margin in the quarter. Cost control is good. One-off costs India(SEK 10 m) in Q2. Opportunities to improve operationally in one site in India, one site in Sweden. EBT Margin (%) goal is 8% The margin shall consistently be within 8±2% every quarter. 10
Slide 11: Inventory value & turnover development
Inventory value & turnover development Inventory turnover target is 3.5 turns/year. Improvement actions are ongoing and prioritized. A training program for all staff is ongoing and in parallell we are working more focused with some sites were improvement potential is great. 11
Slide 12: Net cash from operating activities and Net debt
Net cash from operating activities and Net debt Good operating cash flow of SEK 301 m in the quarter which results in net debt (ex IFRS 16) of SEK -204 m. Mainly driven by good profit level and inventory turnover. Note, in Q2 we paid dividend of SEK 122 m and the payment for JIT Mech (SEK 40 m). New
Slide 13: Quality and delivery precision
Quality and delivery precision
Slide 14: On-time Delivery (OTD) Jan-June
On-time Delivery (OTD) Jan- June - Goal 98% Result Q2: 92% Delays are shorter but we again have issues to get everything out on time. We have capacity constraints in JIT- Mech. To improve we today announced major investments to increase milling capacity. Still challenging to deliver on time in Mexic
Slide 15: Quality Jan-June
Quality Jan- June - Goal 98% Result Q2: 99,7% Quality is on good improved level from last year. Newly acquired units deliver good quality. Normally we have higher requirements than our customers.
Slide 16: AQ in UK, Robertsfors & Örnsköldsvik
AQ in UK, Robertsfors & Örnsköldsvik
Slide 17: AQ JIT Mech update
AQ JIT Mech update ▪ Strong growth in all market segments e.g. Electrification, Defence and forestry automation. Current run rate is SEK 200 m/year ▪ Profitability in line with expectations. ▪ Two large investments ▪ One new large 5-axis milling machine installed in Robertsfors during July. ▪ Order
Slide 18: Rockford + AQ Background
Rockford + AQ Background ▪ Rockford ▪ Supplier of wire harnesses and electromechanical components and systems for demanding industrial customers ▪ Low volume high mix ▪ High technical knowledge with customers within defence and aviation industry ▪ UK design, sales and manufacturing footprint in Rend
Slide 19: Acquisition rational
Acquisition rational ▪ New country for AQ ▪ Strong in defence and aviation industry ▪ Perfect combination with AQ Group manufacturing footprint ▪ We expect to invest further in manufacturing capabillities in UK to facilitate growth. ▪ AQ strong financials will enable growth. ▪ Profit should be in li
Slide 20: Why invest in AQ Group
Why invest in AQ Group EPS CAGR +15% over the past 10 years Profit every quarter since foundation in 1994 Exposure to industrial market segments with underlying growth; JIT Mech Electrification Railway Marine Long history of acquistions. 2-4 factories/year Strong balance sheet 20
Slide 21: Questions?
04 3 () 2 Questions? — fe fe] Qé&G WE ARE RELIABLE 2