Half Year 2026 Relais Group Oyj Earnings Call

August 13, 2026

Christian Johansson Gebauer: Good morning, everyone, and very welcome to Relais Group's Q2 2026 financial presentation. We are live from our studio here in Helsinki this summer morning with the lovely sunny weather in Helsinki. Today we have myself, Christian Gebauer, the Group CEO, and with me, the Interim CFO, Sebastian Seppänen.

Christian Johansson Gebauer: Good morning, everyone, and very welcome to Relais Group's Q2 2026 Financial Presentation. We are live from our studio here in Helsinki this summer morning with the lovely sunny weather in Helsinki. Today we have myself, Christian Gebauer, the Group Chief Executive Officer, and with me, the Interim Chief Financial Officer, Sebastian Seppänen.

Speaker #1: Good morning, everyone, and a very warm welcome to Relais Group's second quarter 2026 financial presentation. We are live from our studio here in Helsinki. On this summer morning, with the lovely sunny weather in Helsinki, today we have myself, Christian Gebauer, the Group CEO, and with me the interim CFO, Sebastian Seppänen.

Speaker #2: Good morning.

Sebastian Seppänen: Good morning.

Speaker #1: Before jumping into Q2, I would like to give a short recap of what we presented at Capital Markets Day back in May this year.

Christian Johansson Gebauer: Before jumping into the Q2, I would like to make a short recap of what we presented in the Capital Markets Day back in May this year. We are a group of specialized leading niche companies working across the vehicle aftermarket. Our business is to identify, attract, and develop these specialized leading niche businesses. As you have seen in July, we acquired Tershine. Tershine is a perfect example where we are able to attract one of the most exciting brands in the vehicle aftermarket and in vehicle care in Sweden. Tobias chose to join us because he thinks we have the best possibilities to support him in his ongoing journey and development of his company, and that we are proud of.

Speaker #1: We are a group of specialized, leading niche companies working across the vehicle aftermarket. Our business is to identify, attract, and develop these specialized, leading niche businesses.

Speaker #1: As you have seen, in July, we acquired Tyrshine. Tyrshine is a perfect example of where we are able to attract one of the most exciting brands in the vehicle aftermarket and vehicle care in Sweden.

Speaker #1: Tobias chose to join us because he thinks we have the best possibilities to support him in his ongoing journey and development of his company.

Speaker #1: And that we are proud of. We work in a decentralized environment, meaning we let the management teams of the companies run their business, continue to develop their business, grow the EBITDA, work in a capital-efficient way. We are there to support them.

Christian Johansson Gebauer: We work in a decentralized environment, meaning we let the management teams of the companies run their business, continue to develop their business, grow the EBITA, work on a capital efficient way. We are there to support them. Our aim is to create the best surroundings, the best possibilities for them to continue growing and developing their business. Our focus is clear. We focus on long-term EBITA growth, and we are very focused on making sure that we use the cash that we have in the most efficient way. We are operating today across eight countries. The majority of the business is in the Nordics, and we also have establishments in the Benelux. We operate across three different business areas since the beginning of this year. We have the Commercial Vehicle Services, where we do service and maintenance of commercial vehicles across Sweden, Finland, and Norway.

Speaker #1: Our aim is to create the best surroundings and the best possibilities for them to continue growing and developing their business. Our focus is clear. We focus on long-term EBITDA growth, and we are very focused on making sure that we use the cash that we have in the most efficient way.

Speaker #1: We are operating today across eight countries. The majority of the business is in the Nordics, and we also have establishments in the Benelux. We operate across the three different business areas since the beginning of this year.

Speaker #1: We have the commercial vehicle services where we do service and maintenance of commercial vehicles across Sweden, Finland, and Norway. We have products and solutions for the leading brands within the vehicle aftermarket in the Nordics, as well as in Benelux.

Christian Johansson Gebauer: We have Products and Solutions, the leading brands within the vehicle aftermarket in the Nordics and as well in Benelux. Then we have Technical Wholesale, the distribution and availability of spare parts and tools for the vehicle aftermarket customers. As we laid out in the Capital Markets Day, we are working on three different steps towards 2028. We are, first of all, building the foundation, very much an ongoing work during the H1 2026, and this will continue for the rest of the year. We have also started on improving the quality of growth, focusing on organic EBITA growth and capital efficiency. Then we are coming into the scale the model. Then we are ready for the next acceleration and the increased growth journey.

Christian Johansson Gebauer: We have Products and Solutions, the leading brands within the vehicle aftermarket in the Nordics and as well in Benelux. Then we have Technical Wholesale, the distribution and availability of spare parts and tools for the vehicle aftermarket customers. As we laid out in the Capital Markets Day, we are working on three different steps towards 2028. We are, first of all, building the foundation, very much an ongoing work during the H1 of 2026, and this will continue for the rest of the year. We have also started on improving the quality of growth, focusing on organic EBITA growth and capital efficiency. Then we are coming into the scale the model. Then we are ready for the next acceleration and the increased growth journey.

Speaker #1: Then we have technical wholesale: the distribution and availability of spare parts and tools for the vehicle aftermarket customers. As we laid out at the Capital Markets Day, we are working on three different steps towards 2028.

Speaker #1: We are, first of all, building the foundation. This is very much ongoing work during the first half of 2026, and this will continue for the rest of the year.

Speaker #1: We have also started improving the quality of growth by focusing on organic EBITDA growth and capital efficiency. Then we are moving into the scaled model.

Speaker #1: Then we are ready for the next acceleration and the increased growth journey. Our financial targets are double-digit EBITDA growth over a business cycle, return on capital employed above 13%, and, when it comes to dividends, it's 30% of fully diluted earnings per share.

Christian Johansson Gebauer: Our financial targets are double-digit EBITA growth over a business cycle, return on capital employed above 13%, and when it comes to dividend, it is 30% of fully diluted EPS. So let us dig into the Q2. We had a strong cash generation, and we are continuing to focus on improving our returns. What went well in the quarter? We had a 33% net sales growth, and we are happy to post a 4% organic growth, continuing the organic growth journey in the group from also the Q1 to Q2. We had a strong cash flow in the quarter, EUR 6.8 million cash flow from operations. Actually, in the H1 of the year, we had a record cash flow from operations in the group. We never had such high cash flow from operations in the group before. And this quarter, we posted almost 100% cash conversion.

Christian Johansson Gebauer: Our financial targets are double-digit EBITA growth over a business cycle, return on capital employed above 13%, and when it comes to dividend, it is 30% of fully diluted EPS. Let us dig into the Q2. We had a strong cash generation, and we are continuing to focus on improving our returns. What went well in the quarter? We had a 33% net sales growth, and we are happy to post a 4% organic growth, continuing the organic growth journey in the group from also the Q1 to Q2. We had a strong cash flow in the quarter, EUR 6.8 million cash flow from operations. Actually, in the H1 of the year, we had a record cash flow from operations in the group. We never had such high cash flow from operations in the group before. This quarter, we posted almost 100% cash conversion.

Speaker #1: So, let's dig into the second quarter. We had a strong question ratio, and we are continuing to focus on improving our returns. What went well in the quarter?

Speaker #1: Yeah, we had a 33% net sales growth, and we are happy to post a 4% organic growth, continuing the organic growth journey in the group from also Q1 to Q2.

Speaker #1: We had a strong cash flow in the quarter—€6.8 million cash flow from operations. Actually, in the first half of the year, we had record cash flow from operations in the Group; we have never had such high cash flow from operations in the Group before.

Speaker #1: And this quarter, we posted almost 100% cash conversion. As you've seen in the report, we had especially three items that impacted the profitability significantly in this quarter.

Christian Johansson Gebauer: As you have seen in the report, we had especially three items that impacted the profitability significantly in this quarter. First of all, we had a EUR 1.2 million swing year-over-year, related to the expected credit loss provisions. This is primarily hitting to the Technical Wholesale business area, and you will get a more detailed explanation about the dynamics behind that in Sebastian's section of the presentation. Then we are also doing investments for the future. We are investing in growth opportunities in the Technical Wholesale business area. So in three of our companies, we have established new locations. We have a better reach for our customers. We provide a better service for our customers. Of course, these establishments comes initially with 100% of the cost, with personnel and the facilities and the logistics and everything that comes around it.

Speaker #1: First of all, we had a €1.2 million swing year over year, related to the expected credit loss provisions. This is primarily hitting the technical wholesale business area, and you will get a more detailed explanation about the dynamics behind that in Sebastian's section of the presentation.

Speaker #1: Then we are also doing investments for the future. We are investing in growth opportunities in the technical wholesale business area. In three of our companies, we have established new locations, so we have a better reach for our customers.

Speaker #1: We provide a better service for our customers. Of course, these establishments initially come with 100% of the cost, including personnel, the facilities, the logistics, and everything that comes with it.

Speaker #1: And then the volume is, you know, week after week increasing as the customers get to know our new facilities and change their habits to make purchases from our facilities.

Christian Johansson Gebauer: The volume is week after week increasing as the customers gets to know our new facilities and change their habits to do the purchase from our facilities. So this is initially harming the margin, but in the long term, going to be a big contributor. Then we had the relocation of the workshop outside of Helsinki in Raskone. This is one of Europe's largest workshops for commercial vehicles. It has been very well received by the customers. We have been able to increase the throughput and efficiency in the workshop. But of course, it came with some downtime, and that is also putting a weight on the margin and the profitability in the quarter. Coming to the outlook, it is very clear for us what are our priorities for the rest of this year.

Speaker #1: So, this is initially harming the margin, but in the long term, it's going to be a big contributor. And then we had the relocation of the workshop outside of Helsinki in Raskonen.

Speaker #1: This is one of Europe's largest workshops for commercial vehicles. It has been very well received by customers. We have been able to increase both throughput and efficiency in the workshop.

Speaker #1: But, of course, it came with some downtime, and that is also putting a weight on the margin and the profitability in the quarter. Coming to the outlook, it’s very clear for us what our priorities are for the rest of this year.

Speaker #1: We are continuing to focus on converting the growth that we have on the top line into profitability and a stronger return for our shareholders. Looking into net sales, we had 33% net sales growth in the quarter.

Christian Johansson Gebauer: We are continuing to focus on converting the growth that we have on top line to profitability and a stronger return for our shareholders. Looking into the net sales, we had 33% net sales growth in the quarter, and out of that, 4% was organic growth. We had organic growth in two out of the three business areas. In Products and Solutions, we had a good organic growth, driven especially by Strands, that is continuing to perform very well. We also had organic growth in the Technical Wholesale business area, to a large extent driven by the establishment of the new facilities. In Commercial Vehicle Services, we had a slight decline of the organic growth, related to the Raskone relocation and one of the workshops in Sweden that posted a lower sales in the quarter. But overall, we see a good demand for our products across the business areas.

Speaker #1: And out of that, 4% was organic growth. We had organic growth in two out of the three business areas in products and solutions. We had good organic growth, driven especially by strands that are continuing to perform very well.

Speaker #1: We also had organic growth in the technical wholesale business area, to a large extent driven by the establishment of the new facilities. In commercial vehicle services, we had a slight decline in organic growth related to the Raskone relocation and one of the workshops in Sweden that posted lower sales in the quarter.

Speaker #1: But overall, we see good demand for our products across the business areas. Then, coming into the profitability and EBITDA, we had, despite the headwinds, a 6% growth of EBITDA in the quarter in absolute figures.

Christian Johansson Gebauer: Coming into the profitability and EBITDA, we had, despite the headwinds, 6% growth of EBITDA in the quarter in absolute figures. It comes from, of course, acquisitions that we have done, but also in Products & Solutions, we have a strong profitability and growth of adjusted EBITDA in Strands. In Commercial Vehicle Services, we are happy to conclude that the focus that we have had and the actions in the Swedish operations are starting to pay off, and we see that the profitability is increasing in that entity as well. The negative drivers, I already talked about them briefly, but we have the swing of the expected credit losses that put the burden on this quarter by EUR 600,000 and was putting a positive effect last year on the quarter of EUR 600,000. In total, EUR 1.2 million swing effect that disturbs the comparability.

Speaker #1: It comes from, of course, acquisitions that we have done. But also, in products and solutions, we have strong profitability and a growth of adjusted EBITDA in strands.

Speaker #1: And in commercial vehicle services, we are happy to conclude that the focus we have had and the actions in the Swedish operations are starting to pay off, and we see that profitability is increasing in that entity as well.

Speaker #1: Then the negative drivers—I already talked about them briefly—but we have the swing of the expected credit losses that put a burden on this quarter by €600,000 and was putting a positive effect last year on the quarter of €600,000. In total, a €1.2 million swing effect that disturbs the comparability.

Speaker #1: We had growth investments in technical wholesale and the Raskonen relocation. We introduced, at the beginning of this year, the new segments. This has served us well.

Christian Johansson Gebauer: We had the growth investments in Technical Wholesale and the Raskone relocation. We introduced in the beginning of this year the new segment. This has served us well. We appreciate that you, the market, get a better transparency on what's going on in our businesses. We have a better and clearer structure in terms of accountability, who is running what, and how are we structuring and following up the group. Finally, when it comes to capital allocation, we can do more precise capital allocation when we have this segment split. Coming into the business areas, starting off with the Commercial Vehicle Services, we saw a strong growth in the quarter of 46%. This is in its entirety driven by the acquisitions that we did last year, Team Verkstad, Wetteri Auto Workshops, TJ Fordonsservice, and Landströms Bygg & Plåt in Sweden.

Speaker #1: We appreciate that you, the market, get better transparency on what's going on in our businesses. We also have a better and clearer structure in terms of accountability.

Speaker #1: Who is running what, and how are we structuring and following up with the group? And finally, when it comes to capital allocation, we can do more precise capital allocation when we have this segment split.

Speaker #1: Coming into the business areas then, starting off with the commercial vehicle services, we saw strong growth in the quarter of 46%. This is in its entirety driven by the acquisitions that we did last year: Team Werkstad, where we have workshops, TG Food and Service, and Lundströms Bygg and Plåt in Sweden.

Speaker #1: We conclude that the demand across the three markets—Sweden, Norway, and Finland—where we're operating in this business area, is stable. We saw a slight net sales decline organically that we talked about in the previous slide.

Christian Johansson Gebauer: We conclude that the demand across the three markets, Sweden, Norway, and Finland, where we're operating in this business area, is stable. We saw a slight net sales decline organically that we talked about in the previous slide. So we are showing a 14% increase in the EBITDA in the quarter. A positive effect is the improvement in Sweden, where we can see now that the margin is improving. Still, we are on a journey, and we have more potential in Sweden, but it's encouraging to see that we are on the right track. We had the negative effect of the relocation of Raskone. But also we consolidated Team Verkstad in Norway last year, only from June, meaning only June came into the quarter last year. June is actually the best-performing month in the Q2.

Speaker #1: So, we are showing a 14% increase in EBITDA in the quarter. A positive effect is the improvement in Sweden, where we can see now that the margin is improving.

Speaker #1: Still, we are on a journey, and we have more potential in Sweden. But it's encouraging to see that we are on the right track.

Speaker #1: Then we had the negative effect of the relocation in Raskonen, but also we consolidated Team Werkstad in Norway last year, only from June, meaning only June came into the quarter last year.

Speaker #1: June is actually the best performing month in the second quarter. This year we took in the whole quarter, obviously, and April and May are kind of taking down the margin for the quarter as a total.

Christian Johansson Gebauer: This year, we took in the whole quarter, obviously, and April and May is taking down the margin for the quarter as a total, and that is impacting the comparability between this year and last year. Products & Solutions continues to perform well. You can see 112% top-line growth driven by the acquisitions of Matro Group and Qpax AB, but also Strands Group that is performing very well in a still challenging market. The EBITDA is also following the top-line growth with 103% improvement, driven by the acquisitions, obviously, but also by the strengthening profitability in Strands Group.

Speaker #1: And that is impacting the comparability between this year and last year. Products and solutions continue to perform well. You can see 112% top-line growth, driven by the acquisitions of Matra Group and QPAX, but also Strands Group, which is performing very well in a still challenging market.

Speaker #1: EBITDA is also following the top-line growth, with a 103% improvement, driven by the acquisitions, obviously, but also by the strengthening profitability in Strands Group.

Speaker #1: We got in Matra and QPAX in this quarter, and as you know from the acquisitions, those are coming in with a margin slightly below 20%.

Christian Johansson Gebauer: We got in Matro Group and Qpax AB in this quarter, and as you know from the acquisitions, those are coming in with a margin slightly below 20%, and we are working on the product mixes and with these companies to bring them above 20%, but as a total, they put, at least initially, a downwards pressure on the margin for the business area. Finally, Technical Wholesale. You see a good growth of 18%. A big part of that is organic growth driven by the organic investments that we have done. Coming to the adjusted EBITDA, of course, it is a disappointment to see -17%, but when you read that figure, you need to be aware about the expected credit loss provisions that is significantly impacting the comparability between this quarter and the last year's Q2 for the business area. We have the growth investments that are investments for the future.

Speaker #1: And we are working on the product mixes and with these companies to bring them above 20%, but as a total, they put, at least initially, a downward pressure on the margin for the business area.

Speaker #1: Finally, technical wholesale—you see a good growth of 18%. A big part of that is organic growth, driven by the organic investments that we have done.

Speaker #1: Coming to the adjusted EBITDA, of course, it's a disappointment to see minus 17%. But when you read that figure, you need to be aware of the expected credit loss provisions that are significantly impacting the comparability between this quarter and last year's second quarter for the business area.

Christian Johansson Gebauer: Coming to the adjusted EBITDA, of course, it is a disappointment to see -17%, but when you read that figure, you need to be aware about the expected credit loss provisions that is significantly impacting the comparability between this quarter and the last year's Q2 for the business area. We have the growth investments that are investments for the future.

Speaker #1: We have the growth investments that are investments for the future. I would also like to mention that, towards the end of the quarter, we saw early signs of increased price competition in the Finnish market.

Christian Johansson Gebauer: Also I would like to mention that towards the end of the quarter, we saw early signs of increased price competition in the Finnish market. Tershine Ab. I would say that this is the proof point that our model is working. Tobias, with team, have been developing a star within vehicle care in the Swedish market. Very strong brand loyalty, very loyal and supportive customers. In this process, Tobias had many buyers to choose from. He selected us. He selected us because he thinks that we are the ones partnering up with him can help him take the company to the next level, do the international growth that we have done in other businesses and that Tobias would like to learn from. So we are really proud of welcoming such excellent business into our group and especially into the Products & Solutions business area.

Speaker #1: Tearshine. I would say that this is the proof point that our model is working. To be, as has been, to be as with the team—have been developing a star within vehicle care, in the Swedish market.

Speaker #1: Very strong brand loyalty, very loyal and supportive customers. You know, in this process, Tobias had many buyers to choose from. He selected us. He selected us because he thinks that we are the ones partnering up with him can help him take the company to the next level.

Speaker #1: Due to the international growth that we have achieved in other businesses, and that Tobias would like to learn from, we are really proud to welcome such an excellent business into our group—and especially into the Products and Solutions business area.

Speaker #1: The acquisition pace that was very high last year has continued to be at a, I would say, rather high pace in the first half of 2026, with these acquisitions done in the last 12 months.

Christian Johansson Gebauer: The acquisition pace that was very high last year has continued to be on a, I would say, rather high pace in the H1 of 2026 with these acquisitions done in the last 12 months. With that, I would like to hand over to Sebastian for the financial slides.

Speaker #1: And with that, I would like to hand over to Sebastian for the financial slides.

Speaker #2: Thank you, Christian. Good. Let's start with some details on the adjusted EBITDA margin quarter-on-quarter bridge. So, last year in Q2, we had an adjusted EBITDA margin of 9.1%.

Sebastian Seppänen: Thank you, Christian. Let's start with some details on the adjusted EBITDA margin quarter on quarter bridge. Last year in Q2, we had an adjusted EBITDA margin of 9.1%, and this year 7.3%. What Christian was talking about, this change in expected credit loss provisions, this had a non-cash impact in the margin of 1.3 percentage points. That's actually the biggest explanation in this margin gap. Then we had a -0.3 percentage points as a result of acquisitions, and that's mainly due to the business mix of the acquired companies. We have a further -0.3 percentage points from a couple of factors. So positively impacted by organic EBITDA growth in several group companies. Then we have a negative impact from the organic growth investments that Christian was talking about.

Speaker #2: And this year, 7.3%. So actually, what Christian was talking about—this change in expected credit loss provisions—this had a non-cash impact on the margin of 1.3 percentage points.

Speaker #2: So, that's actually the biggest explanation for this margin gap. Then we had a minus 0.3 percentage points as a result of acquisitions, and that's mainly due to the business mix of the acquired companies.

Speaker #2: We have a further minus 0.3 percentage points from a couple of factors. So, positively impacted by organic EBITDA growth in several group companies. And then we have a negative impact from the organic growth investments that Christian was talking about.

Speaker #2: Then below adjusted EBITDA, we had approximately €1.9 million of items affecting comparability, meaning that the adjusted EBITDA was €8.0 million and the reported EBITDA was €6.2 million, with a gap of €1.9 million.

Sebastian Seppänen: Below adjusted EBITDA, we had approximately EUR 1.9 million of items affecting comparability, meaning that the adjusted EBITDA from 8.0 and the reported EBITDA was 6.2 with a gap of 1.9. These items affecting comparability were primarily two items. We had a discontinuation of two central IT development projects that are no longer fitting our decentralized operating model. These had a non-cash impact of EUR 0.9 million. Then there are other items that together sum up to EUR 1 million, and most of that is relating to one-time cost relating to this establishment of a new long-term incentive plan. Then there are acquisition-related costs on top of that. Cash flow and cash conversion. Christian was already talking about this. We had a really strong operating cash flow in the quarter.

Speaker #2: These items affecting comparability were primarily two items. So, we had a discontinuation of two central IT development projects that are no longer fitting our decentralized operating model.

Speaker #2: And this had a non-cash impact of €0.9 million. Then there are other items that together sum up to €1 million. Most of that relates to one-time costs associated with the establishment of a new long-term incentive plan.

Speaker #2: And then there are acquisition-related costs on top of that. Cash flow and cash conversion—so Christian was already talking about this. We had really strong operating cash flow in the quarter.

Speaker #2: And last year, operating cash flow was minus €0.2 million, and this year, plus €6.8 million. And there is both an operating element here.

Sebastian Seppänen: Last year, operating cash flow was -EUR 0.2 million, and this year, +EUR 6.8 million. There is both an operating element here. Cash flow before change in networking capital was 13.9 against 11.9 last year. This reflects the healthy underlying operational performance in the group. Then we have a change in networking capital impact that last year was -EUR 2.3 million in the cash flow, and this year +EUR 1.7 million in the cash flow, meaning that there is a +EUR 4 million cash flow impact from networking capital efficiency measures that we have seen in the group. Then there is a slightly smaller net financial items in the quarter compared to last year. When looking at the networking capital, there is an increase in networking capital, which is mainly driven by the acquired companies.

Speaker #2: So, cash flow before change in net working capital was €13.9 million, compared to €11.9 million last year. This reflects the healthy underlying operational performance in the group.

Speaker #2: Then we have a change in networking capital impact that last year was minus €2.3 million in the cash flow, and this year plus €1.7 million in the cash flow.

Speaker #2: This means that there is a €4 million-plus cash flow impact from net working capital efficiency measures that we have seen in the group. Then, there are slightly smaller net financial items in the quarter compared to last year.

Speaker #2: When looking at the net working capital, there is an increase in net working capital, which is mainly driven by the acquired companies. Excluding these acquisitions, the net working capital actually decreased in absolute terms.

Sebastian Seppänen: Excluding these acquisitions, the networking capital actually decreased in absolute terms, and especially what is noticeable is that the networking capital in relation to sales declined significantly. This is also a result of the capital efficiency focus that we have had across the group. Inventory turnover declined to 4.3, and networking capital turnover increased to 4.5. Inventory and networking capital turnover were both impacted positively by the efficiency measures, and they both have a decreasing impact from the acquisitions as the net sales component in the formula does not include the full year sales of the acquired companies. Cash flow, in summary, +EUR 6.6 million this year in operating cash flow. Then we had cash flow from investing activities of -EUR 1 million, which mainly consisted of investments in intangible and tangible assets.

Speaker #2: What is especially noticeable is that the net working capital in relation to sales declined significantly. This is also a result of the capital efficiency focus that we have had across the group.

Speaker #2: Inventory turnover declined to 4.3, and net working capital turnover increased to 4.5. Inventory and net working capital turnover were both impacted positively by the efficiency measures.

Speaker #2: And they both have a decreasing impact from the acquisitions, as the net sales component in the formula does not include the full-year sales of the acquired companies.

Speaker #2: So, cash flow in summary: plus €6.8 million this year in operating cash flow. Then we had cash flow for investing activities of minus €1 million.

Speaker #2: Which mainly consisted of investments in intangible and tangible assets. Last year was minus €20.7 million, and that is of course relating to the acquisitions we did last year.

Sebastian Seppänen: Last year was minus EUR 20.7 million, and that is, of course, relating to the acquisitions we did last year. Cash flow from financing activities was minus EUR 11.9 million, and in the review period, that consisted of repayment of lease liabilities of EUR 5.8 million, loan amortization of EUR 2.9 million, and a paid dividend of EUR 2.8 million. So just normal operating stuff. Last year, it was plus EUR 11.3 million, and that was impacted also by the acquisitions that I mentioned last year. This is the kind of acquisition financing part of that. Looking at the net debt, this year in Q2, we had end of Q2, we had EUR 226 million in net debt. Last year it was EUR 226.9 million. So net debt decreased.

Speaker #2: Cash flow from financing activities was minus €11.9 million. And in the review period, that consisted of repayment of lease liabilities of €5.8 million, loan amortization of €2.9 million, and the paid dividend of €2.8 million.

Speaker #2: So, just normal operating stuff. Last year, it was plus €11.3 million, and that was impacted also by the acquisitions that I mentioned last year.

Speaker #2: So this is the kind of acquisition financing part of that. So, looking at the net debt, we had this year in Q2, at the end of Q2, we had €226 million in net debt.

Speaker #2: Last year, it was 226.9, so net debt decreased. We had an increase from lease liabilities and acquisition-related liabilities. And then we have a decreasing effect from the repayment of the bridge loan with the hybrid bond proceeds.

Sebastian Seppänen: We had an increase from lease liabilities and acquisition-related liabilities, and then we have a decreasing effect from repayment of the bridge loan with the hybrid bond proceeds, and then more cash on hand. You can see here that the undrawn, uncommitted facility was EUR 5.9 million at the end of the period, and after the end of the review period, this uncommitted facility has been fully drawn. Looking at the net financials, so we had minus EUR 4.6 million net financial expenses compared to minus EUR 4.4 million last year. Interest expense on loans, net of the change in fair value of floating to fixed interest rate swaps were minus EUR 1.8 million compared to EUR 1.4 million last year. Interest expense on lease liabilities were EUR 1.5 million compared to EUR 0.8 million last year.

Speaker #2: And then, more cash on hand. After that, you can see here that the undrawn, uncommitted facility was €5.9 million at the end of the period.

Speaker #2: And after the end of the review period, this uncommitted facility has been fully drawn. Looking at the net financials, we had negative €4.6 million in net financial expenses compared to negative €4.4 million last year.

Speaker #2: Interest expense on loans, net of the change in fair value of floating to fixed interest rate swaps, was minus €1.8 million compared to €1.4 million last year.

Speaker #2: Interest expense on lease liabilities was minus €1.5 million, compared to minus €0.8 million last year. The increase in interest on lease liabilities was attributable to significantly increased lease liabilities as a result of the acquisitions.

Sebastian Seppänen: The increases in interest on lease liabilities was attributable to significantly increased lease liabilities as a result of the acquisitions. Exchange rate differences included in the net financial items were EUR 1.4 million, of which EUR 0.8 million were unrealized. Relating to these net financial items, historically, Forex differences have caused quarter-to-quarter fluctuations on net financial items. We have now implemented measures in the loan portfolio to reduce the fluctuations going forward. Coming down to EPS, earnings per share for Q2. Basic earnings per share was EUR 0.09 per share this year, and last year it was EUR 0.08 per share. In addition to the other factors discussed today, the decrease is due to increased amortization of acquisition-related intangible assets. As we acquire, we also get those intangible assets on the balance sheet that we amortize. Then we had a decrease due to hybrid bond interest this year.

Speaker #2: Exchange rate differences included in the net financial items were minus 1.4 million euros of which minus 0.8 million was were unrealized. Relating to these net financial items, so historically Forex differences have caused quarter to quarter fluctuations on the net financial items.

Speaker #2: We have now implemented measures in the loan portfolio to reduce the fluctuations going forward. Good. Coming down to EPS, earnings per share, for Q2.

Speaker #2: So, basic earnings per share was minus 9 cents per share this year, and last year it was plus 8 cents per share. The decrease is mainly, in addition to the other factors discussed today, due to increased amortization of acquisition-related intangible assets.

Speaker #2: So as we acquire, we also get those intangible assets on the balance sheet that we amortize. Then we had a decrease due to the hybrid bond interest this year.

Speaker #2: Adjusted EPS excluding these acquisition amortizations was 12 cents per share. And last year it was 15 cents per share. And this decrease is in addition to the other factors we have talked today, it's mainly due to the hybrid bond interest.

Sebastian Seppänen: Adjusted EPS excluding these acquisition amortizations was EUR 0.12 per share, and last year it was EUR 0.15 per share. This decrease is in addition to the other factors we have talked today, it is mainly due to the hybrid bond interest. Looking at the returns for Q2, return on net working capital and return on capital employed were impacted by acquisitions. Return component only includes partial year profit while the capital employed and net working capital includes more of the acquired assets. Return on net working capital was 42.8%, and return on capital employed was 10.8%. Return on equity was 7.1%. Events after the review period. Highlights in July was, of course, the acquisition of Tershine that Christian mentioned. Then we had shares subscribed with 2023 options. Then we had the share issue relating to the Tershine acquisition. Thank you.

Speaker #2: Looking at the returns for Q2, the return on networking capital and return on capital employed were impacted by acquisitions. So the return component only includes partial year profit, while the capital employed and the networking capital include more of the acquired assets.

Speaker #2: Return on networking capital was 42.8% and return on return on capital employed was 10.8%. Return on equity was 7.1%. So events after the review period, highlights of the in July was of course the acquisition of Tershine that Christian mentioned.

Speaker #2: And then we had shares subscribed with options 2023 options. And then we had a share issue relating to the to the Tershine acquisition. Thank you.

Speaker #1: Thank you Sebastian. So the focus for 2026 as we have said now in several of the quarterly presentations and in capital markets day. We are focusing on converting our top line growth to profitability and returns.

Christian Johansson Gebauer: Thank you, Sebastian. The focus for 2026, as we have said now in several of the quarterly presentations and in Capital Markets Day, we are focusing on converting our top-line growth to profitability and returns. We do that through operational discipline in our operating units. We do that through working capital discipline, and this will convert into profitable growth and healthy cash generation for the years to come. Coming into the outlook for the year, as you know, we do not give a numeric guidance for the full year. We see that the marketing conditions across our portfolio was also broadly stable. As always, in our diversified portfolio across different geographies and market segments, the demand continues to vary between the different operating units. Looking ahead, our priority is clear.

Speaker #1: We do that through operational discipline in our operating units. We do that through working capital discipline. And this will convert into profitable growth and healthy cash generation for the years to come.

Speaker #1: So, coming into the outlook for the year, as you know, we don't give a numeric guidance for the full year. We see that the market conditions across our portfolio were broadly stable.

Speaker #1: You know, as always in our diversified portfolio across different geographies and market segments, the demand continues to vary between the different operating units. Looking ahead, our priority is clear.

Speaker #1: Focusing on eBay growth, and making sure that we only have the cash that we really need in each of the operating units, so that we can release it and invest it into interesting growth opportunities.

Christian Johansson Gebauer: Focusing on EBITA growth, focusing on making sure that we only have the cash that we really need in each of the operating units so that we can release it and invest it into interesting growth opportunities. With that, I would like to sum up the quarter. Strong cash generation. We are proud with the 4% organic sales growth in the quarter above the market growth. Cash conversion of 100% in the quarter. The profitability in this quarter had some factors that needs to be considered when you read the report. The ECL provisions, the organic growth investments for the future, and one of Europe's biggest workshops was established in Raskone. The priorities for the year is unchanged. We are focusing on converting the growth into profitability and returns. With that, we would like to say thank you and open up for questions.

Speaker #1: With that, I would like to sum up the quarter. Strong cash generation—we are proud of the 4% organic sales growth in the quarter, which is above the market growth.

Speaker #1: Cash conversion was 100% in the quarter. The profitability this quarter had some factors that need to be considered when you read the report.

Speaker #1: The UCL provisions, the organic growth investments for the future, and one of Europe's biggest workshops was established in Raskone. The priorities for the year are unchanged.

Speaker #1: We are focusing on converting the growth into profitability and returns. With that, we would like to say thank you and open up the floor for questions.

Sebastian Seppänen: Yes. Let's start going through. We have five questions at the moment. First three comes from Joni Sandvall from Nordea. Is there further seasonal variation in H2 that we should be aware of?

Operator: Yes. Let's start going through. We have five questions at the moment. First three comes from Joni Sandvall from Nordea. Is there further seasonal variation in H2 that we should be aware of?

Speaker #3: Yes. Let's start going through. We have five questions at the moment. The first three come from Joni Sandfall from Nordea. Is there further seasonal variation in H2 that we should be aware of?

Speaker #1: Due to the increased share of commercial vehicle services, the second quarter is, you know, more seasonally impacted than before in the group. But we have historically had a stronger second half of the year, and we expect the second half of this year also to be, you know, a bigger part of the group's earnings than the first half.

Christian Johansson Gebauer: Due to the increased share of Commercial Vehicle Services, the Q2 is more seasonally impacted than before in the group. But we have historically had a stronger H2, and we expect the H2 of this year also to be a bigger part of the group's earnings than the H1.

Sebastian Seppänen: Good. Joni continues. Are higher credit loss allowances due to increased risks related to expansion in Technical Wholesale, or have you seen changes in your client base?

Operator: Good. Joni continues. Are higher credit loss allowances due to increased risks related to expansion in Technical Wholesale, or have you seen changes in your client base?

Speaker #3: Good. Then Joni continues: Are higher credit loss allowances due to increased risks related to expansion in technical wholesale, or have you seen changes in your client base?

Speaker #1: I mean, of course, when the group is growing, we have more receivables and, as a technical effect, we need to have a higher provision, everything else equal.

Christian Johansson Gebauer: Of course, when the group is growing, we have more receivables, and as a technical effect, we need to have a higher provision, everything else equal. We do not see an increased credit risk across the group. The increase of the provision that we saw this year is based on the way we calculate it and on a management adjustment or assessment of what is the healthy level going forward. That is all we are going to say about the reason for that.

Speaker #1: We don't see an increased credit risk across the group. The increase of the provision that we saw this year is based on the way we calculate it and on the management adjustment or assessment of what is a healthy level going forward.

Speaker #1: And that is all we're going to say about the reason for that.

Speaker #3: Good, then the last one. Based on the history of organic investments, how long a ramp-up period are you expecting in technical wholesale, and have you seen any deviations from your plans on these investments?

Sebastian Seppänen: Good. The last one. Based on history of organic investments, how long ramp-up period are you expecting in Technical Wholesale? Have you seen any deviations from your plans on these investments?

Operator: Good. The last one. Based on history of organic investments, how long ramp-up period are you expecting in Technical Wholesale? Have you seen any deviations from your plans on these investments?

Speaker #1: Yeah, thank you. Brilliant question. So, I don't think you can say that it's the same in every investment and every new location.

Christian Johansson Gebauer: Yeah, thank you. Brilliant question. I do not think you can say that it is the same in every investment, in every new location. Naturally, it takes a few quarters, I would say, for the customers to change their habits and get to know our offering and we get the full potential of a new location. It can take 6 to 12 months to reach to the full volume of a new location. You see a couple of locations where the demand is not following the expected growth path. Sorry. There we are very closely monitoring the development and, of course, we are ready to take actions should we need to if we do not see that the growth is coming the way we expect it to come.

Speaker #1: Naturally it takes a few a few quarters I would say for the customers to change their habits and and get you know to know our our offering and and get the full potential of a new new location.

Speaker #1: So it can take you know 6 to 12 months to reach to the to the full volume of a of a new location. We see we see a couple of a couple of locations where where the demand is not following the expected growth pause.

Speaker #1: Sorry. And there we are very closely monitoring the development and of course we are we are ready to take actions should we need to if we don't see that the the growth is coming the way we expect it to come.

Speaker #3: Good. Then let's move on to Petri Gostovski from Inderes. Is the number of new locations in Technical, is the number of new locations in Technical Wholesale three?

Sebastian Seppänen: Good. Then let's move on to Petri Gostowski from Inderes. Is the number of new locations in Technical Wholesale three?

Operator: Good. Then let's move on to Petri Gostowski from Inderes. Is the number of new locations in Technical Wholesale three?

Christian Johansson Gebauer: It's more. More than three. Okay, it's in three different operating units, but it's multiple locations across these operating units.

Speaker #1: It's more. More than three. Okay, it's in three different operating units, but it's multiple locations across these operating units.

Speaker #3: And continuing on that, what kind of ramp-up time do you expect, and how big of a revenue potential do you see in these new locations in the long term?

Sebastian Seppänen: Continuing on that, what kind of ramp-up time do you expect, and how big of a revenue potential do you see in these new locations in the long term? Can you give some magnitude of potential revenue?

Operator: Continuing on that, what kind of ramp-up time do you expect, and how big of a revenue potential do you see in these new locations in the long term? Can you give some magnitude of potential revenue?

Speaker #3: Can you give some magnitude of potential revenue?

Speaker #1: We I mean the ramp up will continue throughout the rest of this year. But you know quarter by quarter the the effect is is coming additional top line of course but but more more more important we're going to have the conversion to to profit.

Christian Johansson Gebauer: The ramp-up will continue throughout the rest of this year, but quarter by quarter, the effect is coming additional top line, of course, but more important, we're going to have the conversion to profit. I'm not going to give a figure of what exact revenue do we expect from these new establishments. But you can see the growth in the business area that is a good indication and high single-digit organic growth in the business area due to these investments. So I guess that gives some understanding of the magnitude.

Speaker #1: I mean we can see I'm not going to give a figure of what exact revenue do we expect from these new establishments but you can see the growth in the business area that is a that is a good indication and you know high single digit organic growth in the in the business area due to this investment.

Speaker #1: So, I guess that gives some understanding of the magnitude.

Speaker #3: Then let's move on to Pia Ruusqvist-Heinsalmi from DNB Carnegie. Does your plan include significant further investments in growth in H2?

Sebastian Seppänen: Then let's move on to Pia Rosqvist-Heinsalmi from DNB Carnegie. Does your plan include significant further investments in growth in H2?

Operator: Then let's move on to Pia Rosqvist-Heinsalmi from DNB Carnegie. Does your plan include significant further investments in growth in H2?

Speaker #1: I can say it like this: we are not planning to start any new organic investments or new locations in the second half of this year in technical wholesale.

Christian Johansson Gebauer: I can say like this, we are not planning to start any new organic investments or new locations in the second half of this year in Technical Wholesale. As far as I'm aware, I don't think there will be any new ones coming up. Rather, the current ones being focused on making sure they reach their full potential.

Speaker #1: That's as far as I'm aware, and I don't think that there will be any new ones coming up. Rather, the current ones are being, you know, focused on to make sure they reach their full potential.

Speaker #3: Good. Then Pia continues: What are the reasons for the reversal of the credit loss provisions last year? Was it a change in management assessment, or something else?

Sebastian Seppänen: Good. Then Pia continues. What are the reasons for the reversal of the expected credit loss provisions last year? A change in management assessment, or?

Operator: Good. Then Pia continues. What are the reasons for the reversal of the expected credit loss provisions last year? A change in management assessment, or?

Speaker #1: I mean neither me nor Sebastian was was here last year. So it was an assessment done by by the management at that at that time and and now we have done this assessment.

Christian Johansson Gebauer: Neither me nor Sebastian was here last year, so it was an assessment done by the management at that time, and now we have done this assessment. So that's the fact.

Speaker #1: So that's the fact.

Speaker #3: Thank you. That's all the questions from the chat for now.

Sebastian Seppänen: Thank you. That is all the questions from the chat now.

Operator: Thank you. That is all the questions from the chat now.

Speaker #1: All right then. Thank you very much for listening in. We are happy with the strong cash flow and the organic growth in the quarter.

Christian Johansson Gebauer: All right then. Thank you very much for listening in. We are happy with the strong cash flow and organic growth in the quarter. This quarter, you need to read the report in the details to get the facts behind the figures, and we are very much looking forward to the H2 of this year and to meet all of you again in the Q3 report. Thank you.

Speaker #1: This quarter you need to read the report in the details to get to know the facts behind the figures, and we are very much looking forward to the second half of this year and to meeting all of you again in the Q3 report.

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Half Year 2026 Relais Group Oyj Earnings Call

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