Beijer Ref (Stockholm:BEIJ B) Q2 2026 Earnings Call

0:00 Welcome everyone. Christopher and Joel here on a beautiful summer day. Looking forward to present the result and then as usual we'll finish off with some Q and A at the end of the presentation. So starting a little bit of summary of the quarter. Of course we like the heading of another record quarter. And as you know when we put all of our business together Q2 driven by EMEA is the strongest quarter of the year. So we had a 6% growth of sales about 1% organic of that 6% the rest acquisitions. And also as we stated a little bit before, we're now coming to the end of very strong comps from Eastern Europe driven by some inventory issues in Eastern Europe last year. So as we move forward in out to Q3 and Q4, that'll be fading off.

1:06 And that's also why we stated we just, for East Europe, the underlying organic growth, was around 5%. So we see some good, good trends in Eastern Europe, driven by some inventory issues in Eastern Europe last year. So as we move forward in the group, as I noted, we will continue and accelerate growth in our OEM business driven by EMEA, but also very good activities around in APAC, in Southeast Asia. We see more and more trends moving over to natural refrigerants and a lot of activities there. And EMEA we see an accelerated transition into the natural refrigerants. And part of that is that January first quarter levels in the EU is going to be cup another 50%.

1:57 And also you see a lot of trends on the natural refrigerants on the heating side through our Fenergy platform. So record backlogs, good growth in the OEM side and we see that continue as we move through the rest of the year. HVAC negative affected by, Eastern Europe otherwise positive. And we also see trends now in Europe are picking up, demand in countries like France, Netherlands, UK and other markets. So it's a pretty positive on the HVAC development as we move through the year. The refrigeration stable 3% so solid quarter on the industrial and commercial refrigeration side. Moving over a little bit to MEI as we talked about, we would say a good underlying organic growth in the platform.

2:51 We see good activities across the board. As I said, Nordics positive, Central Europe positive, Southern Europe positive. So and we see that trend moving in with good backlogs on the HVAC side as we move into the second half of the year. So positive on EMEA as these in Europe is fading away here in Q3 we'll have a good development as we move through the year both driven by the HVAC side but also on the OEM side as we mentioned before. And also I would say a good backlog. And as we stated on the slide both are two key platforms in OEM, Fenergi and SEM Frigo having a record or intake and record backlogs to move through the year. So we see a lot of activities on the OEM segment.

3:49 And also of course a very strong quarter for them on the sales side. Margins at good levels. We still are producing at record levels for BEIJARF here in Q2. So we continue to be happy with the margin side in EMEA. So all in all very solid quarter in EMEA and as I stated before it looks positive I was moving to the rest of the year division for us. So very happy about that. We move into APAC. APAC continues to deliver a solid development, continue to be driven by Australia and rest of Asia. Also active in the OM segment that's very happy. A lot of these regions don't have regulation, but still looking at transitioning to natural refrigerants.

4:42 So they continue to do a very good job in those areas. And we'll continue to invest quite a lot of building up sales training centers around Southeast Asia, where more activities in a lot of countries, South Korea, is mentioned there, China, Thailand, India. So quite a lot of activities here that we believe long term will also start driving more growth in this region as step by step they start moving into more of OEM type solution for us. Margin solid all in all Q2 is a smaller quarter. It's more a winter quarter out in Australia and New Zealand. So of course their season starts ramping up at the end of Q3 moving into Q4.

5:28 So another good solid development in our APAC region for the quarter. You mean you moving into The US minus 3% organic. It was kind of a messy quarter in The US to be very frank. It started off with you know some bad weather and rain in April, so the season got started late. Then we also had some announcement in May on on pricing and and different type of customs from Mexico where a lot of equipment is manufactured for the OEM. So we first had sharp price increases then the announcement were pulled back and then price decreases and and etcetera. So for us as a distributor it was a very messy May to align with with these and and our exclusive OEM went first with price increases then realigned it. So looking at more clean June and July was pretty good and nice growth in there. So we'll keep in track of that. We believe the pricing issues are behind us.

6:40 But a little bit of a messy quarter to start off April, May, but strong June and a good development in July. Margin is solid. If you adjust for dilution continue develop good margins, nice acquisition and AIM distribution and we do have continue to have a nice pipeline expecting to close a nice deal here in the next couple of weeks as well. And that's very strategic for The US. So all in all quite positive. As I mentioned before, we don't see any big trends in the market shifting. We're still waiting for higher activity in the housing market. But in the meantime, we continue to develop well and stable in The U. S. In the aftermarket replacement repair. I think worth mentioning what's going extremely well in The U. S. Is our private label expansion now moved in to almost 90 over 130 branches. We're going to continue to expand the portfolio and we'll continue to grow at you know double high, high double digit levels on this and we expect this to continue. So it's a very nice added part of our portfolio in The U.

7:48 S. And also as we move into these acquisition a big driver to expand their sales and margin through this platform. So we continue to expand in The U. S. And we expect this to continue. If you summarize the quarter sales growth of 6% organic one, EBITDA of five, EPS changed 5%. So an okay quarter but a little bit more positive as we move into the rest of the year, especially in our EMEA platform that we expect to see pretty good growth and that should also accelerate our numbers in this type of slide as we move into the rest of the year next year. With that I'll hand over to Joel. Alright, thank you Christopher. Good morning everyone.

8:35 As always straight into our EBIT which is up 5% compared to last year. As mentioned, the FX translation effect that has been substantial now for a number of quarters have now almost finally faded fully, and on a currency neutral basis, our Q2 EBIT is up 6%. Financial net continues to develop well on the back of our new financing structure. We report a financial net here in the quarter of 122,000,000, which is 5,000,000 below last year, despite the higher net debt position. We did have some favorable FX effects in the financial net compared to last year, but adjusted for that, we are basically on par with last year.

9:22 Tax line, SEK $285,000,000, effective tax rate of 25%, in line with last year. And so all in all, net profit of SEK $834,000,000, 5% higher than last year. So moving over to EPS, point six three in the quarter, increase of 5%. Year to date, we are at 3%. But as you remember from Q1, we had some relatively tough FX headwind and on a currency neutral basis, our EPS is up 5%. So cash flow, as you know, Q2 is also a quarter where we continue to build working capital.

10:10 We did, however, deliver an operational cash flow in Q2 of almost 300,000,000. Yes, cash flow in Q2 was lower compared to last year, but it was driven almost exclusively by a more back ended buildup of accounts receivable this year compared to in Q2 last year where trading faded a little bit differently in individual months in the quarter. Next slide here, as you see, continued to deliver positive cash flow in our seasonally weaker first half of the year, and now we are entering the more cash generated quarters where we have a rolling twelve months operating cash flow of 4,000,000,000 here so far.

10:57 Leverage net debt increased by approximately 1,000,000,000 here in the quarter on the back of M and A activity and distribution to shareholders. Our leverage ratio here sits at 2.16, which is 0.3 turns above Q1 and also above Q2 last year. And as said, we are now entering the seasonally much stronger cash flow generating quarters and we are in a very good position to continue to execute on our M and A pipeline. So with that, I'll hand back over to Christopher. Chris can't hear you.

11:53 So summarizing Q2, another record quarter as I said before you Q2 is our strongest quarter, driven by the EMEA, summer season. Good or underlying organic growth if we adjust or look at the EMEA and a lot of regions, especially in Europe looks good. OEM, strong development, you know, EBITDA in that only the second time over 12%. Of course it was Q2 last year, but then there were some currency effects. So underlying margin and what we see looks good. Cash flow as you all said will accelerate quite a lot here in Q3 and Q4. So that it looks positive always move into the rest of the year.

12:43 And then you have the acquisition that we really like down in Florida and we're more of those hopefully coming in here in actually in the next couple of weeks. So

12:53 it looks good. And then if you look at the long term, I think just updated here is of course the backlogs in the OEM and the development there. I see a lot of activities, in there and looks positive here. See not only for the rest of this year, but also for 2027 and moving forward. Hopefully we start seeing this acceleration in transition as by 2030 in The EU you cannot use the synthetic refrigerants and moving over to these type of equipment that we focus on. And also in general in EMEA backlogs on HVAC looks good. I mean you follow the news been quite hot all over the place and a lot of requirements on moving into HVAC as you probably were today in Europe. I think penetration is less than 18%.

13:47 Just a reference point in the OS penetration is 80%. So it's two different market also

13:55 and this is of course not gonna change in the short term. So looks good. The US platform, I think a little bit of a messy quarter running through April and May, on the pricing side as we talked about looks to be in control now and find the right alignment with our OEMs. Private label continue to grow at a high pace and will continue to expand in our portfolio. And then if you look at the rest of the position balance sheet, cash flow and pipeline looks good. So a little bit more positive this quarter as we move into to the rest of the year in '27 as we finally in at least in EMEA see some good traction and improvement of the business.

14:42 So with that our presentation is concluded and then we open up for any questions on the call out there. The next question comes from Adela Dashian from Jefferies. Please go ahead. Good morning, gentlemen. A couple from me. Firstly, you mentioned here that you started to see accelerating momentum towards the end of the quarter and into July. And you did, Christopher, mention heat waves just now on your ending commentary.

15:30 We dive a little bit deeper into that. Are you actually seeing that the heat waves across Europe are is impacting your demand positively? And if that's the case, I guess, what sort of trends should we expect for Q3 because you are meeting tougher comps on reported numbers in Q3 than you did in Q2?

15:56 Yeah. Thanks for that. And and as you know and and talking about weather always makes you a little bit uncomfortable because it's probably one of the hardest thing to predict and understand and see. But sitting here in in a May and in countries like France, I mean, if if you try and get HVAC now, I mean your installers will probably telling you have to wait quite some time. So what we see in key markets, Central Europe, UK and France where it's been extremely hot for a long time. And penetration in those countries are not at the levels. If you have heat waves in Spain or Greece and other countries, it's less, it's more a replacement market but in these markets you also get penetration in that sense. So in these segments, we're realigning inventory setups and moving inventory in here and supporting because there's a lot of demand out there.

16:56 So I think we're moving towards higher comps, you're absolutely right. But if you look at EMEA with this trend and also on the OEM side, we still feel pretty positive around a good EMEA expansion here over the future. So with those two points, it looks promising. Also remembering we're sitting in July, it's a one month moving into that, but June was pretty solid. July started Eastern Europe is fading away during the quarter. So all in all what we look seeing it right now looks good in that part of the world.

17:40 Thank you for that then. Ankul for you, can you remind us if the contribution was as significant in Q3 last year as it was in Q2? Yeah, it was a massive and that is one of the main components and if you look at CoolFu last year we reported that sales growth in in M and A as it was in organic. So it has a major impact on organic growth in EMEA in Q2 and then it faded off. And for details the reason why cool for you was up so much last year because it was a inventory issue in their key market Hungary where they have a huge market share. So they had

18:19 to replenish the whole inventory that drove up their sales. It wasn't sales out, it was more sales into their distributors. So it was a little bit of a special situation there. So when we look at these things, the underlying development in most of our regions is really good. And as you see on EMEA it was solid in Q2 if you exclude this. So yeah cool fuel is one of the main reasons for it more a one off situation last year and that's normalizing now as moving to Q3 and Q4. Great and then you were talking about the refrigerant upgrades in Europe as well. Should this result in any sort of price tailwinds as you enter H2?

19:06 No, think on what we're seeing in that is of course the acceleration on the OEM side driving that you need to replace your equipment. On the refrigerants per se, we had seen one and I think some of the analysts picked that up. UK has made a significant price increase on refrigerant because they're starting to follow more the EU phase out and they haven't been doing that for many years. So that's positive for us but it's not big enough for BEIRAF to be make any significant difference. In the rest of Europe right now refrigerants are stable. There's no significant price changes. We are curious how the market will start moving at the second half of the year as January 1 the quota levels for refrigerants in EU will be cut by another 50%.

19:57 But right now we're seeing more stable prices under refrigerants. So no major impact on our margins.

20:05 Okay. And then lastly, if I may on North America. It has been somewhat of a disappointment over the past three quarters. Granted, it's been moving factors impacting the organic growth development, but how confident are you in the recovery now already by the third quarter? No, I think depends on your expectations and we would challenge the word disappointed. I think right now as we see The U. S. Market it for that to start on the distribution side. You had some alignment on product changes on know, 14a being phased out in your SEER. So OEM and distribution wasn't in line for the last you know eighteen months. I think

20:53 it's in line now. And then on the market that we see an active on the afterbark replacement and repair. We see the market as pretty stable and we haven't seen any change really in the market from Q1 and Q2 and we don't expect to see it really in Q3 or Q4. But in the meantime, we don't see any deterioration but I don't see any major improvements. And I think we need to start looking at housing sales and other trigger to start picking up in The US to start seeing that tailwind. But of course what we've seen in the market is that you start building up a pretty nice pent up demand on the housing side but also as you're repairing equipment you need to replacement and you have indication that you start getting to an age of equipment that a replacement cycle mathematical should start picking up here in the second

21:47 half or in 2027. But I think to balance that you need also the consumer to get some more investment into it with interest rates, a housing sales, how it's connected until you start seeing a nice tailwind in The US. So I don't have any signals today where we look that that's shifting or changing. But in the meantime I don't see, I have no signals either that the market is going backwards either. Great, thanks a lot. Thanks Adela. The next question comes from Victor Trolsten from Danske. Please go ahead. Yes, super. Hi, Christopher, Joel. Thanks a lot for taking my questions.

22:38 Perhaps firstly, if I could push a little bit on there's a bit of moving parts here in Q2. And if you could just elaborate a bit more on the phasing of comps in EMEA? You obviously sound quite optimistic for growth in the coming quarters. But I guess in Q4 this year, comps in coal for you will be completely gone, if

23:02 I don't read this commentary wrong. But how will it look now in Q3 more specifically? Mean you have a 7% headwind now in Q2. Is it half? Is it and perhaps just another perspective on that, you mentioned 8% underlying organic growth in EMEA. What how does that help us for Q3 given how comps develop? I mean, we'll that doesn't tell 5% organic growth or whatever in in q three. If you could just help us a little bit with the quantification. Do you want an exact number? Do you have the decimal also, please? Yeah. Yeah. Yeah. Yeah. No. Let let me open my AI tool, and I'll I'll get it to you. No, but I understand what you're asking for. And of course there's mathematical ways to calculate on our side depending on comps and etcetera.

23:59 And then you have the market and trends and everything else. I'll leave the details to you all on us how it fades out. But I think if you try and just be short term, Victor, I mean Q4 just to take that was kind of a weak comps quarter. So I'm not too worried about or that while Q3 was still okay in most regions. I think we had a five percent organic growth. So it's more of overcoming that as Q2 last year or plus two. So Q3 was a good quarter

24:31 for us. But I think you can look at the Eastern Europe fading away at least 50% as we move into Q3 and completely gone in Q4. So based on that underlying looks good. Yeah, the OEM sales now we had a really strong OEM in Q2, right? Plus 25%. So you look at those components, just will move more from you know the BEIRAF the underlying or the adjusted for Eastern Europe. We think these are the activity levels we see right now, but in the same token let's not get carried away and start you know pushing out very high numbers. Let's see but we do believe based on those adjustment and the OEM side and activities in EMEA that they will

25:25 accelerate as we move into the rest of the year and into next year based on what we see right now. That's brilliant, that's brilliant, very helpful. And perhaps just a follow-up on that because from my perspective, 8% underlying organic growth in Europe in Q2, very solid. Discussed a bit Hilt wells and weather difficult to forecast also. The question, Beijer, do you feel like that 8% includes a lot of Hilt wells in Europe? Or is that more of a Q3 topic, I don't know, end June or July film? Just to understand if that 8% is you know boosted a lot from that. Yeah, of course it is because if you look at our Q3 and as we spoke speak about EMEA, the two big months are June and July, right? As you move into August, you pretty much have two weeks of business then all of Southern Europe shuts down for two three weeks and etc. So I mean you'll you have parts of the heat wave in June and then it triggers off in July. So of course part of that 8% is the very high growth in OEM, right? If it's a 25% growth and then you add June strong and July at a good level. And then the numbers for us as a seasonality

26:51 fades off in August, September. So I think you can look at it half in Q2 and half in Q3 type of And then of course the OEM will continue and grow maybe double digit and balance that. So I think without those points, that's how we're looking at the market right now. Fair enough. And then if I just move just a final on North America, just to understand a little bit, because a lot of money in parts also, but sounds like messy April, a bit better in June, July. Could you just help us what is okay June and July? We're talking you discussed flat markets. Is that volumes? And if you could help us with what is the cadence on volumes and on top of that price, of course, because you discussed price quite a lot in North America. Is that a positive factor now into Q3? And yes, if you could help us with some sort of tailwinds for North America. Yeah.

27:54 I think it's looking a little bit on if you try and not help you with exact numbers, you look at 2025 and 2026 and we don't see the markets have changed a lot on the sentiment, right?

28:11 It's still repair, it's replacement, housing sales continues to be weak, new construction is weak. But of course if you live in the Southern parts of The US you have to repair or replace your HVAC equipment. So it continues to be I would say on a sales level a flattish level. And then if you take volume you probably have 34% price mixed into that. So I would have seen volume being down you know 5% or a little bit more and depending on that and I do of course some sometime this will catch up. But I think to catch it up you need some trigger points where this volume is going to start picking up organically on volume.

28:59 So I don't see that trend changing right now. I think you need some changes in the housing and etcetera to move. But of course in the meantime you can only repair this equipment so many times. They are aging and replacement cycle coming in. So I'm more looking at more of the same in 2026 as 2025. And then you might have a quarter that's up a little bit down depending on some project or some weather patterns or anything else that affects the business short term. And I'm expecting that similar in Q3 and then Q4 you move a little bit more into heating and then let's see how 2027 plays out. But of course for every quarter in The U. S.

29:45 With these type of development you continue and build out a pent up demand because the difference here is of course you have 80% is installed HVAC in The U. S. And equipment is aging and it's getting hotter. So you're wearing it down. So I think long term we feel extremely good about The U. S. And then short term we continue to invest in branches in private label acquisitions. It's a very good time to buy companies we believe. So we're active on those sets. Our sentiment, I usually say every quarter is a quarter closer to the market improving. But right now I'm more used the word stable. Noted, many thanks guys. Thanks Viktor. The next question comes from Anders Akerblom from Nordea. Please go ahead.

30:40 Yes. Hi, gents. Just a few questions from my end. I mean, firstly, I wanted to ask a bit about OEM. Obviously, very strong sort of numbers here on organic growth. And I mean, you say that both SEM, Frigo and Fenegy enter Q3 with record order books. Could you give a bit more color on sort of the I guess the backlog duration and if you see any production capacity constraints going forward? Yeah, it's two different colors, right? If you look at a company like Fenergi, their backlog is built on longer lead times and projects. There's no standard products in their portfolio. So Fenergi backlog will be somewhere between six, twelve and eighteen months.

31:30 And then do you deliver accordingly? The fantastic part of energy, I mean, have a backlog now well into 2027, with nice growth and a lot of activities out there. Well, SEM freego should have a lead time of ten to twelve weeks. What happens when the order intake with activities is higher than we expected lead times gets pushed out and you shouldn't have more than ten or twelve weeks in this industry to be competitive because our customers doesn't have the same view as if you do a project with Fenergi might be planned to be executed six to twelve months later. So it's two different stories. Capacity yes, we are ramping up in SMC. It's more putting on a second shift than these type of things, but we've been working on that for the last six months as we've seen the order book accelerating.

32:24 So I think that the question should I assume 25% growth every quarter going forward? No. But should I assume double No and I think this was a lot of finishing projects on Fenogy but double digits I feel pretty comfortable to say yeah it'll be double digit as we see for quite some time now in the backlog we have in the OEM side. Okay, that makes a lot of sense. Thanks for that. And I also wanted to ask a bit about The U. S, not maybe talking so much about the sort of organic prospects as that's been covered quite well, sounds like. But you mentioned expecting a strategic deal in the next coming weeks if didn't sort of hear you wrong there.

33:13 I mean without disclosing specifics could you characterize anything about sort of the size or geography or product segment of this? I can give you one it's HVAC. That's that's not what I was looking for. But alright. Well by the way, the reason I I can give you some. But the reason I'm specific is that we we're just about to wrap it up. But we will in next couple of weeks. I mean I can give you it's bigger than AM, it's an HVAC, it's a strategic area for us and we've been working quite some time together with this target. So we really look forward to get it over the fence. And of course in The U. S. When we do signing, it's signing and closing at the same time because you don't have any competition authorities. But we also have a fantastic opportunity in Europe where we're looking at expanding the OEM side with new capabilities.

34:13 That's also on the way in. So we're positive on that side as well and we don't, we are lumpy when we do acquisition, right? It doesn't come you know five a quarter. So we've been working on these for quite some time. They're fairly strategic for us and we look forward to getting them into the platform here by hopefully you know next couple of weeks to be honest. Exciting. Thanks Christopher. And finally, just wanted to ask sort of a high level question, but I mean elephant in the room obviously MSAB set to become them or is the sort of largest shareholder by voting rights. I mean, does this change sort of in any way the strategic direction of you guys sort of alter the pace or nature of sort of capital allocation decisions going forward? Anything there that you want to share?

35:12 I guess it's the good elephant in the room. Usually when you're an elephant it's a bad thing but no, no I think I didn't mean it as a bad thing. I know, I know, I know. No, it's very good for us and I got the question earlier this morning that everybody has been aware over the last three, six months that EQT was on the way out which was you know, you always want to have clarity in this situation, but I usually answer that we had a fantastic journey together with EQT. It was more to transition the last ownership of A shares that was important thing for BEIJRF for management for our shareholders and investors out there. And I think we've got a fantastic solution with with one of the best owners we could ever wish for a long term strategic involved owner with good capabilities.

36:03 But short term and long term, I think a little bit as the press release they support strategy, they like the M and A, like the consolidation, they like the industry. So I think we're we're fairly aligned on the plan going forward as well. So I don't expect any major changes than what we continue to do and continue to grow the business. Okay, very good. Thanks a lot guys. Have a good day. You too. Thank you. The next question comes from Karl Dijenberg from Carnegie. Please go ahead. Good morning, Tim. So I just had one more topic that I wanted to follow-up on, which we are obviously following very closely, the private label expansion in The U. S. I mean, you talked about it in the beginning.

36:59 It seems to be progressing really well here. And I just wanted to hear, could you talk a little bit more broadly when you expect this to be wide in most of your branches? And maybe also secondly, given that you have a different main distribution partner external in The U. S. Relative to your European operations, do they have any views on this, the expansion you're doing on the private label side or is that fine? Yeah so I mean I'll combine or I'll start with you Johan. When we talk private label in The U. S. Under our brand Sinclair it's under what we call the transactional part of the business. Which in The U. S. It changes for territory and branches or in most but transactional we would call about 30% of your HVAC portfolio.

37:54 And that that's a you know a second tier for the OEM. So if we are exclusive say with ream, that would be related to our premium brand and dealers and portfolio work together to expand. On the transactional part always historically you can buy any anything you want. You could be you know, has five second tier brand carriers 10, you have Allied, you have a plethora of things and there's no exclusivity. So we were never been loyal to ream on the private label. We used to buy it from somebody else and etcetera. So the whole strategy was built to, and it was to build to exchange that transactional with a much better product in our view, stronger brand and a stronger margin with Sinclair and build up that brand. And today we launched it at I think 80 to 90 branches. Well by the end of the year it'd be fully integrated and next year we will only do a transactional with Sinclair and we're also expanding the portfolio into ductless and some other areas from ducted. So it's nothing I mean it's two two different strategies will continue and expand together with with Ream and that part of business. But now we have a fantastic portfolio. I mean it also opens up you know we can go into more project business. We're going into new construction. We can go into different areas on the commercial side with this portfolio and still make good margins.

39:18 So but we can't do it too fast because it's also building capabilities setting up the inventory. Mean when you do private label, do your own logistics, you set up. So there's a lot of steps to build and that's why not a lot of companies can do this. And of course as we do acquisitions, we can integrate this portfolio into it. We're excited, we're expanding, we're building the organization and it's growing a lot it because it's also a great product priced at a good place. So for us it's more within this 30% of our business that we think we can transact 100% with with our Sinclair product as we go through the next three to five years. Interesting. Yes.

40:05 I wanted to ask also, I mean, WIM has obviously been quite active in Europe over the last couple of quarters with the consolidation of Atlantic and so forth. And I know we talked about this last quarter as well, but that was quite early days back then. And I just wanted to hear is that opening up any incremental opportunities for you in Europe? I guess historically you haven't had that much with WILM in the European markets, right? No and and it does. Mean our agreements together with RIM is global agreements. So we always have that part of the business and as we you know work with their global management team that is The US team both Fujitsu and Atlantic will roll in under that management team. So Fujitsu of course have good distribution across Europe Atlantic of course a little bit related to Fujitsu as well more on the heat pump side.

41:08 They also have water heaters in Australia. We have a good platform. So yeah, it's part of the strategy and it's also Fujitsu in The US that's part of the strategy as well. So these are the you know strategic meetings we do talk and also have incentive to drive, because of more we do together with them the better our overall portfolio becomes and also on the pricing side. So it is part of it but it is early still early days and it's still more plans on how we could help each other in different territories but no significant impact at least as of yet. But it is a good partner for us and we are happy when they're expanding because we do have a very strong relationship in The US.

41:56 Okay, great. Thanks guys. Thank you. The next question comes from Karl Bokvist from ABG Sundal Collier. Please go ahead. Thank you. Good morning. My first question is on the measures that you previously announced targeting improved profitability and also on the back end side of things in Europe. How is that program progressing? And has there been any changes to the scope in terms of financial impact? I'll leave that to you, Joel. Alright. Good morning, Carl. So our restructuring program is progressing according to plan. Obviously, as mentioned, you recall, high activities on on on some of the markets here involved, which is a good problem, but overall everything is no changes to estimates and so on, so in line with plan.

43:01 All right. And then on the I know you did talk about it a little bit here earlier, but in North America on the branch initiatives, that kind of dilutive effect on margins, can you kind of say a rough time line on how you think about this dilutive effect? Like is it something that as you continuously expand your branches, it will have every branch will have this dilutive impact for six to twelve months? Or how are you thinking about it compared to the well now announced inefficiency measures in North America and the ability to perhaps extract synergies from previous acquisitions and so on? Yes, so I mean obviously if you look at the quarter here you have, I mean on the acquisition side it's fairly straightforward.

43:54 And I guess on the branches, I mean there is always differences in how quickly you ramp up and so on, but I think the assumption of around twelve months dilution from a branch opening is on average relatively correct. All right. That's all from my side. Thank you. Thanks, Bob. The next question comes from Rajesh Patky from Barclays. Please go ahead. Yes. Good morning. Good morning all. I have got four questions, hopefully quick ones. First one is for Joel. Maybe you could add some color on the buildup of accounts receivable, that you reported at the end of the second quarter, was it related to a specific product or region? And do you expect it to normalize during the second half?

44:47 Yes, it's a bit of a combination, of course. I mean, US we talked about and we had a turbulent start to the quarter in April and May, which obviously tilted more sales to June, then you have equal, but for different reasons in Europe, where you have sort of a hotter weather coming in June to a larger extent, so it's just a question of growth profile within the quarter, which pushed accounts receivable higher at the ending balance compared to how it came together last year. So obviously accounts receivable will be paid back here in the next quarter, so nothing to worry about.

45:42 Very clear. The second one is around M and A activity. I see there is a change in wording on the slide from good to very good. Should we read that as indicative of an acceleration in the second half? I'm glad you picked that up. I think it was me who did it last night. No, it was just relating to that. We were actually hoping to have a couple of really nice strategic ones I spoke to signed here before the report. So it's more it's imminent in next couple of weeks. So we will have I talked about it for for quite some time. So it's just that some dragged out for different reasons. But now we're putting crossing the t's, getting financing ready and etcetera. So yeah, I feel comfortable to use the word very good.

46:39 It's more of short term you'll have some some nice acquisitions falling into the to to BEIREF so yeah. Great. But third one is on price increases. Do you see any scope for mid year increases driven by rising inflation? I want to explain it because we talked about this before right? So so you had some of those areas in The US as we said a messy April May on price increase and price decrease and etcetera. So I don't expect any more price expansion in The US but you never know right? But right now I think that should be settled. EMEA of course when you have a development expectation here in HVAC there's also always opportunities for us to work with price.

47:34 What happens when you have, we have countries where we're almost not accepting any new external customers. We're just working with the one that that's our strategic customers. And then you could have prices a new customer comes on board, they will be on a different price level in these areas. But in general, I think pricing in Europe is more related to anything from one to 2%. What we have seen to finish off that is that on the HVAC side in Australia, New Zealand which is our main markets, we do expect price increases as we roll into end of Q3 of three to 4% on HVAC equipment. That's what we're seeing from the OEM. So in general, you've been positive on APAC hasn't been price increase for a couple of years. U. S. You probably know the story and pretty stable in EMEA as what we see right now.

48:30 Got it. Very clear. And last one for you, Chris. We've had some shareholders asking about what EKT's exit means for your individual alignment with Beijer Ref. I hope there is no reason to see any change there. Sorry, I missed the last part of the question. That's just hope to see there is no change with your individual alignment with Beijer Ref with EQT's exit. No, no, think we have those things part of the journey and we all we always had an ambition to keep those things separate for the long term benefit of BEIJARF as well. Perfect, thank you very much. Thank you. The next question comes from Gustaf Sverrein from Handelsbanken.

49:26 Please go ahead. Good morning. Sorry to come back to Victor's question on the pace there in U. S. For June, July. I think my line broke up a bit, so I'm not sure if I got it correctly. Did you say that sales was flattish in June with let's say a 3%, 4% price contribution? Thank you. No. I'm not that clear on an individual month. What I said nothing around flattish. I think I addressed the full quarter and we said that we finally had a nice trajectory in June and July was positive from a sales perspective. But what I did say when we talked about prices in general and The US market, what we see as a pricing effect on the HVAC side is the 3% to 4% in general, but that's nothing new and hasn't changed. And the noise we had in May was that there were two announcement on tariffs going up and then tariffs going down from Mexico, which is a big platform of manufacturing for some of the OEMs.

50:35 And Ream who's our main partner has the majority of theirs. So they went up with prices. Some of the other OEMs did not and then they went down and it was a messy May for us on the pricing and customer and I'm sure we lost some sales short term because of pricing issues from our OEM and that's settled now And we feel like we're in line with the market as we move into June and July. So, that's a little bit what I how I explained the situation in The US. Okay, got it. Thank you. Thank you. There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. Yeah, thank you for all the questions. I was debating with Joel if everybody has gone holiday, or will have questions for us, but appreciate the discussion.

51:29 And of course as always, if there's any specific questions, we're still around, and we wish you a hopefully some summer holiday when it comes and we, as you know, like that it's hot and, yeah, that that's all for me. Thank you very much and, we'll talk soon. Thank you very much.