Operator: Q3 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing # key five on their telephone keypad. Now I will hand the conference over to the speakers, CEO Henrik Fagrenius and CFO Thom Mathisen. Please go ahead.
Henrik Fagrenius: Thank you very much, operator, and good morning to all of you, and welcome to the revenue call for Q3 for CTEK. Today's presenter is myself, Henrik Fagrenius, and I also have our CFO, Thom Mathisen here together with me. As usually, we start with a brief recap of CTEK before we dig into the numbers. CTEK was founded 30 years ago by Bengt Wahlqvist, who invented the first smart charger, and that's the invention that has founded our company. We have two technologies. One with Low Voltage, where we have chargers for Consumer, Client Brand, and Professional, and also power solution. The other technology is EVSE. That's chargers for electric-driven cars. We have a global reach with our products, and we are divided into two divisions. Consumer divisions are focused to retail chains and e-tail chains and have, as I mentioned, a global reach.
Henrik Fagrenius: Our Professional divisions are selling our Client Brand and our chargers for electric-driven cars to B2B. So the customers there are OEMs and parking operators and others. We are proud suppliers to the very best of car manufacturers. We have more than 50 of the world's biggest and most prestigious vehicle manufacturers. Among them, Ferrari, Lamborghini, Porsche, BMW, et cetera. I think that speaks a lot of the quality and innovation that we represent and the trust that these prominent customers are giving us year after year. We are in the premium segments. We have products for many different applications. We have, during the last H1, introduced many new products in the booster segment, and we are on our way also in the power solution segments, and we have accelerated our efforts in the development to renew our product portfolio and also go into adjacent segments.
Henrik Fagrenius: With that, we move over to Q3. Q3 was a very solid quarter with profitable growth for us. The revenues were coming into SEK 217 million, an organic growth of 2%. The gross margin was very strong, an improvement with 5.4 percentage points to 64.5%, turning into an EBITDA of SEK 53 million and an adjusted EBITDA of SEK 53 million and an EBITDA of SEK 38 million, and that is a margin of 17.5%. The cash flow was slightly negative, but an improvement compared to the comparison quarter, and it is also seasonally. Q3 is seasonally where we build up some stock for our high season. We have a very solid and strong financial position. Our leverage is 0.8, and we have a solid position and the freedom to act and look for M&As going forward.
Henrik Fagrenius: If we look a little bit deeper into the numbers, we have, as I mentioned, an organic growth of 2% with increased profitability. If we look into the two different divisions and start with the Consumer divisions, our new products was, of course, helping the gross margin and also the growth. I would say that the underlying growth in the Consumer segment was more than we can see here. It was a very strong development in many of the regions, particularly Scandinavia, North America, UK, and DACH. We had a lower sell-in to Amazon of almost SEK 15 million, but the sell-out from Amazon was higher than previous years. That is due to a change in ordering from Amazon Professional, we recovered a bit from the partly low first quarter. So we were increasing good in the Professional Low Voltage segment.
Henrik Fagrenius: The EVSE is still a bit challenging marketing conditions, but a positive trend in the quarter, and also improving margins with our new CC3 charger. Cash flow I mentioned, seasonal but better than comparable quarter and a very strong financial position. We announced earlier this year that we are doing a strategic overview or review of our EVSE operation, and we are aiming to have that concluded within this financial year. With that, I hand over to Thom for some more details.
Thom Mathisen: Yes, thanks, Henrik. So I continue with primarily some more information from the divisions and also on CapEx and cash flow position. Starting with the Consumer division, as Henrik mentioned, it looks like flat, but in reality an underlying growth. The change buying pattern from Amazon from Q3 last year meant that we had very high revenues Q3 last year, and if we put SEK 50 million above to this year, you should see a growth. I put it like that. Strong profitability as always, and it is helped by the new product launches and still continued good cost control. Coming over to the Professional division, here we had a strong increase of organic growth with 11%, driven by the Low Voltage that has coming back now after the first two quarters with a little bit lower volumes than normal.
Thom Mathisen: As Henrik also mentioned, the EVSE market is still a bit challenging, but we have had a very good trend upward during the quarter. I am happy to say that we have had a good development on the profitability in the division, driven both by volumes but also supported by improved margins in the EVSE business. So now we are on SEK 6 million positive, corresponding to 10% EBITDA margin in the Professional division. Coming over to some words around cash flow and CapEx. As mentioned, we are building up some net working capital during Q3. It is our high season, end of Q3 and Q4, so just the normal seasonality. We have done investments, and that investments for us is primarily in product development, a little bit lower than last year number-wise, but that doesn't mean that we don't invest in development.
Thom Mathisen: It remained in the same line as last year, but we have had a bigger share of early-stage research that we don't put on the balance sheet, but we expense it directly into OpEx. Still very important for us to keep our focus on product development, and we are still doing that. Cash flow after investing activities, around SEK 14 million negative, far better than last year, and we have continued to strengthen our net cash position. So we now have a cash on hand on almost SEK 170 million. It is around SEK 90 million better than last year. Our net debt is now below SEK 130 million. With the EBITDA ratio, we are now at 0.8. That is significantly better than last Q3. We have also prolonged our financing credit facility, so we now have it valid until end of September 2029.
Thom Mathisen: Again, strong position for doing M&A investments going forward if we find the right things. With that, I hand it back to you, Henrik.
Henrik Fagrenius: Thank you, Thom. To summarize the quarter, it is a very solid quarter. We are back to profitable growth in both our different divisions. We can see that the improvement that we have done now in the organization is starting to pay off. We are having a lot of new products, and that will continue. In the next coming week, we will continue and reintroduce more products in our booster category. The very strong financial position that we are in makes it possible for us to continue to invest in growth, both organically and with selected acquisitions. With that, I hand over for some question and answer session.
Operator: If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad. There are no phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.
[Company Representative]: Sorry to interrupt. There is one phone question. I will-
Henrik Fagrenius: Yep
[Company Representative]: Yeah, just activate it.
Operator: The next question comes from Mattias Ehrenborg, from Redeye. Please go ahead.
Mattias Ehrenborg: Yes. Hello, and good morning. Just a few questions from my side here. Obviously, a very strong quarter in terms of profitability, and the gross margin was once again very strong, as we saw in Q2. I was just curious if we look ahead a bit, going into the coming quarters, how much of this improvement do you expect to be sustainable going forward, in terms of the gross margin?
Henrik Fagrenius: Thank you, Mattias. I think that we can see that our new products are contributing to this stronger gross margin. There is, of course, also a mix effect when it comes to products and regions that are favorable for us right now. We have taken quite a step change in the EVSE production products with a much better gross margin with the CC3. So those are, of course, resistant and they will be there. But on the other hand, we also know that there is a cost increase coming towards us from components and freight. So that will have a negative effect. So there will be some that are consistent, but there will be some pressure on the cost side going forward.
Mattias Ehrenborg: Okay. That is very clear. Thank you. Looking in a Professional segment, and especially Client Brand volumes, you mentioned in the Q2 report, I believe, that some orders had been pushed in time between quarters. Would you say that these orders or volumes were delivered as expected in Q3, or is there some of the volume still pending? How should we view the underlying demand for these products, would you say?
Henrik Fagrenius: In the Professional segment?
Mattias Ehrenborg: Yes, exactly. The Client Brand products.
Henrik Fagrenius: No, we had a pretty weak H1 in the Client Brand, and we see some recovery in Q3. So we had a growth of almost 11%, I think, in the Client Brand, because last year was a strong H1 and a weaker H2. This year we foresee the different development, so a weak H1, but stronger H2.
Mattias Ehrenborg: Okay. Going into Q4 now, which is typically a very strong quarter for you. You mentioned also in the report a planned inventory buildup ahead of Q4, which can be seen in the numbers. Combined with these new product launches, how do you think investors and analysts should think about the sales development in Q4?
Henrik Fagrenius: We are not guiding for coming quarters, but we have new products coming in. We see a positive development on that. It is no secret that we are aiming for growth, but we are not guiding more than that.
Mattias Ehrenborg: Okay. Just moving a bit to the geographical development. I noticed that Americas was quite strong in the quarter. I think the strongest quarter since Q4 2024. Sweden also performed strongly here in Q3. What would you say were the main drivers behind these growth numbers in these markets?
Henrik Fagrenius: I would say it is very much due to our new products. They have been very well received in Nordics. In Nordics, we have a wide distribution network and a lot of good retail chains, so we get out our products quick to the market, and they have been well received by the end consumers. We also see that North America, the growth is driven also by new products, but also an underlying growth in all our products.
Henrik Fagrenius: We have opened up our e-commerce in North America. It is not big numbers, but big percentage growth.
Mattias Ehrenborg: I understand. Would you say that this quarter in particular could provide some guidance on what to expect for the coming quarters? Do you think that the volumes were somewhat elevated due to timing effects? I think it was SEK 20 million in this quarter in Americas. Is it reasonable to expect the same numbers going forward or slightly higher even?
Henrik Fagrenius: As I mentioned, we are not guiding for future quarters, but I think that the American market has been underserved by CTEK, and we are aiming to gain market share in North America. We are focusing on North America, and we are aiming to gain market shares in North America.
Mattias Ehrenborg: I understand. Just moving on to M&A a bit. You mentioned in the report that you are actively evaluating opportunities. Would you say that your appetite for M&A has changed since our last discussion in Q2, or when the Q2 report was released?
Henrik Fagrenius: No, I would say it is still very high. Of course, we need to find the right object that is supporting our strategy going forward. That is important that we have a strategical fit, but the appetite is high. It was high in Q2, and it is very high in Q3 as well, and going forward.
Mattias Ehrenborg: Sounds interesting going forward then. Lastly, from my side, the EVSE strategic review. You mentioned the report that you aim to conclude this review before year-end. I assume that this timeline is still on track, of course. Would you say that it mainly depends on CTEK's own decisions, or is it ongoing negotiations with potential counterparties that is affecting the timeline?
Henrik Fagrenius: The only thing I would say there is that the process is going according to our time schedule, and it is ongoing, and our aim is to conclude it within this financial year.
Mattias Ehrenborg: Okay, excellent. That was all from my side, and thank you for taking my questions.
Henrik Fagrenius: Thank you, Mattias.
Operator: There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.
Thom Mathisen: Yeah, we have the first question. Written question is about OpEx, which has increased almost SEK 10 million year-on-year. What is driving this increase? I would say it is mostly, if you take it year to date, it is more or less, it is less of increase. You see some periodization impacts of some provisions we are making here and there, but the underlying OpEx is stable. We have the same number of employees as the last year, so nothing more dramatic than some periodization impacts.
Henrik Fagrenius: Good. The next written question is, can you talk a bit on your view of the revenue targets? Is it time to review these targets? In our financial target, we have a SEK 2 billion revenue target, and we are a bit from that, and I would say that depending on the outcome on the strategic overview of our EVSE operation, we might have reasons to come back to that target. But as of now, that is our financial target that we have. Next question, Low Voltage has a small rebound in Q3, but is still down 30% year to date. What is your view on this? Have you lost many clients? I would say there is mainly two reasons for this.
Henrik Fagrenius: The first one is in the Client Brand section where we had a weak H1, and we are rebalancing a bit, and we calculate that will continue throughout the H2. And the other one is a slightly different change in ordering from our big customer, Amazon, which has changed their ordering. The sellout from Amazon as such is still very positive. So it is more of a periodization. But we see that we will take back part of that losses. Okay, thanks. So you still feel confident on your Low Voltage guidance on revenue if you exclude EVSE? We definitely still feel confident on that. Of course, it has to do with the consumer appetite as well. We cannot steer that, but we do not see that we are losing any clients. On the opposite, we are gaining clients, both small and big retail chains.
Henrik Fagrenius: And with our new products and adjacent segments, we are also growing. It will take some time, of course, to get into new segments, but we see a very positive take on our new products. I think for the moment, that was all written questions. So with that, if there is no further questions, I thank you very much for your attendance today and wish you a nice day going forward. Thank you very much.
Thom Mathisen: Thank you.
Operator: The host has ended this call. Goodbye.
