Operator: technology company, Careium. Following the presentation, there will be a Q&A session with equity analysts, and investors can submit their questions via the chat. I will address as many of them as time permits. With that, it is time to welcome Careium's management, CEO Tove Christiansson and CFO David Granath. Welcome. Well, strong report. You have now been with the company for about 5 months. What is your view of the company now?
Tove Christiansson: Yeah, let us start with some reflections around that. I really think it is a nice company. I have now been out meeting with colleagues and customers in all markets, and it is lovely to see the good relationships and all the trust we get from customers. Customers are there together with us. I also see a company that has built on the strengths of coming from local companies in each market, being close to the market, close to the customers. I also see the strengths of being the first one, being there in going for digitalization in Scandinavia with the alarm receiving centers. That was really powerful from Careium. Also with the good products that we have developed, and we see a momentum with the mobile alarm products that we have out in the market.
Tove Christiansson: I see a lot of good strengths in the company to continue to build on. I also see that we need to, of course, be more efficient. We need to be working with our operational excellence, and we need to make sure that we scale, that we can scale as a European company. So, there are good things to work with and a fantastic company to be part of and being the CEO of.
Operator: I can imagine that. Thank you so much for that intro. Please go ahead with your presentation. I will be back for the Q&A.
Tove Christiansson: Yeah. Thank you. Let us start. Me and David will present the report together, and I will start, and then I will hand over to David. I think it is a report we are very proud of. It is a very nice product sales in it, and it is a good service sales in it, and we grow in all markets. Looking into the numbers, you can see that we are growing 22% on the top line. When it comes to service sales, we have a big part of our service sales that is based on longer contracts with recurrent revenue in it. If you see the growth over the year, you can see that we have the growth coming in from a couple of nice contracts in UK, and also the big contract we had from Norway with Asker and Bærum. Product sales, we see the momentum.
Tove Christiansson: We see the momentum, we are selling much more from the Abby, and we are step by step taking out Alba in the market, and we see that is part of the Adda agreement in Sweden, and we see also that we sell it, and we see potential in the European markets. So we have a good growth, underlying growth in all markets, and some kind of boosted sales on the top due to a couple of really nice contracts that we have in the markets. That brings us to an EBIT on SEK 27 million, and yeah, we are happy to meet the 10% on the EBIT, so that is good for us. We did talk about it last time, the balance sheet that we have strengthened. We had the hybrid loan of SEK 64 million, and we repaid it for SEK 45 million, and the rest has been written off.
Tove Christiansson: So there are a couple of good things that we bring with us in this report. Let us start with markets and dig into that. Let us start with the Nordics. Nordics is a tender-driven market, a tender-driven market where the municipalities are buying in care services. Care services where products and services with our alarm receiving centers are bundled in a service contract. So these markets are really service-driven markets, and we see on the top that we are growing, and it is up on above 25% growth. That also comes to when you look into going back to Q4 in 2025, you see that this is where we brought in Asker and Bærum into our service portfolio. So a big part of the 25% is, of course, driven by that contract, and it is a nice product.
Tove Christiansson: It is a nice service contract, and we can really see that we have been working with the margin in this market, and we are up on 41.5% in the gross margin. So we are getting there. United Kingdom, if we go to this market, this is a broader mix of what we sell. You can see we have more product sales and still a lot of service sales. Major part of the service sales is also here contracts, long service contracts with the local authorities and care providers, with recurrent revenue written and signed for a couple of years. So it is a good base in it. We do see a lot of activities in this market now when they are closing down and they are going from analog to digital.
Tove Christiansson: And that, of course, is a lot of activities, and we are happy to see that we see the effect of the activities we are doing in the market. We can see that we get sales both in the product part and in the service part. Of course, we see in the service also that we have a couple of installation projects with lower margins to make sure to get it happen. That is why it comes down to 37.7% in the margin, that we are really making all we can to get on this onboarding the service contract and making sure that we can go for digital products. Next market to talk about is the Netherlands. As you know, the Netherlands is a mainly service-driven market. We have a lot of good contracts here as well. Here in Netherlands, we do not own our own ARC.
Tove Christiansson: We work with fulfillment with other ARCs, and still we are fronting the customers, and we are having a good service sales as a growth engine in this market. You see, though, that the product sales has increased fantastic in this market, and I would like to talk a bit about that, because we see that we have a momentum in the mobile devices with the mobile alarms that we are selling. We see that these products are enabling our customers to have good services in the market and to target new target groups. Working with Gerust, it is one national alarm receiving center in Belgium, you can really see that they are focusing on younger elderly that really want to continue to live an active life and also making sure that they feel the security and safeness and can get support from an ARC when needed.
Tove Christiansson: So you can see in Netherlands, we continue to be a good service-driven market, but we also add some product sales to enable services with our customers. Other markets. Other markets is mainly France and Germany from our side. These are markets that we step by step are growing with our products. We increase with 21.7%, so it is a good, nice growth in the market, and it can, of course, differ from quarter-to-quarter. Looking into this quarter, we see also momentum with our mobile alarm products. We see we get a lot of positive feedback, and sales is growing with the new products, so it is really nice to see. We have a gross margin increase, and we are up on 62% when it comes to margin in other markets.
Tove Christiansson: So, I would say summarizing sales and gross margin for all markets, we are very happy with this, to see the effect of what the markets have been doing, been working with. We see the effect of top-line growth, and it is 20% if you adjust it for currency, and that is a good level. We see that it is boosted of the contracts from UK coming in in the Q2 and Q3, and it is also boosted by the contract with Asker and Bærum in Norway, of course. But underlying, we have a nice growth in the company. We see also that product sales is, and will continue to be there as a good mix with our service portfolio.
Tove Christiansson: And as you see, gross margin increased to 45%, and that is an area we talked about last quarterly report and that we continuously work with being more efficient and trying to improve the gross margin. So 45% is good to be up on now. David, hand over to you.
David Granath: Well, thank you, Tove. Now an update on the profitability for the quarter, for Q3 2026. We see higher sales and gross margin, and that supported the strong profit improvement, and it enabled us to continue to invest in our future. EBITDA amounted to SEK 47 million compared to SEK 32 million for the same period last year, with an improved EBITDA margin. EBIT increased to SEK 27 million in Q2, giving an EBIT margin of 10.3%, as Tove mentioned, compared to 6.7% last year. Profit for the period was SEK 20 million versus SEK 9 million last year. To summarize, we are happy to see the positive profit development. With that, moving on to cash flow. Cash flow from operating activities amounted to SEK 29 million compared to SEK 35 million for the same period in 2025. Improved profit in the quarter were offset by increased working capital.
David Granath: Investments amounted to SEK 50 million in the period compared to SEK 20 million last year, and as a result, free cash flow remained at last year's level and amounted to SEK 14 million. Cash totaled SEK 28 million, and net debt increased to SEK 192 million at the end of the quarter, following the settlement of the hybrid loan, as that we talked about in the last presentation. I would say we are well-financed for our continued growth journey, and with that, I hand over to Tove for some concluding remarks.
Tove Christiansson: Yeah, thank you. Yes, as I started, it is a very nice company, and we see a lot of good activities that we do run. We see the great effect of the work that we have been done, and in all markets, we are growing, and we have a net sales increase of 22%, which is a really good growth. Even if it is boosted, it is good. That is also why I would like to highlight that we are growing with service sales. That is recurring revenue business for us, which is good to have. It is stabilizing the top line. Also the product sales, where we see the momentum of the mobile alarms. It strengthens us to have a good portfolio in this, because the area of mobility in this sector is what we see a journey that we would like to take.
Tove Christiansson: We would like to be there with good products and services to make sure that elderly can continue to work and have an active life, be active, be free, feel safe, and that is an area where we would like to grow in. We are proud to see that we get the feedback in a very positive way from the customers. Gross margin increase of 45%, and EBIT is above 10%. We are taking the company in a good direction. Priorities ahead, of course, we should continue to reach out, and we should continue to work with customer relationships that we have in the market. It is fantastic to strengthen. It is good to be there.
Tove Christiansson: With this dialogue, we will make sure to, of course, have the best offering out there and always supporting our customers in the whole aging journey for elderly, making sure that they can transform the way of working with care. By that, we will continue to grow, of course, and we will also continue to improve the efficiency across all operations, and we will continue to invest in our offering to make sure that we have a scalable offering, a European offering, and that we always balance the technology part in it and always make sure to have balance with the human touch to make sure that we are there for our customer in the best way. Yes, we are summarizing a good quarter.
Operator: Absolutely. Okay. Thank you so much, Tove and David. With that, we will start with the Q&A. First out is Alice Beer, Equity Research Analyst with ABG Sundal Collier. Please welcome with your questions, Alice.
Alice Beer: For the presentation. Starting off on service sales, they were up 27% with connections.
Operator: There you go.
Alice Beer: only up 8%. Sorry, can you hear me?
Operator: Yeah, we can hear you.
Tove Christiansson: Now it is good.
Alice Beer: Thank you. Okay, great. I will reiterate. Service sales were up 27%, while connections were up 8%. How much of that is price increase, mix, and installation revenue? Could you give us an indication of the underlying per connection growth?
David Granath: I mean, I would say we do not go into the details on that, but we do see that there are some non-recurring service sales that we have that are on the higher level now. We see it both in Q3 and Q4, mostly related to the UK A to D switch that we discussed before.
Alice Beer: Okay. On the Nordics then, gross margin took quite a jump in the quarter, but it is about flattish year-to-date. Is Q3, should that be considered like a new run rate, or was that just a timing effect?
David Granath: I mean, I would say we see improvements. We have seen improvements in Sweden, partly driven by the less financial lease and the kind of shift in the dynamic of the P&L, so to say. But we also know, as we communicated before, that the kind of onboarding of Asker and Bærum is completed. Now it is more on kind of taking this long contract and continuously work on the margin, and we see some effect of that this quarter.
Alice Beer: Okay. Just to continue on Asker and Bærum, they started invoicing in Q4 2025, as you wrote. How much did that add to sales last year, and what is the Nordic organic growth excluding that contract? Just any indication that we can size the Q4 comp step-down?
David Granath: Yeah. Asker and Bærum invoicing is roughly SEK 10 million per quarter.
Alice Beer: Okay. Perfect. How should we think about the UK gross margin in Q4? How long should we expect sales to be driven by these low-margin installation projects? Is that something that is going to go into next year, or is that pretty much over now?
Tove Christiansson: I can start talking about the market and the business we are doing. There is high pressure in the market, and the pressure comes from public, it comes from the whole industry, and the customers are really putting all their efforts to find the best solutions. It is a high competition out there. So it will continue, and it is said that we are going to close down end of January now, and that is the date everybody is working for.
Alice Beer: Okay, great. Thanks for the clarity. On a group level more then, net financials were down quite a bit year-on-year. What is the normalized run rate for net financials now that the hybrid is gone?
David Granath: The hybrid doesn't affect the net financials. This quarter, we only see currency effect. The hybrid loan only had an effect in the equity because we never paid the interest. It was only deferred.
Alice Beer: Yeah, right. So that was just an FX effect.
David Granath: Yeah.
Alice Beer: We shouldn't expect the runway to step down?
David Granath: No.
Alice Beer: Okay. Then I know that it is difficult to comment on cash flow, but working capital has weighed quite a lot on the cash flow this year. What is driving the inventory build, and when should we expect this to unwind?
David Granath: I mean, we are constantly reviewing our working capital. We see increases a little bit on accounts receivable and inventory. Those are the areas we work hardest with. I mean, I would say inventory, given the situation that we have as well, I mean, we see not maybe such a big impact on the gross margins, but we see longer lead times. So we continuously work to have the best kind of inventory levels as we see for our future growth. If that in some quarters are higher inventory, that is, but that is also what we see in the future. Yeah.
Alice Beer: Okay. Then going back to Q4 last year, quickly, just on a group level again. Q4 last year was very heavy on OpEx. How should we think about the comp going into next quarter?
David Granath: I would say we are, as we have mentioned previous quarters as well, I mean, we are at a fairly stable OpEx level for the year. I mean, we saw increases end of last year where we did some investments in the organizations. But overall, I would say it is somewhat stable. Of course, we have summer periods where holiday pay and such could impact, but overall, it is fairly stable during 2026.
Alice Beer: Okay, perfect. Just a final question that I am guessing maybe you cannot answer, but we are going into the Q4 report, and for 2026, you did not really have any financial targets. I guess this is more of a question for Tove, but, I mean, you have been with the company for a while now. Should we expect maybe any strategic decisions or any sort of guidance for next year?
Tove Christiansson: We are having a good strategic dialogue and discussions within the board, and we think that we need to really stabilize, and we need to make sure that we can continue to invest. We are not talking about having financial targets in the public information. That is not what we see in front of us.
Alice Beer: Okay. Great. Thank you. That was all for me.
Operator: Thank you, Alice, for your participation. Let us move on to Fredrik Reuterhäll at SEB. Welcome with your questions, Fredrik.
Fredrik Reuterhäll: Good morning. Thank you very much. I want to go back to the UK. That was very strong. I just want to ask you, when do you see these effects roll off? I mean, you said it was January 2027 it was supposed to close down. Should we expect, you know, Q4 to be boosted by it as well?
Tove Christiansson: Q2 and Q3 are boosted by the contracts that we had taken in, and that is a big part of the growth. We will have continuously work within the service contracts we have with customers, and we will continue to drive product sales, but we do not see that bigger contracts knocking on the door that closely.
Fredrik Reuterhäll: No. For the UK A to D switch here, that was more. How big part of the revenue would you say was affected this quarter?
Tove Christiansson: I mean, it is a lot of the products that are changed in the market, and product sales is a major part of that. Of course, we have installation services as well. Number-wise, perhaps you are better to
David Granath: I mean, I can say that, I mean, if you look at the product sales historically over the quarters, we can see an increase in the levels, starting maybe Q3 last year. So that is why we also do not have a growth in this quarter, because it was high already in Q3.
Fredrik Reuterhäll: Yeah.
David Granath: The A to D switch is a boost on the product sales. We do, however, of course, have normal run rate on the product sales, as you have seen also historically. Then the product sales itself also brings installation work in some areas, and that is what you can see partly in the service sales. However, we have also, as Tove mentioned, won quite a few contracts here now in Q2 and Q3 that also brings on more of the quarter-on-quarter effect on the recurring side.
Fredrik Reuterhäll: Okay. Yeah. You talked about the OpEx levels. I just want to ask you about the admin costs that were like 10% lower year-on-year. I think it was like SEK 26 million for the quarter, and you have been, you know, that is more or less the levels that you have been throughout the year. Is that a level we should think about next year as well, or?
David Granath: Sounds reasonable.
Fredrik Reuterhäll: Yeah. Okay. Let me see here. I will need to go through my questions. Yeah, the working capital, Q2 with the higher working capital, where do you see this rolling off? I mean, I understand it is very hard to give a guidance on, but I want to see the free cash flow in the future. When can we expect that?
David Granath: Yes, I also like free cash flow, so you are not alone in that. What I can say is that we see the working capital being on high levels right now. So we expect working capital to go down.
Fredrik Reuterhäll: Can we expect that to happen Q4 or beginning of next year?
David Granath: Well, I am not really talking so much about the future, but what I can say is that we consider us being on the higher part of the scale at this quarter. Again, I mean, cash flow, as you know, I mean, we are not into optimizing cash flow quarter by quarter. I mean, I would say it is more kind of make sure that we, on a longer term, have a good kind of cash flow through, so that the conversion is kind of sound over time. If there is a quarter here and there that is less free cash flow compared to last year, it does not concern us as much. But we do have high working capital this quarter.
Fredrik Reuterhäll: Yeah. Okay. The hybrid loan was repaid. What are the capital allocation priorities now?
David Granath: I mean, basically what we have done is basically taking one loan from the equity, and we put it into kind of our bank loan, so to say, and that is what we see in the net debt. We do have a credit facility that we can utilize. Of course, we invest in the organization, and then we invest in the growth, but it has been quite stable. I mean, of course.
Tove Christiansson: Yeah. I mean, I could add. I mean, when it comes to, as I said in the beginning, we will continue to invest in our markets and reach out to the customer. We will continue to invest in our offering. We would like to be there as the partner of choice, to be there hooking up and make sure that the offering for care providers is the best. Then we talk about technology-enabled services, which means that we would like to have a scalable offering, making sure that we always find the right combination of technology and services with a human touch in it. So, of course, we will do what we can to continue to invest in the future to make sure that we are competitive and that we take a good position in this market.
Fredrik Reuterhäll: Yeah. You talked about the Nordics, that you see pretty tough competition there, and the other framework has been in place for almost six months now.
Tove Christiansson: Yeah.
Fredrik Reuterhäll: I just want to ask you, are you happy with the flow or the offering within the Adda? I mean, the bidding process, is the volume meeting your expectations, or is it a lot of deals going on outside the framework?
Tove Christiansson: I would say that everybody are still in the starting blocks when it comes to the Adda framework. It is a lot about customers now getting into the Adda framework, to fully understand the Adda framework, and we have a lot of good discussions and dialogues with our customers, but the deal flow has not really been started off yet.
Fredrik Reuterhäll: Okay. I want to ask you about, there are some proactive AI monitor solutions out there now. I just want to ask you, what is your thinking about this? Is this something you are looking at or even developing in-house as we speak, or are you looking to move in and do some acquisitions, or I mean, what do you think about this new?
Tove Christiansson: I think it is always good with new smaller companies trying out new technology and elaborate with services, and I think that is a good thing if we just think about what they are doing. AI for us will always be there as a part, of course. AI will be there for us working with operational efficiency within our company, and also we are looking into how should AI be part of our services. We will take it wisely, and it will take some time for us. I think that is key when we are in this kind of sector. The industry we are in has to really take in consideration that we are talking about vulnerable people, and they are getting their care services at their homes. So we need to find the right balance of that.
Tove Christiansson: But of course, it is on the agenda, and it is something we are both looking at and making sure that we are taking out the right direction into this.
Fredrik Reuterhäll: Good. I think that was all questions for me. Thank you very much.
Tove Christiansson: Thank you.
Operator: Thank you, Fredrik, Roger, and Tove at SEB. We will move on with a few questions from our viewers and start off, since we just talked about AI, how do you view the risk of cheaper hardware from China, for example?
Tove Christiansson: A good question. I mean, some of the cheaper hardware is good coming from China, and then there is, of course, something to look at and see if we should bring it in or if we should do our own. It is a lot about looking in long term to see what we should develop on our own and what should be taken in from other companies, of course. But I do not have any certain view on Chinese vendors.
Operator: Time is up, but I want to ask one more question. That is, now with the hybrid instrument removed and profitability improving, should shareholders view 2027 as the first realistic year for a dividend discussion?
David Granath: I mean, I would say that what the hybrid loan removal has brought is that it would be easier for us to do dividends. That is pretty much it. But we do not speculate in dividends, and it is up to the board and the owners to decide on that.
Operator: Yeah. Okay. This was arguably one of the strongest reports for this earning season. Thank you for joining us out there, and thank you, Tove and David, for participating.
David Granath: Thank you.
Tove Christiansson: Thank you.
