Operator: Welcome to the Nederman Holding Q3 2026 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to speakers, CEO Sven Kristensson and CFO Matthew Cusick.
Sven Kristensson: Good morning, everyone, and thank you for joining us today. We are here to present the Q3 report, and hopefully we can give you some meat to the bone of that report. The positive order momentum we saw in the Q2 continued and was even strengthened during Q3. Order intake increased by roughly 12%, currency neutral, supported by a strong inflow of small and medium-sized orders, as well as a few larger strategic projects across all four divisions. This development is particularly encouraging as it reflects the work we do to broaden our position in new industry and potential new growth segments. Process Technology had a particularly strong quarter, with order intake up almost 32%, currency neutral. It is a big bounce back from a period with low order intake. Duct & Filter Technology also continued its positive development with higher order intake, sales, and profitability.
Sven Kristensson: In Extraction and Filtration Technology, order intake increased, supported by a stronger base business and also several larger orders. We are also seeing results from the investment we have made to strengthen our operational platform. We have invested significantly in manufacturing logistics in recent years, and we have a strong platform for improved margin as volume increase. The ongoing expansion and modernization of our facility in Charlotte further strengthen our position in the North American market. Sales and profitability remained below last year, reflecting the weaker order intake at the very beginning of the year, but both improved compared with previous quarter. At the same time, cash flow was strong. During the quarter, we saw clear results from our continued efforts to expand into new industries and market. That comes from defense pharmaceuticals in Europe to metal recycling in the US and semiconductors in Asia.
Sven Kristensson: Strategic orders showing how we use proven and acquired competence and technologies to enter new markets and creating growth opportunities. Overall, Q3 strengthens my confidence in the direction of the company. With the order growth seen in recent quarters, a solid order backlog, and a pipeline that continues to look promising, we see good prospects for volumes and consequently profitability to increase as the year draws to a close. With that, I hand over to Matthew.
Matthew Cusick: Thank you, Sven. If we go through now a few of the key financials. Orders received, as Sven mentioned, a strong orders received quarter in Q3, 11.8% up organically, currency neutral versus the same quarter last year. Those of you that can see the slides that are being presented, there is a chart in the middle of this current slide where you can see definitely the upwards trend is there. Nice organic growth, SEK 147 million in organic growth in this quarter alone. Year to date now, currency neutral positive 3.4% is also pleasing. There definitely seems to be a momentum on the market after this very slow January and February we saw at the start of the year. We have had seven basically very good months of order intake now.
Matthew Cusick: Highest quarterly sales so far this year as well in Q3, 1.7% currency neutral behind the same quarter last year. Again, as Sven mentioned, that is a result of the order intake, largely a result of the order intake being slow in the first quarter of the year. But definitely an upwards tick. You can see on, again, the chart in the middle, it is heading in the right direction. Given the order intake that we had in this current Q3, we are rather confident that will continue the upwards trend in the fourth quarter as well. Moving on to profitability. It is the most profitable quarter of the year so far. We are still at SEK 131 million, EBITA is behind a very strong Q3 last year of SEK 166 million, and not yet where we want to be.
Matthew Cusick: It is 9.2%, operating profit is SEK 104 million, and earnings per share SEK 1.68 krona in the quarter. Not where we want to be, but again, expectation for the fourth quarter is for the sales and therefore profitability will clearly increase again. With the order momentum that we have right now, we are reasonably confident going into next year, although the forecasting there is less clear. Cash flow and net debt. Extremely good cash flow from operations in this Q3. We have a tendency in the Nederman Group, it is just with the nature of our business, that the cash flow picks up throughout the year, and it is very pleasing to see that the cash flow from operations has gone up.
Matthew Cusick: At the same time, we do not see that quite so much on this slide, but the level of investments that we have seen in the last 2 years, 2 and a half years in fixed assets has reduced somewhat. We are still finishing off some investments in the Charlotte premises and the facility there, but it will be not at the same levels as we have seen in the last couple of years that we have fixed asset investments. That will generate cash and reduce the net debt. We see the net debt has ticked down a little bit in Q3 already here, which is clearly positive. But further cash generation should be or is a clear target of ours, and with the volume growth that we anticipate, that will clearly happen. We can go through the 4 divisions now, Sven, and starting with Extraction and Filtration Technology.
Sven Kristensson: Yes. If we are starting with the largest division, Extraction and Filtration Technology, we start to dive into Q3. Actually, the orders increased, and there was a stronger base business in both EMEA and APAC, and we had some larger orders coming back into the Americas region. We actually had the highest sales quarter for the year to date, but it is still behind Q3, and that comes from the low, I would say, extremely low order intake in January, February, and that has impacted sales. Service and product sales are growing, and especially our focus on service business and building the continuous relation is pleasing to see that continue to work well. In EMEA, the underlying base business has been positive, and we have seen some increase in the sales.
Sven Kristensson: If we go overseas to Americas and APAC, we can see that the Americas order increased while APAC orders rose sharply, and that was especially Australia and China. China sells more for us in the division, but we got some orders here. If we continue to what are the key activities, one of course, is the integration of Fume & Dust Control in Australia. That will strengthen the position in certain growth industries. And we are also going to move the Brisbane office to one consolidated office, preferably without the snake farm in the garden. New technologies were shown at the International Woodworking Fair in Atlanta, and we have had focus on smart airflow control, energy efficiency, and dust management, and it was well-received, and we booked more than 25 orders in the fair, which was also encouraging. Some more positive momentum in US.
Sven Kristensson: Expansion and modernization of the manufacturing facility, Charlotte, is ongoing, and it is nearing completion. That will mean that we will continue insourcing more, and we will have a much more stable supply chain here, especially in this first period for our business in RoboVent, Detroit, but also continue with our woodworking business.
Matthew Cusick: Briefly on financials then on Extraction and Filtration Technology. As Sven mentioned, very good order intake, 4.5% up versus the same quarter last year. Sales, 2.8% down currency neutral versus the same quarter last year, which results in an EBITA margin of 11.3%. We expect the Q4 to be significantly stronger for this division given the order momentum that they have right now. Moving on then, Sven, to Process Technology.
Sven Kristensson: Yes. For Process Technology, we have, as mentioned before, the highest order intake quarter this year, and it is actually 32% increase versus last year. It was supported especially with one big order, but also a number of mid-size good orders. The aftermarket business continued its positive trend. We continue to grow massively. We are building our capabilities, and we are also supporting with newly developed product, H-chain product that can increase the efficiency in existing installation, well-received by the market. Strong order intake in Americas and in India. India performed very well as growth of both fiber, textile, and foundry and smelters. Here we have introduced and taken, if I may say, German technology to India, manufacturing locally and handled by our very strong management team from Luwa supporting. We are also supporting them as sort of country lead here.
Sven Kristensson: The profitability, unfortunately, dampened versus Q3 2025 due to sales mix and lower sales volume, mainly the latter. Order backlog continued to grow, providing a solid base for future sales growth and that we are very happy for. The key activities is a continued focus to grow the service business, including the digital portfolio. Ongoing improvements of product lines and upgrade to test centers. We are continuing to use our data we have collected. We are using our innovation center, testing different dust material, et cetera. We are using that knowledge to improve our product range.
Matthew Cusick: Financials for Process Technology then. Orders received, very strong, 32% up, SEK 45 million higher than the sales figure, which is sales of 5.6% down currency neutral versus last year. Of course, the division has then built SEK 45 million in backlog, which we can see on the chart on this slide, which bodes well, looking forwards as well. Sven mentioned mix briefly a little bit more on that and why the profitability is down. There is, of course, lower sales that does not help. When it comes to mix, we have a positive mix effect here through more service business, but we have a negative mix effect in terms of the solutions that have been sold with more fiber and textile proportionally than the foundry and smelters business inside Europe. Foundry and smelters in Europe has traditionally been one of the more profitable parts of this business.
Matthew Cusick: We see good potential for growing that particularly in the US in the coming months. We have seen orders received already to support that. Q3, 7.4% adjusted EBITA is where we were. On to Duct & Filter Technology, Sven.
Sven Kristensson: Yes. For Duct & Filter, we can say that orders received increased, driven by Nordfab US and also the bit smaller Nordfab EMEA. Very good base business development, and it was then boosted with topping up. The icing on the cake was a number of reasonably large orders here. Sales volume increased and profitability improved, supported by the recent efficiency investments in manufacturing and logistics, and that goes for both our North America and European business. US and EMEA improved both order sales and profitability. Menardi is some decline in order intake in the US, while Menardi EMEA grew. Overall, profitability increased. Key activities for this division is the development that is ongoing of a new generation of Nordfab's QTO. It is only engineers that can have such fabulous name on a tool that is crucial to make it easy to do business with Nederman and Nordfab.
Sven Kristensson: Upcoming introduction of AGVs at the new XD Ducting facility in Thomasville. That will be a move towards a fully automated warehouse that will be finalized by the end of Q2 next year. The AGVs are orders, the layout are there, and that will make also the XD, which means large dimension manufacturing, highly efficient. We mentioned for some in Brisbane, we had poisonous snakes in the office, and in Bangkok, we had flooding, so that is good excuses for a lot of things. We were lucky, even if there were a few days when we had no personnel in the factory due to impossibilities to get there, we had no damages.
Matthew Cusick: Financials for Duct & Filter are very strong, as everyone has understood, 8.1% organic growth. Sales at SEK 219 million in the quarter, which is 7.6% up versus Q3 last year, giving an adjusted EBITA of SEK 43.6 million, 19.9% is very strong. This division now up at 19.3% for the year to date. Like you mentioned, Sven, these investments in the manufacturing and logistics facilities are, among other reasons, why we are so strong here. Monitoring and control technology.
Sven Kristensson: Yes. During the quarter, orders increased with Americas the strongest region and positive performance across all business units. The highest sales quarter so far this year, and the order intake also grew versus last year's Q3. Auburn investment was positive, while NEO Monitors declined slightly due to lower order backlog in EMEA. We had the highest quarterly EBITA so far this year, and we continue to have good order intake in Americas. APAC secured the first direct semiconductor industry order, and that was very encouraging. We have spent a lot of resources, manpower, money to build up a service organization, finalize the test units both in Korea, Singapore, and in China, and we have now finally seen the first result. The first commercial order actually in Korea, but we also followed up this quarter, beginning of this quarter, with the second one going into China to the same customer.
Sven Kristensson: We are pleased to be able to announce that. When it comes to EMEA, orders received was lower than Q3 2025. There were some larger orders that was not repeated this year. If we go to key activities, we had a breakthrough order, as mentioned, in the semiconductor industry. We had a very strong start of the GT7000 Telos, with several orders received following the launch in late Q2. So again, new product that has been on the market that has been well received. Service has been strengthened with targeted activities aiming to the install base, the already existing install base. We are using our measurement and also adding the Olicem systems here. We continue to invest in digital solutions, product development, and upgraded service workshop. As mentioned in Singapore, it's actually also in Seoul, and we updated the one in Houston as well.
Matthew Cusick: Monitoring and control technology order intake increased approximately SEK 5 million. Currency neutral, that's exactly flat versus Q3 last year. Sales, as we mentioned, at sales and profitability, the highest quarter so far this year, 1.6% higher sales than 12 months ago. The adjusted EBITA was SEK 26 million, which is a 14% EBITA margin. It must be pointed out that this division is weighed a little bit down in the quarter with some costs of establishment in the APAC region, particularly in the setting up the Korean and Singaporean offices further. So 14% is definitely heading in the right direction, but we expect further improvements there, particularly with the order intake momentum that they've had in the past seven months or so.
Matthew Cusick: Very briefly, financial calendar, this information is available in the report, but the year-end report will be released on 12 February, where you'll get a chance to speak to us there. Interim report for Q1 is on 23 April, and the AGM is on 27 April. Following that, interim reports two and three, I'll let you put those dates in the diary yourselves. With that, Sven, I think we can open up for any questions that listeners may have for us.
Sven Kristensson: Absolutely.
Operator: If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from August Flinning from Handelsbanken. Please go ahead.
August Flyning: Good morning, Sven and Matthew, and thanks for taking my questions. Two questions from my side, please. Starting with orders, we are now seeing two consecutive quarters of improving order momentum with organic growth here reaching almost 12% in Q3. Could you talk a little bit about the underlying activity you are seeing and whether you see enough in the pipeline to sustain this momentum going into 2027?
Sven Kristensson: Well, if I understand right, we have seen that we have, and we have had for some time, a very strong pipeline, a long pipeline, where we get increased interest from our newly launched system products, et cetera. We hope that this momentum will continue. We see in number of assets, still a strong pipeline. We have an increased activity among customers and potential customers. But it is very difficult to say because every morning there is on, not Twitter, but something else, some new follies going on that can have a short-term impact. But we look long-term, we see we are taking market share. We see that with all of our quality digitalization, not only offering, but also the way we are using our digitalization to make it easier to do business with us is having a growing interest.
Sven Kristensson: We also see that our capability around the EPCs, mainly the engineering companies, with different tools, including, what is it called now? Yeah. The different tool makes Nederman a more interesting partner going forward. So I will not promise, but I sincerely hope and think that there will be a momentum also after this quarter.
Matthew Cusick: What the numbers guy here could also add is if you compare, August Flinning, if you are looking compared to 12 months ago and how we were feeling in terms of market momentum, it is definitely stronger now than then. You have understood we are rather confident about Q4, but there is definitely more market momentum. Whether that continues or not, we will see, but we are more confident than 12 months ago.
August Flyning: Right. Perfect. Thank you so much. On to service and aftermarket then, which continues to grow quite nicely here in the quarter, now accounting for around 23% of Nederman Group sales in Q3. I know you mentioned it a little bit before, Matthew Cusick, but how should we think about this number going forward and what are the key initiatives you are taking to drive that growth further? You mentioned building relationships, et cetera, but is there any other things to point to? Because the trend is clearly heading towards a positive direction here.
Matthew Cusick: If I answer the numbers and then Sven Kristensson can give more meat on the bones in terms of activities, the 23% is good and of course, we want to grow. Over a sustained period of time, we want to grow the aftermarket faster than the solutions business. This 23%, if we are a little bit self-critical, is because our solutions sales are not at the level we would like them to be right now. We expect and we think that we will be able to grow this over time faster than the rest of the business. It is clearly the most profitable part of the business. Then there are activities that is going on to back that up and make it happen, Sven Kristensson.
Sven Kristensson: Yep. We do not measure, the percentage units is not so interesting. We measure how much in dollars, euros, and kronas that we are growing.
Matthew Cusick: Yeah
Sven Kristensson: for each business because it can be skewed, as mentioned by Matthew, by low ordering taking in solution sales. Of course, the percentage of aftermarket is higher. We are continuing to work on retrofit kits, and that has been one of the suggested offerings that has been giving us growth. We are working with different, both products and systems to lower energy use. It is like Nederman SAVE, the monitoring capabilities here. That gives us a good confidence that we will continue. We are also adding manpower resources. One of the key elements being able to sell into the semiconductor industry as well as to the oil and gas and petrochemical industry in US, has been that we have invested heavily in manpower on site with capabilities to do it. We continue to do that, so I am confident that portion will continue to grow.
August Flyning: Perfect. Thank you very much.
Operator: The next question comes from Anna Lagerlof from DNB Carnegie. Please go ahead.
Anna Lagerlöf: Yes. Hi, good morning, Sven, and good morning, Matthew. My first question is on the product mix effect in Monitoring and Control Technology. Could you tell us a bit on how it looks in sales and particularly in orders? Even if the margins are down year-over-year, it is quite a solid sequential step up in profitability in Q3.
Matthew Cusick: Inside Monitoring and Control Technology, we are referring to there, Anna, is that right?
Anna Lagerlöf: Yeah, Monitoring and Control Technology, exactly.
Matthew Cusick: Yeah, what can we say about the mix there? That division has significantly more margin to deliver. They are at nearly 15% for this quarter. That is with less sales in the traditionally most profitable part of the business, which is in EMEA. Therefore, we are rather confident that with modest volume growth, we will get an even better margin. At the same time, they have grown their service business, which again, is the most profitable part of that business. Also, as Sven just mentioned in replying to Alga's question, this service business not only gives you good margins, but it gives you repeat orders and guarantees orders of the solutions or sales of instruments in the case of Monitoring and Control Technology.
Sven Kristensson: There is one, if we can say, very profitable, low cost to sell is the portable units coming from Gasmet. They have continuously been hurt of the cut in spending in official or public spending, especially in US, where customs, et cetera, and school, university has reduced their spending significantly here, and that has been a continuous story during the year. So that is part of that. Then we have had initial higher cost when it comes to get into the Asian market. As mentioned before, we have spent time, effort to get introduced into this market. Therefore, it is so encouraging that we got the first two sort of lighthouse orders that we are working with the leaders in this field. So I am positive that we will see a return here.
Sven Kristensson: But again, the market is volatile, political decisions impact more than it used to be doing a few years ago. Was that a fair enough answer to
Anna Lagerlöf: Yeah. So, if I understand you correctly, the portable unit in Gasmet, that remains a challenge, but you have seen some other positive benefits that are starting to have a positive impact on product mix.
Matthew Cusick: Exactly.
Sven Kristensson: Yeah.
Matthew Cusick: We have not seen a full return on the portables. We have some new potential routes for selling portables. For example, the military use is one that we think we will be able to drive up sales of portables further, but that is not materialized significantly yet and has not affected margin positively yet.
Sven Kristensson: The purchasing time is very long, but we see a significant interest. We have the capabilities.
Anna Lagerlöf: Perfect. So on the
Sven Kristensson: We also see a possibility on mercury measurement with new regulation giving us as being one of few, if not the only one, that can fulfill the technological requirement.
Anna Lagerlöf: Okay, perfect. And on the semiconductor related orders in Asia, how much is that showing already in this quarter, and what are you expecting going forward?
Sven Kristensson: Very little in this quarter. One order.
Matthew Cusick: Yeah. There is one order in this quarter. No impact on sales yet.
Sven Kristensson: Yeah.
Matthew Cusick: Let Sven answer how much we can expect.
Sven Kristensson: If we are successful, we can expect tens of millions in NOK per annum, if that is.
Anna Lagerlöf: Right
Sven Kristensson: Because we are technologically superior, and we have got the first, as I say, two lighthouse orders, and we have been accepted by the leader in there, and we are now exchanging Japanese older equipment. Yes, it can be very positive, but again, we should not say that everything is, in the end, deals are done. We see we already get the second one, so yes, I am very positive.
Anna Lagerlöf: Okay, perfect. On the order situation in Process Technology, how should we think about timing of deliveries here? Because it sounds like some larger orders are back. How should you think about deliveries into Q4 instead of having delivery time into 2027?
Matthew Cusick: The backlog, as you saw, is obviously better than it was 12 months ago, so Q4 ought to be stronger than Q4 last year. The orders, when we are booking orders, the biggest individual one came in the middle of the summer, which means the majority of the revenue for that will not be recognized in the fourth quarter. There will be some, but it will stretch into next year now.
Sven Kristensson: Six to nine months, normally.
Matthew Cusick: Yeah, exactly. That is the average time you need to look at. An average for that division is six to nine months for the backlog. You can look a little bit further back in time on order intake in that division if you are trying to forecast sales, than you can for Monitoring and Control Technology and Extraction and Filtration Technology, and definitely for Duct & Filter Technology, which is just, as you know, that is a very quick turnaround there.
Anna Lagerlöf: Perfect. So, just a final one from me, because you did mention a bit on Chinese competition in the report. Could you maybe elaborate a bit on what you are seeing here, and in what way and in which areas that has been a challenge?
Sven Kristensson: Not really outside China, but in China, where we are not having the strength of a very strong organization, we have. It varies from division to division there. We do have a very strong position in high end supply within MCT, where we are so technologically superior that there is no alternative basically for certain application. Here, we still have a good growth momentum. If we look to the other divisions, we have a strong position as number 2 when it comes to fiber and textile in Process Technology. We are by far number 1 in India. We are a good number 2 in China, and here we also try to build a position with some other and increase the local content into the Chinese operation.
Sven Kristensson: When it comes to EFT, in certain high tech application, for Western European companies, we do have a competitive edge because we are capable of delivering a good effect. But the interest in this more workspace improvement products are not at the same level as they are in Europe and US. For other applications, we are capable in a number of niches, but we do not have the strongest organization in China. We are contemplating our way strategically forward in that region. We are definitely looking at further growing our position in neighboring countries like in Australia, et cetera.
Anna Lagerlöf: Okay. Very clear. Thank you so much.
Operator: There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Sven Kristensson: Okay. Then we try to wrap up this. To conclude, I would say we are quite encouraged by the continued strong order activity during the quarter. Positive momentum we had in Q2 strengthened even further, and we saw a fairly strong demand across our divisions. Our strategic direction remains very clear. We continue to elevate Nederman by strengthening our positions in our traditional markets, while quite successfully expand into structural growth industries like defense, semiconductors, and some others, and food among that. At the same time, our growing service business and digital offering provide resilience, long-term customer value, and recurring revenues. With the order growth from recent quarters and a very solid order book, a strong pipeline, and the long-term need for cleaner, safer, and more efficient industrial productions, we do see good prospect for volumes and consequently profitability to increase as the year draws to a close.
Sven Kristensson: By that, I do thank you for taking the time, and I do thank you for your continued interest in clean air and in Nederman as a company. Thank you.
Operator: The host has ended this call. Goodbye.
