Operator: calling in and want to ask a question, please press star nine to raise your hand and star six to unmute your line when you have been handed the word. With that said, I will hand it over to you, Andreas and Charlotta. Please go ahead.
Andreas Stenbäck: Thank you very much, and thank you everyone for listening in today. Let's get into today's presentation. Volati, we delivered continued growth and improved underlying earnings for Q3. Sales grew by 12%, and that is driven by the three acquisitions that has been performed in 2026, adding a total of SEK 575 million in annual sales. Reported EBITDA came in at SEK 58 million, which is below last year. However, more importantly, underlying EBITDA grew 15% to SEK 87 million. I usually do not highlight EBITDA before items affecting comparability, but I think that is justified this quarter. The reason is that we have quite significant items affecting comparability. They are all M&A related, and the larger part are related to synergy-related restructuring costs in Ettiketto, and I will get into these shortly.
Andreas Stenbäck: However, before doing that, on a platform level, we have a good performance in the growth-focused platforms, Ettiketto, Corroventa, and Communication. We see in Ettiketto and Corroventa a significant growth, both in sales and EBITDA, and that is both by acquisitions that we have done to these two platforms, but also an organic growth profile. In Communication, we show the stable organic growth in both sales and EBITDA. S:t Eriks and Tornum, they both declined in sales, but the focus that we have had on profitability is now slowly starting to show, and we can see that by we have slowed down the negative profit trend from previous quarters. Cash conversion remains strong and was strong in the quarter, and it is now amounting to 93% on a rolling 12-month basis. Then I promised a few words about the synergy-related restructuring costs in Ettiketto.
Andreas Stenbäck: To start with, in Ettiketto, we have industry-leading margins, and the margins of its add-ons acquisitions are then lower than the overall margins, which means that we get a dilution effect. We create value by improving the margins in the companies that we acquire, and we do that by synergies, operational improvements, and what we call the Ettiketto Way of Working. That means Ettiketto's proven working methods. One way of creating synergies and improve operational efficiency is by co-locating existing production platforms and existing production units. We have had two such examples this quarter. The first one is NicEtikett. It is a Swedish company which we acquired in the beginning of this quarter, which has now been moved into our existing production units in Sweden.
Andreas Stenbäck: Secondly, that is a larger part of the restructuring costs, are in Germany, where we got one additional production unit in the beginning of this year, that was through the acquisition of Interket. That is now co-located with the already existing production unit that we have in Germany through the acquisition of Clever, which was done last year. These type of measures, of course, increases operational efficiency. They save cost, that is one way for us of improving the margins. In this case, we will start to see effects from this measure in the beginning of 2027. In addition, we have items affecting comparability for Q3 related to transaction costs of SEK 8 million.
Andreas Stenbäck: All in all, we have quite significant items affecting the comparability in this quarter, but what is very important is that these are part of our, in order for us to be able to make the acquisitions, and then even more importantly, the value-creating process of integrating acquired companies. With that, I leave the word to Charlotta.
Charlotta Nyberg: Thank you, Andreas. As we talk about the EBITDA development in the quarter, as we mentioned in Q2, we are of course not happy with this negative trend that we are seeing. But when we unpack the EBITDA in this quarter, the reported EBITDA was SEK 58 million, and EBITDA before items affecting comparability, SEK 87 million. As Andreas said, that is a strength and underlying EBITDA margin. To dive into the platforms, we see that in Ettiketto, the EBITDA increased to SEK 64 million. As expected, and as very clear with Interket, we see that the margin decreased, because that is a reflection of the lower margins in the Interket Group. Communication, the EBITDA increased with 6%, and the margins are in line with last year's. In Corroventa, we see an increase with 68% in the EBITDA, and the margins are up about 3 percentage points.
Charlotta Nyberg: That is mainly supported by Tramex's higher profitability that we see in this quarter. For S:t Eriks Group, we see that despite lower net sales, it maintains its EBITDA margin for the quarter at the same level as in the quarter of previous year. EBITDA in Tornum decreased, but we see that the impact of the lower sales were counteracted by the cost efficiency and operational improvement that has been done. We also continue to see a strong cash flow in the quarter. The cash conversion remains strong, amounting to 93% of a rolling 12-month basis. With a seasonally strong cash flow towards the end of the year, we expect leverage to decrease over the coming quarters. We are satisfied with the pace of acquisition, but we will, of course, continue to balance acquisition activity against our leverage.
Charlotta Nyberg: Following this year's acquisition, the net debt to adjusted EBITDA is now at a 3.1x ratio, and that is slightly above our target range. It is important to remember that the consistent cash conversion across all the platforms is what has allowed us to maintain our acquisition pace. Well, the growth in EBITA per ordinary share is -31%. As I said, we now see that the underlying growth in EBITDA is improving in the quarter. We have a ROE of 13% that is very closely tied to the EBITDA growth, and we see that when that changes, we will also see the improvement in the ROE. As we said, the net debt to adjusted EBITDA is 3.1x, and this we see as okay and a deliberate result of our M&A strategy.
Charlotta Nyberg: It is important to note that our approach to capital allocation remains unchanged, focus on disciplined acquisition and securing strong cash flows. Good. Andreas, over to you.
Andreas Stenbäck: Okay. We are going to talk a bit about the individual platforms, and we will start with Ettiketto. As we mentioned already, Ettiketto Group reported a strong Q3, increasing net sales by more than 50%. Growth was primarily driven by the completed acquisitions, but we also see a strong underlying organic growth. That was mainly driven in Sweden, where we see a strong demand. EBITDA increased to SEK 64 million, and that is a growth of 22%, so it is a solid growth. However, as expected, margins are still seeing a dilution effect from the completed acquisitions. As already commented on, we see a significant potential to gradually improve the margins by systematically realizing synergies and strengthening the operational efficiency through the Ettiketto Way of Working. We expect to get that effect going forward. Turning to Communication.
Andreas Stenbäck: Communication continued to perform steadily, and has done also for many quarters, delivering a good Q3. Despite the continued growth that we see, we see a cautious and somewhat hesitant telecom market. We have had that for quite some time. We are compensating that with sales to other areas within what we call critical infrastructure, and that are areas such as surveillance, defense, electrification. The EBITDA margin was in line with last year, so very much in line what we expected. We do see Communication now being a platform well-positioned for also acquisition-driven growth. Then I believe we have, yes, Corroventa. Corroventa increased its sales by 44%, and much of that, of course, is driven by the acquisition of Tramex that we completed in the beginning of Q3.
Andreas Stenbäck: However, we do also see organic growth in Corroventa, and that is mainly driven actually by Tramex, which has developed quite well since the acquisition. The EBITDA margin also improved compared to the same quarter last year, with almost 3 percentage points, and that is mainly because Tramex is showing a strength within the overall margin profile. I think one important aspect of the Tramex acquisition is that it reduces the weather dependency in this platform. Corroventa, we still experience a very dry weather. We haven't had any flooding effects in Corroventa. That mainly explains the growth profile that we've seen in Q3 in Corroventa. But with adding Tramex, which is much less weather-dependent, we still see an organic growth, which is very positive for us.
Andreas Stenbäck: We also have a new CEO now in place since the beginning of actually this week, Christian Engvall, which has joined that platform. We'll get over to S:t Eriks. S:t Eriks net sales amounted to SEK 219 million, and that's a decrease of 9% compared to the same period last year. The decline reflects the deliberate shift away from less profitable product segments, but it's also an effect of that we have a weak, we're acting in a weak part of the construction market. As I said before, S:t Eriks is late cyclical when it comes to the construction market, so we're still seeing a weak market there.
Andreas Stenbäck: As also in previous quarter, we're seeing a stable development in the infrastructure segment, and that benefits from a stronger civil engineering market, while actually the water and wastewater segment in this quarter has been a bit weaker, and that's mainly because of the lack of major projects. Despite lower net sales, S:t Eriks Group maintained the EBITDA margin for the quarter at the same level as last year, and that shows that the cost adjustments that we've done are now showing effect. We took some restructuring costs in Q2, and we now see the effects of this, starting to see the effects of this. Also, it shows the effects of that we've now increased the production rates again in S:t Eriks, and they are now more in line with the existing demands.
Andreas Stenbäck: The last quarters, we have released significant cash flows from S:t Eriks through lower production rates, which have dampened the earnings but created good cash flows. Now we're back on track with regards to balancing cash flow and earnings. Key priorities for 2026 are still on focusing on profitability, focusing on improving earnings, and that is done by continuing to doing the structural changes within what we call the infrastructure, but the construction segment, improve the production mix, and very much focusing on capturing the volumes that are out there on the market. Tornum Group, net sales decreased 17% compared to the same quarter previous year. That decline is mainly attributable to the Lantmännen project, which we have not been able to fully offset with new volumes.
Andreas Stenbäck: We are now completely done with regards to invoicing or revenue recognition in Lantmännen, and we meet in quarters where we had quite much of that last year. The business continues to face challenging market condition characterized by lower grain and pulp prices. We have high fertilizer and diesel prices, so that are dampening the willingness to invest. I would rather say that the investment need remains, but we see a delay, and we see that delay also in terms in both short term, in short term. The key priorities that we have right now is really to deliver on the order book that we have, but also to capture new volumes. It is very much of a sales focus, and then it is to continue working with the execution and operational efficiency measures that we already initiated. That was that about the platforms.
Andreas Stenbäck: Now, going to spend a few words on acquisitions. As already mentioned, we have done three add-on acquisitions in 2026, and they are adding an annual sales of SEK 575 million. We have done two in Ettiketto and one in Corroventa. That is an acquisition pace that I am satisfied with. That will help us drive growth in line with our financial target. We are focusing on add-on acquisitions, and as you can see on this slide, we have done add-on acquisitions now to all of our platforms, Corroventa being the last one, which actually are done now and have an acquisition this quarter. We are currently focusing on Ettiketto, Communication, and Corroventa with regards to add-on, while S:t Eriks and Tornum Group are more focused on profitability measures. We have a good pipeline. I am happy with that.
Andreas Stenbäck: What we are now doing is that we are balancing that pipeline with the leverage and the net debt ratio that we have seen. We used to do that. We have done that now the last couple of years, and I think we have been able to show that we are successful in keeping the acquisition rate going. To summarize, net sales driven by Ettiketto, Corroventa, and Communication, and by where we see both, where we see a good organic growth, and we also see that we have effects from the acquisitions that we have done to Ettiketto and Corroventa. EBITDA reported, we see a decline, but we have the items affecting comparability, and if you adjust for that, we have a 15% growth in the underlying earnings.
Andreas Stenbäck: We still see lower earnings in S:t Eriks and Tornum Group, where we are focusing on improvement initiatives, and I would say that we are starting to see effects from this already in this quarter. As Charlotta mentioned, it is extremely important for us to have the operational cash flow. That is what enables us to continue making acquisitions and invest in that. These are still on a good level, so 93% cash conversion the last 12 months. I think with that, we leave for any potential questions from the audience.
Operator: Thank you for that presentation. We will now open up for our Q&A session. As stated before, you are welcome to submit questions using the form located to the right of the webcast. If you are calling in and want to ask a question, please press star 9 to raise your hand and star 6 to unmute your line when you have been handed the word. The first question, reported EBITDA declined by 23% despite revenue growth of 12%. What were the main drivers behind the decline?
Andreas Stenbäck: Yeah, I think that is a valid question. As we highlighted, the main reason for that is the items affecting comparability, which are all M&A-related and value creation-related, and which will also enable cost savings going forward. If you adjust for those, we are actually strengthening the margins, the underlying margins in this quarter. I think adjusting for those, the profile is that we are growing net sales with 12% and EBITDA with 15%, which means that we see a margin improvement.
Operator: Thank you for that answer. Moving on, both Tornum and S:t Eriks Group continue to face weak demand. Are you seeing any early signs of a market recovery heading into 2027?
Andreas Stenbäck: I think we are not expecting the end markets to drastically shift with regards to neither of those two platforms. What we are acting upon right now is to make sure that we are profitable enough in the market that we are experiencing right now. Then, talking about the long-term outlook, we believe that the investment need is there both in S:t Eriks' end markets and in Tornum's end markets, but we are not expecting any dramatic short-term shifts with regards to the external circumstances.
Operator: Yes. Moving on. Net debt to adjusted EBITDA reached 3.1x, which is above your target range. How does this affect your acquisition strategy going forward?
Andreas Stenbäck: It is an extremely valid question, that as well. I think I have said, actually, it is probably now the last two years or so, when we have been in the very upper range of our financial goal. We should be between 2 and 3 times, and we have been now in the upper range, close to 3. I have also said that we might end up in a situation where individual quarters actually exceed that financial target slightly. What is important for us is that when we exceed that, it is because of that we have deliberately taken the decisions to act on acquisitions opportunities that we have. I think, I am fully confident that we have the operational cash flow. That is where we want it to be. Then we have done two acquisitions in this quarter, both Tramex and NicEtikett. That brings us up to 3.1.
Andreas Stenbäck: Now we have a seasonally strong Q4 in front of us, which I am confident will take the leverage down, and that will create room for acquisitions again. But again, it is very similar to what we have been acting. We have been having these kind of circumstances now for the last two years or so.
Operator: Thank you. Finally, about Ettiketto's EBITDA margin that declined from 18% to 14%. When do you expect acquisition synergies to have a meaningful impact on margins?
Andreas Stenbäck: No, it is hard for us to predict. Actually, if you draw any longer line on that, we were up in excess of 20%, which is the margins that the core of Ettiketto's actually operate under. Then we have had now three acquisitions. Two of them are quite significant, which have diluted the overall margins. We still have kind of one quarter, I would say, Q4, where we will see the effect of Interket rolling into the numbers. Then to meet that, we have the synergies and the operational efficiency measures that we are working with. I think I spent some time today to talk about the measures that we have taken in Germany, as an example. From those measures, we will start seeing effect in the beginning of 2027. So that is an example of where we will see effects which will improve the margins.
Andreas Stenbäck: We are taking these kind of actions all the time, and the margin trend will turn once we see the effects of that.
Operator: Yes, that was the final question for today, so we will now conclude today's conference call. I would like to extend my sincere thanks to Andreas and Charlotta for the presentation, as well as to everyone who submitted questions and joined today's webcast. I wish you all a pleasant day.
Andreas Stenbäck: Thank you very much.
