Summit Therapeutics Inc.

A warm welcome to Sandvik's presentation of the third quarter results 2025. My name is Louise Cheddar, Head of Investor Relations here at Sandvik and beside me I have our CEO Stefan Widing and CFO Cecilia Felton. We will do as we usually do. We will start with the presentation. Stefan and Cecilia will take you through the highlights of the quarter. And then we will move on to your questions. And with this, it's time to listen to the presentation. And over to you, Stefan.

Thank you, Louise. And also from my side, welcome to Sandvik's third quarter report in 2025. It's a quarter that's been characterized by a strong momentum and strong demand in several of our key segments. We see a strong demand in mining, in software solutions, Also, cutting tools are up by single digits, and the underlying demand in general engineering has been stable. We have seen strong growth also in aerospace and defense and, however, a weak picture in automotive. In infrastructure, the demand has been mixed, and I'll come back to that later in the presentation. Total order intake grew by 7% and organically we grew by 16%. Total revenues decreased by 4% but grew organically by 5%. We see resilient delivery on the margin considering the significant currency headwinds we have in the quarter. Adjusted EBITDA came in at 5.5 billion, which corresponds to a margin of 19%. And the rolling 12 months is now 19.3 versus 19.2, same period last year. We see continued effect from our restructuring programs with savings of 145 million in the quarter. Adjusted profit for the period amounted to 3.5 billion and we had a good free operating cash flow of 5.6 billion corresponding to a cash conversion of 105% in the quarter. We have launched several key innovations in the quarter. First of all is the Mastercam co-pilot. We launched about a year ago AI-based solutions in several of our softwares. And now we have also launched a co-pilot in our largest software suite, which is Mastercam, increasing productivity for our customers. We've also launched a new jaw plate range, which is actually very important. You might remember about a year ago, we had price pressure in the wear parts in rock processing because this is a very much a commoditized product with a lot of oversupply historically. And launching new products like this to differentiate our offering protects our margin and volumes in the aftermarket business. So this was an important launch. And then AutoMine surface drilling training simulator, yet another module in our AutoMine suite, helping our customers to more easily adopt our new surface drilling solutions. Going into the market and the segments, if I start with a geographical perspective first, we are up 6% in Europe. Cutting tools in Europe is down low single digits. North America, we are up 18%. Here, cutting tools are up double digits. Important to note, of course, that we have a bigger price element than normal in North America because of tariff surcharges. But even without that, good underlying demand in North America. Asia up 18%. Here China was strong with double digit growth as well on the cutting tool side. Also here we have a price dynamic which is a bit unusual, driven by the high tungsten prices. This has already come through also in price increases and therefore higher top line than normal. But also here, even without that price effect, a very solid demand picture. And then we have the mining markets, which all are up, of course, given the strong momentum we see in mining. If we then take this by market segment, of course, mining very strong, continues with strong momentum. We'll come more into that when we go through the businesses. General engineering, I would say a positive in that this has turned from being a negative to now underlying stable. From a PV point of view, it's actually up high single digits. Europe is stable. North America is up high single digits and China is up double digits. And the reason you see a difference between sort of the underlying and the PV numbers, of course, partly relate to what I mentioned around tariff surcharges and price in China. Infrastructure, a bit of a mixed picture. Overall, it's stable at low levels. We did see an uptick in North America, especially in demolition and recycling, where we see some stock filling orders from our dealers, which is a positive sign again now in infrastructure. Automotive is weak overall, I would say. Down low single digits overall. Europe is down low single. North America is down mid single, while China has been stronger, up high single digits. Aerospace is strong across the board with double digit growth in all regions. The other segment here is a bit mixed. We see very good demand in some smaller strategic segments like defense, medical and consumer electronics. The other parts of this is more related to general engineering. So here we see overall a mid single digit growth, Europe up low single and North America and China up in the low double digits. So overall, I would say a decent momentum if we exclude automotive. This converged into an order intake of 30.8 billion, revenues of 29.2 and a book to bill of 105. And of course, noteworthy that it's the third quarter in the row where we have a positive book to bill and thus building order backlog. If we look at it from this perspective with organic and structure, we can see the order momentum in the past quarter has been growing and the revenue momentum is also improving, but lagging the order intake. So I would say we have not yet in this quarter seen the positive effect of the very high order intake we've had in mining in particular in the past three quarters. But of course, something we expect to start enjoying shortly. Then coming to EBITDA, margin again of 19%, 5.5 billion, down 5.6% versus the same period last year. We have good leverage on the volume increases in several of the businesses, also very good price execution, but this is then of course offset negatively by currency. The currency impact came in at minus 837 million, so slightly worse than what we're guided for, and a dilution of 130 basis points. And also, as I mentioned, the rolling 12-month EBITDA margin is now 19.3%. Diving a little bit deeper into the various businesses, starting with mining. As already mentioned, continuous very strong momentum across the board. Equipment growth up 75%. We should be honest here and say it's of course partly due to that we have had a couple of weak Q3s in the past years. Now the momentum just continued and then gave a very strong growth. Also, the service business parts and services grew double digits again, and also digital mining continued with strong momentum and grew double digits. Total order intake then increased by 13% and organically by 24%. If we exclude the major orders we had in the quarter of 1.6 billion, the organic order intake would have increased by 16%. So this shows, I think, good momentum both in the major orders, but also excluding them in the smaller replacement and expansion orders, also very healthy. Adjusted EBITDA, 3.1 billion, corresponding to a margin of 20.1%. Good leverage here on the volume increase, but then negatively offset by 150 basis points due to exchange rates. We also had an impact from the ERP goal we talked about in Q2 of around 30 bps also in this quarter. When it comes to tariffs, we expect them to be fully offset by our surcharges. We also expect a little bit of impact from this ERP go live in Q4. We can come back to that and go through the bridges. Going down into rock processing, also here they saw solid growth in mining. We talked about the infrastructure with a positive acceleration of dealer activity in the US in demolition and recycling as sort of a highlight. So total order intake was flat, but the organic growth was 9%. And excluding major orders, we had some larger orders in Q3 last year. The organic order intake grew by 14%. Adjusted EBITDA of almost 400 million, corresponding to a margin of 15.1%. Very strong organic leverage driven by savings and also the fact that we had some negative pricing in the same period last year related to these wear parts. So a good offset of even also the currency impact of 130 basis points. And also here tariffs for offset. in the quarter. Coming then into machining and intelligent manufacturing, as already mentioned, a bit more of a mixed demand picture with strong growth in aerospace and smaller strategic segments. Underlying demand in general engineering was stable, which we regard as a positive and then a weaker automotive. The organic order intake for cutting tools increased by high single digits year on year, and that's of course partly driven by the lower comps that we had in Q3. Sequentially, this represents a stable development from the second quarter. We also saw strong development in powder with low double digit growth in the quarter on the order side and as already mentioned also double digit growth from the software in intelligent manufacturing. This means that the total order intake grew by 1%, of which organic was 8%. If you look now at the start of the month in October, we continue to see a stable development. Maybe something to say about the development within Q3 here for context. As you know, Q3 is a bit of a tricky quarter with two holiday months and then a long and important September. I would say September came through in a good way for us, meaning it met expectations and delivered solidly in regard to what we expected. That was a good testament that we are now more waiting for things to turn around again, which is good. Adjusted EBITDA 2.2 billion corresponding to a margin of 19.2%. Good price execution, strong savings here in total 116 millions and also here tariffs fully offset but then a negative exchange rate impact of 60 basis points. Here we also had some additional currency effects, which is sitting in the organic column, which Cecilia will explain a bit more in her part of the presentation. And with that, I'll hand over to you to continue the presentation.

Great. Thank you, Stefan. All right. So as usual, let's start with the growth bridge on the right hand side here. And as Stefan mentioned, we had very strong organic order intake up 16% and revenues grew by 5%. Structure was neutral on both orders and revenue, but we still saw significant currency headwinds on both orders and revenues, minus 9 and minus 8% respectively. So all in all, this meant that orders grew by 7% while revenues declined by 4%. Earnings at 5.5 billion, as Stefan mentioned, which corresponds to a resilient margin of 19%. Net financial items came down year over year, and I'll show you a detailed bridge of that in a few minutes. Tax rate excluding items affecting comparability and also on a normalized basis was 25%, so just within our guided range. Networking capital in relative terms continued to gradually come down. On a 12-month rolling basis, we're now at 29.3%, almost a percentage point lower than last year. Free operating cash flow strong in the quarter 5.6 billion corresponding to a cash conversion of 105%. Returns improved year over year while adjusted EPS decline due to currency. If we then continue with the EBITDA bridge and start with the organic column, here you can see that we had a good leverage at group level, 34%, which gave an accretion of 0.7 percentage points. And as Stefan mentioned, though, when you look at the leverage for machining and intelligent manufacturing, it's lower than usual. And one contributing factor to this is that, as Stefan mentioned, we have a currency impact here in the organic column. And the currency impact comes from internal flows in and out of our distribution centers. And these were not hedged. And a few months back, we had a very sudden and sharp strengthening of the SEC, which has then resulted in this currency impact. And the reason why we treat these type of currency impacts as organic is because we want our divisions to work with mitigating these impacts as part of running their business. Now we are looking into improving our processes and hedging these flows. So unless we see another sudden change in currency rates, this is a one-off item. We do, however, expect partland impact also in the fourth quarter from this. If we then take the next column here, currency, you can see that also this quarter we had a significant currency impact on top line, similar to what we saw in the second quarter this year. And we also expect continued currency headwinds on the top line for a couple of more quarters. On EBITDA, we had a negative impact of 837 million, which gave a dilution of 1.3 percentage points. Structure then was slightly accretive, 0.1 percentage points. And all in all then, that brings us from a margin of 19.4% last year to 19% this year. If we then continue down the P&L, looking at the finance net, you can see, as I mentioned, that it's down year over year. This is driven by the lower interest net you can see on the first row here. It's almost half of what it was a year ago. And this is due to a combination of both lower borrowed volumes, but also, as you can see here at the bottom, lower yield cost. The reported tax rate for the quarter was 25.8%. But then, as I mentioned, excluding items affecting comparability and also on a normalized basis, it was 25%. So just within our guided range. Year to date, though, we are at 24.1%. Yeah, if you look at the graph here on the left, you can see that networking capital in relative terms is gradually coming down. We're almost one percentage point lower than last year. And on the right, you can see that it's the business areas, mining and rock processing driving this improvement. We had a strong cash flow in the quarter, 5.6 billion. If you look in the graph at the black trend line, you can see that cash conversion is at 94% on a 12-month rolling basis. When we look at the year-over-year development, EBITDA adjusted for non-cash was slightly higher than last year. CAPEX was a bit lower, but last year we had a significant positive impact from networking capital. And if you look at the bars on the left, you can see that we had some timing impact between the second and the third quarter last year. But this year then a strong cash flow and a cash conversion of 105%. Financial net debt came down sequentially to 33 billion, driven by the good cash flow. And in relation to 12 months rolling EBITDA, we're now at 1.2. And capitalized leases increased slightly sequentially. Pension liability came down, which resulted in a net debt of 41 billion. Looking then at outcome versus guidance, currency minus 837, as we mentioned before. And then looking at a year-to-date basis, CapEx is at 2.8 billion, interest net at 0.6. And as I mentioned, normalized tax rate at 24.1, so in the middle of the guided range. Looking ahead then at the fourth quarter and full year. So for Q4, we expect a continued negative currency impact on EBITDA, minus one billion, based on the currency rates at the end of September. And for the other items, CapEx, interest net and the tax rate, we have left guidance unchanged for the year. And with that, I will hand back over to you, Stefan.