Afry Ab

Good morning everyone and warm welcome to our presentation of AFRIS Q3 results. I will begin with some of the highlights from the quarter and then our CFO Bo Sandström will provide a more detailed overview of the financials. So in the third quarter, we delivered stable results and improved our EBITDA margin to 6.4%. We also saw positive development of the order backlog, which increased 3.6% compared to the same period last year, or 5.3% when adjusted for currency effects. We achieved this despite a decline in net sales, with a total year-over-year growth of minus 5.1%. Similar to what we saw in the second quarter, currency effect had a significant negative impact on sales. For Q3, it amounted to minus 118 million Swedish crowns. Sales volumes were also impacted by a challenging market we experienced in parts of our business, mainly in our global division industry. The third quarter was also the first within our new group structure and our three global divisions. Under the new group structure, we have intensified our efforts to improve utilization and to structurally address the cost base. As part of this, we have continued executing on the restructuring agenda that we initiated during the second quarter. And for the third quarter, we report restructuring costs of 31 million Swedish kronor related to this, and they are classified as item affecting comparability. So to summarize, I can conclude that we have been able to deliver stable results despite the decline in net sales, and we continue our efforts to pave the way for profitable growth. Moving on then to the market, and let's start with energy. We see a continued strong long-term demand across segments and on a global scale. Market activity is particularly high in areas such as transmission and distribution, hydro and nuclear. At the same time, we are seeing some short-term regional variations. This is evident in areas such as thermal, solar and wind power, where for example demand in the Nordics is currently somewhat slower. With that said, this kind of variations are expected over time for a growing and dynamic sector like the energy sector. For global division industry, the demand remains mixed. We see that persistent global uncertainty continues to impact the overall investment sentiment in several segments. For example, in the pulp and paper, where the demand for new large-scale projects remains at low level. The slowdown in the Nordic industrial market is also impacted in the automotive segment. At the same time, we see strong market opportunities in areas such as defense and also within mining and metals, which is encouraging to see. And finally, in transportation and places, public investments in transport infrastructure and water remains at good levels across the regions. The investments are driven by large-scale infrastructure programs and increasing focus on climate and defense-related projects. At the same time, we see that demand in the Nordic real estate market remains at low level and is mainly driven by refurbishments and public investments. So now let's dive a bit into our new global divisions and their performance in the quarter, starting with Enidu. We continue to see high project activity in several of our segments, which reflects the overall market that we experience in energy. We report negative total sales growth in the quarter, which is impacted by significant currency effects of minus 45 million SEC, as well as short-term regional variations in some segments. We keep profitability at a solid level of 9.8%, which is slightly lower than last year. Moving on to our global division industry, a challenging market reflects the net sales development in some of our segments. Despite this, profitability improved year over year, and this is due to the ongoing capacity adjustments and the improved utilization in the quarter. In the second quarter, we announced the acquisition of Reta Engineering, a Brazilian company specializing in project and construction management services, with a strong foothold in the mining and metal sectors. And in the third quarter, we completed the acquisition and the numbers are consolidated into the industry division as of September 1st. And finally, transportation and places. Here we saw some sales growth in the quarter, which was driven by high activity in projects, as well as improved attendance rates. Also on the EBITDA side, we continue to see positive development, driven by the continuous efficiency measures that we do in the division. I would also like to highlight some of our key project wins in this quarter. In the mining and metal segments, we were selected by the British mining company Anglo American to lead the pre-feasibility study for the Sakati mining project in Finland. The mine is planned as a highly automated underground operation with low carbon footprint. And once operational, the mine will supply critical minerals that are essential for Europe's green transition. And AFRI's strong expertise in sustainable engineering makes this a great fit. On the energy side, we have signed a strategic framework agreement with Svenska Kraftnät, Sweden's national grid operator. This is the second of two recently announced agreements and covers technical consultancy and design planning services within transmission and distribution, which will strengthen Sweden's energy system. Svenska Kraftnät is one of our key clients in the Swedish energy market, and we are pleased to strengthen our partnership with them through these agreements. In Denmark, we have won a contract in the road and rail segment, covering comprehensive advisory services in intelligent traffic systems, traffic management and emergency preparedness. With AFRI's extensive experience in traffic engineering, this project is a great opportunity to deliver innovative and effective solutions that improve road user safety and mobility. With these great projects, I would like to hand over to Juubo.

Thank you, Linda. I will cover the financials for Q3 2025. Quarter three showed net sales of 5.7 billion and EBITDA excluding IAC of 362 million. On rolling 12 months, we are now at 26.2 billion on net sales and remain right below 1.9 billion on EBITDA. On the rolling 12 months development compared to 12 months ago, we carry significant negative currency and calendar effects, explaining approximately 600 million on net sales and 240 million on EBITDA. In Q3, with the net sales of 5.7 billion, adjusted organic growth came in at negative 3.7%, where volume continued to be pressured by capacity adjustments during the last quarters. As previously, the decline in volume was partially compensated by positive pricing. For Q3, we continue to see higher average fees, although at a somewhat lower level than the last number of quarters. Total growth is reported at minus 5.1%, affected also by FX movement from a strengthened SEC compared to last year. The negative adjusted organic growth in Q3 was sequentially lower, and global divisions energy and industry both saw lower growth levels. In particular, industry experienced a challenging market and continued capacity adjustment pressure growth rates. In Q3, industry also saw lower sales of material than last year, affecting the quarterly growth. Transportation and places showed sequential improvement, mainly driven from the road and rail segment. The order backlog continued to develop favorably and is reported at 20.4 billion, improving to last year, but somewhat lower sequentially. Currency adjusted, the backlog has improved 5.3% to last year with improvements primarily from global division industry. The energy division maintained the largest order backlog in relation to net sales at a level in line with last year, but improving 3.7% adjusted currency effects. EBITDA excluding IEC is reported at 362 million and the EBITDA margin was at 6.4%. Calendar affects EBITDA with plus 15 million and the EBITDA margin with plus 0.2% to last year. So that calendar adjusted margin was marginally better than last year. Currency movements have marginal impact on the EBITDA margin, but on absolute terms, we estimate a negative currency impact of 13 million on EBITDA compared to last year. Global divisions industry and transportation and places support the calendar adjusted margin development of the group, while energy report the highest margin of the global divisions, but somewhat lower than last year in this quarter. We report a utilization of 72% for Q3, in line with the rolling 12-months level. Looking at the year-over-year development by quarter, we see that Q3 2025 is again behind last year, but with a decline at a lower rate than seen last two years. Utilization is the clear focus for AFRI, and we are determined to turn the negative trend. We report 31 million restructuring costs as items affecting comparability in the quarter. The restructuring costs again primarily relate to redundancies across the group. In the new group structure, we will continue to address our cost base as well as making portfolio optimization in quarters to come. And we reiterate our estimate of restructuring costs of 2 to 300 million in the quarters from Q3 2025 to Q2 2026. We have not guided on phasing, but given that the cost levels were slightly lower in Q3, it is fair to assume that they will, on average, be higher for the upcoming quarters. Cash flow from operating activities in Q3 was stronger than last year. Available liquidity remained at 3.8 billion. Net debt remained at 5.1 billion, where the positive operating cash flow compensated completion of the acquisition of Reta Engineering that was completed during the quarter. On net debt to EBITDA, we remained at 2.9 times. Normal seasonality would provide significant deleveraging in the last quarter of the year and take us to around or below our financial target of 2.5 times. With that, I leave back to you, Linda.

Thank you for that, Bo. So I would also like to say a few words on our next chapter and what we've achieved in the third quarter. So as I mentioned in the start of today's session, we launched the new group structure in the third quarter. We now operate through three global divisions representing 14 core segments, which all will drive global sales and delivery. This has been a key milestone, simplifying our operating model and paving the way for profitable growth. During the quarter, we also intensified our efforts to improve utilization and to structurally address our cost base. As a part of this, we continue to execute on our restructuring agenda, which remains on track and will proceed as planned through the second quarter of 2026. We have also reviewed our existing incentive structure and we took action to align and harmonize them. This will reduce complexity and sub-optimization and ultimately drive group performance. And finally, strategies for each global division and segment are now in place, which provides a strong foundation to deliver on our strategic ambitions going forward. And even if we are still in the initial stage of our strategy execution journey, it's encouraging to see the progress we are making. As we finalize our group strategy and have the organizational foundation in place, we are ready to fully move on to strategy execution. We will share more details about this at our upcoming Capital Markets Day. In parallel, we are progressing according to plan with the implementation of the fit for purpose operating model, while continuously working to address operational efficiency and our cost base. And as mentioned, we are looking forward to welcoming you to our Capital Markets Day on November 4th, where we will be presenting our new strategic direction and our plans ahead. I'm excited to meet many of you there and to good discussions and insights. And with that, let's open up for the Q&A session.