Addtech AB (publ.)

Thank you and most welcome everyone to Adtech's third quarter report presentation. As usual, we will spend approximately 15-20 minutes to summarize and give our comments on the results and then followed by a Q&A session. Let's start with some highlights from the quarter. Overall, the activity in the quarter remained high and we increased our sales by 11%, of which 3% were organic. We report a very satisfying EBITDA growth of 17% and increased our margins to 14.4%, comparable with 13.6% same quarter last year. Our cash flow remained on good levels and we kept the high pace of acquisitions in the quarter, now totaling 11 acquisitions during the fiscal year, adding a total of 1.4 billion SEC in sales. So in conclusion, a strong result in a quite demanding environment. A bit more on the sales. Despite calendar effects and the weaker sentiment in some customer segments, it's very satisfying to see that all of our five business areas contributing positively to the quarterly sales growth. As I said, 11% of which 3% organic with solid contributions from three of the business areas. So again, a quarter with good based sales on high level of activity, but with clear variations between segments and geographies. Our backlog remains well filled and we had a solid order intake during the quarter and also good start of this last quarter. The overarching customer segment trends are more or less unchanged. Energy sticks out this quarter, continues to be very strong, broad-based growth, where transmission and distribution remains the key driver. Companies exposed to building and installation, forestry and parts of special vehicles continue to meet the challenging market. I will come back to more details about the development within different business areas in a minute. Looking at the result development, as I said, EBITDA was up very satisfying 17%. A clear proof of our ability to get sales into the result and positive contributions across the line. But again, as you can see in the bottom graph, a very positive trend in energy, which is a combination on leverage on the organic and acquired growth, improved product mix and solid pricing power. EBITDA margin improved to 14.4% and a strong trend in increasing our profitable working capital continued and the cash flow remained strong. Some more in-depth of each of the business areas. Automation delivered a satisfying quarter with solid top-line growth, mainly due to the important OEM customer segments, such as medical, mechanical, and process industries stabilizing during the quarter. Sales growth towards defense industry also contributed in a good way. Demand was somewhat weaker than expected in the quarter as a total due to continued sluggish market situations, especially for our companies in Finland and partly also in Daesh. The margin in automation was a bit on the weaker side. This is due to the product mix combined with negative calendar effects. We also, as we mentioned in the second quarter, we have a bit too high costs in some companies due to expected growth that has not materialized yet. Move over to electrification, delivers a good third quarter, good earnings contribution, both organically and from acquisitions. The overall market situation within the business area was strong. Again, clear variations between different parts of the business. But key drivers in the quarter, medical technology and defense industry. Building installation remained weak, but this was partly offset by a slight uptick within data and telecom. Energy then, as you can see, continued on a positive note with yet a very strong and broad-based growth in the quarter. And the key segments, infrastructure products for electrical transmission and also niche products for power distribution remained very good. Also sales towards data centers continue to develop in a very good way. And wind power is picking up still and also traffic safety segment continued in a positive way. Building installation, another quarter where it's still a bit sluggish. All in all, very good momentum and energy, and we expect this to give us nice contribution also going into next financial year. Industrial Solution delivered another solid quarter with a good business situation on total level. Sales related to project deliveries towards the forest and sawmill industry remain good, while the demand for new projects continue to be on hold. The other important leg within industrial solutions, special vehicles, continued weak market, especially in construction machines. But we do see a tendency that parts of the OEM market here will pick up during 2025, which is also partly thanks to that some of our companies are winning new projects and taking market shares here. The niche segments, apart from the two I mentioned, waste management, subsea, continued strength during the quarter. Finally, process technology on total level, a stable quarter. Also here, variations between different parts of the business. So one thing we notice here is that there is a hesitation to launch major investments. We have talked about that a couple of quarters now. And we saw this quarter that this also affected some of our project companies in the period or in the quarter when it comes to the sales. Also in process technology, we have companies exposed to the aftermarket towards the forest industry. And here we saw also a weakening during the quarter. The segment's energy-special vehicle, again, a bit weaker, but marine showed continued strength, and also medical and process industry were stable. To sum up, we have a market situation that varies, but the strength of running a well-diversified portfolio that we always talk about is that is shown in this quarter. So when some are struggling, we have really good tailwinds in other parts. Bottom line, we continue to see high activity and when the sentiment and the will to invest returns that we foresee will happen when the interest rates are kicking in, our companies are in a good position to capture growth. A few words on the period. We can conclude all in all solid growth on all lines. Net sales up 7% accumulated, of which 2% organic. So very satisfying to see that we kept organic growth over the quarters with a slight uptick now in the Q3. And the key strength that I was already mentioned, which is valid also in the quarter, is that we managed to get the volumes down into the earnings. So EBITDA is up 14% in the period and a high margin of 14.9% to be compared with 14% margin same period last year. All in all, a successful year so far. Solid sales growth and good order intake in the quite challenging market and good leverage on the result and margins. So earnings per share for the period is up 13% to slightly above 5 SEC. With that said, over to you, Malin.

Thank you. And as Niklas commented, our profit margin in the quarter continued to improve. The improvement over time is broad based and is in general thanks to active work to increase the value add in our value proposition and make sure to charge for it. Strategically improve our product mix and not least good leverage from acquired companies. We can see that the trend line of total costs still has a good development and our overhead costs in relation to sales are stable. We take actions where needed if we see a long-term weakness in the market conditions, but we also invest where we see good potential for future growth, which is also very important. One foot on the brake and one on the gas. Gas, as always. Our long-term target profitable working capital reached 74% in the quarter, and cash flow was stable at high level during the quarter as well as during the period. We had a positive effect from working capital development, but it was relatively lower than last year's third quarter, mainly due to increase in accounts receivables and inventory levels. Inventory levels are always one of our most important focus areas, and we still see a decrease organically year on year, even though comps are quite tough for the time being. Inventories in relation to order backlog and sales are on satisfactory levels. Our financial position remained strong and as expected, our gearing decreased sequentially from the second quarter. As you know, the key figures do vary over the year, but are still at very reassuring levels. Our balance sheet is strong and gives us plenty of headroom to support our ambitions going forward. And with those short comments, I hand back to you, Niklas.

So acquisitions then, the high pace continued in the quarter and we strengthened our operations with three acquisitions followed by one more after closing. So we have started this year also, or this quarter already with acquisitions. In total for the fiscal year, that means... The 11 high performing companies, of which eight of them are outside Nordics, adds a total turnover of approximately 1.4 billion SEK with good profitability. And as I said, one more quarter remaining on the financial year. We have now already acquired slightly above our financial targets on acquired growth. Just a brief comments on the two most recent acquisitions, NanoSystek completed early November and KOL Motors in mid-January. So the German company NanoSystek has a leading position in its niche. which is developing and producing equipment for manufacture of optoelectronics and precision mechanics to customers, primarily in data communication and medical technology, where there is a demand of high degree of precision. And then Korn Motori, a very nice company in Italy. So the third Italian companies we acquired this year. This company is focused on the niche within electrical brake motors and brake modules with patents on the products for industrial application in European markets. And this also complements our offer within electrical drivelines in a very good way. In general, we still have a very positive view of the acquisition market. There are plenty of possibilities and our pipeline of attractive companies, both in Nordics and other selected markets, is well filled. And it's also very satisfying that we constantly continue to find and drink coffee, as we say, with new potential prospects. So we are also further filling our pipeline. So all in all, a strong financial position gives us a good possibility and ability to act. And we expect to continue to acquire in a good pace in accordance with our strategy. So to conclude, all in all, a strong report. Customer activity remains high. but with variations between segments. Solid top line growth in the quarter, and we get the volumes down to the result in a very satisfying way. Order intake was good during the period, and our backlog remains well filled. And our international footprint, which is really part of our strategy, continues to increase. Finally, forward looking, the macroeconomic situation remains uncertain and that will, of course, continue to impact the market sentiment for at least some of our companies. But given our backlog and strong positions in the attractive niches and the diversified business in general, gives us a positive short term outlook. And as we often emphasize, our business model entitles us to act quickly and adapt to change market conditions. So we are well prepared when the general market picks up. With that said, let's open up for questions.