Alcadon Group AB (publ)

Good morning and welcome to Alcadon Group's presentation of the third quarter 2026. My name is Fredrik Valentin, I am the CEO of Alcadon Group and with me I have Adam Jonsson who is our CFO. We thought we should start directly and talk a little bit about how we have Done in the third quarter, but just first a quick recap of Alcadon Group. We are an owner of well-working and well-established companies within the niche of digitalization of society. We have a vision to be the best eternal owner for businesses that share our joint mission of enabling digitalization for a better world. We consist of seven independent subsidiaries in seven European markets. We have a Turnover of approximately 1.5 billion Swedish with a slightly improving EBITDA of 100 million Swedish crowns. So that's close to or just above 7% EBITDA margin. We were founded in 1988 and stocklisted in 2016. Going directly into the third quarter of 2026, we are fairly satisfied with the quarter. Yet again, we continue to report EBITDA earnings increase. So we have now done six consecutive quarters of increasing earnings since we restarted our business or our operations in 2025. The really good news that we feel is a milestone is that all our subsidiaries are now contributing to our profitability. We use a metric called profit over working capital, and we record the highest profit of working capital ever in Alcanon Group's history of 38%, which we feel is a good measure of how efficient we can be with our working capital, which is for a distributor like us, mainly the inventory. We are gradually improving our EBITDA margin, and we are also fairly proud of having a net debt ratio stable at 2.3 times. We've had that now for three quarters in a row, which then gives us room for further acquisitions. And acquisitions is something that we will continue to look at, and we have also increased our efforts in this area during the quarter. We have intensified our lead generation and have quite many interesting dialogues ongoing. We also see very interesting business opportunities in all our market segments. We have previously seen a downturn in broadband, which we were quite dependent of when we started this journey. That dependency has now reduced significantly at the same time as we see data centers booming. So we need to be careful to make sure that we are not too dependent of any segment going forward. So we have a strong ambition to broaden our business, and this is why acquisitions will continue to be an important part of our strategy. If we should zoom a little bit more into the details of the third quarter, I thought I should hand over to Adam.

Yes, so a little bit about the financial numbers for the third quarter and starting from the top we see again a quarter-over-quarter growth and this quarter actually year-on-year growth as well so as Fredrik mentioned we see a strong underlying market demand in all our markets and especially in the data center segment which also means that we had during the quarter several High volume projects mainly in that data center projects and those high volume projects are putting some pressure on our gross margins but that's all an active choice from our side and especially our companies within the green zone within our focus model which we'll talk a little bit more later on but Our companies in the green zone are encouraged to go after growth and balance that with the woodworking capital. So we see a little bit of pressure on the gross margins but with that growth we're still satisfied and Combined with we believe a good cost control which also decreased our cost of sales now below 18% and resulting in an adjusted EBITDA of 27 million SEK for the quarter. That's a growth of 17% from previous years so we're rather satisfied with that improvement and also improving the EBITDA margin slightly up to 7.1%. Looking a bit at the working capital and balance sheet we are able to decrease our working capital looking compared to last year despite having a higher volume so a really good job done by all subsidiaries working with the working capital components and even though the inventory is going up during the quarter we continue to see a A rather challenging macro climate on the inventory and the supply chain, both getting access to material and also price increases and lead times. So it has been a deliberate choice to increase our inventory levels slightly in order to deliver to our customers on those high demands. We see high demand in our markets and we have to balance that with keeping inventory Inge Dahl, Adam Jonsson, André Radley Grundahl, Piet den Ouden And as Fredrik mentioned, we record a record high of 38%, which is up six percentage points from last year and two percentage points from last quarter. So step by step, we're improving that and monitoring that on all our subsidiaries. Just slightly commenting also on the rolling 12. We've had a few quarters now where we had decreasing both sales and EBITDA on rolling 12 compared to 12 months prior to that. We now see that we're pretty much on par with the previous 12 months. So we can see that that trend is now slightly shifting. And as we said, we see in the quarter to quarter, we increase our profits and our growth. Also we have our four financial targets we thought to comment on a little bit. We have a profitability metric, as we said, which is measured as profit over working capital. We aim to have that above 50%. We want to increase our profit with 10% annually and we want to strive towards a profit margin of 10% while keeping a net debt ratio below 3. So at the end of Q3 we recorded 8% on our profitability. That is still some way to go to 50%, but we have a trend pointing upwards and although every percentage point from here on will be harder and harder, we continue that trend and we will continue to work on that. Our profit growth looking the rolling 12 so annually 12 months we actually see slight decline as we mentioned on the last slide but looking quarter isolated from previous year we actually recorded then a 17% increase so We believe that we're now kind of see a shift in that trend and looking forward we're aiming towards the 10% increase. The profit margin were three percentage points from our target and this It's very challenging to increase and will take hard work, but that's also where our acquisition agenda comes in play. We need to acquire companies with better KPIs and add that to the group in order to improve our profit margin on group level. And as mentioned, we have a net debt at 2.3, so well below our target of 3 and leaves us room for further acquisitions. And going a bit into each market as stated we see on a group level looking at all our subsidiaries it is a continued complex market climate there is high demand we see high investment rates in all our markets and especially Data Center, as mentioned previously. However, the price increases, we started to see that coming in play now in Q3 and the start of Q4. So far, we haven't seen any major changes in the investment rate from our customers, but that's still to We will be seeing in the coming months how that will play out. And also the supply chain and the inventory build up in order to have that balance between being able to deliver to our customers without tying up too much capital into our inventory. And going into each market we see Sweden in growth in all business areas. Q3 historically is weaker quarter with July being vacation period. We still see a year over year Really strong performance and growth. So for Sweden, looking forward in increase on finding new business opportunities and continue on the path ahead. Similar in Ireland on wood communication, really solid quarter with high growth. The businesses in wood communication is project driven and working towards a lot of data centers. That means that the volatility in revenue and margins can be rather high, but always with a big emphasis on the working capital and profitable working capital each year. In each business. So focus here again finding new growth businesses for good communication. Norway is recording a really good quarter. We had a year of transforming the organization and our outreach to being more focused on the data center. In Norway we see enormous investment in data center. So we see the effect of that in Q3 coming from relatively small numbers but still we see the financial effect on the work we've done on restructuring the resources and going after those new business opportunities. At the same time there is a rather low investment rate in constructions so we have to balance as Fredrik said before we cannot be too dependent on any segment so continue to work on on broadening offering and diversifying our businesses in Norway. Network Center Group in the UK and Netherlands. We've seen a rapid downturn in the broadband segment during the year. We're now continuing to shift our focus towards data center, especially in new cloud and AI. A lot of it is built in the UK, but also decisions made in the UK in other parts of Europe, which we can capitalize on. So we see a lot of interesting dialogues in the Network Center Group. In that shift from broadband to data center, we put a lot of emphasis on profitability and both increasing gross margins, but also operational efficiency and working with our working capital. In Belgium we continue to expand beyond broadband and take inspiration from our other companies in order to find new businesses diversifying the revenue streams. We've had a very efficient working capital and lean organization after the leadership change in Belgium and we're very well set up for what we now see the broadband picking up again. and the rollout. So trying to capitalize on that again with its challenge to get materials and supplying our customers, but we're doing all we can and balancing the inventory levels in Belgium. In Denmark, the new organization continues to deliver improvement. We see again quarter over quarter sales growth and improving margins and moving up in the profitable working capital scale. So well done to Denmark. We continue to step by step improving. And our newcomer A Antennas acquired 1st of June. So Q3 was the first full quarter for A Antennas in the Alkadon Group. contributing to all our financial targets and we're setting up for growth in both new and existing markets for A&S.

Very good. Thank you very much, Adam. As we write in the Q3 report, we see a quite strong growth in sales in this quarter, and it is partly due to larger projects that we are winning in data center segments across the different entities. And we have been talking a lot about volume or maybe even not too much about volume, say more talk about profit. So I just thought we should go through our focus model, the tool we use to guide our companies. Historically we have been quite volume focused and of course there could be a question around are we falling back into volume focus and the answer is then yes and no because we use the focus model shown on this page To a little bit guide our companies when it comes to when to do what. So those interesting and large data center projects we are winning, they are primarily won by companies in the green zone. And there we encourage companies to take larger projects, potentially even at lower margins, because they are so efficient with their capital. That could be projects that go straight directly to the customer from the supplier where we have a kickback margin. So we try to do two things at the same time. Companies in the green zone, we strongly encourage them to go out and win new deals, protect the margins, but potentially, if needed, also have the freedom to go down a little bit in gross margins to win deals that strengthen the bottom line profit. Whilst we are quite strict towards companies in the red zone that their volume is not prioritized, there it is margins, there it is profitability, inventory turnover, making sure that we use our capital in an efficient way. So I feel that we have done a quite large mental change in the Alcadon Group's subsidiaries during the past one and a half to two years. to focus a lot more on profitability, bottom line results, EBITDA margin and the gross margins, as well as costs in order to create a returning profit for each of the entities. So we have got the question a few times before, where do you have your companies? So we thought we should actually go through that without detailing who is who. But when we look back to mid 2025, which is where we are more or less on rock bottom in profit of working capital, this is how it looked then. We had three companies that were quite deep into the red zone, and we defined red zone as profit of working capital below 25%, meaning a capital efficiency of four times that you will André Radley Grundahl, But a year ago we had only one company in the green zone and we had three in the yellow zone fairly close to green but still in yellow. And the journey that has happened since then We now have three companies in the green zone and quite well into the green. The movement is continuing towards the right on those green companies, which is very satisfying to see. We have two companies in the yellow zone. One just crossed the line to enter yellow on 25%. And we only have two companies in the red zone and they are now much closer to the border to yellow, which is a transition zone. So we look forward to seeing these two continuing to develop to the right and make sure that we do not have any companies in the red zone as we progress forward. So a very strong journey and a strong emphasis on profitable working capital in all the companies which we are quite proud of. If we should look at priorities going forward, one is, of course, the most important one is, of course, to continue to support our customers. We see that the market demand is a lot higher than the availability on products. There is still almost a fight for products as AI and data centers are taking up so much of fiber production capacity, but also steel and different materials going into these enormous investments. So making sure that we can continue to help our customers complete their projects is of course our priority number one. But we need to do that with continued strict working capital discipline. And that's why we use the focus model to let companies that are in the green zone grow and those in the red zone focus on profitability. We also use our two supporting targets here, which is inventory turnover. We want to make sure that we can roll over the entire inventory five times per year. And we have implemented what we call the red basket, which is all products that are older than 12 months in the inventory. We have said that that can be maximum 10% of the total inventory. And that's a good way to free up working capital and create cash by continuously selling out products that are not rotating or lying still. We have a strong ambition to get all subsidiaries out of the red zone, as I said, and we will continue to ramp up our acquisition agenda. We will continue to broaden our engagement in the digitalization of society and balance exposure so that we can find new business opportunities that are not directly linked to the different business we do today. And we have a vision to continue delivering these step-by-step financial improvements towards our long-term targets that Adam presented. So we have done a few good steps in that journey. We will try to continue those and try to be as predictable as possible in our EBITDA creation. If we then should sum up before we go to some questions. So summarizing the third quarter of 2026, it's a six consecutive quarter of EBITDA improvements and countings. We look forward to continue to be predictable. We have all our subsidiaries now positively contributing, so no one is losing money, to speak clear language. We recorded a new record in profit of working capital. We slowly improve our EBITDA margin. We have a stable net depth. There are lots of interesting business opportunities in all our current market segments as well as in new ones. Acquisition ramp up, continue to create dialogues and talk to interesting companies with the goal to acquire one to two companies per year going forward. And we would like to send a big thank you to all our engaged and committed leaders and employees in all our subsidiaries that have done a fantastic job during this year.