Alimak Group AB (publ)

Welcome to the Alamak Group Q3 2025 report presentation. For the first part of the conference call, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound 5 on their telephone keypad. Now I will hand the conference over to the speakers, CEO Ol' Christian Jodahl and CFO Sylvan Gronch. Please go ahead.

Thank you and welcome to this quarter three 2025 call. And as always, as you know, I have with me Sylvain here. Turning page and making a short group recap, as we always do, we are a leading provider of sustainable vertical access and working at Height Solutions. Some fundamental drivers for our success is that we are supported by global trends like urbanization, safety regulations, more increased electrification, automation, etc. We do have a leading market position in the niches where we focus around the globe. It also means we have a global footprint and with a large history. It's a significant installed base that you find out there, which is something that we, through our global service organizations, also then take care of. So that's a fundamental piece of the group, the service and the aftermarket. And we do have a strong balance sheet and a strong cash conversion. But how do we all make it happen? Yes, if we turn page, it's about the New Heights program that we have had in place now for five years, which continue to serve us well. And also, you know, we will have CMD, Capital Market Day, on November 25th here in Stockholm, where we will talk more about New Heights 2.0 and our journey up to 2030. So I look forward to seeing you there. Turning page, we also have our financial and sustainability targets, as you do know very well. And these are targets we are 100% committed to delivering on. And we are, I would say. Turning page and diving then into the quarter. The markets continue to be challenging, but at the same time, it's also very pleasing to see that our new height strategy that I was alluding to, and we have had ongoing now for five years, is continuing to serve us very well. And we show resilience in this challenging market. Order intake was up 4% organically. in the quarter and it's actually four out of five divisions showing organic growth on order intake. Revenue was up 1% organically. But it's really the challenging construction market that continues to influence the group. uh and we also see very low level of investments for capex in new hoists in europe and north america and that's affecting our celebrity factory as we have also talked about before and also the summer months was now very slow for the hsps division and that's also driven by the construction market that they are partially exposed to Then we also had this new administration's focus on, or negative focus if you like, on the wind energy, which has caused an impact on developments there over a short while. We saw it in Q2, we also see it now in Q3, might be a little bit in Q4, but it's also something that is temporary and that will go away and we see a good base going forward from 26 and onwards. The strength in SEC is continuing to impact our conversion of results. And that together with the weak construction division margin took us then to a beta, adjusted the beta margin of 17.3% in the quarter, which still is a good margin. And it's only three times that we have been higher than this. So we are still on our profitable growth journey. We have a solid financial position. Cash flow was 196 million SEK and the leverage was 179. Turning page, some more details on the group quarter. Order intake was 1,547,000,000 SEK, down 3% reported, but 4% up organic. We had positive contributions from the industrial and construction division, but also HSPS and Wind had a small organic growth in the quarter, and the decrease came from façade excess. Year-to-date, organic order intake is up 8%. Revenue was 1,658,000,000 SEK, minus 5%, or 1% up organic. And we saw strong performance from industrial and facade access. In the year to date, organic revenue is up than 2%. EBITDA adjusted at 287 million SEK down from the 310, giving this margin at 17.3 versus a strong one at 17.8 last year. It's a 7% decline year over year, of which 6% is due to the strengthened SEC. We are a very global company. I think it's around 2% of our turnover, which is then in SEC, else it's all foreign currency. And the weak construction margin was partially offset then by improved margins in industrial and facade excess in the quarter. And year to date, organic adjusted EBITDA is up 5%. Turning page, service. Fundamental piece, as you all know, of the group, something we drive in all divisions. And in the quarter, organic order intake was up 6% organically. and reported 599 million sec versus 605, down 1%, and is driven by industrial and HSPS in the quarter. Revenue increased 7%, 14% organic, to 663 million sec, up from 621, and strong performance then in facade excess, HSPS and industrial. Year-to-date, order intake organic is up 5%, and revenue is up 10%. And as we all know, it creates resilience, creates opportunities, gives us this opportunity to be very close to our customers, learn our market, and a fundamental growth driver for the group. Turning page and diving into divisions. So we start off, as usual, with facade excess. Order intake was 379 million SEC, down 16%, or minus 9% at constant rates. And it's basically reflecting the irregularity of the business between months and quarters. Year to date, we are up 13% and the pipe continues to look good. So it's nothing really in this than other than it's the timing and this irregularity of the business. We saw several replacement orders in the Netherlands in the quarter, major BMU order or project one in the Middle East. and we continue to have also positive momentum in north america but driven then by our new initiatives you know integrated design services low complex solutions and also infrastructure and here on top we won which we have been focusing more on now nuclear and we want a very nice contract there something we we strongly believe we can do much more of Revenue was 491 million SEC, up 2% or 11% at constant rates. And we see double digits organic growth in North America and Asia Pacific. EBITDA at 64 million SEC, up from 55, giving a margin of 13 versus 11.5. So again, very happy to see we continue to drive margin improvements in this business, which is what we have set out to do. And it's due to these things that we have been talking about for a long time, project pricing, planning, execution, but also negatively affected still then by the legacy projects that now are in final stages. But also a currency effect is of course affecting this division. The low factory load we have on BMUs, building maintenance units, has been compensated and it's a good move that we did last year to drive the closure of the assembly site in Mamendorf. One thing I should note maybe, or you should note, is that Q4 last year was a very high comparable, and it will also be a tough comparable. So you shouldn't expect that we should be on that level, but you should expect that we continue our journey. Turning page. um yeah you know we do more restructuring as we announced the last quarter so we do use some capacity further in our cox community factory in in spain and also in our luxembourg operations and the two-thirds of the cost related to this restructuring was taken now in q3 and the the 30 million cost saving that is expected out from this is due to happen from beginning of 26. We continue also to drive diversified revenue streams and this is for this division as it is for basically all I would say if it wouldn't have been for the new heights and really what we are driving to find profitable growth in all parts of the business. It would have been a very different situation. So here, you know, with our joint initiatives with Skyline Robotics, first of all, we have won some nice IDS contracts related to that together with them. But we also jointly, of course, go to events, promote, and we have strong beliefs in this going forward. And also infrastructure. We have one during the year two, very nice bridge projects that we are now implementing. We learn a lot. We manage them very well. And this is also something we see as a very bright future for this business. Plus, I also want to highlight that the building maintenance unit market, the pipe looks very, very strong. But these are not, you know, projects that are in the in the face of being signed yet. But we are projects which is, you know, ready to be signed. We see in the market. So when market improves, that will also be a very welcome back market for us, of course. Turning page to construction and here we continue to face a tough market. But again, also here our actions over the last years, which has been focused on driving growth, diversification of the portfolio and cost is really what makes this still a good business and a decent quarter. So order intake was 361 million SEK, up 3% and 11% in constant rates, supported by mass climbing work platforms, nice orders in the UAE, reflecting also our, as I said, commercial efforts in this region. So when some parts of the world is low, we work very intense on other parts where we have opportunities. Material transport platforms also, you know, smaller, lighter machinery. We see nice orders, things that were not really in focus before, both in Denmark, Korea. And all of this is helping offset the very weak demand that we now have seen for a while, but it's also continuing for new hoists in North America and Europe. Because, you know, the interest in investing in capex is really not there when the market is low. And this is, of course, affecting our load in the Shell FTO factory. And that's why the main effect on the result. Revenue was 333 million SEK, down 22% or 16% down, constant rates. And they are driven by the lower order intake in the previous quarter. EBITDA at 44 million SEC versus the 74 last year. Margin of 13.3 versus 17.4. And as I said, driven by these weaker hoist sales and the effect on the Skellefteå factory, basically. And this lower order intake now also, because relative terms, it's a relatively low level for us. We'll also, of course, something that will come into Q4. We are taking more actions to protect the result. Of course, to ensure our costs are variable, but we also don't want to destroy this market that will come back, and we know that we are in a very strong position when that will turn. Turning page, we have launched a new product in the quarter, the Levato 450 out of our China factory, meant for non-CE markets, so the emerging markets. And this China factory and the assortment we have there continue to develop very well with our sales then in Asia Pacific, the Middle East, Latin America, Eastern Europe. And yeah, good strategic and important piece for us in the construction division. uh also very nice project we've gone down in in greece it's a new hard rock casino thing where you know we work together with our partner down there and the customer on finding the optimal logistical solutions and and we will you know the machine are sold to this project but we will support throughout the project also so more close entanglement with customers Turning page, height safety productivity solutions, also somewhat a challenging quarter with the soft summer. Order intake was 305 million sec, down 2%, but up 3% of constant rates. And it's the European market that was very soft during July and August, but also then partially compensated by a positive trend again in September, and good momentum also in emerging markets. And here we accelerate our investments in product development, sales, marketing to increase and really drive the fundamental profitable growth. Revenue was 310 million SEK, down 7%, down 2% at constant rates and impacted by the lower order intake in the previous quarter and summer. EBITDA at 57 million SEK, down from 64, giving a margin of 18.5 versus 19.2. And again, impacted by the lower revenue. Turning page focus here is to drive profitable growth. So and you will also hear much more about this in the capital market day. But of course, you know, prioritizing, focusing. So it's about different segments and specific solutions into these segments. And yeah, like the elevator segment, wastewater management, electric grid, energy. We are investing in more sales resources. You know, we see that it's potential for us in the Middle East, Australia and Brazil more, you know, most in the near future. So we are investing in sales resources here. And we also work, of course, closer now. We're also with the regulatory authorities to ensure that, you know, there are regulations in place to to take care of health and safety perspectives and and also improve market opportunities for us. A couple of nice projects, you know, energy sector in Spain. We adopt and specially make, you know, a TIRAC for a customer solution, but also a railway project in Italy where we use our ladders to provide access down in railway shafts. Turning page. we also you know very happily to announce that now just around you know before we came here we have signed an agreement with the swedish company interlift to be acquired we are expecting to close it by the end of november revenue around 50 million sec and this is within hsps then so it's a distributor of of hsps here in the in the swedish and the partly nordic market so and we don't fully have our own setup here so that will be a good strength and a new thing for us but also that we try this thing of vertical integration which will give us again more you know market presence more opportunities more products closer to customers driving more service after markets etc So it's a nice move and very excited about the continuation of this one. Turning page and industrial. Here we see the same story as we have seen for a long, long time since basically we launched New Heights and we gave full attention to this business. It's been growing. And here we continue to deliver strong profitable growth. Order intake was 356 million SEK, up 4% or 10% organic. Supported by refurbishment business, which we have also now been putting extra focus on. And also still ports, power, heavy industries continue to contribute positively. Revenue was 376 million SEK, up 6% or 9% organic. And yeah, it's, you know, due to strong order intake over a long time, but also, of course, a small effect now also from the century acquisition. I think in the quarter it came in to the last part, it's around 11 million SEK that is affecting revenue. And then aftermarket continue also to contribute positively, EBITDA. 92 million SEK up from 81, margin of 24.5 versus the 23 last year. And happy to see that we continue to make solid margin improvements at these type of levels. Turning page, we closed in the quarter then the acquisition of Century Elevators, this party in the US. And it's running well for us. We have a new building there. We are driving the short-term cost synergies. It's well on its way. The team have come together in a good way. And also the opportunity for order intake and everything is... is developing well and looks strong. So we are very confident about the future of this business and that we have made a good move on getting this into the group. Then also, as I mentioned, the refurbishment last quarter, I talked about the Mini 400 development that we had done, and we have now also captured quite a lot of orders for this. So it's a short term, a nice success for a product development. Turning page into wind, order intake was 157 million SEC, down 2% or up 3% in constant rates. Orders in US remained slow, but we now see signs of trend reversal. And yeah, I'm coming back to a little bit of market in the next page. Continued strong momentum in Asia-Pacific and also offshore market in Northern Europe now starts to improve. Revenue was 160 million SEC, down 11% or down 6% in constant rates. and is impacted by the software order intake in Q2. Good performance in China and it's also then continuing to reinforce its strategic importance into the wind industry and it's very strategic for the Chinese and I'm very happy to say also that we are very strong in China and with these Chinese OEMs. EBITDA at 30 million SEC, down from 35, giving a margin of 18.6 versus the 19.4. Gross margin impacted some by negative geographical mix and a little bit by the lower revenue. But our strong business model, cost control, supported another, you know, it's a great profit level for this type of business and in this market. Turning page, so market, you know, China, as I said, continue to invest, continue to see this as a very important strategic piece, you know, wind energy. not only in China but also outside China and we are in a strong position with them and expanding with them not only not at least India for the time being North America they're the market due to the US administration you know have we saw it in Q2 we talked about it then that it's slowing down you know the investments, you know, or signing of new projects because it's so much uncertainty. But now that uncertainty is more clear, you know, so we know that projects that have been started off before 4th of July next summer will be carried out, you know. So it's a high push now on new things and signing up new projects. So it looks good for us in the next two, three years, absolutely, in North America also. And Europe, offshore wind parks are again being signed up. So it's also here we start to see market moving. But we will have an effect, I think, still into the Q4 with what we have seen a little bit lower order intake in Q3. Product highlights, we focus on training because this number of turbines that are coming out of warranty in the next coming years that will be fully available for us and our service business, it's increasing rapidly. So training of the market is very, very important for us and will be a significant growth contributor forward. But then also, of course, the new products within safety, the PPE and the fall protection safety stuff or products, etc. So with that, I am at profit and loss. And then I leave the floor to Sylvain.

Thank you, Ole. Good morning. So as you indicated, Ole, our adjusted EBITDA decreased by 7% in the quarter, 2% organically. Most of the difference is due to the adverse development of the French exchange rates, the strengthened SEC. But there was in the quarter a small positive impact from the earnings of century. So we see that the organic quarterly adjusted EBITDA performance is slightly worse than revenue in the quarter. And that's due to a small downtick in the gross margin. I will come to that on the next slide. But it's worth mentioning that on a year-to-date basis, adjusted EBITDA grows more than revenue. Organically, year-to-date adjusted EBITDA grew by 5% for the first three quarters of the year versus 2% on the revenue. Below EBITDA, individual PNN lines are basically in line with our expectations, with what I've been indicating over the last few quarters. We think we are where we should be. To make it short, items affecting comparability relate to the restructuring costs in the Facade Access Division, which we announced in July this year. Quarterly amortization is consistent with the first two quarters this year, and it's coming down versus Q3 2024 due to some Tractel-related intangible assets, which are now fully amortized. Finance net is down due to lower interest rates, and I've been saying we should be at around an average of 40 million SEC this year, and this is what you see for the first three quarters. Regarding taxation, in the quarter the taxation rate was 24.9%. This is higher than Q3 2024. due to the country mix. But that's close to what we have been seeing for this year, around 25%. So the bottom line has decreased by 22 million SEC in the quarter. That's a 14% decrease. And the main driver is items affecting comparability. If one excludes ISE and the related tax effect, the net earnings go by 4%. Next page, please. And we come to the two EBITDA drivers, which are gross margin and operating expenses. Gross margin was down in the quarter, but that's primarily due to ISE. ISE have an impact on both gross margin and SG&A this quarter. Beyond ISE, we still see a small decrease, which is due to primarily construction and wind divisions. And in both divisions, we saw the impact of the lower revenue. And to a lesser extent in wind, we had a negative geographical mix, which had a negative impact on the margin. But Facade Access and HSPAs kept their gross margin at a high level, and Industriol managed to grow its margin, to expand its margin in the quarter. i'd like to repeat here what we have been saying for some few quarters is that the tariff have had no impact on our margin we have managed those tariffs in a way that we had no negative impact on the margins operating expenses as a percentage of revenue were slightly up in the quarter but again excluding isc that's the reversed they came down And we have been able to keep SG&A stable or to decrease them in all divisions, but industrial, despite cost inflation, despite labor. So that means we have been able to make some Some cost reductions where we could, but at the same time, we have continued to invest in product development, R&D, sales forces, and that's even more true for industrial, which is the only division with higher SG&E as a percentage of revenue in the quarter. due to an expanded sales organization primarily. So we will continue to work on our cost base to basically generate room for maneuver and be able to invest in R&D and sales. Next, please. Result for the period was 133 million SEC versus 155 in Q3 2024. That's a 14% reduction, as I said earlier. Excluding ISE, the result for the period was 163 million SEC versus 157, that's a 4% increase. And EPS has seen the same evolution because we kept the same number of shares. So it was in the quarter 1.25 SEC versus 1.46 in Q3 2024, that's a 14% decrease. Adjusted for ISE and the acquisition-related amortization, EPS was 1.78 sex versus 1.79. That's a 1% decrease. Next, please. We continue to put a high level of focus and efforts on cash flows and to try to keep cash flows on a high level, which has been the case if you look at the 12 months relief cash flow, as you can see on the right hand graph. In the quarter, they came down slightly due to lower earnings and phasing of tax payments, but we did manage to slightly reduce working capital in the quarter. Looking at the year-to-date performance, we saw an increase in the working capital that's mainly due to inventories, in particular in the construction division. And that comes from, you know, to increase stocks in some location in order to seize opportunities, commercial opportunities with very short lead time. At the same time, we were slightly caught by the lower revenue. So we see that we can reduce inventory in the next couple of quarters and that we will be working on that. So overall, reasonably good quarter, but with some potential to do a bit better on working capital. Next, please. The net debt is 2.6 billion SEC at the end of the quarter. It's the same level as the end of Q2. And this stability derives from the positive operating cash flows compensated by primarily the century acquisition price, which was paid in the quarter. The leverage is at 179 and this is in line with our target of being below 2.5, very slightly up versus end of Q2 2025, we were at 1.74. Our capital allocation priorities remain unchanged. We will continue to invest in organic growth. I mentioned R&D, sales, that is actually happening in order to fuel our profitable growth journey. We have announced two acquisitions. We closed Centuri, we signed Interlift. We have a growing funnel and we are very active and I'm hoping we get some new acquisitions agreed in the coming months and quarters. We are committed to delivering our dividend policy, which is 40% to 60% of our earnings. And one last word on ROSI, which is an important matrix for us. It is slightly coming down in the quarter due to the lower EBIT. It's decreasing to 26%, excluding goodwill, and 10.6% including goodwill, to be compared with 26.8% and 11% respectively in Q2 2025. And on that, I will hand over again to Ole for the conclusion.