Alligo AB (publ)

Good day and thank you for standing by. Welcome to the Aligo interim report third quarter 2025 conference call and webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star, one, one on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw a question, please press star, one, and one again. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link anytime during the live event. Please be advised that this conference has been recorded. I would now like to hand the conference over to our speaker today, Glenn Johansen Olenvik. Please go ahead, sir.

Thank you, Nadia. Welcome to Aligo Q3 Report 2025. Presenters today, as since Quite a while back is our CFO, Irene Wittson-Volmbelander, and myself, Kling Ullambik, CEO. It's always, it feels, a very busy day when we report, so we will keep it swift as always. We focus on highlights and will not go through too many details that everybody can read on their own. So this is Aligo, a quick, quick flyover. 9.5 billion sector turnover approximately. Sweden is the biggest country by far. and even bigger if you consider the earnings. It's actually two or three shops less compared to last time. We have co-located a couple of more stores, but the biggest uptick with some 26 stores from the beginning of the year was the acquisition of Batterilager. So as of today, 239 shops. This is a busy slide, but it's to illustrate something we're quite happy with that we can We can run an integrated, fully Nordic business and at the same time see investment opportunities in adjacent or in actually the product assortment that we actually have in integrated businesses. But for different reasons, it doesn't really make sense to integrate them. So we have our 13 very nice product media companies. We have our six welding companies. And we have Vatterilagret, as you know, a nice acquisition we made. And then we have some other businesses. So those together amount to 20% of our sales. But 80% of our turnover is, of course, in the integrated businesses with the two main brands, Swedol and TOOLS. And we are a true Nordic organization, as we will see on the next slide. So this is our organization with three sales organizations, one per country, Sweden, Norway, and Finland. And then we have the Nordic functions supporting those sales organizations. This is, according to us, the most efficient way to run our business. And what is new, since we've shown this picture earlier to you, is in the top left corner, Nordic operations, where we have said that in our type of structure, in our type of business, this is many times The Nordic operations are included in the Swedish operation, but to make this a true equal support to all countries, we have put the Nordic operations in a specific box, and I mean Nordic sales supporting operations. Like the segments, industrial and construction, those two segments are placed under Nordic operations. Retail, shop development, marketing, real estate, and some other functions. So now all countries equally can have the same support and we can run much better through Nordic sales organization. And having done that, we have also recruited a new company manager for Sweden in Daniel B. who will join at the year end around. Acquisitions, three completed acquisitions, one big and two small ones. This year, 29 stores were added. Battery luggage is obvious, but also two acquisitions within the product media area. And they amount to around 300 million in annual sales. And we've got some 98 new employees into the group. Some highlights, Q3. Market situation, as we have written in the report, is very much the same. We've said that quite a while. And I see all reporting companies say more or less the same thing. It's the same market conditions. There are some hesitance, some cautiousness from the customers. But it's very much the same. About every day, every week, every month, every quarter we put behind us takes us one step closer to hopefully a better market climate. We have done, we think, whatever is possible. We have been pushing for sale for quite some time. That we have communicated many, many times. And it has not slowed down in any way. We have done the cost reductions very early on. through this downturn. I think you can all agree that we were quite early on identifying the downturn and taking actions. And the highlight, if you can say that, about cost savings, it's a terrible activity, but it was the first quarter of this year with a plan that, as you know, which we have delivered on to the decimal. We have been able to focus on acquisitions while downscaling costs. We are working very hard with reducing inventory levels, and that is a tricky thing that we are struggling with. We see good performance, or better performance, I should say, but there's much more to be done. We need to reduce the number of own brands, and we need to look over the partnership we have with our suppliers, and not having, even if we reduced, you know, by many, many thousands of suppliers, we need to do much more, and we think we are able to do that going forward. price adjustments we after this high inflation period there are some product areas where we could be perceived as expensive or more expensive and that we are addressing and we are around halfway through that delivery capacity is good best being the last or the last central warehouse we built it's back on track mainly some minor adjustments left but It has a good delivery capacity. And microeconomic factors is very much the same, but luckily at least we can benefit from better exchange rates between tech and the dollar. That's some positive things with all these disasters. Then a slide with six boxes where we tick at least five of them. Revenue we grew thanks to acquisitions. Organically, we are still in minus, a little bit less minus, but we're still in minus. We improved the cash flow. The adjusted EBITDA is up. The margin went up from 6.4 to 7.2. We are super happy about that. And the gross margin, as you know, and we have communicated many, many times, we have been focusing on cost and contribution gross margin. And we continue to have that in mind. Because as you know, the gross margin that you arrive at in a slow market is many times the gross margin you are stuck with when things turn back. So the whole trick is for us to get volume growth with this high gross margin. Then we will have a super nice future. So highlights from the Q3. Continued extremely high sales focus. We are running our growth initiatives. We are working very much with sales efficiency, what targets to put on different sales roles we have, and adapting the pricing system and the pricing levels. We do that constantly. We know how to do it. It takes some time, and it's necessary for us going forward. Acquisitions, I've said we don't need to repeat that, but we have a good pipeline when we feel it's time to hit the throttle again. Operations. We are very much focusing on tools Finland and we will not stop that focus. We have even more focused on getting the gross margins up in Finland. It's normally the Finnish organizations wherever I've been has a decent cost structure but we need to improve our gross margins of Finland and we and the management team in Finland are extremely focused on that. Assortment management. We are a reasonably new organism, and of course, when we establish assortments and things happen, you fine-tune that a bit. We need to arrive at a position where we say, this is now our assortment, and we can do a more structured way of developing assortments. Capital efficiency, we have said we were 24, and we are up at 28, and we should come down to 24, so that's a target we will come back to. Turnaround Finland, as I said, gross margin is a super focus. The team is very dedicated. We are learning from each other within the group. Norway did in the Q3 some really good initiatives bringing the gross margins up. It's a hard work. It's intellectually no challenge, but it's super difficult to really make it happen in the everyday life. We are all trying to help our Finnish colleagues to do the right thing in turning the gross margin up in Finland. The financial targets are super clear. There's no changes there. The organic growth being 5%, as we've said, and we have always said that we have hoped to add another 5% in a normal environment with acquisitions. Our debt ratio is down at 3.1, and we don't see any reason why we shouldn't be around last year's level at the year end, because Q3 is our weakest quarter from a cash flow perspective, and Q4 is our best. The EBITDA margin, we will start from where we are today, and we were close in 2023 before the market started turning sour. But it's still there as a target, clearer than ever. And the dividend, of course, we are in line with what we have set. And also the sustainability targets, they are all developing in the right direction, meeting the supply standards. Customer satisfaction index, we're actually above our target in all countries. Sick absence is at a targeted level. CO2 levels, we have a good plan in order and we are executing on it. And female in management positions are slowly, very terrifying, slow development, but at least in the right direction. So an update on our portfolio. We say we go for growth and we have very clear targets and they are, of course, Nordic. And services are a very important area for us because they are part of our assortment, which our competitors have. And then we need to differentiate in other ways than price and how to do that. Then you add services and we think we are pretty good at that. So the laundry service is developing nicely. You need first to win the contract and then you need to exchange the garments. So it takes a time before it ramps up. But from a process perspective, everything is in place and it will continue to have this nice development. To develop our shops is also a very important thing. I think we have a great part of the organization in the group. We have a good way of running our shop sales and it needs to be developed a little bit more. We have a very focused initiative for the construction industry. We think we are well positioned, we have the right brands, and we have a strong position in Sweden, but we also need to develop that in Norway and Finland. And then all brands, and I think we can skip to the next page directly. So then we have our Björklädde, probably the oldest workwear brand in the Nordics, and Uniburn being the real premium from a price position. And then if you take the mid-range, From a quality perspective, it's actually premium, both Gesto and Ampro, but priced a little bit more attractively. For you who has been around for quite some time, you remember when we launched Gesto in 2014, that was our affordable line in those days. But it has developed. It has become almost perhaps a little bit too good. But it's priced in the mid-range. And the same thing with Ampro, super quality product. in tools, but priced as very attractive at price level. And then the affordable, the 1832, we launched to meet competition with lower priced products. And since it's us putting our names under it, it's affordable in price, but in quality, very, very good. And then we're pro well in tools just to meet competition. shop assortments from low price competitors so our dear customers don't feel that they need to go somewhere else to buy that. So I think we have a very good set of own brands, potentially two wide assortments. We are focusing on scaling it down in a number of articles, but we'd like to increase the sales of own brands a lot. Market position. It's an analysis we do every year around these times when annual reports have come out. And as it looks, it's a very mathematically advanced model behind it. From a Nordic perspective, we are keeping our market chance potentially a little bit up in Sweden, flat in Norway, a little bit up in Finland. But if you look at profitability and market share development, we come out okay, to say the least. Especially from a profitability level, we are on a very good level. Financials.

Thank you. As Clay mentioned, of the six quarters, we now have a quarter with improved profitability across all countries. despite the continued wheat market. Revenue increased by 2.1% in the quarter, driven by a 6.3% growth from acquisitions, but contracted by a negative organic growth of 2.7% and adverse FX effects. The organic sales growth was weakest in Sweden, but it was significantly impacted by large project orders to the decent industry last year, and also the loss of Norfolk volumes this year. Adjusted for this, the group's organic growth was flat. Sales within the manufacturing sector in Finland recovered, although from low levels, and Norway continued to benefit from a strong oil and gas sector in the quarter. EBITDA reached 158 million, representing an improvement of 21 million, or 15%. And this increase was driven by improved results across all countries, following stronger gross margins in Sweden and in Norway, cost reductions, and contributions from acquired businesses. The enhanced gross margins are due to positive customer mix effects, better sales and assortment management, as Jane mentioned, and to some extent reduced purchase costs in US dollars. The impact from stronger margins, cost reductions and contributions from acquired businesses is illustrated in the APJ bridge. And we have 100 million cost saving program implemented in Q1 has further reduced the cost base in Q3 And as you can see in the chart, the cost reductions have offset the annual salary increases and inflation effects on other expenses. Sweden has the highest share of SMEs and own brands, followed by Norway, while Finland has the lowest. And this directly correlates with profitability in each market. The higher the shares, the greater the profitability. And the market downturn has primarily affected small and mid-sized customers. However, the decline related to SMEs is now less significant, and their share has increased from 68% to 73% in the integrated Swedish business. Additionally, the share of own brands in Sweden has increased from 26% to 30%. as sales of our own brands primarily derives from the store channel. And as you can see in the graph, there is also a slight positive development in the share of SMEs and own brands in Norway and Finland. Moving on to some highlights of each market's development. Starting with Sweden, the Swedish market remained weak with organic growth declining by about 6%. However, if adjusted for the large project orders to the decent industry, the growth was slightly positive. The improvement in EBITDA is due to better gross margin resulting from more favorable customer mix as well as cost savings and contribution from acquisition. Moving on to Norway, the oil and gas market in Norway has remained strong. but the growth in this segment was lower compared to the first half of 2025. EBITDA was slightly better than last year, driven by cost reduction and a higher gross margin resulting from positive customer mix effects, but also improved sales and assortment management. Moving to Finland, there was a safe recovery in Finland, but from low levels last year. And while our recent acquisitions have had a positive impact on results, the old tools business remains challenging. And as Glenn mentioned, the main focus is on improving trading cross margin in the direct safe channel. Moving on to cash flow, you can see that we had an improvement when it comes to operating cash flow driven by improved EBITDA. and repayment of preliminary tax. We have an ongoing capital efficiency project, and we have reduced the inventory levels of external brands, but the investments in our own brands counteract this progress. And networking capital as percentage of sales is about 29%, and we aim for 24%, which was the level in 2022. Investing activities in the quarter mainly relates to the add-on acquisitions within product media, and the organic investments are lower than last year, and the capex to depreciation ratio was 0.5. The next step at the end of the period was 2.1 billion, an increase from previous year, primarily due to higher acquisition pace and lower operating cash flow. And the ratio of net debt to EBITDA was a multiple of 3.1. And the ratio is higher than last year due to a combination of lower EBITDA and increased net debt. And typically, the debt ratio increases from the second quarter to the third quarter, since Q3 is the richest cash flow quarter. However, the debt ratio has actually decreased slightly from Q2. expected to continue to decline. Our covenants relate to interest coverage and equity asset ratio, and they are fulfilled at the end of the period, and there is still good headroom before reaching the threshold. So in summary, despite the temporary increase in leverage, we maintain a solid financial position and expect leverage to be well below the financial target level by year end. Sending it over to you, Clint.

Thank you, Ilion. So Q3, in summary, improved profitability in all countries. That is, of course, extremely nice to say. High sales activities, even if we don't really get the benefits of all the hard work. But there will come a period where we can harvest the fruits of our hard work. But everybody is struggling and our lovely colleagues are fighting every day. And we hear more positive signals. There are more quotations. We're even getting answers to quotations and we're winning quotations. So that's it. We feel there is a little bit of a different market feeling. We empower them with the better sales concepts and services. And we think we have a market office which is quite strong, a little bit different from several others. And continued cost cautiousness. We're always ready to take actions when we see that needed. Outlook for 2025 and beginning of 2026. You've all probably seen the latest statistics. In Sweden, at least, a revised upwards construction market to 2026. Unfortunately, a little bit revised downwards at the end of 2025, but at least the longer outlook looks good. We are well-positioned to leverage on this. We have built a very efficient and financially sound company. So if you add a few percent of organic growth on top of this, this should be a very nice journey going forward. So for 2026 very much focus on sales, marketing and continued focus on acquisitions. And one last thing before we open up for questions. You've seen the news me leaving during 2026. It's the least dramatic thing in history and should be seen as a signal that we are in a very, very good position. We are getting closer and closer to a market upturn. When and how strong, nobody really knows. It's also a signal that the group, it will never be finished. It will never be 100% ready built, but we are in a very, very good position. We're taking all the largest strategic grips and building this platform. And looking at the timeframe down there, I hope you all can agree on that. It has been a decent amount of time and it has not been just leaning back. It has been some dramatic grip we have taken over the years. So, yeah, that's that. So, handing back to you, Nadja, for Q&A.

Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press star 1 1 on your telephone keypad and wait for a name to be announced. If you withdraw a question, please press star 1 and 1 again. Alternatively, you can submit your questions via the webcast. Please stand by. We'll compile the Q&A queue.

This will take a few moments. And now we're going to take our first question.

And it comes to the line of Emmanuelle Jansson from Danske Bank. Your line is open. Please ask your question.

Good morning, Klein and Irene. I hope you can hear me. Thank you always for a very good and informative presentation. A couple of questions from my side then. Looking at the market development and how you're performing, we can see now that the Swedish market is declining around 6% organic. I know that you for quite some time had quite tough comparable figures versus last year. And we also have the struggling account with Norfolk, so to say. How much of the decline is related to this, you would say, and how is the underlying development going? And also, can you maybe shed some light on the underlying demand from the SME customers, which we know are very important for your business?

Yeah, very good. You are extremely well-informed, as always, Amon, and you know that We sincerely dislike bringing up excuses, but of course, the defense orders and Northvolt, if you adjust for them, we would have had a positive organic growth in Sweden with a couple of percent and even affecting the group so much. So it would have been at least flat from that perspective. When it comes to the SME customers, I heard on this lovely pod yesterday, they mentioned that it was the worst SME market in over 40 years. And I feel that we have felt that. We think we have a good grip of that customer category and we know them very well and we know their behavior very, very well. But we see that we have just been, some of you know about our days, if you take Sweden and Tuesdays in Norway and Finland. We still attract the same amount of customers or even more to the shops. But we can still see that the average purchase is still lower than it used to be. But at least we see stability and we also know which accounts we win. So just as you said, the comparables going forward from Q4 and onwards, those two excuses are on a much lower level. But the potential is still there if you take the defense, for example. We are well positioned with sales to the defense. Norfolk has gone forever, but the defense, it's an opportunity for us going forward. But we are pushing for the small and medium-sized customer and hence those price adjustments we also are making so they can get the feeling again that they don't need to go to any low cost, lower quality competitors of ours.

Perfect, thank you. That's very, very clear. And on the defense exposure that you have and have built up the last couple of years, how big do you think this could potentially be in the future for this business?

I don't know if we're communicating, but we have in all our countries, Norway, we are in the middle of a huge tendering process. Nobody knows the outcome. We know we're pre-qualified. We came out best of all the bidders from a sustainability perspective and all other vitals around it. So price will be the determining factor. The HCP, Hemantheolis Palvolo, we acquired in Finland. It's a super important partner with Patria. I've been there seeing what they build. And it's not just product they develop. They actually assemble parts for the vehicles they have there. And in Sweden, we know both from workwear, tools. We are in so many different product areas. So the potential is big. It's a number of hundreds of millions over time. You also know that we've communicated that 2024 was the last of the budget cycle and 2025 is the first, but 2026 and 2027, the purchases from the defense will go up. I don't say that we will win all the orders. It's tough competition and it's also attracting international players from countries you are You're questioning how can they quote to a Swedish defense. We have a strong position. We are very involved in their planning, but it's tough competition.

That's really interesting. Of course, what's the potential there for you to deliver even high growth within your private labels within the defense sector? Is that possible? Absolutely. How is that working?

Absolutely. And we are, we can take that in a different type of way. We are delivering some very interesting products, both high-tech and down to garment for the kitchen. So it's a whole spread and we are in tents and we are in backpacks and we are in shoe soles, but very technically advanced shoe soles. So it's across the line and we are strong, especially since our connections to Far East suppliers. And we've been successful in winning these separate tenders. So absolutely, we have a specific team we have set up to deal with this. So this is not in the normal sales organization, so to speak. We have a specific team set up since a year or two back to benefit the most from this.

And did you have this opportunity during the old days within this defense sector?

Not really, I mean it has been the investments now being pumped into defense from different perspectives is of course much much higher. But the tools part of the Aligo group had on the work on the tools side hand tool side had an agreement since many years back so we've been able to capitalize on that so with the good relationships from the previous tools business and add with assortments that that's that's what all came to the table with it should be a match made in heaven uh really really exciting i will i'm not stick to this subject for too long but really interesting but given now that

perhaps the comparison base is now behind us regarding Norfolk and probably defense order. Do you think that the following quarters now will show more clearly on how well you are performing versus the markets as you showed in your presentation?

Yeah, it's a very good question and we anticipated that that would come and we don't dare to say anything. We are a bit too nervous on the market outlook. Nobody dares to say anything and I think all the reporting companies have said the same thing that it's It's some hesitance and cautiousness from the customers. But at least, as you say, the comparables are, we have nothing to blame anymore or to excuse. So that excuse is gone for sure. So now our true performance will be more visible. That is for sure.

Perfect, thank you. Jumping on to Finland which shows organic growth, that's of course really positive. What is driving the improvement there and also it appears that you're also growing on store basis. Have you started to see results from the transformation of your physical stores there or What's driving the growth at the moment?

We are always very open and transparent. We have a couple of larger customers that have had a good development and we need to do much, much more in order to transform the Finnish organization to be more successful with smaller customers. Having said that, for the transformed shops, as you say, we have seen good development over the last... Sales are picking up. Sales are picking up. That's typically us. We expect that it should be booming from day one and it never is. But we see that the new shops are developing, most of them, not all, most of them are developing nicely. But the figure you see and you relate to is, if I'm downgrading ourselves, it's mainly because a couple of larger customers have had a good development.

And where are you now at the transformation of the store network in Finland?

We stopped after the shops we did, and we said, let's see if this is the right way. So we did it. Potentially, we should have done less. I think, was it six we did?

Yeah, I think that we have six or seven concepts.

So we said, let's not roll that out further until we see that this is the successful way of doing it. And we would be in a very good group of many other businesses thinking that you can copy concepts from other countries into a country and it doesn't work. So we said, let's be cautious. Let's really look into how has this developed now in Finland. Is this the way for Finland or not? Or do we need to make an adjustment? So we're not rolling out any new, we're not converting any new shops as it is.

Thank you. That's very clear. And on the gross margin, obviously, good improvement there. And you're mentioning the mix effect driving the gross margin. And If we now start to potentially see the market in 2026, at least, to turning in your favor, I assume you have both country mix, the customer mix, and also you're mentioning epic tailwind of purchasing on your side. Where do you think the gross margin could be in the future, or in the near-term future, in one year?

We've got to that question many times in the old Svedal case, but when the gross margins were very, very healthy. But it's not the gross margin maximizing case. When we see stability in gross margin, then we could push more for sales. And I think that would create the best shareholder value to say that we're not intending to get to 50% gross margin because then we are losing out on a lot of businesses. So to find a good, solid base, as you said, the currency is helping. More and more professional purchasing is helping.

Increase the share of own brands.

Share of own brands. Increase the share of small and medium-sized customers. All that will help. But it will also give us, if we refer back to the defense discussion, better ammunition for the sales organization to actually be able to grow a little bit more.

That sounds fair. Absolutely. And last two questions from my side before letting someone else jump into this call but on this then what you think we should expect in terms of leverage and profit development if you start to actually volume growth in the next year giving that you're already now growing profits with not giving have been given any specifically help from from volumes exactly

Mathematically, if you could simulate, I'm not going to say a figure, but with a healthy gross margin, our cost efficient platform and base, and then if you start adding a few percent on actual organic growth, and if we also conclude that we do not ruin the nice acquisitions we've done, of course, you get a good leverage. we've had this leverage against us a couple of years when the market has turned down. I mean, with our structure with a half a billion SEC in rent cost per year, it's difficult to scale this business downwards. But if you add volume on top, we don't need to scale much cost in proportion. So I can't give you a figure, but sometimes we meet people who have been calculated and it should be okay.

Yeah, we have to wait and see then. And last but not least, we are sorry, of course, to hear that you are leaving Klain. What do you see as the most important task here for your successor? And what will he or she need to focus on to drive Aligo to the next level, do you think?

I think everything is in place. I said to some people who have called, I mean, the largest disappointment for me, and nobody should open the champagne bottles yet. I'm not leaving in a couple of months. But my first focus is for nobody to be able to come in and say, now I've cleaned up after clean and the existing management team. That should not be possible, hopefully. And the financial targets are solid. They are there. The strategies we have in place to take us there, they are there. So from my perspective, we are in a very good place to execute on the strategy we have. So that should be my, as they do in the White House, when the new president comes in, they leave a note on the desk. Don't change too much, potentially.

Yeah. Well, thank you. That sounds like a good plan. I think that was all my question for now and we might speak again during the Q4 call as well. Have a great day and thank you very much.

Thank you.

Thank you. Now we're going to take our next question. Just give us a moment. And the question comes to the line of Carl-Johan Bonnevier from DNB Carnegie. Your line is open. Please ask your question.

Yes. Good morning, Klein and Ari. And a lot of good color and answers already. So I'll be just having a couple of smaller ones for you. Looking at the gross margin development, would you say that we have seen anything of the benefits of the US dollar coming through yet? Or is that more of a question for the coming quarters?

Yeah, it's more of a question of the coming quarters, but we do have some minor effects in Q3.

And looking at the biggest opportunity there, I guess it's on your own brands where you probably have the least of what you would call market pricing of it. So you should be able to keep most of it yourself. Is that a good assumption?

Yeah. And also, let's not forget that we have suppliers who they themselves buy their products in dollars. So, of course, this is the quickest way, of course, when we purchase something in dollars and it suddenly is at 9.4 instead of 10.3. That is, of course, good. But we also need to take the negotiations with our suppliers who, of course, were arguing for higher prices when the SEC went down. Now the SEC has gone up and we need to call for new meetings and negotiate that.

it's also both our own brands of course that is more it just happens but also negotiation wise with with our suppliers here clear uh and and clients setting the agenda for your your your successors are coming in so say looking at what you talked about in finland getting the finish operation up to six and eight percent you have stated that target uh earlier in some stages and the Obviously, with volumes coming back, that should be easier to get up there. But what kind of time frame would you suggest would be a logical thing to deliver on that target?

The financial modeling we're doing is a couple of years out, two years out. But as I said earlier, we need to really show that we can turn up the gross margin. Wherever I've been in my working life, Finnish businesses have always been cost-efficient. And the same thing goes for us in general. So we cannot save ourselves to success for the tools business in Finland. We have other businesses which are super profitable. The former growth is profitable. HCP, RTP and so forth are very nicely profitable. So it's the tools business that is struggling. So we cannot save ourselves through cost. And I think it's also dangerous to at least plan for volume saving us. We need to prove that we can improve gross margins and quickly.

And when you look at Finland, is there a lot of pruning still to be done looking at customer segments, looking at product offerings that I know has been historically challenging to get the margins out of, so to say? But are those still there getting to 68%?

Yeah, absolutely. All above. Everything needs to be done. You saw Irene's slide on share of own brands. We need to work closely with our suppliers. Parts of our organization is very, very good at that. And Finland perhaps needs to come back to that. I mean, if you win a contract and the profitability is not good enough, then you partner up with the suppliers and say, you need to help us. We need a couple of percent in support to get this on a decent profitable level. So it's a It's not intellectually challenging in any way, but the work has to be done. That's what we are together with our Finnish team pushing for.

But as you see, there is nothing on the system side when you're looking at your setup in Finland that puts any limitation to it, that there is anything that needs to be invested in to do that opportunity.

No, we are now following the development of the converted shops. And if that turns out to be the right way forward, then that should be the right way forward. But we don't need to take any strategical grips from a structural point of view. Everything is there. I think from a behavioral and execution point of view, we need to do more.

Excellent. I heard in your initial statement, Klein, that you talked about when you talked about the strong M&A pipeline to execute on when you are ready. When are you ready?

I think I already said that. Or perhaps it was me. I'm not quite sure. We will be down from a gearing perspective. We will be down to 2024 level in Q4. So then we feel confident again. When the interest rates were a bit higher, we said it's uncomfortable to be above 2.5. But we ended up at 3.2. We'll pick that 2.1 or 2.2. So again, It's time now to start looking again.

And looking at the active pipeline you have, you haven't missed any transactions during these times where you have now held back on the acquisition phase?

No. As we talked about before, you and I, previously perhaps you could push things to do it earlier. But now for a while we have not pushed, but we haven't lost any. We haven't said no to anybody. So we will continue to do acquisitions in the identified areas that we see potential for growth.

And hearing you mention Northvolt in the comparison numbers for last year, do you have any exposure to talk about to stay around their financial problems of late?

0.0. And they are a cash customer. If they want to buy something, they have to pay cash.

So it's 0.0. Sounds like a prudent way of doing it. I'm looking forward to talk to you again before you leave Klein, but thank you very much for this and all the best out there. Thank you, Colleen. Take care.

Thank you. Dear participants, as a reminder, if you wish to ask a question over the phone, please press star 1 1. And if you would like to submit any questions, please use the webcast link.

We will just give a moment to our participants to press star 1-1 or to submit any questions via the webcast.

Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Claire Johansson-Ullenbeek, for any closing remarks.

Thank you, Nadja. And I think, Annika, we have covered everything that has come in mail-wise. We have covered in all the discussions we've had now, so it feels good. Very good, everybody. I think we can conclude that the quarter was decent, despite no help from the market yet. I think we built a solid platform. We have a balance sheet in order. We will come back at the end of the year with a net debt ratio, which is in line with last year, which is good. And we focus on sales that we've said quite some time, but we continue to focus on when that starts to kick in. This should be a little bit better. Yeah, we continue with what we are doing. We see that we get effect on what we are doing. And as I always say at the end of these meetings, the journey continues. Thank you very much. Enjoy the weekend when that comes.

This concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day. Thank you.