Arjo AB (publ)

Welcome to the ARJO Q3 presentation for 2026. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to President and CEO Andreas Elgaard and CFO Christopher Carlson. Please go ahead.

Hello, everybody. And thanks for joining our Q3 call. And we are happy to report that we have solid growth and a lot of good news to share with you today. So I think we can head into the presentation. And as usual, we'll begin just with a few words to remind everybody about who we are. And at Arjo, we are really guided by a real and living strong purpose that this something that this driving a lot of the commitment and passion across all our coworkers. We exist really when we are needed the most for our customers, when they need somebody to help them with their integrity and dignity, when they are at their most vulnerable position. And that's something that is really strong and important across our group. We are experts in mobility care settings, and we are every day working in healthcare systems that are put under a lot of pressure. The number of patients that need care is growing. The money that floods into the system is not enough for the needs, which is good for us. It's a growing need. And this is regardless of how the economy performs around us. The need is still continuing to grow. We are a company that has been around for a while. We are soon going to have a celebration next year to celebrate 70 years as a company. We have 11 billion in turnover and we are around 7,000 employees and we sell to more than 100 countries. And we manufacture, assemble our products in five facilities across three continents. So now we'll come in a little bit to the Q3 presentation and we'll start with some of the key takeaways. So of course the growth is what sticks out this quarter with the 6% organic growth, so we're really proud of that. And we also see that the gross margin is healthy in the quarter. Of course, the gross margin have been a little bit boost by tariff refunds of approximately 3.7 million US dollars in the quarter. And also important to mention that is maybe not as positive is that we have done re-evaluation of our assets that we have that we hold in Atlas Mobility and V+. And that has affected us on the net financial items side. At the Capital Markets Day a few weeks ago, we shared our new strategy in the direction that we will take for the coming years, that is really focusing on improving our performance and building a more scalable platform. And we, at that time, communicated 350 million commitments of profit improvements until H1, 2029. We're continuing to prepare for change and to drive change and we're Adjusting our operating model, we are changing a little bit the roles and responsibilities across the group and that also leads to changes on group management level where we try to strengthen and focus on the job that we have the next few years. Maybe worth mentioning is that we have recently shared with all of you that we introduced a new segment reporting with divided into three parts, so North America, Europe, and our international and distributor-led markets. Take the next slide. So just to continue a little bit to share and spread some light on the quarter. So North America was really a big part of leading the growth, especially given the size of the business there together with Europe. And Europe had really strong month. And you can also see that year to date, we are on a very good path. This quarter, our international and distributor-led markets did not have a similar strong growth, but year to date, they're really performing well. And I think that's also important to mention that you need to look at us, maybe not just quarter by quarter, but to see the trend that we are on. So I think by that, it's time for me to hand over to Christoffer.

Thank you, Andreas. As Andreas noted, we delivered a solid growth during the quarter. Our gross margin increased by 1.9% year on year. During the quarter we received a reimbursement of approximately 35 million SEK related to US tariff. The reimbursement was recognized as a reduction in cost of goods sold, consistent with the treatment in the second quarter. Excluding reimbursements, US tariff costs were approximately 11 million SEK lower than in the corresponding quarter last year. The total gross margin impact from US tariffs was 1.6%. The remaining gross margin improvement was driven by a favorable sales mix supported by strong growth in capital sales with patient handling the main contributor. Higher transportation costs across all categories partly offset the benefit of the favorable sales mix. FX provided a tailwind during the quarter. It had no impact on gross margin but increased gross profit approximately with 16 million SEK year on year. In summary, gross margin improved even if we exclude US tariff FX despite higher transportation costs. This means that we had a healthy underlying development driven by good momentum in our patient handling business. Let's now turn to the adjusted EBIT and operating expenses. Next slide, please. Adjusted EBIT for the third quarter amounted to 247 million SEK compared to 165 million SEK last year. Higher gross profit was the main driver of the improvement. A lower operating expense to sales ratio also contributed. under strong capital sales led to higher variable sales costs. Overall, FX increased adjusted EBIT by approximately 50 million SEK during the quarter. The positive impact on the adjusted EBIT margin was 0.5% from the FX. Excluding FX and the US tariff reimbursement, adjusted EBIT amounted to 195 million SEK with an improved EBIT margin of 6.8% compared to 6.2% last year. Turning to EBIT, the margin improved 7.2% compared to 5.7% last year. This improvement came despite high restriction cost of 41 million SEK compared to 30 million SEK last year. to increase its many reflected costs related to the strategy review and activities within our sales organization. Turning from profitability to cash generation, let's look at working capital and operating cash flow. Operating cash flow increased to 485 million SEK, up 31 million SEK compared with the same period last year. The improvement was driven primarily by stronger operating profit, partly offset by less favorable development in working capital. Working capital contributed with 67 million SEK to cash flow compared to 83 million last year. Inventories increased mainly due to finished goods in transit to support sales in the final quarter of the year. Working capital days increased to 88 compared to 82 last year. Cash conversion was 100.4% compared to 105 in the corresponding period last year. On a rolling 12-month basis, cash conversion remained above our financial target of 80%. Cash flow for investing activities was minus 177 million SEK compared to 148 million in Q3 2025. I could also mention that, as you have seen, our net financial items amounted to negative 102 million compared to negative 41 million in Q3 last year. This includes negative revelation effects, as Andreas earlier talked about, of 62 million SEK related to the investment in Atlas Mobility and Veplas. Both investments now have a carrying value of zero. Net debt to adjusted EBITDA decreased to 2.2 times at the quarter end and our equity ratio stood at 50.3%, slightly up from 49.8 at year end. In summary, profitability improved and operating cash flow increased while working capital in days rose. Leverage decreased to 2.2 times. With that, I hand it over to Andreas.