Dustin Group AB (publ)

Welcome to the Dustin Q3 presentation for 2026. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the CEO, Samuel Scott, and CFO, Julia Lagerquist. Please begin your meeting.

Thank you, and good morning, everyone, and welcome to Dustin's presentation of our third quarter results. My name is Samuel, and I'm joined here today by our CFO, Julia Lagerqvist, and together we will take you through the highlights of the quarter before we open up for questions. I'm pleased to report yet another quarter with organic growth, improved margins, strong cash flow, and reduced leverage, while continuing to sharpen our commercial focus and the efficiency of our operations. Net sales development was positive in the quarter, with organic growth of 2.6%, Growth WAS DRIVEN BY CONTINUED STRONG PERFORMANCE FROM THE PUBLIC SECTOR AND SUPPORTED BY ORDERS BROUGHT FORWARD TO SECURE PRICING AND AVAILABILITY IN THE LIGHT OF THE COMPONENT SHORTAGE. THE GROWTH MARGIN INCREASED TO 14.4% COMPARED WITH 13.4% LAST YEAR AND IS ALSO A SEQUENTIAL IMPROVEMENT COMPARED TO THE SECOND QUARTER. THE HIGHER MARGIN IS MAINLY EXPLAINED BY HIGHER MARKET PRICING AND IMPROVEMENTS WITHIN LARGE CORPORATES AND PUBLIC. Adjusted EBITDA improved to 118 million compared to 72 million a year ago, explained by the stronger gross margin and earlier incremental efficiency measures. The margin increased to 2.3% compared to 1.4% last year. Cash flow from operating activities increased to 259 million compared to minus 139 million last year. This is primarily driven by improved networking capital. Leverage measured as net debt to EDITA dropped to 2.3 times and is now well within our target range of 2 to 3 times and significantly improved compared to 4.1 times last year. Turning then to operational highlights for the quarter. During the quarter, we completed several important initiatives that strengthened both our commercial ability and financial performance. First, we completed implementation of our new sales organization. Regional leadership is now fully in place across the Nordics and Benelux, including the appointment of Anne Nielesson as EVP Relations Sales Benelux and member of Dustin's group management team. The new organization and stronger local leadership bring us closer to our customers and partners and create better conditions to deliver customer value and profitable growth. Second, We have completed efficiency measures announced last quarter. These measures are expected to deliver annual savings of approximately 80 million SEK with the full run rate effect expected from the fourth quarter. We also took an important strategic step by defining a clear exit plan for our non-standardized services business. This supports our continued transformation towards our standardized service offering And as a part of this, we recognized an 800 million SEK non-cash impairment during the quarter. On the balance sheet, targeted efforts to improve systems and processes to reduce trade receivances in Benelux have paid off, and the receivable levels have now returned to a normalized level, contributing to stronger cash flow and lower leverage. Finally, we're pleased to receive several important partner awards during the quarter from NVIDIA, Dell, and HPE, And these recognitions reinforce our strong market position and demonstrate the value we create together with our partners. And by this, I hand over to our CFO, Julia, to give you some more details on our results and financials.

Thank you, Daniel. If we then move to page four, we will look more closely at the LCP segment, the large corporate and public. And the sales in LCP was 4.0 billion SEC in the quarter, or 8.1% higher than last year. The organic growth was also 8.1%, so basically no forex effect this quarter. The growth was mainly driven by increased demand in the public sector, leading to larger roll-ups, and also customer orders brought forward in the light of the memory component shortage and customers wanting to secure volumes. From a geographic perspective, it was strong growth in Sweden and Belgium, driven then by the larger roll-ups in the public sector. We also saw growing demand within our lifecycle services offerings. As said before, we can see some large volatility in sales between the quarters in LCP. The gross margin improved versus previous year and versus previous quarter, which is of course encouraging to see. The margin benefited from higher market prices, coupled with a slightly more selective approach to new businesses. In addition, the margin was also supported by a more mature contract portfolio in Belgium, where we allowed to have low initial margins on new frame agreements. The improved profitability in take-back also had a positive impact on margin and EBITDA. The growing volumes and margins led to segment results of $170 million versus $63 million last year, and the segment margin ended at 2.9% versus 1.7% last year. We then moved to the overview of the S&D segment on page 5, where sales landed at $1.2 billion thick, or 11.7% below last year. The granite growth was at minus 11.9%, so very little forex effect. Adjusted for the exit from B2C, the organic growth was minus 5.3%. As explained earlier, this is a strategic move to better focus on our core business, and we always expected some sales headwind coming from this. We see some signs of stabilization, but customers remain cautious due to the ongoing economic uncertainty. Looking at the business development, the hardware and software business in the Nordics developed positively and remains a key focus area going forward for us. The growth model improved versus previous year, supported again by the higher market prices and a continued strong price discipline. This was partly set by weak performance in the non-standard services, which was a burden to profitability, even though it is some improvement versus previous quarter. Improved cost base from efficiency measures partly protected the segment result, but could not fully offset the lower volumes and weak performance in non-standard services. And the segment result landed at 34 million SEC versus 37 million SEC last year. This corresponded to a segment margin of 2.8% versus 2.7% last year. We have now established a clear exit plan for our non-standard services, as Samuel explained, and we begin to execute. This cleanup plan has also led to an impairment of the CBD segment of 800 million SEK carried out in this quarter. The impairment has no cash impact. Moving then to look at the cash flow on slide 6, we see that cash flow for the period was plus 167 million SEK versus a little bit over a billion last year, where last year it was then impacted by the completed new rights issue. Looking at the details, we can see that cash flow from operating activities was plus 259 music, a clear improvement versus last year, and driven by both improved operational results as well as targeted work on tax management and also improvement in networking capital. I will talk more about networking capital on the next slide. Cash flow from investing activities was minus 40 million SEK and mainly related to development of different IT platforms. And the cash flow from financing activities was at normal level and mainly linked to leasing. Our last year was impacted again and by the completed new right issue. The combination of the improved operation results and improved cash flow led to further improved leverage, now at 2.3 times and well within the target range today between 2 to 3. Overall, we are, of course, very proud of the cash development due to date versus the poor development last year. Coming then to page 7, looking at the networking capital, we see that networking capital landed at 182 million SEK, an improvement versus last year where we were at plus 261 million SEK. And inventory increased this quarter, roughly 44 million versus last year, and this was expected and part of managing the ongoing shortage in memory components. putting pressure on inventory levels to make sure we can deliver. Account receivables and opposite decreased, driven by, as Samuel has talked about, continued active efforts to settle receivables from previous periods. In addition, we had some positive timing effects of receivables at the end of the quarter, which all in all led to this positive development of the lettering captain. We note that Q4 is usually seasonally weaker in terms of lettering captain levels due to timing of large rollers at the end of the quarter, driving higher receivables. And as I said before, we will always have some of these timing effects between quarters, but our long-term target for international capital remains to be around minus 100 million SEK. And with that, I would hand back the words to Samuel.