Garo Aktiebolag (publ)

Hello and thank you for joining the GARO Interim Report January to September 2025. My name is Harry and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. You exit the queue. I will now hand over to CEO Jonas Clarion to begin. Please go ahead, sir.

Hello and welcome everyone to GARO's Q3 presentation. I am Jonas Claren, CEO, and as always, we appreciate you taking the time to join. Our focus this quarter has been turning structure into rhythm and rhythm into results. With me is our CFO, Helena Clausson, who will take you through the financials shortly. But first, let me share the key developments from the last month. Next slide, please. Let's look at the third quarter and how Garo is progressing. The overall picture is one of steady improvement. We're building momentum across the group and beginning to see structure turning into rhythm. Electrification continues to be our financial backbone, performing steadily across markets. We see positive momentum within installation products and stronger project pipeline, particularly in the UK and Ireland. The Swedish residential market is still slow, but we're starting to see signs of increased activity. Our focus is on sharpening sales integration and preparing for the next market upturn. Immobility remains challenging as the home charging segment has become a clear low price market. We are staying disciplined, simplifying the portfolio, reducing inventory and focusing on professional and public charging where our strengths lie. Technically, the entity platform is stable and the LS4 platform continues to gain traction on export markets. step by step for gaining control and positioning the business for recovery. On the leadership side, collaborations between sales, production and product development is much stronger and the organization is starting to find its rhythm. We have one unified Swedish sales team and better alignment across the group. Operational control and liquidity have improved, creating a stronger base for what's ahead. We are now refining and executing the group roadmap to ensure every part of Garo contributes to a more resilient company as we move into 2026. In summary, Q3 shows that our plan is working. The fundamentals are improving and we are continuing to build Garo step by step for the long term. Over to you, Helena. Next slide, please.

Thank you, Jonas. And as usual, I would like to start by looking at the financial summary for the third quarter. Net sales amounted to 251 million, a decrease of 7% compared with the same quarter last year. Garo Electrification showed a stable quarter with sales almost in line with last year. It is very pleasing to notice that our product group Electrical Distribution Product showed growth of 4% compared to the year earlier quarter. Also, our project business seems to be recovering after the summer. Immobility continued to develop weakly, with a 22% decrease in sales in the quarter. Gross margins have been on similar levels to previous quarters, where stronger margins within Gado Electrification have been offset by lower gross margins within Gado Immobility. The adjusted EBIT for the quarter amounted to 2.5 million compared to 0.4 in the same quarter last year. EBIT for the third quarter amounted to negative 1.6 million, where the result was charged with 4 million in termination costs for the departing personnel. We have a significant imbalance between the two business areas, Goro Electrification and Goro Immobility, where the latter weighs on the group's overall results. Next slide, please. And now moving over and looking at the two business areas separately, starting with guard or electrification. Net sales amounted to 197 million in the quarter, 3 million less compared with the same quarter last year. Sweden experienced a decline of 13%. On the other hand, our sales to the Nordic countries grew with 5% and the sales to Europe, excluding the Nordic countries, showed growth of 18% in the quarter. Looking into the different product groups, sales within electrical distribution products increased by 4% compared to the same quarter last year, while sales in product areas Project and Temporary Repair both decreased by 12%. However, sales within project was sequentially higher in September, and current order intake indicates that also October will be a good month for project business. This indicates that Garo's seasonality also applies for this year, where the fourth quarter normally is Garo's strongest quarter. Adjusted operating profit amounted to €22 million, compared with 20 million in the same quarter last year. The result in the quarter is explained by growth with strengthened gross margins in both Ireland and in the UK, which has then partly been offset by the costs of ongoing ERP projects. Our work with the implementation of a new ERP system has reached an intensive phase involving a high rate of investments. but the project is crucial for our long-term efficiency. Adjusted operating margin came in at 11% compared to 10.3% last year. EBIT for the third quarter amounted to 21 million, where the result was charged with 1 million in termination costs for the departing personnel. Next slide, please. And now we move and focus on the Garo immobility business area. Net sales amounted to 54 million for the quarter, giving us a negative growth of 22% or 50 million compared with the same quarter last year. In the quarter, collaborations with E.ON and Hyundai has resulted in Garo delivering a large number of LS4s to the Hyundai European factory in the Czech Republic. Furthermore, the dialogues have also created business with SHEA in Slovakia for the Kia factory, where Garo will deliver semi-public charging. The adjusted operating profit for the quarter amounted to negative 19 million and is fully explained by the low sales and a product mix. EBIT for the third quarter amounted to negative 22 million, where the result was charged with 3 million EUR. in termination costs for departing personnel. Next slide, please. And now looking into our cash flow and our balance sheet. Cash flow from operating activities before change in working capital amounted to 5 million. Cash flow from operating activities after changes in working capital amounted to 11 million. Tied up capital from inventories decreased net with €18 million in the quarter. We have a deposit with the supplier for materials ordered but not yet called off. The deposit being in euros has remained unchanged during the quarter and amounted to the equivalence of €43 million. Our net debt deposits amounted to €270 million compared with €319 million. in the year earlier quarter. We had an equity asset ratio of 51.5% and available liquidity including overdraft facilities of 50 million. In July, as a result of improved cash flow over time, Garo's available overdraft facilities were reduced and 2.5 million Euro repaid. And now back to you, Jonas. Next slide, please.