Indutrade AB (publ)

14.8% last year, but still a high level and a clear step up sequentially from 13.7% in Q2. We had a record high Q3 gross margin of 35.5%. Margin accretive acquisitions and divestments supported as well, but the EBITDA margin was dampened by the lower organic sales and somewhat higher organic expenses. In terms of the organic expenses, around a percentage point year over year increase in absolute numbers. I would say that the expense situation overall is in control. There is still a cluster of companies which can improve somewhat. However, a majority of the companies are growing and it's likely to see some expense increase linked to this. Looking at the net sales per business area, as mentioned, the same number of working days in the quarter, but the slightly lower order book coming into the quarter and strong references resulted in a slightly negative organic sales development for the group as a whole. Organic sales was up 3% in business area, process, energy and water. For instance, many of the Swedish companies had a good development and the development within the finished process industry also improved. In technology and system solutions, sales was unchanged. Infrastructure and construction and industrial and engineering continued to be impacted by the weak general business climate. Business area life science had a 5% organic sales drop due to the strong sales to Novo Nordisk the same period last year. Excluding this life science would have had a positive organic sales growth of 6%. The business area had a continued good development within the single use area and also the medical technology distribution during the quarter. The EBITDA margin improved in two of the five business areas with the most significant improvement in infrastructure and construction. mainly due to acquisitions and divestments. Life Science managed to improve the margin despite the lower organic sales. They had a strong gross margin development due to a favorable product mix, some currency tailwind, but also good work on pricing in many companies. In the other three business areas, the EBITDA margin was basically in line with last year. Since the beginning of the year, we have added 10 new companies to the group with total annual sales of approximately 1.1 billion SEK. After a somewhat slower start of the year, the acquisition pace improved in the third quarter with six acquisitions completed. In quarter four, we have so far welcomed one company. We are working with several projects in different stages So we look forward to welcome a few more companies in the remainder of the year. Our new organization with business segment leaders are also generating more internal leads than before. Looking at the longer trend, more importantly, we are stepwise increasing the number of acquisitions per year, as can be seen in the yellow line to the left. although number of acquisitions per year can be a bit volatile. Looking at the bridge effects from acquisitions over the last 12 months, we have added 140 million SEK to the group's EBITDA in 2025. Furthermore, we can also see that the acquisitions are margin accretive with an accumulated EBITDA margin of 16.4% for the quarter and over 17% rolling 12 months. By that, I leave the word over to Patrick to comment more on the financials.

Yes, thank you, Bo. Yes, total growth for orders and sales in the quarter was plus three and minus two, respectively. Year-to-date orders have also increased by three percent and sales is slightly down minus one. Book-to-bill close to one, slightly below, but as Bo said, impacted by seasonal variations during the quarter. Year-to-date, it is above one. In quarter three, we further improved the gross margins, reaching 35.5 versus 34, so a really good improvement. However, last year's figure was impacted by inventory write-downs in a few companies, so the underlying improvement was not as high as shown in these numbers, but still a clear improvement. On a year-to-date basis, our gross margin remains ahead of last year's level. EBITDA decreased with 3% in the quarter and also 3% down also year-to-date. If you look at the margin, the EBITDA margin for the quarter, that was 14.6 compared to 14.8 last year. Good improvement, really good improvement then from quarter one and quarter two. We had some non-operational one-offs items during the quarter connected to earnouts and goodwill right down as we have from time to time. But the net effect during the quarter was close to zero. As a side note, as maybe a few of you have noted group items, appear as unusually high this quarter. I would say this is, however, a wrong conclusion. It's a bit unfortunate, but it actually relates mostly to our routine concerning management fee, which we, for tax reasons, push out to the business areas. This was last year done in quarter three, which lowered group items last year. So that's the main reason for the increase. Yes, continuing further down in the P&L, finance net decreased 31% in the quarter and 16% year-to-date because of both lower interest rates and also lower debt level. Tax costs increased 17% in the quarter and 3% year-to-date. The higher tax costs is due to an unusually low tax level last year that came from the one-off situation, operational one-off situation we had last year. Earnings per share decreased with 4% in the quarter and also year to date. And I will show a graphical trend on the following slides. Return on capital employed. is at 19% and that's unchanged from last year, but slightly below our targets. Operational cash flow was unchanged at the good high level and I will also elaborate on that one on the coming slides. Net debt EBITDA end of the quarter is at 1.4 versus 1.6 last year. So an improvement in that area as well. So moving on to the cash flow. Cash flow, as I said, was unchanged from the same period last year and at a good level. Total organic working capital was down in the quarter versus last year. And despite more normalized inventory levels, our companies actually managed to reduce it further sequentially and also compared to last year. Cash conversion is continued on a high level right now, trending on a rolling four quarter basis at a level of 133 compared to net profit less capex. That's a good and strong level. We're closely monitoring the working capital efficiency and despite the lower organic sales, the ratio in relation to sales improved again during the quarter compared to last year. Continuing to the earnings per share amounted to 1.5%. 85 SEK compared to 1.92 last year. The decline is of course mainly related to the lower operational result. Lower interest costs continued to compensate but was offset by the higher tax costs I talked about earlier. Zooming out, looking at the longer perspective, the average growth in the three and five year rolling four quarter perspectives was was plus two and 10%. And lastly, the financial position, which we think remains strong and solid. The interest bearing net debt decreased versus last year from 8.8 billion to 8.1. mainly due to the strong operational cash flow combined with a slightly lower acquisition pace during the year. And our net debt ratios are stable and low from a historical perspective. Net debt equity ratio was at 48% compared to 56% last year. And net debt EBITDA was 1.4% versus 1.6%. And if you exclude earnouts, it is then 1.3 end of quarter three this year and 1.4 last year. To summarize, our financial position is strong and that is, of course, a good fundament for continued value accretive acquisition and also organic growth initiatives. Then I leave back over to you, Mo.

Thank you. We've also included a slide elaborating a bit on, you can say, the broader cost situation and linked to headcount. So as we have talked about for some quarters, demand and sales in some of our companies have been challenging and expenses, headcount and productivity have increased in focus. All of these companies are running cost reduction activities, including headcount reductions. However, more than half of our companies are still growing, and for these companies it is sound to continue with growth plans and to selectively add headcount and cost. This slide shows the organic change in FTEs among companies growing, respectively declining order intake. By the end of Q3, headcount is reduced with 6% compared to the last year in the companies with the declining order intake. Further reductions are planned for Q4. In the companies with a positive order development, we have increased headcount with 2%. In a decentralized organization like Indutrade, there is not a one-size-fits-all approach. Rather, individual actions are being implemented continuously. Overall, our companies and MDs are managing the challenging market situation in a good way. However, there is also a strong principle embedded in our culture to continuously improve. By that, we sum up the key takeaways of the presentation. The positive demand development continues. Order intake up 3% organically. Slightly lower organic sales, mainly due to challenging references. Strong EBITDA margin of 14.6%. Companies continue to work actively with adapting costs to their respective market situations. Market uncertainty remains for the upcoming quarter. Slightly larger order book and higher acquisition pace provide some comfort about the financial performance trend. 10 companies acquired so far in 2025 and still a good pipeline. All in all, a strong platform for long-term sustainable profitable growth. By that we say thank you and open up for potential questions.