Lifco AB (publ)

Thank you very much and welcome again. We had some technical difficulties, so we will restart the call again. And we start again at page number two and look at the overall performance of the NIFCO group. And we can then conclude that the third quarter is a solid quarter, despite some difficult market conditions in parts of our business, especially in system solutions. In the third quarter, we grew net sales with 9%, of which 5% was organic growth, 8% growth came from acquisitions, and we had a negative foreign exchange rate effect of 4% in the quarter. EBITDA grew with 10%, and the EBITDA margin of 22.6% was slightly higher than the same quarter last year. We have very solid and strong cash flow in the quarter, and then I'd like to highlight when we look at net profit, where we have a growth of 90%, that we had an impact of a one-time effect in this quarter, where of about 63 million Swedish kronor, and this has to do with a revaluation effect on deferred taxes, due to a decision in Germany that they will, in year 2028 onwards, gradually lower the German corporate tax rate. So this is one type of revaluation should affect. So there will be no further impact of this tax effect in the coming years until 2028, where we'll see gradual lowering of taxes in Germany. If we then look at the nine-month period in 2025, we grew our net sales with 9%, of which 4% was organic growth. We had 7% positive impact from acquisitions and then a negative impact of 3% from foreign exchange rates And then EBITDA grew with 7% and margin for nine month period was 22.2%, which is slightly lower than the year before due to weaker market conditions in parts of our system solutions business, which has led to an organic decline in sales and lower margins in some areas of our business. We can then go over to page number three and look into the different business areas. If we start with dental, it's overall quite stable development, which is not unusual for this area. So for the full year, we have a small growth in profit and sales. Of course, we also have some negative foreign exchange effects dragging down those numbers. In Q3, we grew the profit with 9%, and margins was a bit higher than last year. But I just want to highlight that there could always be variation between quarters, and we've seen that also in history. So I look more at the full year performance here. In demolition tools, we have improved organically now in 2025, and this has to do with a quite weak development in 2024, so we see a comeback. So this organic growth that we see in 2025 also leads us to improve margins because we have a positive operational leverage effect. When we have slightly higher volumes, we can also get normally better margins. And the beta margin of 25% for nine months is strong, but I also want to highlight that the market conditions are still not back to the levels we saw a few years back when we had our record years in this business area. If we go down further down to CSUS Solutions, we are growing with 14% for the nine-month period, but margin is slightly lower than previous year at 22.4%. And once again, the main reason for our low margin is that we are experiencing weaker market conditions throughout this year in some areas, which led to lower organic sales and then slightly lower margins organically in those companies. And this is mainly in our transportation products and special products subdivisions, but also some other areas we've experienced this, depending on what situation the companies are in. And I also want to highlight that our companies, as always, are focusing very hard to now get back the margins to normal levels, to tight, not the perfect market predictions. I just also want to remind everyone that another reason for the lower margin in consumer solutions for the nine-month period is that we, especially in the beginning of 2025, had very strong organic sales growth in contract manufacturing. which is an area we slightly lower more than the other fortresses. So we get sort of a little bit negative mixed effect in this year in the numbers. And then we can go to page number seven and take a look at our financial position. And our interest-bearing net debt to EBITDA remains at low levels at 1.3 times net debt to EBITDA. This is a number where, despite the fact that we have done quite a number of acquisitions this year and have pretty good activity, we are still having a very solid position when it comes to our opportunity to continue doing acquisitions. We will, as always, continue to look to find attractive opportunities to acquire good companies all around Europe that can contribute to the future development of our group. I would like to remind everyone we focus on acquiring very high-margin companies with strong positions in small niches. We also keep our focus on staying disciplined and finding reasonable valuations. This is always a difficult task, but we have historically done a good job. Once again, I remind everyone the timing of acquisition when they materialize is always difficult to predict, and they will be a bit lumpy. So far in 2025, we have had acquisition carried out at quite a good level. I also want to remind everyone that we are working very hard on continuously developing our organization so that we can do more acquisitions. Over the last past five to seven years, we have grown our capacity to make more acquisitions with around, I would say, 10% every year. And this, of course, is an area we will continue to work very hard on in the future so we can continue to develop LIFCO step by step. And with that comment, I would like to open up if there are any potential questions. Thank you.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Zeno England Rick Chudy from Handelsbanken. Please go ahead.

Yes, good morning, Per. Thanks for the presentation and taking on questions. I would like to start out in the emulation and tools. If you can nuance a bit in terms of, so to say, end markets, both in terms of products and geographies.

Yes. So if we start, thank you for the questions, you know, I think if we start with products where we see that maybe the most clear comeback in this year is obviously where we had the most difficulties last year. It's a typical effect we see, you know, we had a quite difficult situation in 2024, especially when it came to the attachment business. And I think they are now seeing improvement from those low levels. When it comes to the other areas, the more machinery-based equipment that we sell, it's a more mixed picture in this year, I have to say. We see in some areas quite good development and in other areas more difficult development. And that's a little bit more volatile area. Also maybe a little bit an area where for some companies tariffs can have an impact short term. The more uncertainty the market makes customers wait, et cetera. So I think that's more on the product side. When it comes to geography, then you would conclude that, based on the first comment, that the USA business is dropping dramatically this year. It's not really true, because we see also a mixed picture. Some companies are still doing quite fine in the US, despite tariffs, so they're able to continue, whereas others are having more problems there. And in Europe, I think the area where we In general, and that's maybe not the Demolition Tools comment, UK has been quite difficult, I think, this year in general. Germany has been difficult for a while, so that's maybe not the change in this year. So that's basically maybe the markets that stand out. But that's as much as I can mention on this question.

Very, very clear. And jumping into system solutions, two questions from me. Firstly, quickly on contract manufacturing, if there are any new comments on your expectations in the quarter that we had and comments from the clients.

Well, as you maybe can read from the numbers, it was a quarter where we sort of matched roughly matched the last year when it was starting to pick up. So it's an improvement from Q2, which we indicated also in the last earnings call. It looked a bit better in July. And just a comment on that. So right now, it feels that we're on the stable level compared to previous years when it picked up. But given the uncertainty that we saw also in Q2, we are very careful in making any promises around this area. But you can say so far, so good.

Yeah, very clear. And if we look at systems solutions adjusted for contract manufacturing, you highlighted some of the maybe the weaker areas. Can you talk a bit about how the momentum in the business area adjusted for contract manufacturing feels? Of course, it's varied, but more in general.

Sorry, I couldn't really hear you. Your question was about contract manufacturing or the other areas?

Okay, please repeat. No, excluding contract manufacturing.

Okay. All right. No, but there is, I mean, there's a number of things that, you know, some companies are doing quite well, actually growing, you know, they have their structural growth and they continue with that in this year. And then we have some companies in the UK, for example, companies that are more exposed to UK, we see more reluctant markets in this year. And also, of course, some companies are impacted by tariffs, not in the way that we think we can sell in the future, but we have, for example, if you have a bigger TAPEX investment, it seems to be taking a longer time to close deals in the U.S. So we're also impacting from that. And then I think in some other areas, it's just a general, maybe weaker market in industrial parts of Europe that also impacts us. So it's a combination of some companies dropping a little bit more, maybe due to this, you stop in the U.S. temporarily and then other companies just dropping a little bit because of slightly weaker market conditions in industrial parts of Europe. And then I would say, as I mentioned before, maybe a little bit more in the U.K.

exposed in this year. And just to follow up, you're mentioning quite a lot now impacts from tariffs. It would just be more interesting to hear more what your what you're feeling is regarding the tariff situation and what the companies need to see for investments to pick up.

It's good that you asked that question because I don't think in general we have a huge problem with tariffs. We haven't commented that specific report, but some specific companies with maybe more higher capex investment products, they have a, you know, it's a little bit takes a bit longer time to get that done because the customers are maybe a little bit reluctant to make a decision because the uncertainty of if tariffs will be removed, et cetera. But we also have companies in the U.S. where we are actually growing this year. So I don't want to overstate that the problem of the slightly lower margin this year has to do only with tariffs. So it's a bit mixed picture for us, actually, in the tariff situation. So I wouldn't make it too big of a point at this stage. Even though you have individual companies that are... There are maybe a few companies that have a really, really decline in use, but it's marginal for Lyft overall. And we have others that are growing quite well, despite the fact that they have, of course, increased prices to compensate for tariffs, and they're still growing. So it's a mixed action for us.

Yeah. Very good. Thank you, Per. We'll get back in line.

Thank you very much. As a reminder, if you wish to ask a question, please dial poundkey5 on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Okay, thank you very much for listening. We apologize for the technical issues and hope that it worked anyways. And I wish everyone a good day and eventually a good weekend. Thank you.