Lifco AB (publ)

Welcome to LIFCO Q3 Report for 2026. For the first part of the conference call, the participants will be in listen-only mode. 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 CEO Per Waldemarsson and CFO Therese Hoffman. Please go ahead.

Thank you and good morning everyone and welcome to the LIFCO Q3 2036 earnings call. And as usual, we can go in directly to page number two in our investor presentation. And we will take a look at the overall development of the LIFCO group. If we start with the third quarter specifically, we presented a sales growth with 8%. of which acquisition contributed with 6%, organic growth was 2%, and we had a slight positive impact from currency of 1% in the quarter. If we go further down to the EBITDA, we grew that with 11%. EBITDA margin improved to 23.1%, driven by strong modern development in dental and system solutions. Profit before tax increased with 18% due to the growth we had in operating profit and lower financial costs. And then if we look at the net profit, it grew with around 10%. And here I'd just like to highlight that the comparison number for net profit in the quarter was impacted by a lower than normal effective tax rate in the third quarter last year. where there was a reduction in the corporate tax rate in Germany, which resulted in lower deferred tax liabilities. This revaluation last year then decreased the tax expenses in the third quarter 2025 with 63 million Swedish krona. If we then look at operating cash flow, we had a growth of 19% in the quarter. Moving on to the nine-month period, we have increased sales with 8%, where 7% of the growth came from acquisition, 3% organic growth and we had a negative 2% impact on currencies for the nine-month period. Further down, going into EBITDA, we have grown that year-to-date with 10% and profit before taxes increased with 14%. Operating cash flow has grown with 12%. If we then go into page number three and take a deeper look at our different business areas, starting by the dental area we are experiencing a stable development overall and the sales growth is mainly coming from acquisition both in the quarter and for the nine month period the margin continues to improve due to the mix the positive mix effect we have where higher margin companies with unique proprietary products are developing slightly better than our distribution companies And I'd like to also once again remind everyone that during the last decade we have gradually shifted our exposure into more unique proprietary products mainly through acquisition and also from organic developments in this area. If we then go to the demolition tools pieces area, we have during 2026 had overall a quite stable development, slightly stronger growth in the third quarter. in the sales, but margins are negatively impacted by negative mix effects, where the market for our demolition robots are a bit weaker than for the attachment side of the business. And that trend has sort of remained throughout the year. If we go further down to environmental technology, we have grown sales and profit and margins for a nine-month period. I'd like to highlight that the more stable development in Q3 mainly has to do with a very strong comparison number and very strong quarter in the same period last year. Going further to transportation products, we have, during the first nine months, grown thanks to acquisition and organic growth. The development in Q3 was a bit weaker organically, mainly related to weaker market conditions in the UK. which is the largest country within the transportation products area. And then finally, going into CISO solution, we have strong development in 2006, supported both by acquisition and organic growth, which has led to improved profits and margins. And here, all subdivisions within the area are developing strongly. And I can also highlight after several years of weaker market conditions in infrastructure products, we are now experiencing better underlying markets in that segment now for the last few quarters. I also like to mention in the sister solutions area we have in our quarterly report mentioned that a large customer within contract manufacturing division which accounts for approximately five percent of total sales has reduced forecast going into 2027 And the customers also announced that they have intentions to, in the future, shift purchases to other suppliers outside Europe. And based on the information we have today, which is not complete, we have to highlight that we expect that this will have a negative impact on our sister solutions revenue and earnings in 2027. I also would like to highlight and just give a comment that this is an area within contract manufacturing where we saw larger than normal growth during 2024 and 2025. It's been more on a stable high level in 26. And we made strategically the decision quite some time ago not to continue to grow this specific customer further. And we will also going forward limit so we don't grow too far in specific customer segments. can then go further on to page number four in our investor presentation and on this page we take a much longer term perspective on LIFCO development and our most important metric is the free cash flow per share after capex and only before dividend and acquisition this is a measurement that of course quarterly can have volatility because cash flow doesn't always linearly grow every quarter, but over long periods of time, it's a very good indication of how we develop. And since our listing in 2014, LIFCO has then grown our cash flow per share with 21%. And also, if you look in the more recent period, the growth since 2019, the compounded annual growth rate is 17%. If we then go further into page number five, we take a quick look at our balance sheet and specifically into our NetDebt situation. And after closing of Q3 2026, our interest bearing NetDebt to EBITDA is at one times, which is quite low and means that we have plenty of room for further acquisitions. And speaking of acquisition, we can then go all the way down to the next page at page 43, where we are basically looking at the acquisitions so far in this year. We have during 2026 announced, acquired eight companies with a total combined turnover of more than one billion SEK. I'd like to highlight that we are also in 2026 expanding our capacity both to identify and take care of new acquisitions. and our internal ambition levels are very high. I also like to, as always, mention that we are very long-term oriented when it comes to acquisitions and it's more important that we make the right deals rather than being overly stressed in periods of slightly lower deal volumes that we have experienced so far this year. The activity level is very high and we have many interesting targets that we are working with as always, but the timing, exact timing of when acquisition materials is very difficult to predict. And we look for highly differentiated niche companies with a long history of high margins, sustainable financial development. And we acquire great companies from entrepreneurs and families. And once again, the exact timing on when they're ready to sell to us is difficult to predict. And that was all from my side. And with that, I'd like to open up for 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 Englund Rikcudi from Handelsbanken. Please go ahead.