Nederman Holding AB (publ)

Welcome to the Netterman Holding Q3 2025 report presentation. For the first part of the presentation, 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 Speaker's CEO Sven Christensen and CFO Matthew Cusick. Please go ahead.

Good morning everyone and welcome to Nederman Interim Report Q3 2025. If we start with some short summaries we can say that we had good profitability and we continue to invest in our business. We say that we had a solid performance in a very turbulent market environment. Some of the key things during Q3 is that the order intake declined and it's mainly delays as we've been talking about for the last few quarters when it comes to larger and major investments. Especially we had a very slow summer, whereas it came back the business of the long summer holiday. It seems business came back in September in a strong mode and has continued so a little bit so far. The strongest two quarters before bode well for the currency neutral sales growth that we had and it's been the most profitable quarter of this year. despite significant negative currency and tariff effects. We have conducted further investments in product development and launched a few, and we have also focused a lot on operational efficiency. We have strengthened our leading position in industrial air filtration. And now, Matthew, some of the financials.

Exactly. If we start with orders received, as Sven mentioned, orders received did decline. These continued delays on the major investments was the main issue there. The base business was relatively strong, particularly at the end of the quarter. For the quarter three, total order intake was 1.25 billion Swedish kronor versus 1.44 last quarter. Same quarter last year. Currency neutral, that's a decline of 7.1%. The currency actually in itself has a 6% negative impact. It is, of course, the weakening of the US dollar, particularly versus the Swedish kronor. That's the major impact there. Year-to-date orders are 4.18 billion kronor, down from 4.38%. very nearly flat on a currency neutral basis minus 0.3 organically minus 3.2 so we have got some positive impact from the newly acquired companies all the companies we acquired since q3 last year that's olisem in denmark and euro equipped down in spain moving on to the sales um Currency neutral sales and sales growth and organic sales growth, both in the quarter and for the year to date. So we're very pleased with that. Sales, currency neutral up 7.5%. The currency effect very much in line with orders around 6% negative. Organic growth 2.2% in the quarter as well. Year to date, currency neutral growth is still at 4.3% and organically we've grown 0.5% despite this very challenging market with the the longer decision times on these major capital investments. If you see on the bar charts at the bottom, there is a clear 184 million of the sales reduction is purely down to currency movements, which is significant. It has less of an effect on profitability, of course, but it's still not an insignificant effect on profitability, which if I move on, one more slide onto slide seven here, Good profitability despite negative currency effects. The adjusted EBITDA in the quarter, quarter three, was 166 million Swedish kronor. That's up 5 million versus the same quarter last year. The negative currency effects were 19 million in the quarter as well. So this is extremely strong. If we look at the margin, the margin in the quarter, 11.6% up from 11.4%. We would have been clearly over 12% had we not seen this impact from the dollar. It's a lot of ifs and the dollar is how it is, of course, but it's important to have that in context, particularly when you're looking at comparative periods. Earnings per share, 2.27 Swedish kronor. That's up from exactly two kronor for the same period last year. For the year to date, adjusted to beat 468 million kroner. Margin down somewhat 10.9% now versus 12.2%. Earnings per share well behind following the weaker start to the year in terms of total profitability. Solid cash flow performance in the quarter was... was a clear positive. This stable cash flow is despite the negative impact that we do have. When we take these larger, particularly in process technology division, the larger investment projects, the larger projects within the net from a net amount perspective, they very often come with large down payments and we are very often cash neutral throughout these projects or even cash positive throughout these projects. There has been a lack of those and that does impact cash flow somewhat negatively. But despite that, we've got a good steady inflow of cash flow from operations and they're clear positive free cash flow for the quarter despite our continued expenditure on investments in R&D and in our operations around the world. Cash flow from operations, 123 million in quarter three versus 181, which is extremely strong in quarter three last year. Year to date, 198 million. So it's picking up now. Net debt position we have following in Q2, we saw an increase in net debt due to dividend payments. And we acquired euro equipped back at the very start of Q or the very end of Q1. That has come down somewhat significantly. We are nevertheless higher than we were 12 months ago. But we can see, excluding RFS16, the debt is reducing right now, despite significant investments. If we move on and take a little look division by division, Sven, we can start with extraction and filtration technology.