Nordnet AB (publ)

Welcome to the Jettinga Q3 Report 2025 presentation. During the questions and answer session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to the speakers, CEO Matthias Peerjus and CFO Agnetha Palmer. Please go ahead.

Thank you very much and welcome everyone to today's conference. Today we will first look into our performance in the third quarter and then also reflect a bit on the current market situation and our expectations for the remainder of 2025. So we can move over to page number two, please. So if we start then by looking at the development of some of our long-term or strategic KPIs, we can see that we continue to clearly track in line with our plan to increase the share of sales from recurring revenue products and also accelerating the share of sales from high margin products like our Paragonics offering, our ECLS portfolio, consumables in infection prevention and beta bags in sterile transfer. This is all supported by solid and effective quality processes as well. Sales from recurring revenue is now at 65% and high margin products make up more than two-thirds of sales today. When it comes to quality, the number of field actions in relation to sales has decreased significantly and we see this positive trend continue also in the third quarter of this year. These improvements should of course be achieved through responsible leverage and an attractive long-term return on invested capital. We can move then to page number three, please. So if we focus then on the third quarter for a moment and the key takeaways for the quarter, we can see that we show strength in the quarter with significant growth on the top line. Net sales grew by 9.5% organically with positive development in all business areas and all regions. Order intake also increased by 4.7% organically. Adjusted growth and EBITDA margins improved mainly due to acquisitions, healthy price increases, positive mix and also productivity gains. And this is in spite of continued strong headwind from tariffs and also currency on the EBITDA margin, which then is a signal that the underlying development is even stronger. Our financial position remains solid with our financial leverage well below 2.5 times EBITDA. We can then move over to page number 4, please. So taking a step back then and looking at some of the key activities and events in the third quarter, when it comes to our offering and the customers, I'm happy to see that Sweden's first fully automated central sterile supply department at the Malmö University Hospital has been inaugurated with the getting its TDOC providing the intelligence that optimizes sterile supply management. And by enhancing quality, patient safety, cost efficiency, and also improving the work environment, TDOC is really the critical enabler for successful operations. And this is something that we've seen for over 25 years now with this product. Productivity is a key priority for us and by implementing the getting a manufacturing excellence program we've been able to for example cut lead times by more than 20% and also reduce the cogs by about 10% for some of our key products in the product category WIS which is washers, isolators and sterilizers. We've also joined forces with Philips to offer hospitals in CE markets an integrated anesthesia workstation for the operating room. So this new solution unites the precise anesthesia delivery and the state of art patient monitoring technologies. When it then comes to sustainability and quality in the quarter, we got the CE mark for a CardioSafe Intra-Ortic Balloon Pump back. This is, of course, subject to certain conditions, and we plan to gradually resume deliveries towards the end of this year. When it comes to our implants business, we received EU MDR approval of three further indications for a V12 balloon expandable covered stent, and this will now strengthen our position, and it's a critical enabler for success on the European endovascular market. When it comes to our environment KPIs, I'm happy to see that our CO2 emissions from operations continue to decrease. Let's move into page number five and look at our top line performance in a bit more detail. So overall we had a specifically strong top-line performance in acute care therapies and life science. Our order intake grew 4.7% organically and the organic order intake for acute care therapies increased mainly due to ventilators in critical care and ECLS consumables. Life science showed double-digit growth in the organic order intake for the quarter due to very strong performance in cell transfer. And the organic order intake for surgical workflows declined a bit in the quarter despite the strong trend that we've seen for operating tables and also consumables in infection control. When it comes to sales, we grew 9.5% organically. Both acute care therapies and life science had double digit growth in organic net sales. In acute care therapies, this was mainly due to the very strong performance in ventilator, ECLS therapy and also within cardiac surgery. Organic net sales for life science primarily increased as a result of healthy growth in sterile transfer and also capital goods in the washer, isolator and sterilizer category. In surgical workflows, organic net sales increased due to growth in infection control and also thanks to operating tables within surgical workplaces. We can then move over to page number six and I'll hand over to you, Agneta.

Thank you, Mattias. I will start on a positive note and highlight that despite some severe headwind from tariffs and FX, we continue to see improvements throughout the business leading to higher margins. When it comes to adjusted gross profit for the group, adjusted gross profit increased to 4 billion 51 million SEK in the quarter, primarily on the back of volume, acquisitions, healthy price increases and positive product mix. Adjusted gross margin was up by 0.9 percentage points in total, primarily supported by price and healthy mix. Looking at adjusted EBITDA, the positive effect from adjusted gross profit on EBITDA margin was 1.4 percentage points, thanks to what I just mentioned. Adjusted for currency, OPEX had a slight positive impact on the margin in the quarter. FX impacted negatively by minus 0.6 percentage points in the quarter. All in all, this resulted in an adjusted EBITDA of 1 billion 79 million, improving our margin by about 1.6 percentage points year over year to 13.1%. We move to page 7, please. Let's have a closer look at the impact from tariffs. Earlier this year, in our Q1 call, we shared some insights on our sales flows. So just to reiterate that, about 60% of our sales in the US are produced in the US. For EU and China respectively, about 10% is produced in the US and about 1% of sales in EU and US is coming from China. As you know, the tariff discussions are highly dynamic, but this overview should provide a good understanding of our exposure. In the third quarter, costs of tariffs amounted to approximately minus 108 million SEK. Adding the impact in Q2, we are then at minus 280 million SEK year to date. Let's move to page eight, please. So how are we then mitigating this and what has been the impact on the margin? In our previous earnings call we talked about the three main areas that we focus on to address this topic and they are pricing, cost reduction and reviewing and challenging our structural setup for sourcing and production. This is of course nothing new but we have intensified the efforts in all three of these areas. The chart on the right illustrates the margin development year on year for Q3. First thing to note is the great comeback in adjusted EBITDA margin from 11.5 to 13.1% for the quarter. What the chart also illustrates with the blue line is what the margin would be without tariffs and with the turquoise line what it would be without tariffs and at last year's currency rates. So without tariffs we would have landed on a 14.4% margin and when also neutralizing currency we would have been at 14.9%. So this is a clear signal of our strong underlying performance and potential. Let's move to page 9 and look at our financial situation. We remain in a solid financial position. Free cash flow amounted to 0.8 billion SEK in the quarter. Compared with last year, free cash flow was positively impacted by improved operating profits and changes in working capital. Working capital days continue to develop well, and on operating return on invested capital, we improved to 12.5% on a rolling 12-month basis, which is well above the cost of capital. At the end of Q3, net debt was 11.1 billion SEK. If we adjust for pension liabilities, we are at 8.6 billion SEK. This brings us to a leverage of 1.6 times adjusted EBITDA, which is well below the 2.5, which we have set as the internal threshold. If we adjust for pension liabilities, leverage is at 1.2 times adjusted EBITDA. Cash amounted to approximately 2.8 billion SEK by the end of the quarter. So all in all, we can conclude that the financial position continues to be strong. Let's move to page 10, please, and back to you, Mathias.