Sensys Gatso Group AB (publ)

Welcome to the Census GOTSO Group 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. If you are listening to the presentation via webcast, you can ask written questions using the form below. Now, I will hand the conference over to speakers CEO Lewis Miller and CFO Simon Mulder. Please go ahead.

Good morning, and welcome to the presentation of Census GATSO Group's Q3 2025 Interim Report. My name is Lewis Miller, Group Chief Executive Officer, and joining me this morning is Simon Mulder, our Group Chief Financial Officer. I'll be speaking briefly on our strategy moving forward, and then provide an overview of our excellent Q3 results. I'll then turn the presentation over to Simon to review the group's results and segment reporting in greater detail before addressing our financial outlook for the remainder of the year. In our Q2 market presentation, I highlighted a plan to assess the company over my first 100 days with the goal of defining how we will deliver profitable growth moving forward. Having completed this assessment, we will move forward centered around three strategic pillars designed to drive growth, efficiency and service. The first pillar focuses on strategic market and customer engagement. Key to this pillar is concentrating on our four core markets, Asia Pacific, Europe, the Middle East and North America, while increasing our share of recurring revenue. The second pillar involves advancing technology and go-to-market strategies. We must better leverage our global solutions and development spend across our core geographies while highlighting our market-leading technologies. Third, we will continuously work to optimize our organization through operational efficiencies and recruiting, retaining, and rewarding top talent and performance. With that said, let's take a look at our Q3 performance. Starting first with order intake, we saw strong bookings in Q3. Specifically, Q3 intake landed at 331 million Swedish krona, up significantly from 54 million in Q2 of this year. Australia and the U.S. were key drivers highlighted by a first-time sale of fixed systems to a new state, South Australia, as well as provision of speed trailer technology for use in the state of Victoria. Recurring revenue made up 86% of the intake with a healthy mix of renewals, existing customer expansions, and new customers. Turning next to revenue, we continued to see year over year improvement. Revenue for the quarter landed at 165 million Swedish Krona, a 17% increase over the same period in 2024. This included strong system sales from our core Swedish and Dutch projects, a full quarter of Saudi maintenance revenue and good performance in the US managed services business. the U.S. business is fully recovered and growing over the impact of legislative changes in Iowa last year. While the weakened U.S. dollar did impact our results, our underlying year-over-year growth rate in local U.S. currency is 17%. Now looking at margin, in our Q2 report, I noted that our 15.4% EBITDA margin better reflected our underlying operational strength moving into the second half of the year. Q3 results validated this statement with EBITDA margin increasing to 17.7%, significantly up from 9.9% in Q3 2024. This continued our positive trend in rolling 12-month EBITDA with year-to-date performance now sitting at 13.8%. Our Q3 margin results were driven by economies of scale in Sweden and operational efficiencies in the U.S. With that, I'd like to turn the presentation over to Simon for a closer look at our results and segment reporting.

Thank you, Louis. As always, I will take you through our group's financial performance, the segments, and our cash position. starting off with group financial performance. Our Q3 revenue increased 17% year over year to 165 million. A large contribution came from system sales, which increased by 60% year over year, with recurring revenue remaining stable despite currency fluctuation challenges. Our gross margin for Q3 was 42% compared to 37% last year, The gross margin has improved due to continued deliveries on the Dutch and the Swedish projects. We've seen a strong EBITDA performance in Q3, with 29 million Swedish kroners, up from 14 million from Q3 2024. The EBITDA margin landed at 17.7% compared to 9.9%. For the quarter, we've seen a positive cash flow from operations amounting to 38 million. And for the year to date, 18 million Swedish kronors. Now diving into the segments and starting with the segment managed services, we can see that year over year, all key metrics have improved. Our order intake is up to 104 million from 25 million last year. This is driven by renewals with a total value of 58 million and expansions and new customers totaling 46 million. Our revenue came in at 45 million Swedish kronors, up 7%. The increase in US dollars, as Lou already mentioned, is 17% year over year. During the quarter, we've seen a negative currency impact to the amount of 4 million Swedish kronor. Ariba DA is up to 6 million for the segment managed services with an EBITDA margin of 13% compared to 5% in Q3 2024. This is driven by improved operational efficiencies in the US. Turning to our segment system sales, we can also see that year over year all key metrics have improved. Order intake is up to 227 million from 70 million in Q3 2024. This is mainly driven by Australian order intake to the amount of 196 million in the quarter and smaller repeat orders in the EU. Revenue for the segment came in at 120 million, up by 21%, driven by the Dutch and the Swedish projects, but also notable the first full quarter of Saudi maintenance contribution this year. EBITDA came in at 23 million, up 92%, driven by economies of scale in Sweden and an important contribution from the Saudi maintenance activities. Both of our segments manage services and system sales have recurring revenue. Recurring revenue is predictable. Our underlying recurring revenue amounts to approximately 100 million per quarter and is based on long-term contracts with customers with a high retention rate. Part of the order intake during the quarter was incremental order intake and will grow our recurring revenue base in the future. As recurring revenue is in both segments, we also see a good geographical mix with contributions from each of our core markets globally. The US market taking approximately 50% of recurring revenue. Going to our cash position. Available cash was stable at 133 million. Year to date, we had positive funds from operating activities of 38 million, funding our working capital needs of 33 million year to date. Investments in fixed assets and operations and software platforms is financed through the bond proceeds. Our interest bearing debt has increased to 292 million, mainly due to usage of funds for our investments. Main movements are increased lease liabilities due to prolongation of lease of our headquarters in Jönköping, 18 million, translation effects on the Euro-nominated bond, 12 million, and usage of credit facility by 90 million, and closing our cash on bank to 160 million. And with that, I'd like to hand it over to Lou.

Thank you, Simon. To conclude our presentation, I'd like to address our financial outlook for the remainder of the year. Overall, our outlook has improved. Full-year revenue guidance is unchanged, trending toward the lower end of the range of 700 to 800 million Swedish krona and overcoming the impact of current currency fluctuations. we are increasing our full year EBITDA guidance from the mid to the high end of the range of 12 to 14%. We are committed and confident in our ability to deliver in line with expectations, and as always, we'll continue to closely monitor market developments. To summarize our interim report today, the takeaways are as follows. We are very pleased with our strong Q3 performance. We have a clear strategic direction moving forward. Order intake is up. And year over year, all key financial metrics are improved. With that, I'd like to open things up to questions.

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 Orgen Rodian from Carnegie Investimon Bank. Please go ahead.

Good day, everyone. Thanks for taking a few questions from my side. The first question relates to the Australian order. What is the timing of this in your current plan?

We expect to deliver – we had multiple Australian orders that came in in Q3. Is there a specific order that you're referring to?

Oh, well, then it's a general question on all these orders.

So certainly, yes, the Australian orders were a mix of both renewals of recurring revenue projects in Tasmania and Victoria, as well as new projects also in Victoria and South Australia, as previously mentioned. And that is also a mix of recurring revenue and one-time system sales. The one-time system sales will be delivered over a period of months, and the recurring revenue will be implemented typically in a handful of months, three to four months, or in some instances in the renewal, a continuation of what's already occurring today. So a combination of continuation and incremental, as well as one-time system sales and recurring revenue.

Okay, thank you. The incremental part, Do you expect to deliver that in this year or is it rather for next?

Yeah, it'll primarily be next year.

Next year. Okay, thank you. How do you view the potential in South Australia? Is it a new state? Do you need to increase the organization there or can you manage this from your current organization in Australia?

Well, we'll monitor that over time. Initially, we would work through our home office in the Melbourne area. As with all new projects and customers, our expectation is that we'll perform well and we'll see where that leads moving forward.

Okay, thank you.

The question relates to the gross margin. It was very strong in the quarter, especially compared year on year. Were there any special items in this quarter or would you say that this was a pure underlying performance?

Yeah, thank you for that question, Erjan. It was a strong performance, right, that 42% gross margin. What we see is that once we get the scale, and we can see that in Sweden, once we start delivering volume, the margins improve. So that's one item. And the other item is, as I already mentioned, right, we've had the first full quarter of Saudi maintenance, and that comes at a good margin contribution. So those are some of the items. And, of course, last year we detailed on the lower margin that the first deliveries on a large project such as the Dutch project, we see that in the first deliveries, right? But once we come up to speed, we also see margin improvements there. So it's those three things that are driving it.

Okay, thank you. And just to remind us, the Saudi maintenance, for how long period do you expect to have that in your books?

Well, we've agreed a framework with the customer for three years and we get like yearly renewals for the maintenance. So that's what we are looking at now. Of course, everybody knows that we've delivered over more than 1200 units to Saudi, right? So that needs to be maintained at some point in time. So we do expect this to continue into the future. Thank you.

I'm turning over to the strategic update, which was very thoroughly made, I think. Is this the full strategic review or do you intend to also come out with some financial targets at a later stage?

It was a comprehensive review, and we're busy working on that and implementing it right now. At this time, we won't make additional financial guidance, but it's something that we'll consider moving forward.

Okay. Thank you very much. That's all from my part. Thank you. You're welcome. Thank you, Ryan.

The next question comes from Robert Vink from Kepler Shoebrew. Please go ahead.

Yeah, thank you very much. Also some questions from my side. So first question on Iowa. You stated that the US managed service business is fully recovered from the Iowa legislative changes. So I was just wondering if you could elaborate a little bit more on that. So what is the action that you took inside of the US managed service business Yeah, to drive that recovery. So that's my first question.

Sure, I'll take that. Specific to Iowa, the legislative framework there has stabilized. So we have a clear understanding of what is allowed in Iowa moving forward. As a result of that, we've had additional systems come back online to improve performance in Iowa. For the U.S. business as a whole, we've also seen incremental revenue driven by expansions with existing customers outside Iowa, as well as some new customer signings. So the combined impact of that is that we've recovered from the impact of Iowa and the U.S. business as a whole is now growing over that.

Okay. Okay. Very good. And then maybe on the order intake, more than 300 million SEC, there was already a little bit of questions on it, but I was wondering if you could give us a little bit more feeling, what is the split between contract extensions and new contracts? I think you've already spoken a bit about the Australian order intake, but if you could clarify a bit more, that would be helpful.

Certainly. And please take a look at slide five on order intake in our market presentation when you can take a second look at that. But that does break down the mix of 86% recurring revenue on the order intake for the quarter and 14% in non-recurring revenue. In the recurring revenue, 189 million was renewals, and the balance of just under 100 million was pretty much a split between expansions with existing customers and new customers.

Okay, very good. And maybe on the revenue guidance, so you're maintaining the lower end of the range for the 25 revenue, which does point, if I do the quick math, to Q4 de-accelerating in terms of growth rates. So clearly, of course, the environment is volatile with currencies, and maybe, of course, the system sales business is also volatile. But could you explain a little bit more Yeah, YAF decided to maintain that guidance. It also sounds like on the U.S. managed service business, the run rate is improving as the business has recovered. So, yeah, definitely.

Yeah, I mean, as we sit here today, we have a fairly good view, nothing certain, as you mentioned, right, on the remaining handful of weeks of the year. And so we have a clear vision of what we expect over the last few weeks, as you mentioned. We are seeing good growth in the U.S. business, but we do have some headwinds from currency. So that's primarily led us to maintain the outlook. Simon, feel free to jump in here, please.

Yeah, I think, like you said, Lou, I mean, it's only a couple of weeks out from the end of the year, right? So we have a clear view on what needs to be delivered. So, yeah.

Okay, very good. And then maybe a question on the strategy, the comprehensive review. Clearly some strategic focus. So there is a mention of core markets and that the group wants to bring focus to the core markets. So what are exactly the key countries that you want to focus on? I assume it's the US, it's Australia, of course it's the business in Europe. Is that a fair assumption, or are there any other countries that are a key priority, maybe in the Middle East? So I was wondering that, and maybe secondly, I think on strategic focus, in the midterm, I assume that the focus remains to transition from a system sales business increasingly to recurring revenues, managed services. So yeah, do you expect in the midterm

manage services to outgrow system sales or uh yeah maybe you could elaborate on that as well certainly um and thank you for the question uh on the core markets i would add saudi to that um it's an important market for us where we have focus uh as mentioned um you know at several at several points in in the report um in terms of recurring revenue um and focus focus on that going forward Yes, I think we've previously indicated a target of a 60% of our revenue being recurring. We continue to work towards that. That doesn't mean we won't focus on system sales as well, and Saudi is a good example of that, where the sale of the in-vehicle systems, over 1,200 in-vehicle systems, led to a follow-on maintenance contract with long-term recurring revenue. So I think, as mentioned in the strategic plan or the description of our strategic focus, We will continue to focus on recurring revenue, growing that share, but system sales plays an important part as a leading indicator in that as well.

Perfect. Thank you very much. That's all from my side.

You're welcome.

There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Yeah, so we have two questions on the board. One is, could you elaborate a bit further on the operational efficiencies that drove the EBTA growth in the managed services?

Certainly, I'll take that. Our team in the U.S. has prioritized implementing a metrics-based culture and measurements for our back office performance, and that includes things such as data processing, customer service and related activities. And the implementation of that metrics based culture has allowed us to better track performance and improve efficiency. So that would be a specific example that has been implemented, which has produced tangible results in improving the margin in the US business.

Okay, and the second question is around the improved financial outlook. And the question is, how has it changed in Q3? And I think, like Lou mentioned in Q2, is that the underlying performance on EBITDA has been around 15%, right? And we expected Q of H2 to be slightly better. Now, seeing the results of Q3 come in at 17.7%, we are confident that we can land the year closer to the high end of the bandwidth on EBITDA. So I hope that answers that question. And there are no more questions on the activity feed. I think that's it for today.

Well, thank you for participating in the presentation and the questions and answers today. And I think with that, we'll wrap it up. Thank you. Good morning, and welcome to the presentation of Census GATSO Group's Q3 2025 Interim Report. My name is Lewis Miller, Group Chief Executive Officer, and joining me this morning is Simon Mulder, our Group Chief Financial Officer. I'll be speaking briefly on our strategy moving forward, and then provide an overview of our excellent Q3 results. I'll then turn the presentation over to Simon to review the group's results and segment reporting in greater detail before addressing our financial outlook for the remainder of the year. In our Q2 market presentation, I highlighted a plan to assess the company over my first 100 days with the goal of defining how we will deliver profitable growth moving forward. Having completed this assessment, we will move forward centered around three strategic pillars designed to drive growth, efficiency and service. The first pillar focuses on strategic market and customer engagement. Key to this pillar is concentrating on our four core markets, Asia Pacific, Europe, the Middle East and North America, while increasing our share of recurring revenue. The second pillar involves advancing technology and go-to-market strategies. We must better leverage our global solutions and development spend across our core geographies while highlighting our market-leading technologies. Third, we will continuously work to optimize our organization through operational efficiencies and recruiting, retaining, and rewarding top talent and performance. With that said, let's take a look at our Q3 performance. Starting first with order intake, we saw strong bookings in Q3. Specifically, Q3 intake landed at 331 million Swedish krona, up significantly from 54 million in Q2 of this year. Australia and the U.S. were key drivers highlighted by a first-time sale of fixed systems to a new state, South Australia, as well as provision of speed trailer technology for use in the state of Victoria. Recurring revenue made up 86% of the intake with a healthy mix of renewals, existing customer expansions, and new customers. Turning next to revenue, we continued to see year over year improvement. Revenue for the quarter landed at 165 million Swedish Krona, a 17% increase over the same period in 2024. This included strong system sales from our core Swedish and Dutch projects, a full quarter of Saudi maintenance revenue and good performance in the US managed services business. the U.S. business is fully recovered and growing over the impact of legislative changes in Iowa last year. While the weakened U.S. dollar did impact our results, our underlying year-over-year growth rate in local U.S. currency is 17%. Now looking at margin, in our Q2 report, I noted that our 15.4% EBITDA margin better reflected our underlying operational strength moving into the second half of the year. Q3 results validated this statement with EBITDA margin increasing to 17.7%, significantly up from 9.9% in Q3 2024. This continued our positive trend in rolling 12-month EBITDA with year-to-date performance now sitting at 13.8%. Our Q3 margin results were driven by economies of scale in Sweden and operational efficiencies in the U.S. With that, I'd like to turn the presentation over to Simon for a closer look at our results and segment reporting.

Thank you, Louis. As always, I will take you through our group's financial performance, the segments, and our cash position. Starting off with group financial performance. Our Q3 revenue increased 17% year over year to 165 million. A large contribution came from system sales, which increased by 60% year over year, with recurring revenue remaining stable despite currency fluctuation challenges. Our gross margin for Q3 was 42% compared to 37% last year. The gross margin has improved due to continued deliveries on the Dutch and the Swedish projects. We've seen a strong EBITDA performance in Q3 with 29 million Swedish kronors, up from 14 million from Q3 2024. The EBITDA margin landed at 17.7% compared to 9.9%. For the quarter, we've seen a positive cash flow from operations amounting to 38 million, And for the year to date, 18 million Swedish kronors. Now diving into the segments and starting with the segment managed services, we can see that year over year, all key metrics have improved. Our order intake is up to 104 million from 25 million last year. This is driven by renewals with a total value of 58 million and expansions and new customers totaling 46 million. Our revenue came in at 45 million Swedish kronors, up 7%. The increase in US dollars, as Lou already mentioned, is 17% year over year. During the quarter, we've seen a negative currency impact to the amount of 4 million Swedish kronor. Ariba DA is up to 6 million for the segment managed services, with an EBITDA margin of 13% compared to 5% in Q3 2024. This is driven by improved operational efficiencies in the US. Turning to our segment system sales, we can also see that year over year, all key metrics have improved. Order intake is up to 227 million from 70 million in Q3 2024. This is mainly driven by Australian order intake to the amount of 196 million in the quarter and smaller repeat orders in the EU. Revenue for the segment came in at 120 million, up by 21%, driven by the Dutch and the Swedish projects, but also notable the first full quarter of Saudi maintenance contribution this year. EBITDA came in at 23 million, up 92%, driven by economies of scale in Sweden and an important contribution from the Saudi maintenance activities. Both of our segments manage services and system sales have recurring revenue. Recurring revenue is predictable. Our underlying recurring revenue amounts to approximately 100 million per quarter and is based on long-term contracts with customers with a high retention rate. Part of the order intake during the quarter was incremental order intake and will grow our recurring revenue base in the future. As recurring revenue is in both segments, we also see a good geographical mix with contributions from each of our core markets globally. The US market taking approximately 50% of recurring revenue. Going to our cash position. Available cash was stable at 133 million. Year to date, we had positive funds from operating activities of 38 million, funding our working capital needs of 33 million year to date. Investments in fixed assets and operations and software platforms is financed through the bond proceeds. Our interest bearing debt has increased to 292 million, mainly due to usage of funds for our investments. Main movements are increased lease liabilities due to prolongation of lease of our headquarters in Jönköping, 18 million, translation effects on the Euro-nominated bond, 12 million, and usage of credit facility by 19 million, and closing our cash on bank to 160 million. And with that, I'd like to hand it over to Lou.

Thank you, Simon. To conclude our presentation, I'd like to address our financial outlook for the remainder of the year. Overall, our outlook has improved. Full-year revenue guidance is unchanged, trending toward the lower end of the range of 700 to 800 million Swedish krona and overcoming the impact of current currency fluctuations. we are increasing our full year EBITDA guidance from the mid to the high end of the range of 12 to 14%. We are committed and confident in our ability to deliver in line with expectations. And as always, we'll continue to closely monitor market developments. To summarize our interim report today, the takeaways are as follows. We are very pleased with our strong Q3 performance. We have a clear strategic direction moving forward. Order intake is up. And year over year, all key financial metrics are improved. With that, I'd like to open things up to questions.

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 Orgen Rodian from Carnegie Investamon Bank. Please go ahead.

Good day, everyone. Thanks for taking a few questions from my side. The first question relates to the Australian order. What is the timing of this in your current plan?

We expect to deliver – we had multiple Australian orders that came in in Q3. Is there a specific order that you're referring to?

Oh, well, then it's a general question on all these orders.

So certainly, yes, the Australian orders were a mix of both renewals of recurring revenue projects in Tasmania and Victoria, as well as new projects also in Victoria and South Australia, as previously mentioned. And that is also a mix of recurring revenue and one-time system sales. The one-time system sales will be delivered over a period of months and the recurring revenue will be implemented typically in a handful of months, three to four months, or in some instances in the renewal, a continuation of what's already occurring today. So a combination of continuation and incremental, as well as one-time system sales and recurring revenue.

Okay, thank you. The incremental part Do you expect to deliver that in this year or is it rather for next?

Yeah, it'll primarily be next year.

Next year. Okay. Thank you. How do you view the potential in South Australia? Is it a new state? Do you need to increase the organization there or can you manage this from your current

uh organization in australia well we'll monitor that over time initially we we would work through our our home office in the melbourne area um as with all new new projects and customers you know our expectation is that we'll perform well and and we'll see to what you know where that leads moving forward

Okay, thank you.

The question relates to the gross margin. It was very strong in the quarter, especially compared year on year. Were there any special items in this quarter or would you say that this was a pure underlying performance?

Yeah, thank you for that question, Erjan. It was a strong performance, right, at 42% gross margin. What we see is that once we get the scale, and we can see that in Sweden, once we start delivering volume, the margins improve. So that's one item. And the other item is, as I already mentioned, right, we've had the first full quarter of Saudi maintenance, and that comes at a good margin contribution. So those are some of the items. And, of course, last year we detailed on the lower margin that the first deliveries on a large project such as the Dutch project, we see that in the first deliveries, right? But once we come up to speed, we also see margin improvements there. So it's those three things that are driving it.

Okay, thank you. And just to remind us, the Saudi maintenance, for how long period do you expect to have that in your books?

Well, we've agreed a framework with the customer for three years and we get like yearly renewals for the maintenance. So that's what we are looking at now. Of course, everybody knows that we've delivered over more than 1200 units to Saudi, right? So that needs to be maintained at some point in time. So we do expect this to continue into the future.

Thank you. I'm turning over to the strategic update, which was very thoroughly made, I think. Is this the full strategic review, or do you intend to also come out with some financial targets at a later stage?

It was a comprehensive review, and we're busy working on that and implementing it right now. At this time, we won't make additional financial guidance, but it's something that we'll consider moving forward.

Okay. Thank you very much. That's all from my part. Thank you. You're welcome. Thank you, Arjan.

The next question comes from Robert Vink from Kepler Shoebrew. Please go ahead.

Yeah, thank you very much. Also some questions from my side. So first question on Iowa. You stated that the US managed service business is fully recovered from the Iowa legislative changes. So I was just wondering if you could elaborate a little bit more on that. So what is the action that you took inside of the US managed service business Yeah, to drive that recovery. So that's my first question.

Sure, I'll take that. Specific to Iowa, the legislative framework there has stabilized. So we have a clear understanding of what is allowed in Iowa moving forward. As a result of that, we've had additional systems come back online to improve performance in Iowa. For the U.S. business as a whole, we've also seen incremental revenue driven by expansions with existing customers outside Iowa, as well as some new customer signings. So the combined impact of that is that we've recovered from the impact of Iowa and the U.S. business as a whole is now growing over that.

Okay. Okay. Very good. And then maybe on the order intake, more than 300 million SEC, there was already a little bit of questions on it, but I was wondering if you could give us a little bit more feeling, what is the split between contract extensions and new contracts? I think you've already spoken a bit about the Australian order intake, but if you could clarify a bit more, that would be helpful.

Certainly, and please take a look at slide five on order intake in our market presentation when you can take a second look at that. But that does break down the mix of 86% recurring revenue on the order intake for the quarter and 14% in non-recurring revenue. In the recurring revenue, $189 million was renewals and the balance of just under 100 million was pretty much a split between expansions with existing customers and new customers.

Okay, very, very good. And maybe on the revenue guidance, so you're maintaining the lower end of the range for the 25 revenue, which does point, if I do the quick math, to Q4 de-accelerating in terms of growth rates. So clearly, of course, the environment is volatile with currencies, and maybe, of course, your system sales business is also volatile. But could you explain a little bit more Yeah, YAF decided to maintain that guidance. It also sounds like, yeah, on the U.S. managed service business, the run rate is improving as the business has recovered. So, yeah, definitely.

Yeah, I mean, as we sit here today, we have a fairly good view, nothing certain, as you mentioned, right, on the remaining handful of weeks of the year. And so we have a clear vision of what we expect over the last few weeks, as you mentioned. We are seeing good growth in the U.S. business, but we do have some headwinds from currency. So that's primarily led us to maintain the outlook. Simon, feel free to jump in here, please.

Yeah, I think, like you said, Lou, I mean, it's only a couple of weeks out from the end of the year, right? So we have a clear view on what needs to be delivered. So, yeah.

Okay, very good. And then maybe a question on the strategy, the comprehensive review. Clearly some strategic focus. So there is a mention of core markets and that the group wants to bring focus to the core markets. So what are exactly the key countries that you want to focus on? I assume it's the US, it's Australia, of course it's the business in Europe. Is that a fair assumption, or are there any other countries that are a key priority, maybe in the Middle East? So I was wondering that, and maybe secondly, I think on strategic focus, in the midterm, I assume that the focus remains to transition from a system sales business increasingly to recurring revenues, managed services. So yeah, do you expect in the midterm

manage services to outgrow system sales or uh yeah maybe you could elaborate on that as well certainly um and thank you for the question uh on the core markets i would add saudi to that um it's an important market for us where we have focus uh as mentioned um you know at several at several points in in the report um in terms of recurring revenue um and focus focus on that going forward Yes, I think we've previously indicated a target of a 60% of our revenue being recurring. We continue to work towards that. That doesn't mean we won't focus on system sales as well, and Saudi is a good example of that, where the sale of the in-vehicle systems, over 1,200 in-vehicle systems, led to a follow-on maintenance contract with long-term recurring revenue. So I think, as mentioned in the strategic plan or the description of our strategic focus, We will continue to focus on recurring revenue, growing that share, but system sales plays an important part as a leading indicator in that as well.

Perfect. Thank you very much. That's all from my side.

You're welcome.

There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Yeah, so we have two questions on the board. One is, could you elaborate a bit further on the operational efficiencies that drove the EBTA growth in the managed services?

Certainly, I'll take that. Our team in the U.S. has prioritized implementing a metrics-based culture and measurements for our back office performance, and that includes things such as data processing, customer service and related activities. And the implementation of that metrics based culture has allowed us to better track performance and improve efficiency. So that would be a specific example that has been implemented, which has produced tangible results in improving the margin in the US business.

Okay, and the second question is around the improved financial outlook, and the question is, how has it changed in Q3? And I think, like Lou mentioned in Q2, is that the underlying performance on EBITDA has been uh around 15 percent right and and we expected q of h2 to be slightly better now seeing the results of of q3 come in at 17.7 percent we are confident that we can um we can land the year closer to the high end of the of the bandwidth uh on ebitda So I hope that answers that question. And there are no more questions on the activity feed. I think that's it for today.

Well, thank you for participating in the presentation and the questions and answers today. And I think with that, we'll wrap it up. Thank you.