Troax Group Stock

Okay. Hi, everyone, and welcome to the interim report for Troax Group. My name is Martin Nystrom, and I am the President and CEO of the Troax Group. And together here with me, I have our new CFO, Robert Burning, who joined the company on the 1st of October. And together with me, Robert will go through the quarterly results of the third quarter.

I'll start by sharing my screen. let's see if it comes here. Great. So here, we have the presentation as well. So we'll do it -- as always, I'll try to summarize the quarter, then we'll walk through the key events, we'll go through the financial numbers, and then we'll end up the call with the Q&A.

So without further ado, let's dive into the quarter. If I summarize the third quarter, I think we had a good quarter from a top line point of view. So we had continued strong growth on order intake as well as improved sales. So we almost got to the EUR 100 million mark in the quarter as well. So our order intake grew by 60% in total. Of that, we had our -- we also saw a sales increase of 51% in total, close to EUR 97 million, and we also had a positive book-to-bill also in this quarter.

Our acquisition continued to deliver very well. So the recent acquisitions added 65% to the total order intake, while we were more flattish on the organic order intake side. The deliveries and the sales during the quarter grew by 5% year-on-year. Here, we also have our order book consisting of more orders, which are midsized and large, which means that the usual order to sales conversion cycle is a little bit longer. So on the back of our second quarter, we had a growth of 5%.

So very strong and even record high numbers, both on order intake as well as sales during the quarter, which is positive. If I then look to demand, demand continued on the pattern from the second quarter and the first half of the year. So we see a scattered picture both across regions as well as the different market segments.

Here, I think it's good to see that our warehousing portfolio continued to grow, particularly in Europe, we continue to see good demand. Also a continuation of the second quarter, which followed into the third quarter is that we do see our data center products and the segment growing strongly, mainly so in North America, but also partly in Europe.

So segments going -- continuing to grow strongly. At the same time, we do see the automotive sector in Europe as well as in Asia and China, in particular, struggling also in the third quarter. And we also see the construction segment for us remaining at a low level, even though we believe that we have seen the bottom from our end.

If I then move over to the profitability side, I think it was good to see a sequential profitability improvement in this quarter. We ended up at an adjusted EBITA margin of 15.6% in the quarter, which was a mixed bag of outcomes. I think the first part is that our gross margin fell to 36.1% from 38.0% last year. Main reasons for this is that we do now have a less favorable sales mix from a gross margin point of view.

We also continue to see cost pressure on raw materials and components in Europe. We started to see that in the second quarter, which has now also become reality more in the third quarter. And we continue to see high transportation costs in Europe. So this puts a bit of pressure on our gross margin in the quarter.

Our North American volumes grew. They started to grow already in the second quarter, but we are now also seeing additional growth in the third quarter. Here, we are on a journey ramping up our new Tennessee facility from our old Chicago facility. Here, we've done a good job, I think, with delivering more volumes and satisfying our customers, but we're still having a journey to make when it comes to our margin in North America, and I'll come back to that during the call as well.

On the SG&A side, we are having a good cost control during the quarter. I think our organic costs are now declining off the back of what investments and initiatives that we've taken in previous quarters and the increase of our sales and admin cost overall stems from both our acquisitions, which we have added, but also our IT investments. The quarter also includes an adjusted EBITA of EUR 2.1 million due to the relocation in North America. We have had more costs than we initially anticipated connected to our ramp-up.

On the net debt side, we continue to be on the high side, to be Troax, but we're seeing a sequential decrease. And of course, this is then a consequence of the recent acquisitions. And during the quarter, we have also reevaluated our earn-out liabilities and earn-out setups. And as a consequence, we've also added EUR 5.3 million to our net debt.

So overall, a very strong quarter from a top line point of view. Our margin is sequentially improving, but there is more work to be done on the margin. If I then look and start to do a few deep dives as we usually do, start with North America, where we have now completed the relocation from Chicago to Portland. We did that already during the second quarter. And now we're fully operational and running out of our Tennessee facility.

I think it's great to know that our capacity -- our facility definitely adds capacity and efficiency to our group. But at the same time, I realize before we are at the same level and in the same position as we are both in APAC as well as in Europe, there is more work to be done until we realize and utilize and leverage that full potential on our investment.

It's pleasing to see that our deliveries during the quarter increased. At the same time, we've done that at the cost of our gross margin. So in the quarter, we had roughly 100 bps relating to additional costs for ramp-up and outsourcing to satisfy our customers. And this effect will -- has gradually come down now during the third quarter, and we'll start to see that declining even further in the coming quarters. And our focus has been through the third quarter as well as into the coming quarters to make sure we run this as a fully stable and also fully optimized facility just like the rest inside the Troax Group.

Also, after the quarter, we have now launched what we call Beyond Safety, which is our commercial platform and the commercial platform that we have for long-term growth. And this is, I think, super exciting because now we start to bring in all the different ingredients and the broader portfolio under the same umbrella. Of course, this is great if we can, in a consistent and competitive way, explain what our solutions bring to our customers in terms of customer value, bringing their safety up, bringing their productivity up and also bringing their performance up.

So I think this is a great way for us and a great tool for us to continue on our sustainable growth journey. And I think one of the things you'd see today out of this is our new logo type and new graphic profile that we're utilizing also during this call.

Thirdly, I'd like to show that we are also strengthening the capabilities as well as the leadership team. So Robert, our new CEO, (sic) [ CFO ], is also on the call. So he joined on the 1st of October to strengthen our finance function. We have promoted Maria Pettersson to the responsibility for both sourcing as well as sustainability, fully in line with our strategy. And I'm also very happy to welcome Linus Karlesand as our new Chief of Digitalization as VP IT. And I think these are all key individuals and key contributors on our journey as the Troax Group. So a warm welcome to all of you into the management team.

Then I'd flip to the market development in the quarter. And in this picture, we look at the organic order intake. We look at it year-on-year, and we look at it excluding currency effects. And in total, we ended the quarter with a flattish number, so 0 in total. And as usual, we would look at this through the geographical lens as well as through the segment lens.

So if we start with Northern Europe, which had a good quarter and also a continuation of the second quarter, we had a growth of 14% all in all, in Northern Europe. Here, we do see the warehousing segment being stronger, and we also see actually a small uptick in the Construction segment as well.

The other segment is also improving in Northern Europe, and this is mainly driven by the data center subsegment. So, all in all, a solid and good development in Northern Europe. If I move over to Southern Europe, where we came in at minus 4%, it's a bit of a mixed picture. We continue also here to see the warehousing segment being positive for us, while we see the other segments being more hesitant. And I think here, we -- in the quarter, we have also had an effect of the automotive segment in particular, driving down the total to the minus 4%.

If we move over to Americas, where we had a very, very strong first half of the year, we now see the third quarter, the market has slowed down a little bit. So we came in at minus 22%. Also here, the automotive sector contributes to that decline, while we see the other segments being in the quarter, fairly flat or even declining in some subsegments. I think here, we've probably been a little bit, let's say, unlucky in the quarter with the orders. If we look at the warehousing segment, in particular, that is still a segment where we have a lot of activities and a strong activity outlook even though we were flat in this quarter.

Last but not least, we have APAC, which fell 34% during the quarter. And here, I'd say all segments are down. Particularly here, we see a decline in the automotive sector, driven by China and Japan. And we also have the similar picture in the process industry, where we have a pretty strong foothold in the market in APAC. So all in all, we came in organically at 0%, but it's, at the same time, a pretty scattered picture.

With that, I'll leave over to Robert to walk you through the numbers in a bit more detail. So Robert, please.

Hello? Can you hear me now.

Yes, loud and clear.

Okay. Good. Sorry for that. Yes. So as Martin said, the order intake in the quarter was at a record level, amounting to EUR 99.7 million, a 60% increase. The organic order intake was flat year-over-year and the structural part was 57% and currency was plus 3%.

Moving over to sales development. Our sales amounted to EUR 96.9 million, which is a 51% increase. And the organic element was 5% and the structural part was 47%, while we had a negative impact of currency of 1%.

Moving over then to profit and profitability. Our EBITA profit rose to EUR 15.1 million in the quarter, which represents an adjusted EBITA margin of 15.6%. As Martin earlier mentioned as well, we saw higher material costs in Europe and higher logistics costs across the whole business. The margin improved in North America, but we're still not at the same level we want to be at. And we will continue to optimize our operations and strengthen our commercial capabilities.

We saw higher SG&A costs and mostly coming from acquisitions and IT investments, but our organic underlying costs actually decreased. We also still see significant potential to simplify admin processes and strengthen our sales efforts. If we then look at the operating cash flow, during the quarter, we had an operating cash flow of EUR 9.9 million, which is an improvement to the first 2 quarters of 2026. The improvement was driven by a solid profitability, while on the other hand, a negative effect from changes in working capital, and that's mostly coming from growing our business. But as we increase our invoicing, our cash flow will pick up during the fourth quarter.

If we then move on and look at the net debt. Our net debt ratio decreased to 3.1 during the quarter from 3.3 in the second quarter. The main reason for lower net debt ratio was a higher profitability and it would have been even lower if we wouldn't have done the revaluation of the earn-out contingent of EUR 5 million, which at this stage is a non-cash. As such, the revaluation is positive as we see a stronger performance and contribution to the group from recent acquisitions than originally anticipated. And as our order book turns into invoicing and cash, the net debt will decrease in the coming quarters, and we will reach the levels below our target, which is 2.5.

If we then do a short financial summary. Our order intake grew by 60% to EUR 99.7 million, which is an all-time high. Our sales grew by 51% to EUR 96.9 million, which also is an all-time high. And our EBITA profit rose to EUR 15.1 million, which represents an adjusted EBITA margin of 15.6%. Our net debt level decreased to 3.1 as a result of higher profitability. And the adjusted earnings per share increased to EUR 0.25 per share.

Yes. And with that, I would hand it over back to you, Martin. Sorry now you're on mute, Martin.

Technology isn't with us today. So thanks, Robert. And I think in summary, I think we look back at third quarter with a very strong top line as in order intake and sales, mainly driven by our recent acquisitions. And I think we also look back at the quarter where we had solid good activity and development, mainly in the warehousing and data center segments.

We are also happy that our profitability is on the improvement track, although we see that there is more work also going forward here to be done mainly on the gross margin side. And we're also very focused on improving our North American operations. As we've been in the third quarter, that focus will continue in the next coming quarters as well.

We have now a broader safety and productivity portfolio, which is very exciting for us when it comes to future growth as well as diving into more segments and subsegments than we have done before. And we've launched our safety platform, which will be our commercial messaging and as well as our commercial platform to support our continued growth going forward.

So with that, we will leave the presentation part of our call, and we will move into the Q&A.

Okay. We have Jonny first.

Hello. I just want to start a little bit with the gross margin. I know that you talked about the ramp-up in the North America plant here, which is impacting, I think you said 100 bps in the quarter roughly. But besides that, I think mix is changing as well. So -- I mean data center, fast-growing part of your business, it's exciting. But what is sort of the gross margin impact from that, as I can imagine, data center projects are larger in size? Could you comment something about that?

Yes. No, I think it's -- I think you're right, Jonny here that our data center business runs at a somewhat lower gross margin. At the same time, we're also having a bit of lesser SG&A costs. So bottom line-wise, it's actually quite good business for us. But from a gross margin point of view, it's true that we get a bit of a dilutive effect in the quarter and also from that business segment.

I understand. I understand.

So it's mainly stemming from the data center segment. I'd say the core of the core actually presents pretty good historical margins.

Yes. Okay. Sounds fair. But I mean it's a lot of moving parts in your gross margin right now. And I just try to understand what's sort of the new normal gross margin for you will be. So I mean, historically, you're performing from sort of average 38% or 39%. As you ramp this U.S. plant here, is it fair to assume we could have similar structural gross margin levels despite the data center has some dilutive effect? Or would it likely be higher or lower, if you understand my question?

Yes. I think our aim would be to improve our North American operations, which could be helpful for the overall gross margin. And if we then look at a little bit the relative size to these different moving parts, I think it's fair to assume that we should get back in line with our informal target of 38% to 40% when that is done, even though the data center segment grows as a share.

Yes. That's fair. Then on the price a little bit. I suppose that you raised prices to try to compensate for the higher raw material cost. Is that right? And secondly, what do you estimate the price impact was on average in your sales? And is it bigger impact on orders?

Yes. So during the third quarter, it's true that we are -- we have done some pricing adjustments already in the third quarter. We will continue to do pricing adjustments now here in the fourth quarter. I don't think the pricing effect during the third quarter on neither order intake or sales was material. So that component will still come during the coming quarters, which is material.

Obviously, we have done adjustments on the transportation part, which is, you could say, more of a pass-through to some customers. So there is, of course, a bit of an effect on the transportation part, but it's not the lion's share of the total.

Okay. So in the organic order growth, should we assume there is some pricing, but not so much, maybe 1% or 2% or...

Yes. Probably in that neighborhood.

Okay. That's good. Then I just have one more before I get back in line. I mean, given your mix now, change in mix in order intake, what is sort of the new average lead time in conversion we should expect on group level? Because historically it have been sort of 3 months, I guess. And now -- I mean, how should we view it now? Is it closer to 6 months now given the size of projects? Or do you say something how we should think there?

Yes. No, I think it varies between the different segments, and it also depends on the size of the project. So it is true that the conversion rate for the larger data center parts and the larger logistics part is longer than the bread-and-butter part. So I'd say that we would -- if we have a pattern in the panel business that would be roughly the quarter you mentioned, Jonny, the mix of orders here will likely add half a quarter to a quarter of order to conversion cycle, of course, depending on the exact project, but give or take. So if we looked at within the next quarter as the norm before, we're now moving from 1 quarter to 1.5 to 2 quarters given the current mix.

Thank you Jonny. We go with [ Anna Lagerlöf ].

First off, could you maybe give us some comments on the development between Vichnet and the safety barrier units, just to understand sort of the growth in order intake slightly more?

Yes. I think if we look at the total group, I think all 3 acquisitions that we did, so both barriers as well as Vich, all of them contribute to good growth. If we then look at Vich specifically, they are, of course, contributing very strongly to the total number. But I'd say all 3 contribute to growth and the strongest contributor of this growth comes then from Vich.

Okay. Perfect. And because if we look on acquisition contribution in Q3 versus the first quarter, it's quite substantially higher. Just a question on the safety barrier acquisition, could you say that we're seeing sort of a sequential step-up from that being driven by you selling those products more and more on your home sales channels? And in that case, where are you on that journey?

I think we're on a very good journey also with the -- also, I should say, with the barriers. I think here, when it comes to -- if we look at the Vich part that has been very, very strong here now in the last couple of quarters. I think that's a project business that is a little more, you could say, digital in a sense that it's more 1 or 0 whether we're successful. I think the barriers is something we really want to push into our -- all of the thousands and thousands of customers we have across the globe, which also means a bit more integration to our sales organizations as well as to our sales tools.

So I think the growth on the barrier side will be more of a gradual growth rather than a very rapid growth. It will still be a good solid growth, but it will not come with the same growth rate numbers sequentially quarter-on-quarter. But we're making good progress on this one. And I'm pretty sure that we will also see more and more of our share of wallet with our larger key accounts being split between the panel business and the barrier business. And I think we have started to see that now both in the second quarter as well as in the third quarter. And I think it's looking promising also for the coming quarters.

Okay. Perfect. Very clear. My final one is on the outlook in Americas, just coming back to your comment on being a bit unlucky in the quarter. Is that mostly related to the warehousing segment? Or should we view this as a sort of lumpiness between quarters for the full region or just mainly within the warehousing segment?

No, it's a comment for the warehousing segment, and it's just, as you say, it's around the lumpiness on how the orders are placed in which quarter and so forth. I think the overall activity and the pipeline in North America looks -- continues to look very, very solid.

Thank you Anna. Victor Forss from SB1.

Thank you for taking my questions. Most of them have been answered already. But -- so following up on Anna's question on acquired units. Just wondering, would you say that Q3 is sort of a fair run-rate going forward for the acquired units into Q4 and maybe for next year as well? And then any commentary on roughly what margin acquired units contributed with in this quarter, please?

If we start with the demand side and the order intake, we don't have anything on the order side that is -- that sticks out in that sense. If we look at Q2 and Q3, I think we look at the similar pattern. At the same time, this business is something that's fairly new to Troax. So take that with a bit of caution, but it's not that we have any known one-off effects on the order intake side there.

I'd say where we do probably have done a bit of extra push in the quarter has been on the invoicing side for the data center. I think that's well reflected also in the sales number, which was maybe a bit stronger than what could have been anticipated. But I wouldn't say nothing that sticks out of the pattern in an abnormal way, so to speak.

Then when it comes to the demand side on data centers, I think that pipeline and that activity around that looks very solid. Then for how long and so forth beyond the next coming quarters, I think it's very difficult to say for the very long run. But for now, it looks very strong and very healthy. So I think it's a good level, and I think it's also fair to anticipate that, that activity will continue here in the coming quarter or quarters as well.

On the margin side then, Victor, I think it's -- as we had an earlier question here, I think it's fair to say that the gross margin of the data center is slightly lower than group average. The gross margin of our barriers is slightly accretive to group average. So, I think, overall, it's contributing well to the overall group average without being more specific about the outcome in this quarter.

But I think it's also fair to say that as the acquired businesses grow, especially if we look at barriers, it's a high gross margin business. So it's all about operating leverage and pretty much the same also on the data center side.

Yes. That's clear. And then on the Vichnet earn-out now at its maximum, I think. How should we look at that? Does that mean that Vichnet is sort of already ahead of the 2027 plan you sort of bought it on? Or -- yes, if you could just help us understand that.

Yes. So it's true that we're now at 100% when it comes to the earn-out. You could say, liability from a financial point of view, I think it's also very fair to say that Vich is ahead of the management plan when we made the acquisition. And into that reevaluation, we also expect the great development that we've had during '26 to continue to a certain extent in '27.

Okay. Perfect. And then just on Americas, if we sort of take a step back, could you just talk a bit about your expectations for the region over sort of the next 1 or 2 years, maybe both on growth and where you see margins relative to the group and so on?

Yes. I think in North America, I think -- first of all, I think it's clear that the overall demand is there. I think also that the penetration rate of more sophisticated solutions such as the ones we sell is slightly lower than in Europe. So I think both the demand and as well as the market penetration in U.S. is slightly lower. So from that point of view, I think there is definitely growth for us to have in North America.

I think it's also fair to say that in pretty much every market in Europe, we are a market leader by size, but we are not yet market leader in North America. So I think from that point of view, there is definitely growth in market share to be had. The Achilles' heel for us in the U.S. has been our operational efficiency. If we look at time, I think our investments here now will certainly help out of bringing that top line and sales into solid bottom line numbers.

So if U.S. has been and still is dilutive to the group margin, I think over time, whether it's in 1 or 2 or 2 years, my expectation would be that U.S. should be accretive to group margins and not the opposite.

Thank you Victor. Gustav Berneblad from Nordea, please.

I thought maybe just -- I mean, you talked about it slightly regarding operating leverage, et cetera. But if we just focus on Vichnet and I mean, given that you see this type of volume uplift, can you just compare Vichnet EBITA performance sort of relative to the legacy Troax of around 20% a few years back? Is sort of Vichnet despite these volumes that are coming through, still dilutive in that sense?

Vichnet would be fairly in line with what you referred to as a historical Troax numbers profitability-wise.

That's very clear. Perfect. And then moving sort of into the data center part of the business. Can you just elaborate a bit more on the split you have there of what is sort of traditional mesh panels and what is more, I guess, other stuff? And if you can just elaborate a bit more on that, I guess, cable hangers, et cetera.

Yes. For Vich specifically, you mean, Gustav?

Yes, but also on the group, that would be very helpful.

Yes. I think if we then start with Vich, we have roughly 50% to 60% connected to data centers, which is then split between data center-specific products as well as cable management products, which can be used also for other things. And the rest would then be, you could say, what you'd call the traditional mesh products. If we then translate this to group overall, we see the data center segment being just north of 10% now order intake-wise in the quarter.

That's very clear. And then I guess, I mean, just looking at the setup now with -- of course, there could be timing issues and you can see warehouse orders come through in North America. But definitely, I mean, the capacity has increased. Is it possible for you to fill up the North American facility with sort of Vichnet products?

I think we -- there is still a bit of work to be done on the commercial approach here. But certainly, I think when it comes to space and capability and production capacity, I think that would be an opportunity to serve the North American market also from a North American base. But we still haven't made any decisions on that, but that would be a possibility, yes.

Perfect. And then, just a question regarding -- I mean, if you take Vichnet, I mean, their success in the data center segment, is that due to them having a more complete offering and that you can just bundle in cable hangers and everything and the mesh panels? Or are you -- how much orders are you seeing for the just traditional Troax brand?

Yes. Well, I think it's a combination here. I think if we look at the data center product lines, it's a combination of, you could say, products or components, which are then built into -- more built into the systems. So from that point of view, it's also part of the systems setup. But when it comes to the data center part, it is in the third quarter, we did not have that much of combination of Troax, you could say, machine guarding panels and data center wire management products.

So the data center part more hinges on the cable management products than it does on the, you could say, conventional core panels. Over time, I would think though that whether its origins from Vich or whether its origins from Troax, I do think we will see more of a blend over time.

That's perfect. Very clear. And just a final one here on the IT costs we have talked about in previous quarter. I think you said in Q2 that you expect or estimated them to be several hundred thousand euros in the quarter and will run through, I guess, until later this year. Is that still the plan? And will it be running through the whole Q4?

So there are a couple of different ingredients to this one, Gustav. So we've had IT costs relating to our commercial platform and to our offering management system, which we've had for quite some quarters and even years. We have now completed the development of that, which is, we could say, a broader platform development. So that's one part of this.

The other part of this also comes with -- is related to our acquisitions that we also want to integrate them into our environment, both to support cross-selling, to support that we have the right level of cybersecurity, et cetera, et cetera. So we're taking the acquisitions step by step, one by one. So it means that we -- on one hand, we are reducing the platform developments that we've had in the last couple of years, but we're now also adding and adjusting the IT infrastructure around the acquisition.

So we've had a bit of that now in the third quarter. We will also then acquisition by acquisition move into the overall IT. So we'll have more -- a little bit of this continue in Q4 and I think also Q1 to be able to -- actually to have gone through all the acquisitions to get to where we need to be from an IT infrastructure point of view. So it's something moving out and something moving in.

But the absolute cost level, would that gradually come down?

It's roughly the same. And when we're through the integration part, they will come out.

Thank you, Gustav. I see Jonny's hand up again. I'm not sure if it's the same hand or if it's a new hand.

It's a new hand. So I have more questions, if I may. Just one on automotive. I understand it's a very tough market right now. But can you maybe shed some update, how are you with the Chinese automotive makers? Are these sort of customers that you are already built a relationship with today? Or is it still an opportunity for you?

I think I've said this multiple times, but I think to Troax, I think we're mostly interested in the fact that we are selling and producing cars in the different regions. To us, it does not matter that much which car or OEM wins in the marketplace. So if we have Chinese gaining share on passenger cars over one of the European ones, that's not necessarily a big concern to us.

We have established and worked well with the Chinese players making an entrance in Europe as well, and we have several activities and projects around that for the time being. I think if I'd expand a bit on that also, Jonny, I think Troax is the only global -- truly global player in our niche, which also provides us a really good capability to actually meet, serve, support and design projects with the Chinese players, which means that we can work with them from a Chinese end and we can also supply them in Europe. So I think from a relative point of view, we're most likely in the best position to actually do business and grow with them if they decide to come to Europe to a larger extent.

So it's already in the making, and I don't think that development for Troax would be negative actually, probably on the contrary.

Yes. Okay. That is good. And then on North America, we talked about it. So just a little bit clarification. Do you feel sort of confident that the production will now be fully ramping as you are exiting Q4? So that's sort of the drag we say, 100 bps in this quarter. Will it half or something like that in Q4 on average and then with 0 drag in 2027?

I think the aim here should definitely be that we kind of enter 2027 with a clean page, so to speak. So that would definitely be what we're targeting. Whether we reach 100% of that plan, I think we'll look at that when we are -- after we have ended the Q4. I think to me, the important thing is that we do the right things. We do them in the right way, and we also improve every day, every week and every month here between where we are and where we need to be. But certainly, we want to move into '27 at a significantly different level than where we started the journey here in the beginning of the second half of '26.

Understood. Then just one final from my side. One on outlook. I understand that demand is uneven now, but I think you also stated that you're confident in your CEO letter for '26, '27. So can you maybe elaborate a little bit on this when you look at sort of your organic project funnel of projects, what is sort of the general feeling? Are you getting closer to sort of -- customers, are they getting more -- less hesitant? Or yes, do you see projects actually be converted to orders? Can you say something on the general gut feeling there?

Yes. No, I'd say from my point of view, I think it's 2 things. I think we do see good activity and continued good activity in the segments which have been strong now the past couple of quarters And I think the pipeline there looks pretty promising. So from that point of view, that gives me some confidence in the development. So that's one part of it.

The second part of this is that if I look at the rest, which has been relatively or quite weak, we talked about automotive, for example, I don't see development that can go that much worse. So there is a potential and an upside in that as well. So there isn't that much of improvement that actually needs to happen for us to see an improvement either. So I think it's a little bit too edged, this discussion.

Okay. I don't see any more hands in the air for additional questions. So with that, I would like to say thank you for calling into this call. And if not before, I'll see you in a quarter's time. Thank you and bye-bye.

Hi, everyone, and welcome to the interim report for the second quarter for Troax Group. My name is Martin Nystrom, and I'm the President and CEO of the group. Today, I'll walk you through the quarter, the financial outcomes and the key events before we open up for a Q&A towards the end.

I will start by sharing the presentation. So without further ado, let's dive into the quarter. The second quarter was a record strong quarter from a top line point of view. The group reports a 51% increase and our sales grew by 23%. And I'm particularly pleased, of course, by the fact that we saw order intake growing both organically as well as through our acquisitions. Our sales increased by 23%, driven by our acquisitions and our organic invoicing declined in the quarter, which was due to the order -- of the order mix that we had in -- late in the first quarter, where we had several midsized orders with longer lead time and also with deliveries going into the second half of the year.

It was also pleasing to see the North American deliveries picking up pace after a slow start of the year after the transition of our inventory and our pick and pack operations from Chicago to Portland. Overall, I'd say we had a strong quarter, but I would also say that it's difficult to predict the demand in general, but there were clearly positive signs and areas that I would like to highlight. During the quarter, we saw a solid recovery in the warehousing segment, both in Europe as well as in North America. And we also experienced solid activity and orders from the data center segment. On the more challenging side, we continue to be impacted by the challenging situation in the European as well as the Chinese automotive sectors.

If I turn to profit, our adjusted EBITA profitability came in at 13.0%. Our gross profit was in line with the last year's levels despite the lower organic volume. And I would say we have had a transition quarter in North America and also we have our acquisitions not being fully ramped up yet. So from that point of view, I consider this to be a good outcome given the delivered volumes that we had in the quarter. Our sales and administration costs rose as a consequence of our acquisitions. So we have added costs from our acquisitions. We have upgraded parts of our IT infrastructure and completed that, and we also had integration activities from our recent acquisitions in the quarter.

Organically, I'm pleased to see that our sales and administration costs went down compared to last year. Our net debt level came in at 3.3, which is on the higher side for the group. And the 2 main drivers are the -- is the dividend payout as well as that we have reevaluated our earn-out commitments from the 3 acquisitions we made late last year and beginning of this year. And I would say here, as our orders turn into deliveries and our operational cash flow will increase and then also this ratio will come down gradually towards the end of the year and through the second half of the year.

If I then start with a few of the key things in the group, I would say a clear highlight for us in Troax in connection to the quarter's ending is that we have now ramped up our new facility in Portland, so close to Nashville in the Nashville area. And we have, by that, also closed production in our Chicago facility. And I think this really marks a new era for Troax in North America, where we will be able to serve our customers better. We'll be able to have more efficiency through our automated production and our best-in-class practices, but also from having a leaner organization. And with our new operations, we will have greater capacity, of course, we will have world-class automation, and we will utilize all of the best practices that we have from other parts of the group.

At the same time, we have also adjusted our go-to-market model a little bit in the U.S., which will allow our customers then to access the full range of relevant solutions across all the different states. And I'm very happy to see now the group strengthening our position significantly and also improve our competitiveness. And I think that bodes well for both future growth as well as for market leadership in North America. The acquisitions that we made of D-flexx as well as Stommpy in the fourth quarter now forms our foundation for our flexible barrier line, which gives us access to a larger share of our customers wallets. And to date, we have experienced great interest in these solutions, and we're also busy with the integration to make this work as true solutions and true parts of the group, both on the sales side as well as the operations side. And I would say these solutions have had a strong and good start in the group, and we and I are very excited to see what the future holds in terms of profitable growth coming from this new product line.

The third highlight comes from the core of the core. And here, we have launched the world's first machine guarding mesh panel, which is entirely made from recycled and reuse material, and we're also using low-emission steel to produce this. And I would say this is a very tangible and concrete step in our work to reduce the climate impact across the value chain. And with this product, it makes the same safe job as a normal Troax panel, but it comes with a less -- with more than 70% lower carbon emission footprint versus the standard without compromising on safety or the performance. And I think this is a great example where we can bring innovation into our products and also show that we are truly the world leader when it comes to mesh panels and machine guarding. And I think this is also a great example where we bring sustainability and safety performance go hand in hand.

If I then turn to the market development, and this is the slide where we walk through how the different segments and the different geographies are developing. As usual, we look to the market through 2 lenses. So it's the geographical lens as well as the market lens. If I start with the total, we had an organic growth of 14% in the quarter, which I consider to be a very strong number. If I look to Northern Europe, we are back on the growth path with 13% year-on-year growth. The growth primarily comes from the warehousing sector as well as general industry, which we can say here also is partly related to data centers. And we also saw some green sparks, in fact, coming from the construction sector with our storage solutions.

The automotive sector in Europe continued -- in North Europe continued to be soft in the quarter. In Southern Europe, the situation was a little bit different. So we had a decline of 11% on orders in Southern Europe. And here, I would say both automotive partly processing as well as general industry were slightly softer. Then I'd say the exclamation point of the quarter is North America with an order intake growth of 84%. And here, of course, we can -- you should note also that the comparison quarter wasn't the strongest after Liberation Day back in 2025. Nevertheless, we had a strong quarter order intake-wise. The automotive sector grew after some 2 soft years, but we also experienced solid activity, both in warehousing as well as in the processing industries, taking us to an 84% increase.

Last but not least, we have the organic development in APAC, which continues to be somewhat slower. Here, the compare is rather strong from last year. And the order intake decline of the 14% is predominantly driven by the automotive and process industries in China and Japan, which were soft in the quarter. As said, turning then to order intake overall, very strong quarter, also a record level and our order intake in total amounted to EUR 98.3 million, which corresponds to 51% increase. If I look at that, organic, we had plus 14%. Structure, very nice contribution with 37% increase, and then we had a bit of currency headwind with minus 1%.

Moving over to sales. Our sales amounted to EUR 84.2 million in the quarter, which is a 31% increase. The organic element here was minus 8%, and this comes back to the order mix back in the first quarter. We will see that order intake from Q1 partly being then delivered into the second half of the year. The structural part was 31%. So good progress in our acquisition. And also here, we had a currency impact of minus 1%, taking the total to plus 23%.

Moving over to profit and profitability. So our adjusted EBITA profit rose to EUR 10.9 million in the quarter, which represents then an EBITA margin adjusted of 13.0%. And I would say, given the lower organic volumes, both in EMEA as well as in Europe as well as in APAC, I think this is a good outcome. We've also had our most intense quarter when it comes to transitioning our Chicago operations to Portland. And we've also done great progress when it comes to integrating our newly acquired businesses into the group. So I think this is a solid outcome for the quarter.

Going forward, I'd also say that I expect some of the raw material prices to continue to develop, not only in North America, but also in Europe. And here, it's important that we continue to be agile on the pricing side. Moving over to operating cash flow, which came in at EUR 0.8 million, which is an improvement then in relative terms to the first quarter. And here, it's obvious that having strong growth mainly coming from them from our acquisition ties up a bit of cash flow in working capital. But as we get the deliveries going during the second half of the year, we will increase our cash flow during the second half of the year.

Turning to our net debt development. Our net debt increased to 3.3 during the quarter from 2.7 in the quarter before. The main reasons for this is the dividend payout in May as we have every year and also reevaluation of the earn-out continuance of EUR 11 million, which at this point is noncash. As such, this reevaluation, I think, is positive because we do see stronger performance and, of course, contribution to the group from these acquisitions than we originally anticipated. And as our order book turns into invoicing and cash, the net debt will decrease during the second half of the year and aiming for levels then -- which are below our target, which is 2.5 net debt to EBITDA.

So if I summarize the key figures, our order intake grew by 51% to EUR 98.3 million. Our sales grew by 23% to EUR 84.2 million. Our EBITA profit rose to EUR 10.9 million, which represents 13% EBITA margin adjusted. And our net debt level increased to 3.3 after revaluation of our earn-out contingents. And last but not least, the adjusted EPS per share increased to EUR 0.12 per share.

So in summary, we had a strong development in the second quarter, and we passed a lot of milestones relating also to our strategy. I think we see some really encouraging signs in multiple important segments. and segments such as warehousing as well as data centers. At the same time, the future continues to remain difficult to predict and predict with certainty. Our broader safety portfolio, including the flexible barriers and the data center solutions continue to gain traction in the market. I think we had strong evidence of that in the second quarter, which also bodes well for coming quarters and coming years. We have started our North American new manufacturing production after an intense project, and this is truly a milestone that will improve our competitiveness and also our profitability in North America going forward. And I'm also very happy that we now operate from a stronger platform overall in North America.

And overall, I'd say the recent investments, acquisitions and operational improvements definitely also provide a stronger foundation for continued growth as well as profitability. And we will -- goes without saying, continue to execute relentlessly on our strategy to make sure that we are in the pole position when our customers have needs and demands when it comes to industrial safety.

And with that, I would like to end the presentation part of this call, and I would like to open up for Q&A.

[Operator Instructions]

So we will start with Jonny Jin from SEB.

Starting with the strong orders here. I want to break down the drivers a little bit closer because they are looking very impressive here. So can you maybe give a little bit flavor of sort of the mix between large orders driving the growth? Or was it more sort of smaller bread and butter if you focus in Americas, for instance?

Yes. I think overall, we had growth in all these 3. I think what stands out in the quarter is predominantly growth of what we would consider midsized orders. So it's not the mega orders that grew the most. I think if we look at North America, in particular, we saw increase both in the bread and butter but we also saw increase in the midsized and with a few examples also large orders. So I think it's -- in North America, I think it's been more of a broad-based growth, which is probably what I consider to be the best mix of things. From a segment point of view, what's growing the most, if we take North America is warehousing combined with process then, as said before.

Understand. Understand. So there's no like sort of say, timing of effect or any sort of one-off orders. This is sort of a representation of the underlying business and business.

Yes. I think this is a good representation of where we are for the time being. As with every quarter, there could, of course, always be one order that comes into the quarter or gets postponed into the next, but there is nothing out of the ordinary in this quarter from this point of view.

Perfect. That's clear. And then M&A contribution seems also stronger here than expected. Was Vichnet the main driver for that? Or what is happening there? Is there any timing effect there? Or is it sort of, just taking market share better than expected? Can you give us a flavor there?

Yes. I think all 3 acquisitions developed well. Then obviously, Vich is the largest of the 3 companies we acquired. So from that point of view, they are contributing more in that sense. When it comes to Vich, I think we are very well positioned to capture the growth in the data center segment, both with data center solutions as well as with the wire trace and cable trace. That is a strength of Vich. Also, I would say that the flexible barrier side develops well, but from a lower baseline in that sense. So from a growth point of view, they are all 3 delivering a very nice performance in the quarter.

Understand. I understand. And then a question on cost and margin side of things because, I mean, even if we adjust for sort of extraordinary high costs to your factory movement and such, it looks to be a little bit higher also if you compare to Q1 here. So can you maybe give some flavor what is happening on the cost side, if there's something you want to highlight there? And is this sort of the fair cost base we can assume going forward as well? Or should it come down or up materially from this level? And also like can you comment something about -- it's very good to see that your orders are coming now and as they are utilized in your factory and such and converted to sales, can we expect sort of an EBITA margin in line with your sort of historical past of yes, above 18% EBITA in H2 already. Is that a fair assumption?

Yes. I think if I start with the cost levels, I think on -- if we break that down a little bit, if I look at the gross profit side, I think there is more -- there is -- and the gross profit level is stable as such. I think that's given that we have lower organic volumes, I think that's a good outcome. I think though that there is more still to be done, definitely coming from North America. And I think there is also more -- a bit more optimization that we should do, particularly in Europe, and that relates to a large extent still that we still have some improvements to do from the transfer from Poland to Sweden. So I think there is more optimization to be done on the gross profit level. Of course, volume will help our gross profit as well when we -- as we start to invoice.

On the SG&A side, I think this quarter contained -- I think organically, we are seeing lower costs. So the costs stem from our acquisitions. They come into the group with a higher relative level. So as we grow the businesses, the cost will not necessarily follow. In the quarter, we also had some costs, of course, related to the U.S., which is one-off, but we also had some extra cost for IT, which will not be the case every quarter going forward as well.

So the IT cost, they -- how much were they -- they are not included in the one-offs in this quarter. How much were there?

No.

How much did it was?

We're talking about a couple of hundred thousand euros in this case.

Okay. And they will disappear in Q3?

Somewhere towards the end of the year.

Okay. Okay. And sorry, the M&A, I understand that M&A, there could be more cost year-on-year, but sort of if you compare to Q1 Q-on-Q, is there an effect of seasonality on the new acquisitions that affect the cost base or...

No, not really. I think the increased SG&A cost on the acquisition side is more related to business volume than anything else since we have some commission base in that. So I think it follows the -- you could say it follows the invoicing side more than anything else.

Yes, yes. But do you think historical EBITA margin levels, is that reachable in second half of this year already if you are converting these higher orders in your new cost and factory structure?

I think we will make sure that we invoice as much as possible. We'll do that as efficiently as possible, and then we will hopefully also see some stronger profitability coming out of this machine. But let's say, predicting whether that's going to be all visible in Q3 or all visible in Q4, I think I leave that to you to guess a little bit. But it's fair to say that Troax is a high leverage business with volume and nothing in that equation has fundamentally changed in the last couple of years. So I think it's fair to at least make that assumption.

Then next question would come from Gustav Berneblad.

I thought maybe just to build a bit more on Jonny's questions here also to get a bit more conviction here in the short term and the order conversion and what we have seen in Q2. I mean if we just look at the Q2 orders, I mean, are there any orders that is sort of stretching into 2027, would you say?

We have parts of deliveries going for data centers, which are, to their nature, a little bit longer order to delivery or order to cash than the usual bread and butter business. So if we look at -- if we take the core as an example, it's a very stable, steady, pretty short-cycle business. Then when it comes to the warehousing projects, usually a little bit larger as well as the data center, that cycle is prolonged. So when we have more of midsized large warehousing and more of data centers, that cycle will then be stretched out a bit. So some of what we took in as orders now, for example, late in Q2, some of those last deliveries will then fall into beginning of '27.

Okay. That's very clear. And is it possible to say how much is related to data center and also midsized or larger warehouse orders of the order intake you present today?

Yes. I think if we take the data centers, we're closing up on the 10% of the group's total on orders, I should say.

And warehouse or that is sort of midsized or as you define it.

So the warehousing segment is a mix of large, midsized as well as, you could say, smaller, what I used to call bread and butter. On the midsized orders, we would probably have somewhere between 25% to 35% of that segment is made up by midsized for the time being.

Okay. That's very clear. And then maybe just to move into Americas a bit here. Just to also here get a bit more conviction in the new factory and so forth. I mean, are you -- I mean, as your press release stated, you're fully up and running now and Chicago is completely closed. So we should not expect any dual costs or anything here in Q3? Or is that correctly?

No, we should not be expecting any dual cost in Q3 from a move or a transfer point of view. So I think that's a very good milestone. Then when you start to ramp up a new facility, of course, there -- we always have a plan. But I also know that it's not just turning on a switch and then it goes from nothing to 100% overnight. So of course, there will be a learning curve before we hit the optimal way of working in the U.S. We have some 70, 80 new colleagues that needs to be trained. We have machinery that needs to be optimized and flows that needs to be optimized. So there will be a gradual -- the gradual effect of our North American operations will come here during the third and fourth quarter. But I think the big milestone has now been passed that we've switched the production away from Chicago and closed that production.

That's perfect. And just -- sorry, is it -- is there a risk -- do you see a risk of sequentially lower volumes in Q3 compared to Q2 due to the ramp-up here in Americas specifically?

Yes. I don't think the risk is on the volume side as such because during the transition period, we've also built an outsourcing supply chain. So I think from a servicing a customer and from an invoicing point of view, I think from that point of view, we should be in a better shape than we were in Q4 and also in Q1 for that matter. I think this is -- this will be a question of how much of that efficiency will get to the bottom line eventually and how fast can we run and ramp up the efficiency in the new plant. And that's difficult for me to have a firm opinion of today when we just got going, so to speak.

That's fair. Just final one, very short one, sorry, everyone. You comment on some orders having longer lead times in EMEA North here that you took end of Q1 that is stretching into H2. Is it possible to quantify this just to get some sense of what is coming through extra here in H2?

I could probably get back to you with a more firm number, Gustav. But I would say it's -- of the minus 8% we recorded now in the quarter, I would say the majority of that comes from these orders or pretty much all of it.

Okay. Perfect. That's very clear.

Thank you, Gustav. Then next in line would be Daniel Lindkvist.

Now I got my phones working again. Congratulations on a strong report. Change is drastic, fantastic numbers this time around. I had most of my questions answered, but just quickly, I mean, you entered this quarter with a significant back order backlog, especially in the North American market. Is that still in place, you would say, judging volumes, it should be?

Yes. So in North America, we had troubles in the beginning of the year with our pick and pack operations that we moved first. We have gradually started to deliver out of that backlog, but we're not fully there yet. And the main reason for that is, of course, that we have had strong order intake, and we've also had to prioritize a little bit among all of the customers in orders when we still haven't ramped up that capability fully. So there is still some of that backlog that technically needs to be delivered here during the second half of the year.

And also perhaps in -- with weighing to Q3?

Yes. Yes. Correct.

And then just -- I mean, we try to gather things up. What have you done in total, if we just look at the headcount, how much has been reduced the last year if we exclude the acquired units approximately?

Is your question related to North America specifically or the group?

For the group in total, I mean, you've done much on [indiscernible] in North America that's happening now. I mean, in group total, just comparing your total number of employees now [indiscernible] acquisitions.

Yes. We have done roughly 300 people, give or take.

And that is how much of...

We are close to 1,400 now, and we have then added, of course, employees also with our acquisitions.

And then how much volumes has been discontinued that was below average in profitability approximately?

You could probably pull that from the report. But we are -- it's quite some business, both partly from the Polish business, which is perhaps difficult to extract from the report. And then there is also the Lee divestment, which we made in the first quarter. That was roughly EUR 10 million.

Then we move over to Anna Widstrom.

A lot of great questions already. But my first one is, as Northern Europe is noting very good organic growth in the order intake, how much is that related to, let's call them, nascent volumes with the capability scaling up?

It's partly, call it, Polish volumes, but it's not the lion part of that. The lion part of this is, in fact, coming from, you could say, other core products as well as data centers. So it's a small -- it's a relatively small portion of that increased order intake coming from, you could say, the former Polish products, which are now Swedish Troax products.

Okay. Perfect. And then just thinking about as the acquisitions are performing very well in top line, how has the scalability been on the operating margin for this business?

To date, it's been very good operating leverage on the Chinese side on Vich. And there is still more leverage to be had on the flexible barriers. But I'm pretty sure that will come here during the second half and going into next year.

Okay. Perfect. And could you maybe give us just some -- a few words on like the drivers for the flexible barrier system, if it's -- if you're sort of meeting a specific end market that's growing quite decently or if it's like a structural shift towards flexible barriers in comparison to other solutions?

Yes. I would say it's both. I would say we're definitely meeting a market which is -- where there is a lot of activity happening. So that's clearly -- that's evident to me. At the same time, we're also meeting a market and the market demand that is shifting away from steel and moving to flexible polymers. So I think -- and it's difficult to separate the 2, but I think it's clear that the market is definitely there. And I think we are also -- we're not the largest player yet in this field. So of course, it also helps to be a bit of a challenger moving into this with our strong brand and our strong organization. And I think that's also very welcome in this niche. And I think that's also clear when we speak to a lot of customers that we have that they would -- they look to us as a very good and credible partner, just as they do for our mesh products that we have had as core. So I think it's a little bit of both.

Great. And then just a final one from my side. Is there any pricing effects in any of the regions in the order intake that we should be aware of? Or is it negligible?

Yes. So in the U.S., we're having a double-digit number. And in Europe, we have a low single-digit number on average while APAC is more flat.

Then I would like to move over to Victor Posch.

So just first on Americas as a follow-up. Just trying to understand how much of the strong order intake is sort of attributable to a good underlying market here? And how much is attributable to your own capacity. So I mean, would you describe this level of order intake as something you could have achieved earlier? Had you had the capacity? Or is the market strong as well? Or how would you frame it?

I would say, I think if I look at the 84% order growth that we saw in North America. I don't think the overall market has grown 84%. So from that point of view, I do think it's a signal of strength. If I then look at how that order intake is distributed, I think I'm very happy to see both that we have a mix of somewhat larger orders, which might not be repetitive every month. But we -- where I'm particularly pleased is that when I look at the -- you could say, the midsized customers and the midsized orders as well as the bread and butter business that we have growth in all 3 buckets or segments, if you will. So from that point of view, I consider the overall to be -- to have improved during the quarter comparing to both the first quarter, but also then to last year.

Yes. That's clear. Okay. And then just another one. So on contingent considerations, the EUR 11 million revaluation here in the quarter. Just wondering if you could help us frame it a bit towards sort of the maximum payout for these acquisitions, where you are in relation to that?

Yes. So perhaps a bit of context to this. When we -- as we got the acquisitions into the group, we made our best estimate of where we would end up with the earn-out payments that will happen in '28. And now since we have had a very strong development and our prediction is then also -- or our forecast going forward is that we will continue to have a stronger development than what we originally thought. That's why we have then adjusted and reevaluated these contingents. If we look at where we are on the scale, we are somewhere between 80% and 90% of total.

Okay. Perfect. Very clear. And then just a final one on seasonality in the acquired units. I mean we know Q1 is seasonally weak for Vichnet. Just comparing Q2 and Q3 and Q4, is there any seasonality we should be aware of in those units?

Not over and above what we have experienced in our business to date. So I think from that point of view, nothing extraordinary. I think what we are exposed to is the -- is for sure -- I'm not sure if that's seasonality, but it's surely demand coming from the data center side that is a big driver for this. And I don't think that's a Q1 to Q4 seasonality necessarily. I think it's more a question of demand and order timing from the hyperscalers in that business.

Then I see Jonny's hand raised again. I'm not sure if that's a new question or if this is...

I have some more questions. Yes. Just want to have a clarification on the price effect. Did you say that, that impact in the U.S., double digit is it both on order intake and sales in this quarter? And also, do you feel like you're sort of caught up with the raw material prices at this level right now? Or are you still chasing them? That's first.

So on the order intake side, we have a double-digit number as price effect. And on the sales side, we have something that is not that far away from it, but a notch below. So that means that we are pretty much in balance from a price cost point of view now in the U.S., which was a problem or a challenge for us in the beginning of the year. So we've made progress with this question, and we are close to on par or not far away from it.

Understand. So maybe on the P&L side in this quarter, price is more minor in total because as I suppose, low single digits in Europe, that is also an order intake then.

Yes.

Yes. Okay. Good. Then I want to just ask a little bit of clarification because Vichnet and acquired acquisitions units here, they've been very, I mean, impressive. So can you maybe shed some more background here why they are developing so strong? I mean, is it pure sort of a customer exposure mix? Or is it -- do they have other sales channels? Or how come they are so strong?

I think we -- I think they have a very strong offering. If we look to the wire trace, which is their, you could say, base business, they are a very strong player in that. Obviously, there is a lot of wire trace going into data centers as well. Then that has expanded into adjacent products that would go into data centers. And then there is, for sure, a bit of, you could say, customer mix into this as well where there is more hyperscaler exposure than the rest of the group.

Okay. Just one final one on outlook because I think you said in your last quarter that you saw some stronger activity towards the end of Q1. And now it seems like it materialized rather significantly here in Q2. So what is sort of your gut feeling or momentum you see entering the second half of this year? Can you maybe elaborate there?

Yes. I think I've been saying this for a few quarters now. I think what is developing, you could say, in relative terms, better continues to develop better. And with better, I am then talking about the warehousing segment, now data centers as well, while the segments where we've had more of a flat or declining curve, I think that also continues. So I don't see any positive signs, for example, from European automotive, which continues to be soft. So my very short-term prediction would be that it's stable. So what has been a little bit better continues to be better and what has been a bit more challenging, continues to be challenging.

Understand. I understand. But given your like mix and exposure now and customer mix, it feels like the warehousing and data center exposure could that sort of offset the positive effect could offset the sort of negative effects from the automotive industry. Is that your feeling?

That's part of our strategy that we want to reposition the -- our exposure and our group to something that is more attractive and more appealing growth-wise.

And with that, I don't see any further questions. So I would then say it's time for me to say thank you for calling in and for spending the time with me here. And if not, if I don't see you before, I'll see you all in a quarter's time. So thank you, and bye-bye.

Hi, everyone, and welcome to Troax Group's Interim Report for the First Quarter 2026. My name is Martin Nystrom, and I'm the President and CEO of the group since close to 2 years. Without further ado, we will dive into the report. And after my presentation, we will follow up with a Q&A session, which we will moderate.

If we start with the first quarter highlights, I'm very happy and very pleased that we had a record order intake in the group's history. This growth is driven by -- mainly by our acquisitions. So in total, we had an order intake growth of 18% in the quarter. Also, our net sales increased, but not as much. And also the net sales was driven by our recent acquisitions.

Our order intake decreased year-on-year. However, it improved versus the fourth quarter. So sequentially, we saw a slight uptick also in our organic order intake. During the quarter, we had declining organic invoicing, mainly due to our project to close down our Chicago facility and ramp up our new facility in Nashville. This meant that we, during the quarter, were making the move and also ramping up and down. And during the quarter, we have not reached the full pace at the beginning of the quarter. So for the full quarter, we were not invoicing as much as a normal quarter, so to speak.

We also saw our price increases that we put through in the fourth quarter due to raw material and energy and transportation. They have also started to come in positively, both to the sales number as well as to the margin in the quarter. I will get back to that through the presentation.

On the market side, I would say the markets overall remained soft and the demand remained weak. I would also say that due to the micro -- macroeconomics and geopolitics, it's very difficult to assess. And this is largely as we saw with the previous quarterly report.

On the positive note, I would say that we saw the demand improving through the quarter. So we started -- the year started relatively slow, but month by month, the demand improved through the quarter. So March was better than January. And I would say very positive after a few bleak years on the warehousing side that we now start to see activity that we had in the second half of last year turning into orders, particularly in Europe and North America. Also, we are now seeing the automotive challenges that we have mainly in Europe and Asia, and this now impacted Troax Group in the first quarter of this year as well. So all in all, our order intake grew by 18%, and our total sales grew by 6%.

If I move over to the EBITA and our profitability, our profitability came in at 10.1% adjusted EBITA margin. And here, the main drivers for this is our low organic volume, but also the ramp-up challenges that we've had, both in North America as well as in Sweden after the move of our shelving facility from Poland to Sweden.

I'm very happy to see that our gross margin came back and was in line with last year, and it's also a sequential improvement versus the fourth quarter. We did have increased sales and marketing costs. But on this side, I would say these -- all of that stems from our added businesses and acquisitions. And we have now started to identify additional cost synergies as we now move into the -- move through and into the acquisition, the integration processes along the year.

On the operational side, there are many moving parts in the group. So the North American factory transfer is in its most intense phase with the move, commissioning new equipment, training teams, et cetera. So we're very busy with this move for the time being, both in the first quarter and going into the second quarter. We also, as part of this process of ramping up the new facility, we started the year relatively slow with a variety or a set of issues, but we gradually through the quarter, improved our ability to deliver to our customers, which means that we left the first quarter with a good run rate of our deliveries.

During the quarter, we have also ramped up our production in Sweden. So the first mesh is off the line, so to speak, after the transition from Poland. So here, we've done a lot of good work, and we reinaugurated our factory during the first quarter. But here, I'd say there is still a bit more on the efficiency side as well as adding volume to this until we're fully up and running and fully where we need and want to be longer term.

We have also done a strategic review of our commercial partitioning business with the manufacturing in the U.K. And after this strategic review, we concluded that this is not -- we are not a good owner, and this does not fit the group portfolio, which means that we have closed down this product line and this assortment, and we've also closed the manufacturing of this product line during the quarter. The costs for this were taken during 2025.

If I move a little bit more into then the group, I would say it's very clear that the recent -- 3 recent acquisitions that we made during the fourth quarter have strengthened both the portfolio as well as the growth potential. So we concluded and closed the Vichnet or Vich acquisition in January 2026 as planned, and we do see strong solid demand, both for the flexible barrier side as well as for the data center safety solutions, which these 3 acquisitions contribute well with.

It's also clear that there are opportunities not only on the sales synergy side and sales side, there are also opportunities to work with cost as well as capital synergies as we move through the integration process. And the contribution of the acquisitions in the fourth quarter were 21% of the group total, so significant contribution, both strategic as well as financially to the group.

If I then move a bit more into the transformation activities that we have. As I said, we have ramped up the production unit in [ Vannimo ] after the transfer from Poland with a promising start. There is more to do on bringing more volume into this business as well as bringing more -- even more efficiency into this. And this is a work that has been going on through Q1, but will continue into Q3 and Q4.

The commercial partitioning business, as I said, discontinued during the first quarter. The production transfer from Chicago to Portland is progressing at gh intensity. And in relation to the results and the performance of our North American operations, we have also, during the quarter, decided to make a leadership change in Americas to secure that we have focus on sales and operational execution and performance.

If we then go more into the North American side, we will -- on the picture here, you'd see our new North American facility. It's located close to Nashville in Tennessee. It's -- it will start operating and produce the first products planned in May. And we have now, during the first quarter, made sure that our delivery operations, our picking and packing operations to support our customers have been -- or has been ramped up. It's been a bit more problematic than we first foresaw, but we made good progress during the first quarter, which means that we move into the second quarter at pretty much full pace and where it should be.

At the same time, it means that we have not invoiced as much as we should have in the first quarter, and this will then come in the following quarter. The longer-term aim with this is, of course, that we improve our competitiveness. So North America is currently the only place where we're not running fully automatic, and fully automatic in our business means more automation, less manual [ task ] points and for sure, a lot more cost efficiency into the manufacturing of our products -- of our mesh products, I should say. And the other reason why this is a very important strategic initiative for us is that we also need to bring higher capacity to our North American operations since we have outgrown our facility in Chicago.

Moving over to shelving or racking, the footprint optimization. So we are completed with moving our machines and operations from Poland to Sweden, and we've done that to improve the efficiency as well as simplify the offering and make it easier for the customers to pick and choose us. We are ramping this up and the communicated annual savings of the EUR 5 million expected after ramp-up are still valid, and we're on a good way to make that to come to fruition. And on the picture here, you see a picture from the inauguration that we held in the first quarter where the Governor of this region was cutting the ribbon. So I thought that was a nice way to depict a project that we're very close or even have managed to finalize.

If I then move over to the market side of this. And on the picture, you'd see the market development. And here, we have depicted the organic order intakes of the year-on-year comparison, and we have excluded FX. So in total, we had minus 5% on the organic side, 18% in total, as I said before. If I start from a geographical point of view, Europe, 67% of our geographical exposure. So we have a mixed picture between Northern Europe, which was down significantly, driven by the automotive sector directly and indirectly. Very positive to see in the Northern Europe also that we have our warehousing segment growing for the first time in a quite long while.

If we then flip to Southern Europe, which was up 10% during the quarter, automotive was also challenged in Southern part, but also here, warehousing, construction was up. So in total, we were up in Southern part of Europe.

If we move to what I think is the exclamation point of the quarter is Americas, which is by now the smallest geographical region we have, but very strong order intake, 36% up, driven by both warehousing as well as construction and I'd say also general industry. So I would say it's a solid start of the year in Americas. And also in Americas, I would say that automotive, which is a challenge for us in Europe as well as in APAC. In Americas, automotive is flattish and not really down.

Last but not least, in APAC, which is now 21% of our sales, we were down 31% in the quarter. Here, I would like you to note that we had a strong comparable quarter in the first quarter last year. And also here, the decline is driven mainly by China automotive, which after a very busy year last year, is having a slower development.

If I then move into the different elements. So if we look at the order intake, it grew from EUR 69.5 million to EUR 82 million in the quarter. And if we look at the bridge, we had minus 5% of that coming from organic price volume, 25% structure, and we had a negative FX effect of minus 2%, taking us to 18% in total on order intake growth in the quarter.

If I move over to sales, which had a slower development on the organic side, we moved from 68.3% to 71.8%. So an uptick of 5%. Here, the organic portion of this is minus 14%, mainly driven by our North American shortfall on the invoicing side, but also the fact that we, throughout last year, saw lower order and slower market in Europe. So a combination of lower volumes in Europe as well as ramp-up issues in North America are the key drivers for the minus 14%.

Here, we had a structural component from our 3 acquisitions of 20% on the net sales side. And we also here had an exchange rate effect of minus 2% in the quarter.

If I flip over to the EBITA development, we came in at 10.1%. And here, I would say that if we start with the gross margin, I think the gross margin in the quarter was fairly strong given the organic volumes. And I think we're in striking distance with our informal target despite the low volumes. I'd also say that our acquisitions contribute well to the overall group gross margin.

If we then look to this from a profitability point of view, we -- the lower volumes and the ramp-up issues also put pressure on the EBITA margin. Definitely, the Americas transition add a decline to the performance. And if I look specifically to Americas, we had several issues in the fourth quarter, and we reported some 300 bps in the fourth quarter due to operational issues transfer plus price. This gap has now shrunk to roughly 150 bps instead of the 300. So we're trending in the right direction in the first quarter.

Given the low organic sales volumes, the sales and admin costs are relatively high in relation to net sales, but it's pleasing to see that the underlying organic SG&A as part of this is now coming down and declining as per the savings projects that we initiated as well as concluded during the last year.

If I move to operating cash flow, we had an operating free cash flow of EUR 4.5 million in the quarter. First quarter for us is usually a seasonally weak quarter for different reasons. Driving this downwards is the U.S. situation where we add some more working capital in terms of inventory to be able to complete the move. And I'd also say that the structural component also runs at a relatively higher working capital. So this is something that we are planning and working on to getting more in line with where the group has been historically on the structural side of this. But EUR 4.5 million of free operating cash flow in the quarter.

Moving over to the net debt development. And here, we came in at 2.7 for the quarter, and the net debt increased as a consequence of the 3 acquisitions we made during the fourth quarter at the same time as we have our rolling EBITDA measure coming down as the business shrunk last year. So both these 2 things contribute to the 2.7 performance in the first quarter. Our target remains to be below 2.5 over time on this one.

And if I then try to conclude the financials for the first quarter, order intake sales, adjusted EBITDA and net debt to EBITDA, I've already gone through. On the EPS adjusted, we came in at $0.07 versus $0.10 in the comparable quarter. If I then end with looking ahead, I think I'd like to reiterate that the market conditions remain uncertain.

I do think we saw some green leaves during the first quarter, and we are actively working with preparing to adopt whether this will now take off or whether we will continue to be in a more challenging situation. So we're actively working to prepare and adopt for either scenario. I think our strategy for profitable growth is unchanged. We are keeping the course. And I think there -- it's a good proof point to look at the order intake in the quarter, looking at it from a total point of view.

I also think it's good to see our broader portfolio focused on safety. I think that through the acquisitions, it's good to see strong demand, both on the flexible barrier side as well as the data center safety solutions that we got included from the acquisition of Vichnet. So very good start and strong solid demand on those.

We are seeing the optimized factory structure starting to come through. We are seeing this in Europe, and we will, in the not-too-distant future, also see the benefits of the factory move in North America coming through as well during the second half of the year. And we are continuing with our decentralized operation and continue to work on our processes and our tools to make sure that we are well positioned now, and we're also well positioned to grow when the market turns.

So with that, I would like to conclude the presentation part of this call, and we will now move into Q&A.

[Operator Instructions] And I see the first hand from Jonny Jin at SEB.

I hope you can hear me. I have a couple of questions. Starting with the invoicing, we touched upon this, but the organic conversion seems to be on the low side here in the quarter. I know you mentioned the ramp-up effect in the U.S. and the closure of business in the U.K. and such. But could you maybe elaborate the effect of these, respectively, please? And what was the effect of the delays in delivery in the U.S., for instance, in the quarter?

Yes. So in the U.S., we moved our inventory from Chicago to Nashville. We moved that over the Christmas season. And when we were planning to start ramping up, it takes some time to ramp up. The original plan was to take the backlog that we've built up during the first half of the quarter and kind of gained that back already in the quarter. Now we realized that we had some more ramp-up challenges than what we first anticipated.

So the impact on the sales side is somewhere between EUR 1.5 million to EUR 2 million in the quarter. And just to be clear on that, I think this is not lost sales in that sense. It's a timing and sequencing effect. So as we have now ramped up our delivery capabilities, we will step by step eat that excess backlog back.

Okay. EUR 1 million to EUR 2 million, that's in the U.S. And what was the effect from the closure of U.K.?

It's roughly EUR 1 million or EUR 2 million in the quarter.

Okay. That's clear. And what was the annualized sales of the U.K. business here, which you now closed down?

It's roughly EUR 10 million.

Okay. That's clear. Perfect. Then I want to move to the contribution from M&A. You mentioned it already, but it seems stronger than expected in the quarter. So maybe you could elaborate what is driving this strength from M&A? Are there any timing or such from the acquisitions you made? Or is this a fair picture of the underlying performance of those acquisitions?

I think it's fair to say that the demand for both [indiscernible] data centers and and barriers is robust. I don't think there is anything in the quarter here that stands out in a very positive way or in a very negative way. So I think it's a fair reflection of the Q1 outcome, you could say. So -- well, I will probably take this to the bank and not put sugar or salt to it, so to speak.

Okay. Okay. Interesting. And then just one on the OpEx cost side. I know you touched upon this also, but it seems to be on the higher side, even if we adjust for the one-offs. So is there something special that happened on the operating expense side in this quarter? Or would you say that this is sort of the expected fair run rate we could expect for the coming quarters as well on the operating expense side?

Yes, I do think we are still on the high side. We plan to conclude one phase of our digitalization project already back late to 2025. This has shown or proven to be more complicated than what we thought, which means that we're also carrying costs for this project in the first quarter here as well. And we will continue to carry some of these costs also into the second quarter and aim for finalization on this.

I would just say this -- the work to put some key digital tools here are also key to be able to make more cost savings on the SG&A side going forward and as a next step. So we're still carrying a bit of extra weight comparing to the original plan here in the first quarter.

Did you try to quantify the extra weight a little bit closer?

Now we're talking a few hundred thousand euros.

Okay. That's fair. And just one final on outlook and demand. I know you mentioned in the report some signs of improvement at the end of the quarter, and you talked about they picked up momentum throughout the quarter, I think as well. So how should we interpret this? Are you seeing better orders already now at the start of Q2? Or is this -- what are you basing those comments on?

Yes. No, I think we saw a gradual improvement throughout quarter 1. And we haven't seen anything beginning of April that's different to the end of quarter 1. So that would be one reflection from my end. The second reflection, I think, is also if we look at the composition of that order intake, we've had a couple of really tough years on the warehousing side, '22, '23 -- sorry, '23, '24 and '25. And we do see some things starting to move here. We had more activity in the second half of last year. We think we see -- we have more of order intake in that segment now in the first quarter, and that's good news, of course, for us since this is the largest segment for us.

Yes, I understand. Just one final -- [ sorry, I ] squeeze in for a lot of questions. But just in the North America, you mentioned strong order momentum there. And I think you said that also it's driven by warehouse but also general industry. There have been some other companies here reporting stating that industrial CapEx is a little bit worse here, sentiment after the Middle East crisis and such. So I mean, is this something you also mentioned or seen? Or is there a few customers that drive this momentum? Or what is driving that, would you say?

Yes. I would say I think on the warehousing side, Q1 was more robust in a sense that we had a more broad-based, you could say, activity as well as orders. On the general side, I think it's likely more our customer mix than something that is broad-based in describing the market.

[indiscernible] is next.

Martin, I hope you can hear me as well.

Loud and clear.

Perfect. So my first question is just if you could give us some details on the price component in the order intake if you have for the whole group or if you could give us some details per region?

Yes. Overall, we have a -- you could look at it as Europe and Asia, fairly stable as price component in the order intake. And in the U.S., we're looking at a double-digit number to compensate for material transportation, et cetera. So if you weigh that together, you'll get a few percentage points on the order intake.

Okay. Perfect. And then just going back to the M&A contribution, as stated by previously, it's very solid. Could we get some assessment of how much of the invoicing orders that are specifically from Vichnet?

Yes. So Vichnet would be a little bit north of between 50% and 60%.

Okay. Perfect. So then just going into -- because as it has a Chinese exposure, it's rather fair to maybe assume that you have a different kind of seasonality than the remaining parts of Troax. So just how should we think about Vichnet's activity going into second quarter and the remaining parts? And maybe also, if we can go into the details on how the acquisitions affected the operating margin. You said that they had a positive contribution on the gross margin, but how does it look on the operating margin as well?

Yes. So if we start with the seasonality question, and I would think, obviously, on -- with Vichnet, we have -- a lot more of that business is an APAC business. So that follows more the Chinese annual cycle, if you will. And that, at least from how we used to know it is Q1 is usually a little weaker than the other quarters. If we look at Europe at the other end of the scale, the pattern is slightly different. So usually, the first quarter in APAC is the weakest one from a volume and profitability point of view.

I think we probably need a few more quarters under the belt with Vichnet to see whether the business is performing or behaving just like that. But I think it's probably a fair assumption to say that it will behave like we know other APAC businesses or Chinese businesses.

On the operating margin side, it's true that our acquisitions are stronger in relative terms on the gross margin side. At the same time, all these 3 are growth cases, which means that the proportional SG&A might still be on the high side. But in the specific quarter, the structural component was over average comparing to the group. So it's been accretive, if you will.

Okay. Perfect. And maybe you could give us some details on how the growth momentum both from -- for Vichnet, but also your own data center exposure?

Yes. No, I'm happy to do that. And I think it's been -- we had some good progress, and we've had some good progress in the last couple of years. We are relatively new into this. I think the data center business, both on racks as well as on wire trays is one of the growth drivers for Vich. So I think the development and momentum in this business is good, and it's good for our -- in our structural part, and it's also quite good on the organic side. So from that point of view, it's a good growth potential and also a growth driver, even though it's from a low base still.

Okay. Perfect. And just thinking about the backlog then that you have in the U.S. as you seem to be quite confident that the delivery issues are fixed into Q2, should we be able to see sort of full delivery on the backlog? Or should this maybe be viewed as gradually throughout the second and the third quarter?

Yes. I think we should be delivering what the customers have ordered from us. And we will eat that backlog mainly in Q2. Perhaps something will then be squeezed and move into Q3. But -- so definitely, we should be able to see that invoicing coming through during the course of the year.

Okay. Perfect. And then just a final one from my side on the warehousing exposure. So the increased activity that you're seeing, is this relating it to sort of base business within like small and midsized order? Or how has activity on larger orders increased as well?

It's a bit of both, I would say. So the pipeline on warehousing is a mix of -- I think what we haven't seen in the past couple of years has been the large projects. We now see them come back, but I would also say that small, medium as well as midsized is also more active. So I'd say it's in all 3 categories, if you will.

Then we go with [indiscernible]

I thought maybe just to start off on sort of the backlog story. Just for Northern Europe in conjunction with the facility consolidation, are there any backlogs to talk about there, given that you say that hopefully, you have to direct the facility towards more volumes, et cetera?

There was a bit of backlog that we decided not to produce in Poland and start ramping up in Sweden. So there is a bit of backlog from that. But I wouldn't say we carry a big backlog in this. So this is win the orders and produce it. And I would say this, hence, we have a lower invoicing that what, you could say, is normalized in this business, and this impacted Q1 slightly as well.

That's perfect. And then just thinking about if you could reason a bit on sort of the margin and the cost. I mean, how should we think sequentially from Q1 into Q2 in terms of what type of costs will ease? I mean you will close down -- if you just take North America, you're likely to close down and you have less personnel there, you will have eventually dual rents, et cetera, but are there anything to do in other areas that we are -- that are worth highlighting?

I think you nailed the 2 big ones. For sure, we are having our most intense months here now. So we've had a very intense quarter 1. We'll continue to drive a very intense work to get not only the logistics in North America, but also the machinery and the equipment. And at one point, we can move from running a dual operation, which we have currently in the U.S. into one more optimal, and that will happen during the second half of the second quarter.

And of course, with that, some of the double costs will naturally decrease as our employees in Chicago will not have a factory to come to in that sense. So that will be the main -- I would say, the main difference here in the second quarter.

Yes. Okay. Perfect. That's great. And then just on your comments in the report regarding cost synergies in terms of the acquisitions, are these material? And how should we think about the timing, best guess, I guess?

I think I'll probably have to get back on this topic with the second quarter report. We're 1 quarter into the integration work, but I think just first glance, it's -- there are a few areas of overlap. Obviously, we can look at the company structure. We can look at admin structures. We can look at how we treat, for example, inventories on the capital side. But I wouldn't dare to quantify how much this is today. But I'll promise you to get back on this when we have a bit more firm view and data on this, Gustav.

That's fair. And then just one last clarifying question just on the commercial positioning here. Did it have any negative impact in the quarter at all?

It has negative impact in -- you could say, in 2 ways. The first one is that we obviously stopped taking orders, so which means that when you compare organic order intake, you will have an artificial effect of that the order intake is not really measuring this apple-to-apple. And you can use the annual figure and divide by 4, you get a rough idea of what that order intake impact is.

The second one is then on the result and sales. Since we stopped taking orders somewhere late last year, it also means that we have less volume to invoice during the first quarter here. And as we move into the second quarter when we have discontinued the operation, obviously, you will have that effect as lower order intake and lower sales organically. However, this business was dilutive to the group average, which means that it should also be seen as a positive thing to the group result.

Yes, yes, perfect. But we saw that positive impact from 1st of January, basically.

No, you will see that impact from the second quarter.

Daniel Lindkvist, please go ahead.

So I've had most of my questions answered by this point, but just a few ones from my side. If we look at the time frame in your order book, I mean, we've got used now to conversion in the upcoming quarter more or less for quite some time. But so I'm particularly interested in the U.S. order intake and delivery structure for that one and also on the acquired units in particular.

Yes. If we look at the U.S., we -- in the first quarter, we had a few larger projects. So if you look at usually you convert with a quarter's delay or something. It means that the order intake in the first quarter will have a somewhat longer conversion rate, which then impacts second, third quarter. And if we look at the structural part, there are -- the business that relates to the data center business also runs at a slightly longer conversion cycle than the, you could say, the bread and butter business that you're used to.

Okay. Cool. And if we just then add the -- how much is left roughly on the backlog from the U.S. now?

Stemming from the move quarter 4, quarter 1, it's roughly EUR 2 million.

Roughly EUR 2 million. Perfect. And then if we just look at the -- I mean, the acquisitions really surprised me in Q1, and it seems like these are bigger operations than we -- in the market perceived. But at the same time, we -- in Q1, we have the Chinese New Year. So one would guess that then the plastic barrier side would have been the stronger put in Q1 and maybe then in the -- what are the opposite situation in Q2. Is that a fair assumption? And is there any difference between the gross margins in the plastic barriers and in the Vich just to bring with us going forward?

I think conceptually, you are right with the quarterly sequencing on barriers and on the Vich acquisition. So in theory, you're right. I think we're only 1 quarter into these acquisitions. So I'd like to be a little careful on that. But conceptually, I'd agree with you, Daniel, on that.

On the gross margin side, all 3 acquisitions are delivering what I consider to be healthy gross margins and healthy gross profit. And I think it's also an outcome of the fact that we're delivering solid value to our customers. So it's -- they are all bringing value products to the customers. So they are all accretive to, you could say, group average on the gross margin -- from a gross margin point of view.

Okay. So Vich is also a higher gross margin business than the average?

Yes.

Cool. And then just on the automotive side, I mean, you've delivered on old projects for some time, but the market has in general been weak? Or should we read that the market has become weaker now? So what's the split between the projects you've had and delivered on and the market becoming weaker or the opposite?

Yes. I think what we are now experiencing at our end is we are pretty late into the cycle. Obviously, a lot of the carmakers and other suppliers to the car industry might have suffered a bit earlier than we have. I think on the order intake side, we're now seeing kind of the reality of where automotive is. So from that point of view, this is one of the first quarters where we're not filling the pipeline with larger new projects. So I wouldn't say necessarily that the market might have gone a lot worse in Q1 versus Q4. But I think now it appears at our end, what that looks like in terms of investment into our product niches.

Okay. Cool. And then on the gross margin side, are there any effects from the cost savings from Natom that are visible in Q1? Or should we expect those going forward in conjunction with higher volumes?

If we look at the fixed costs that we have taken out of Poland, they are part of this, and they are also visible in the result. However, it's not to the full swing yet since the volumes are not completely ramped up. And so obviously, this is also a volume gain. So some of those run rate savings will also come with more volume, and that impact is not seen yet in the first quarter. That's still to come, but we're on a good way to get there.

Perfect. And then just finally, I mean, there are many out there that discussed this in terms of a company that should have a normalization or getting closer to it by 2027. So just from your side, is there anything that contradicts this report or from what you see now with things going on?

It's very difficult to predict the future, I've learned. So I think the big defining parameter here will be what happens in the Middle East if this gets prolonged and whether the world economy gets dragged into something that is slower for longer. But I guess my crystal ball on this is just as clear or as cloudy as yours. So I'm not sure I'd like to make any statements on this one. But nothing, I would say, from the first quarter specifically, contradicts, you can say, your narrative.

Guessing from my side, it's -- you have an insight in the projects and the projects that are postponed and so on and the project sizes that we're discussing. And in that sense...

To date, we have seen very little of any change in that comparing to how we've been trending the last 3 to 6 months depending on segment.

Okay. I don't see any more hands in the air, which means that we will bring this interim presentation and earnings call to an end. So thanks a lot, everyone, for listening in. And if I don't see you before, I'll see you in a quarter's time. Thank you, and bye-bye.

Hi, everyone, and welcome to Troax quarter 4 report. My name is Martin Nystrom; and as always, I have Anders, our CFO, with me here today, and we'll go through the quarter 4 results and key events. After the presentation, we'll open up for a Q&A session. And by that, let's dive into the quarter.

The fourth quarter was for Troax a mixed bag of outcomes. In total, we report a minus 3% order intake growth organically and in the minus 3%, we have excluded the FX effect. We reported 10.8% EBITA margin, excluding the one-off effects, which I will come back to and net debt of EUR 1.7 million. If I start with the market and the market conditions, I think we can conclude that in the fourth quarter, the markets continued to trend softly, largely as we've seen throughout 2025.

In Europe, we continued largely as in the third quarter. We had some signs of recovery in the warehousing segment as well as in the general industry segment. But at the same time, we also continue to see the automotive demand being soft.

In the Americas, we saw a continued decline. And here, it's a 2-sided story. We do have a lot of activity and a lot of quoting activity with our American customers. But at the same time, there is still hesitation to make decisions, which makes us not come back to growth.

APAC, our APAC region has had a fantastic 2025 overall with significant growth. Towards the end of the year, we saw the order intake softening a little bit in the quarter, although I would like to say that the pipeline and the activity remains strong and high in APAC.

Also, I think when we look at the order intake and at the market, we still had a negative impact in this quarter roughly by EUR 2 million due to the move -- the factory move that we've had during the autumn between Poland and Sweden. So we -- if we compare to the third quarter, we had less of a negative impact from this. Now we're completed with the factory move and we will start taking on orders again beginning of 2026.

The other key topic here is our lower EBITA in the quarter. We are now starting to feel really low volumes in our highly automated manufacturing. So that is one thing that pulls our profitability down for the quarter. And we've also to that had some 2 specific issues in the quarter.

The first one is our North American operations. Due to the low order intake we saw in Q3, we now in Q4, have low volumes in our manufacturing facility, which drive our profitability down. We saw -- we had delayed pricing implementation in Q3. This is something we have adjusted. So in the order intake numbers, we do have some pricing impact, but this has not yet hit the P&L yet.

To that, we have operational challenges in our old facility with old equipment, unstable equipment, a different make-by mix. And all in all, this in total diluted our EBITA margin by roughly 3 percentage points or 300 bps in the fourth quarter. The other specific challenge that we had in the quarter was our commercial partitioning business, which suffers from low margin, low volumes and also a profitability problem. And that in the quarter contributed with 1.3 percentage points or roughly 130 bps.

If I move over to our supply chain optimization initiatives, we are making very good progress. We do have one-off impacts from this. So in the fourth quarter, it's very pleasing to see that our factory transfer from Poland to Sweden has been completed. We have completed this on time and within the budget during the fourth quarter. So we're going into 2026 in a much better shape. We're also having the factory transfer from Chicago to Nashville in the U.S., which is moving according to the plan, and we plan to finalize that moving close down Chicago towards the end of the second quarter this year.

Combined with these projects then combined, we have related one-off costs. And in the quarter, we took EUR 4.2 million, covering the additional cost for this. It's double rent, double set of people as we ramp down, ramp up as well as we've looked over our assets, which means that we have written off some inventory, et cetera. And then going forward to guide a little bit for the remaining part of the move in the U.S., we estimate that we will have in addition EUR 2.2 million in the first and second quarter of 2026 up until we have finalized our American move, and we will report that as these costs occur.

Finally, in the fourth quarter, I think we have concluded 3 very important strategic acquisitions. It's the platform acquisition of Vichnet, which provides market leadership in China as well as in Asia. And then we have our D-Flexx and Stommpy acquisitions, making us a platform for flexible barriers and a very needed product portfolio widening. And I'll come back to these in the next coming slides.

If I start with Vichnet, we -- in the beginning of January, we closed this deal, which we announced during the fourth quarter. In practice, this means that we are now the leading player for machine guarding, and we also have a more attractive portfolio and exposure towards the data centers globally through the wire trays for cable management systems. And in 2024, we -- Vichnet had EUR 26 million roughly at the profitability that is the same as Troax Group for 2025. And starting from January and quarter 1 this year, Vichnet is part of the Troax Group.

The second area where we made acquisitions, and this -- we've made 2 acquisitions here. We now have a complete and very strong offering for flexible barriers. So for logistics purposes, we have D-Flexx, which has been part of Danish German Dancop before. So we have a strong product offering in the flexible barriers for intralogistics, which go very well hand-in-hand with the core machine guarding offering that we have in the group. And secondly, we also acquired Stommpy, which has a unique technology for this, mainly targeting the food and bev as well as pharmaceutical segments. So we're very pleased to have all these 3 acquisitions and companies on board into the Troax Group.

Then if I come back also to our North American expansion, we are aiming and we will improve our efficiency and expand our capacity in North America. We have done good progress, as I said. We will see -- when we're through this move, we will see higher competitiveness in the U.S. We will bring this to the 21st century when it comes to automation, best practices and also a better, more cost-effective location in the southern part of U.S. During the fourth quarter, we started to move our inventory, and we're also be seeing commissioning and installing machines, which will then be completed during the first and the second quarter.

Then I'd like to say, and I think this is something that we -- the team should feel very proud of. We have now also optimized our European footprint, which means that our racking portfolio has now been streamlined. We have moved our operations from Poland to Sweden as planned during the fourth quarter. And we will now, going forward, enjoy both the order intake and the orders and sales coming back, and we will also enjoy the cost efficiency and the savings that were attached to this program.

I'll then flip to the market development in the quarter, and it's largely a, you could say, a continuation of what we saw during 2025. If we look organically, excluding FX, we came in at minus 3%. So that is sequentially an improvement to the third quarter where we had minus 7%.

If we then look at this from a geographical point of view with Northern and Southern Europe, we came in at minus 4% and minus 1%, respectively. We see automotive driving being -- driving this downwards, while we do, in fact, now also see some coming back in the warehousing segment. It's still early days for this, but surely a positive development, which bodes well for 2026 and onwards.

In Americas, we came in at minus 4%. Automotive also here is driving this downwards, but -- and we do see some positive signs in the other industries segments. And APAC came in flat in the quarter. So very much a continuation of what we saw in Q3, but with the difference here that automotive is now trending slightly downwards, while we have warehousing and general industry moving slightly upwards.

And with that, I'd like to hand over to you, Anders, to walk us through the financials of the quarter.

Thank you very much, Martin. Let's start with the order intake table. Troax Group reached EUR 64.4 million in order intake in Q4 of this year compared to EUR 68 million in last year. It's a decline by 5%, of which 3% is related to organic decline and the remaining part is related to structure and/or FX. If we look at the full year 2025, we reached EUR 261 million in order intake compared to EUR 277 million in 2024. That's a decline by 6% or 5% organically. As Martin mentioned here earlier, we do see a sequential growth in order intake compared to Q3, and we also have a favorable book-to-bill ratio of 5% in the fourth quarter.

Moving over to sales. We reached EUR 61.2 million in sales compared to EUR 66.7 million in last year Q4. That's the 8% decline in sales. Looking to the full year, we reached EUR 262 million in sales compared to EUR 278 million in prior year, which is a 6% decline in sales year-over-year.

Going then to the EBITA development. We reached EUR 6.6 million in EBITA for the fourth quarter, which is a 10.8% EBITA ratio to be compared with EUR 11.5 million in Q4 of last year or a 17.2% EBITA ratio. Looking into the full year, we reached EUR 36 million in EBITA or slightly below 14% in EBITA ratio compared to EUR 48 million in full year 2024 or a little bit more than 17% in EBITA ratio.

So looking at the operating cash flow, we had cash flow from operations of EUR 4.8 million in Q4 of this year, compared to EUR 14.4 million in Q4 of last year. The ratio for this year was 73% of EBITA versus 126% in Q4 of last year. Again, looking at full year, we reached EUR 29.9 million in free cash flow from operations or 82% of EBITA compared to EUR 42.4 million in last year or 88% ratio.

The net debt development, we have now increased a little bit due to the acquisitions that we have made in the fourth quarter. We are still way below the target of EUR 2.5 million. So we reached EUR 1.7 million in the fourth quarter, which means, of course, then we have continued firepower for future acquisitions.

And last but not least, a summary of everything I mentioned earlier. The only thing I would like to comment here is the EPS for the fourth quarter was EUR 0.07 compared to EUR 0.15 in Q4 of last year. If we look then at full year, we reached EUR 0.40 of EPS compared to EUR 0.56 in 2024 full year. And also, we -- the Board is suggesting a EUR 0.24 dividend to the AGM further here in April compared to EUR 0.34 in last year.

And with that, I hand over again to Martin.

Thank you, Anders. I think we now conclude the fourth quarter as well as the full year. And I think the 2025 has been a very busy and very hectic year for Troax. There has been a lot of transition work going on to this or going into this. And I'd like to say thanks to the whole team who has made this -- all of the work being put in better places.

And I think if I look ahead, I think we have an organizational structure now in place, which definitely will help us to boost sales going forward. I think we have -- we are in a better place when it comes to generating cost synergies. Some of that hard work has been now done and complete during the second half of 2025, and we have our American operations well underway in the beginning of 2026.

And I am also very pleased that we have added acquisitions that will help us drive both strategic relevance, but also profitable growth in the current segments where we're strong and also into new segments. So this makes me cautiously optimistic about '26 and also the development going forward.

So with that, we end the presentation, and we will move over to Q&A.

So if you have a question please raise your hand and we will make sure to unlock your microphone. We will start with Jonny Jin from SEB.

Martin and Anders, can you hear me?

Absolutely.

A couple of questions from my side. I think I will start with the weak profitability in the quarter, starting with gross margin specifically. I would appreciate if you elaborate on the gross margin here. I know that you mentioned the lower volumes affecting the gross margin, but the sequential drop in sales is not extraordinary huge, but sequential drop in the gross margin stands out as very weak in a historical context. So could you maybe elaborate more there and how we should view the gross margin going forward?

Yes. No, absolutely. If we look at the gross margin, I think the gross margin is definitely on the low side in the quarter. If you look at what's driving that, I think we -- the main driver for this is the operational result and problems that we have in the U.S. So there is a pricing -- the pricing impact, there is, for sure, operational challenges to the low volumes.

So I would say on the gross margin side, I think we've done a very good job in Asia, and we've done largely a good job in Europe when it comes to this. The gross profit issue very much sits with a combination of low volume, delayed price and then also having more operational supply problems in the U.S. in the old facility. So that explains the majority of that drop. And to that, we also struggled with low volumes, specifically in the commercial partitioning business. So those are the 2 main drivers, not only driving the EBITA margin down, but also the gross profit down.

Okay. But I think you mentioned the better pricing in the order book now. So how should we view the gross margin in Q1 and forward? Should we -- assuming that the market stays the same, can we expect a more normalized gross margin in Q1 or?

Yes. I think we should be expecting a profit -- gross profit improvement coming from pricing, which will then come to our P&L in the first quarter in the U.S. I don't think miraculously that all of the operational problems that we have in a facility that we're closing down, I don't think they will completely disappear. So it will be an improvement coming from the pricing part in -- yes, well, starting from the first quarter in 2026. We will continue to have quite some struggles on the operational side in the U.S. up until we are starting up our machinery gradually during the second quarter.

Yes. And could you remind me of the pressure of the -- from the price in this quarter on the U.S.?

Yes. If you look at the numbers from the U.S., you could say that probably half of this is price and half of this is operational challenges.

On the group level?

Yes, on the 300 bps that we have at the group level.

Yes, that's clear. Okay. And then I have a question on cost. I mean, you mentioned some double rental costs, relocation costs, overlap in personnel and such. But can we expect those costs to go -- continue going forward as well ahead? Or is that included in the EUR 2.2 million you guide for?

Yes.

Okay. Yes, that's clear. And then a final one on demand. I know that you remain cautiously optimistic. I think you said that, but I think you had similar reasoning for several quarters now, and we haven't really seen an improvement so much yet. So can you just elaborate on your reasoning? And do you have sort of any visibility at all for the coming quarters when we can expect this to show in the numbers even more?

Yes. I think that's the million-dollar question, and I think I'm not alone in being cautiously optimistic here. I do think -- I think we can look at this from different points. I think what makes me a bit more optimistic is when I look at the pipeline and activities in the warehousing segment, it's clearly more active in the second half than in the first half of the year. That, I think, bodes well.

I do think also that we have been struggling partly if we look at the year-on-year comparison with the automotive segment, which has gradually come down during the year. We have started a lot of activities also for other segments, which I'm hoping that we will harvest from. And I also think there are some light in the tunnel when it comes to general industry in some specific markets.

So I think that makes me -- we have, for example, more activity now going into defense partly. We have more activity going into food and pharma, which has been not the strongest segment of ours. So I think there are certainly things we've done within the group that won't necessarily require a more broad-based recovery of the economy. So I think it's a bit of both there. But I think if there is something I'd like to single out there, I do think the activity level on the warehousing segment is -- has been better in the second half than in the first half.

Understood. We'll see. But it sounds that is it more likely mid and the second half of this year, 2026 rather than the first half or...

I think it will be at some point during the year, whether that point is Q1 or Q2 or Q3, we're ready for when it comes.

Then we will bring in Anna Widstrom.

So I just want to go into the relocation status on both the Polish and Swedish one in the U.S. So firstly, starting in the U.S., you're increasing capacity in the new facility in comparison to the old one. So given what the current run rate is, at what capacity utilization, in other words, how much higher volumes would we start to see these margin improvements? Would it be on current run rates? Or do you need to have organic volumes increasing to get the improvements on the higher efficiency in the new site?

Yes. I think this is at current volumes, we -- so basically, of course, the benefits increase with higher volumes. I'm not sure if I'm ready to give you any firm statement on that. I do think though that even at these volumes, I do think there is a benefit with the move. But those benefits are -- might be a bit lower than what a more normalized level would be.

I think when we look at -- if you look at the absolute numbers that we currently have in the U.S., I think they are very soft. And I don't think as a planning prerequisite, that should be the base for how to evaluate this. But we will, for sure, see benefits on the efficiency side before we get to how we utilize the capacity to win more market share.

Okay. And then going into Poland and Sweden. So how has the relocation been received from customers so far, given like the delivery times and cost levels, et cetera? And also if you made any changes in the product portfolio that you have, if you've excluded some products that you delivered from Poland, but won't be delivering from Sweden?

Yes. No, I think we have indeed pruned the portfolio, and we've looked for finding the right balance between customer service and efficiency. So we are not bringing all of the portfolio that we produced in Poland to Sweden. That's clear. That's part of the cost saving initiative. I would say that initially here, we -- I think customers like that they have now a fully-fledged provider who can provide the various types of shelves and dividers and as well as anti-collapse systems, and we would do that from a portfolio point of view rather than from a factory location point of view.

So from that point of view, I think it's been very, very positive. When it comes to the competitiveness and the pricing, I think it's also very much of a customer-by-customer, deal-by-deal discussion. So I think it's a little bit early to say that we have received any firm feedback. But I'd say early days, we -- I think this has been generally very positive in the customer dialogues that we've had.

Okay. And then just a final one from my side. Looking on how you're describing the ordering with the arrows, it seems like the -- most of the market is relatively flat or slightly positive in warehousing, where automotive is weak, and you've talked about it being gradually weaker during 2025. How should we think on that per region for '26? Is this an ongoing trend? Or do you think that we've seen much of the downturn already in some of the regions?

On automotive, I think we have seen most of the decline. I think the arrows are also year-on-year. We still -- since we're late in the cycle, we had pretty good orders towards the end of last year -- well, not last year as in '25, but end of '24. So on a year-on-year comparison, we're clearly down on automotive. I think when it comes to the levels as such, I think we have come down to a much lower level on that. So I'm not expecting that level necessarily to increase that much further going forward.

If we look at this from a geographical point of view, I think my view is that we will likely get to growth in green arrows quicker in the U.S. or in North America than we do in Europe. APAC has been overall a pretty good year, even though the fourth quarter wasn't a growth quarter in automotive.

Next one would be Gustav Berneblad.

It's Gustav here from Nordea. Just thought that maybe just start off here with the order intake and basically given what we have seen here in the last quarters. I mean, is there any reason to think that you go into '26 here now with an extraordinary high backlog to any sense? Or what's your view there?

No. I'm not sure what you'd say, Anders. I would tend to say no. I don't think so. I don't think it's something out of the ordinary. It might be a bit in the U.S. But otherwise, I think it's nothing out of the ordinary, Gustav.

Yes. Okay. Perfect. And then in terms of the consolidation here in Poland, Sweden, I mean, should we expect sort of a ramp-up phase here in starting Q1? Or is it -- are you firing on all cylinders right away or...

No, I do think in theory, we would like this to be just like a button which we push on and off. And that button works well when we turn it off. When it comes to ramping this up, I think it's very much dependent on some of the larger deals and customer discussions we have, whether this will go fast or whether that ramp-up will come a little slower. So there is a bit of timing effect on the large racking projects in the speed of ramping this back up again. But we will, for sure, see a coming back on the order and sales side of that part of the racking portfolio.

That's perfect. And then also sort of connected to this, I mean, warehouse arrows, as Anna was into, looks more positive. Are there also larger projects coming into order intake now and we should expect sort of that lead time for the dynamic in the order intake here changes a bit. So it's longer lead times in the order book or...

I think -- I guess your question comes a bit from what we experienced during '21 and '22. I think we are -- you can, of course, say that the larger projects come with a little bit longer lead time just due to the share size of it and the logistics of it. I think though that we need to remember that the market was kind of firing on all cylinders back then.

I think we come from in the warehousing sector, very low levels. So I think it's not necessarily the supply chain that will -- last time we had supply chain bottlenecks, I would say those are not present for the time being at these levels. So I wouldn't expect the usual order intake to sales pattern to change dramatically at these levels yet.

That's very clear. And sorry, just one last one, just a bit of a clarification here. On the operational struggles you are having in North America, can you just elaborate a bit more on those and also what you expect sort of how this develop in Q1 or starting 2023?

I think what this practically translates to is old equipment breaking down where some of this equipment might -- it might be hard to find repairs and spares and find someone who could fix them for us. So I think it's one week, it might be a welder, the other week, it might be a laser. The third week, it might be the paint shop. So it's very difficult to say exactly how this will pan out as we now ramp down.

And of course, we're also not interested in over repairing old equipment, which we will not bring with us to the new site. And so it drives the repair work, it drives downtime, and it also drives additional outsourcing when the machinery is not up and running. And I think that will continue -- the challenging situation will continue through Q1, then somewhere starting in Q2, we will start to get some production output from our new place when we get going. So that problem will -- with time, will decline a bit as well.

Yes. Okay. Fair. So it sounds like it's -- you're giving up on the equipment sort of now here and with pressure...

I think the equipment is giving up on us.

Next one would be Daniel Lindkvist.

It's Daniel Lindkvist from Danske Bank. So just continuing on Gustav's question, I mean, we have had a number of quarters in a row now with not full conversion of the previous quarter's order book. Have you seen some losses in the order books? Or is it just normal pent-up and fluctuations?

I would say the latter. I would say it's normal. So we -- it's not that we're suffering from order cancellations or anything like that. I'd say that's more part of normal business more than anything else.

Okay. Cool. And then just -- I mean, now you have a EUR 64.4 million with you into Q1. What should we expect conversion-wise like the previous quarters? Or should we expect that you still aim to convert the order book in the upcoming quarter?

I think we should -- I don't think you should change the pattern that you usually have. There is nothing in the mix currently that changes that in any significant way.

Okay. Perfect. And then, I mean, now you have quite some -- we saw very little of it in the order intake for Q4, but you have quite some M&A hitting you starting in Q1. And just doing the easy math, it's some 40 per year, something like that on the levels that you bought them at. So that should be maybe some 10 then in Q1. So my question is basically, are there any seasonal variations we should be aware of in those acquired units that could potentially mean that there's significantly less than so in Q1?

Yes. I think on this one, I think when it comes to the barrier business, it's from core or from the machine guarding product portfolio. And I don't think it has to do with the product. It has to do with the geographical exposure. When it comes to the Vichnet in China, obviously, we have Chinese New Year not in December, but now coming usually somewhere between January and February. So the first quarter usually in APAC or in China specifically is usually a little slower than the rest. And of course, the Chinese or the APAC exposure to for Troax is now with this acquisition a little larger.

But nothing with the normal barrier businesses. Those are just evenly spread normally.

That goes for the APAC and the Chinese business.

Okay. And then just for the newly acquired ones on the lead time from order to delivery, anything to think about? Are those shorter lead times from order to delivery or vice versa?

You'd have a mix in that. You'd have a lot of quite fast-paced orders. So if we usually run between order and delivery, we have, you could say, the machine guarding pattern, you'd have that for portions of that business. Then you'd have the other part of this would then follow more the larger projects where there is a little on average, longer lead time between order and delivery.

Okay. Perfect. And then if you just could update us on the situation with the cost savings. We take the admin side first, and then I guess we should wait for the effects of the net on move to see any effect until Q2 then perhaps or maybe some late Q1? And what have you seen this far with cost savings on admin?

Yes. I think the cost savings on the sales and admin that we launched in Q2, I think, has been as intended. What we saw the personnel cost has come down. That's one side of the story. The other side of the story is also that we're now trying to force some of the digitalization projects and to cross the finish line, which we also had some costs remaining in the fourth quarter though, also from the beginning of Q1. So we perhaps we've been a little bit delayed on this when I thought we'd be completely finalized in the fourth quarter. We'll most likely have a little bit of that in the first quarter, but we'll make sure that we wrap this project up in the first quarter on the digitalization side. So the cost saving program has yielded what it should have done, but there has been also some other elements into this.

When it comes to the factory move, what we said in the savings program is that we will start to have full effect of this from beginning of '26, which means that the factory building, in the factory in Poland is now empty. The personnel has been -- has found new jobs with other companies, which means that the cost base is now lower. Then when it comes to the run rate savings, then you also have the impact of volume, but we have certainly gotten the effect of the fixed cost base out from -- by end of 2025. So that is as per plan.

And you will start to deliver the [ net on ] products from March. Is that the...

Yes, we will do some deliveries prior to that as well.

Now I'm not sure if you want to make one more come back, Jonny. I see your hand being up or is that your old one?

Yes, I want to make one follow-up question, if I may. The acquisitions, the margin, how should we think about the margin there? Because I know that you said, if I interpret it correctly, that they should be in line with the group, but the group EBITA margin has been fluctuating a bit here coming from. I mean, now you do 13.8% EBITA margin in 2025. You did 18% the year before that and over 19% before the year before that. So what level should we expect when you say in line there for acquisitions?

Yes. I think you should expect the combination of this to be above the 2025 full year margin and -- but not as fully as high as prior years. So somewhere in between there to begin with.

So maybe 15%, is that a fair assumption on average?

Yes. Okay. I see no further questions.

Great. Then I'll thank you for attending our call, and we'll -- I'll see you in latest quarter's time. Thank you, and bye-bye.

Bye.

We now have a presentation for the next 1.5 hour by Martin and Anders. After that, we will have a Q&A session where we will walk around with a microphone if you have any questions. And then there will be a factory tour where we will divide you in groups, and you will be taking around different stations around the factory, and then we will finish with a wrap-up. Okay. And I'll hand over to you, Martin.

Wonderful. Thank you Jonas. And also from my side, a very well -- very warm welcome to [indiscernible]. It's a nice excursion on a Wednesday, and I'm really happy to see so many of you here, even though I realize there is quite a few hours of traveling and by car or by train or hopefully not private planes.

Today, we'll talk -- I'll talk -- we'll talk about 3 things. We will go through and go over our position, who we are. We saw a bit of that in the movie. But we'll also look at what makes us the world leader and what makes up our position. And then we'll also talk about the market, what drives our business. Secondly, we'll talk about our revised strategy. There has been a revised strategy, and we also, through this year, we have started to -- or implemented a bit of a new way of organizing the company, making it also aiming for future-proofing the business.

And last but not least, we will look at our ambitions for 2030. We announced new financial targets last week. And hopefully, today, we'll be able to shed some light for not only on the targets themselves, but certainly also our way and how we aim to get there. I'd start with our position, and we decided to name this day future of shaping the future of safety.

Obviously, we've been around for 70 years, shaping the future of safety. We've also been on the stock exchange for 10 years. So we have a double anniversary this year, which is something we're very proud of. And I think we've also had a very fantastic journey over a long -- many, many years. I also think that this as an introduction picture kind of illustrates a lot what we mean by safety. We truly believe that everyone should be able to come to work, work through the day and also get home safe to their relatives and friends.

That also means peace of mind for the business owners, peace of mind as in we protect the productivity and we protect the assets. So it's a double sword thing. To us, we work in the big scheme of safety, and we are a niche player. So we provide one part of the big safety environment for our customers. We deliver our solutions into manufacturing environments as in this example on the screen. We do deliver warehousing and logistics safety. We deliver safety for valuables in storages, mainly here in the Nordics, and we've done so for a long time. And we have now, the last couple of years, also started to dip our toe into providing safety and protection for data centers and for digital assets.

We do so through a couple of product areas. So we have our machine guards, our biggest business. We do doors protective structures like the one in the data center example, but we also provide several products when it comes to racking, so shelves, horizontal and to collapse vertically. And since a few years back, we're now pairing this hardware with sensors and connectivity.

I'll come back to that a little bit later in the presentation. Briefly about the Troax Group. Last year, so 2024 full year, we had a sales of EUR 279 million and an EBITA margin of 17.3%. That means if we go back over a longer period of time, we have grown the business 12% CAGR. So between 15% and 24, we have grown 12%. 9% of that roughly is organic and 3% are through bolt-on acquisitions. By the end of last year, we were 1,200 employees globally. And as you know, we have -- through this year, we have adjusted to the market.

So today, we're roughly 1,100 people. And we're spread out across 40-plus countries. You can see some of the countries where we're present in the map. And here, you can see that there are still quite a few white spots or gray spots where we still have potential to grow. In most of these countries, especially the European ones, we are the market leader and the market leader by far.

I'd also say that we are the, in fact, only player who are truly global, which means that we're the only producer in our niche that have sales, product development and production in all continents, which make us really unique. So before we look forward, let's take a little bit look back, and I've already alluded to this. We were founded in this very place, 1955. So we celebrated our 70th anniversary this year. And we're also having the second anniversary, which is 10 years on the stock exchange. And believe it or not, today is the first Capital Markets Day for the company, which we internally as well as externally want to celebrate a little bit extra. We are truly the market leader in our niche. We are almost 3x larger than the second player in the world who happened to be another Swedish company, not that far away from here. And we do generate, we think, strong profitability, good returns, and we have a good strong cash flow.

And this is very much based on an attractive business model, relatively simple and also with low risk. And looking back the 10 years, we started our journey on the stock exchange, we had EUR 104 million of sales to EUR 78 million, but EUR 79 million last year. So a really great journey to date. If we then look at what our business is composed of. And if we start with how we go to market, our market is and our way to market is very much through integrators as well as distributors. So roughly 75% are through integrators and distributors until they reach the end users. 25% is straight to key accounts or the end users could be through direct sales, but could also be through e-com channels. We sell mainly still into Europe. 79% last year of our sales went into Europe. 16% went into Americas, mainly North America and 5% went into APAC.

If we look at our market exposure and our market segments, our largest end application would be for warehousing and the warehousing segment. The second largest would be automotive, so OEMs, Tier 1s, Tier 2s, et cetera. And after that, we have our processing industries, meaning pulp, paper, steel, food, beverage, pharma, et cetera. And last but not least, we have an array of different subsegments. So in the others bucket, we have probably 30 different subsegments, each being very small, but all in all, 25% of our business. If we then look at our business also from an application point of view. So the market segment is where -- into which industries are the products going.

If we then look to which type of application, so a large customer can have both a manufacturing environment as well as a warehousing environment. If we then look to this from an application point of view, we are having roughly half of our business going into warehousing environments, 35% into manufacturing environments, 10% into storages. And since a few years back, we're also now growing really quickly in the data center application. This is a very common theme, and I'm not sure how often we get the opportunity to explain this.

And very often, we say the products, they look quite simple when you look at them like here on the slide or on a piece of paper. And I'm hoping that with the factory tour and with the stations later today that you'll get to touch and feel and talk to the team members really making these products the best in the world, I'd say. So hopefully, you'd get away from the day feeling that the products aren't in fact, that simple. However, you might argue or think that the products are simple or not. If we look at the business in itself, it's, in fact, pretty complicated for a few reasons.

So if we put ourselves in our buyers' positions, our products, if we take the machine guarding product as an example, they are mandatory by law and regulation. We have this regulation in Europe. We have another regulation, but still regulation in U.S. Parts of Asia are still not regulated. So it's something you have to have. It's a small spend item. You could spend millions on industrial robots or on warehousing equipment, et cetera.

Our products are, in fact, a very small part of that total spending. What also is unique is that there are very few robot cells or installations that are just the same. There is always a tweak. There is a door in this place or there is a panel looking this way, you might put the post in a different way. So every configuration is different, which is, of course, comes to the buying situation. Very often, our products get in late into the process, meaning that I'm not sure in most companies, projects often run late. And since these products come in late, obviously, we get in quite late into the process.

That also means that the customers are in a position where -- they buy something that they need to buy. It's pretty small spending, pretty unique, and it's urgent. Also to consider, and I think it's well displayed in this picture is the fact that we also need to collaborate with others. So it's integrated with other type of solutions, other type of hardware, could be the robot makers, could be the access control, could, of course, be the facility manager, the project teams, et cetera.

So in fact, there are quite a lot of different things that need to fall in place to make this happen. And another thing that our customers find out usually is that we have beautiful drawings of everything. But when you get to site, you start to look at, okay, does this is reality really the same as on the drawing. And very often, you realize that the floor is not even. you might realize we can move the fencing or the protective equipment slightly because then we get a better floor layout, et cetera, et cetera. So reality is very often different from the plan.

Now what do we -- what can we offer here? Yes. Well, we can definitely offer a cost-effective insurance. The fencing in this example is relatively small spending. The alternative cost, if we -- if there is an accident or if something happens is usually very high. Factory or the production line stands still. So in fact, it's a very physical cost-effective insurance. Another thing where we need to meet our customer needs is we need to have a very wide, very flexible offering. And I think we're doing very well. We have the widest offering in the market as a group. Given that it's often very late, we need to be very flexible, and we also need to be quick.

That's also why our business needs to be quite local or regionalized. Another thing that many of our customers when trying an alternative finds out is that, in fact, the quality and the consistency of the product impacts the time it takes to install. So if we look at these things from a total cost of ownership point of view, you could say 60%, 70% would be the product and 30% to 40% would be installation and everything that's kind of surrounded the product.

If the floor is uneven, if the panels or posts are not consistent, you lose a lot of time while installing. So the product quality has a direct impact on the customer's total cost of ownership. And in reality, getting this installing kilometers of fencing or miles of fencing, small or big, it's a lot more complicated than you think. Now you can say there are plenty of players who can make a mesh.

What makes Troax stand out? We believe it's a few things. I already said we're the only global player, meaning that we are strong in the respective local markets, but we're also the best partner the global customers can pick when it comes to securing that their operations look and touch and feel the same and have the same level of safety in all different continents. I think that's a clear USP for Troax. The other part where we stand out is that we do have the widest offering. We have -- I'm not sure if there are any applications where we cannot supply or provide a good solution. I'd say also given our size that we're so much larger, we have built a lot of knowledge over the 70 years. So I would say, in terms of domain expertise, we are really good with this. And you'll see later on today that we do have the most sophisticated, most thought-out supply chain in our business, which provides both, of course, the scale, but also the cost efficiency and the flexibility that are needed for -- to meet our customers' demands.

And last but not least, this is also something that speaks very well for Troax in many of the countries. We have the largest sales force and foot on the ground, so to speak, in most of these countries, which is also first in mind, we're best to serve. So I think we have some really clear USPs why we've taken market share, why we continue to take market share and have done so for a long time. Coming back to our megatrends. We are exposed to a couple of strong megatrends, not all of them, but most of them.

Definitely the automation trend, which continues strongly. We do see with the environment globally that more and more customers want to have a regionalized production, regionalized warehousing. I think many companies learned this both before COVID as well as after COVID, that long supply chains, long lead times, security of supply were problems. And we do see more and more regionalization of both manufacturing as well as partly warehousing. That's a very positive megatrend for us as Troax. Also, I'd say, if we look at e-com, if we look at the consumer pool, every year, we add more consumers to the pool.

Those consumers, young people, they tend to be more -- tend to prefer e-com more than the ones who are leaving the pool. So that is in itself also a very strong trend for us. Another trend worldwide is that we become more and more aware of safety. We want -- we take it almost for granted, and we think it's a right to be able to come to work and be at work and get home, certainly in the Western world and more and more so also in Asia. So there is more awareness.

There is more willingness to spend money on this. And this also trickles into government regulation and stricter and stricter rules. So that is in itself also something that's very good for Troax. The other side of the coin would be our width and size, which is resilience. We're exposed to pretty much, and you'll see this a little bit later in the presentation. We are in many places which you can imagine that this is clearly a Troax place. But there are also quite many places where you wouldn't imagine or reckon that there is some Troax products in there. And that is great for us because it provides us resilience. And none of the end-user segments that we're exposed to is larger really than 20% if we look at it.

So from that point of view, we're also in a very good position from a resilience point of view. If we then look at the longer-term market growth trends, and I'll come back to where we are a bit more here and now in a few slides. But this is the way we look at the world. If we look at this from an end user or industry point of view, we have an exposure to automotive, which is roughly 20%. We do believe that this long term grows some 2% to 3% a year, long term. We're exposed to warehousing, roughly 35% of sales go into the warehousing industry. Automated warehousing, we do quite a lot with forklifts and pallet tracking and of course, also packaging related to this.

This has the closest link to the e-com trend, and we believe this segment over time grows some 8% to 10% a year. Construction, new residential buildings and some renovation grows, we think, with GDP, so 2%, 3% a year. Process grows faster than GDP. We believe it grows probably 2 percentage points more than that globally. And then others, as I said, it's a wide array of different subsegments. You can say it's general industry growing a few percent a year, but there are also a few really stronger growing segments, if you could take data centers or we could take defense and so forth. But you can think of others as GDP plus a little bit.

So this -- if we weigh all of these things together, we have an underlying market longer term that we think grow 4% to 6% a year. The addressable market for us is EUR 1.5 billion if we look at the -- what we have considered core up until today. Now that all sounds fine and good. I'll then take a dive into the quarter 3 numbers, which we published last year -- last year -- last week. And I think it's clear that we are on a very strong growth path in APAC. It continued now in the third quarter, and we had to that a very good first half of the year. We grew 66% on orders in APAC, strong in all countries and in all segments. So very good development for us in Asia. Europe, on the other hand, our largest market continues to be soft, generally speaking. We see automotive being challenged.

We see, of course, the construction as well as others being challenged as well. However, I would say that there is a bit of a positive sign on the -- in the warehousing space. We saw some markets, some customers now starting to take the presales activities that we saw in the first half of the year. This now starts translating into orders at our end as well. And we do see this from -- partly from our customers as well when they report. So a bit of cautious optimism in this regard for Europe. Then we go to Americas, which I think is probably for the time being, the market which is most difficult to predict and also the worst.

We had 26% down in quarter 3. And I think here, we are somewhat frustrated because we have very strong -- we have a very strong pipeline of projects, and we're also not losing any projects, but it seems to be very difficult for the customers to make a decision. So in Americas, we see a lot of activity. But unfortunately, we're not able to convert that to orders or we weren't able to do so in quarter 3. So all in all, minus 7% in the quarter. Then when it comes to the profitability side, we are having low volumes coming from the market, mainly in Europe, partly also in the U.S. We are busy transferring our Polish operations to Sweden. That impacted our profitability.

And we also weren't able to push all the price increases that we should have done in the third quarter into the third quarter, which also means that our profitability came in a little bit lower in the third quarter. So we reported 16.1% in the quarter. If we add the Polish factory transfer as well as the American pricing, if we add that back, we would have been around the 18% mark for the quarter. Also, I'd like to say that despite we are struggling a bit with the volumes, we generated a very strong cash flow in the quarter, so EUR 12.6 million or a bit more than 120% operational cash conversion. So I do think that from that point of view, the quarter was very solid and very strong. Now coming back to the topic of growth. And on this picture, you recognize the map where we have all of our different countries, the blue countries -- if we then break this down a bit more into regions in terms of sales and what that translates to into market share. So if we start with Europe being close to 80% of what we do, this is where we have relative strength. We have a very strong position in Europe, roughly 30% market share.

And in Europe with -- I think there is one exception, we are the market leader in all these markets. But we don't give up until we're #1 in all countries, just to have that said. And there is room to grow even further. Unfortunately, not all customers appreciate what we do. So there is still room to grow even we have a relatively strong market share.

Moving over to Americas, which was 16% of sales last year. Here, we think we are and we know we are #2 in the market if we look across all the brands. But still, our market share is estimated to be below 10%. So there's a lot of room still to grow in the U.S., both because the market is maturing away from blacksmiththing into something that is more sophisticated and more industrialized, and there is a lot more market share for us to be had in the U.S. and North America. If we move over to APAC, and this is now without the acquisition that we announced last Friday.

Also here, quite big market. We are making a lot of progress in terms of how we grow. But at the same time, our relative share and position of that addressable market is still very low. So a lot of room to grow. And that's also one of the reasons why we made the platform acquisition of Vichnet, which we announced last week. So strong position in Europe, excellent opportunities to grow in the rest of the world. Now I'll take a look into how our different businesses are performing.

And now I'll take the product view instead. And when we look at this, we're looking at our machine guarding products and the machine guarding products, they go into manufacturing environment, of course, but they also go into warehousing environments. And this product or product line, you could say, is roughly 65% of what we sell across the group. If we look to our performance with these products, and we do look at this over a period of time, we -- there are a few really important takeaways from this.

If we look from 2019, so 2020 to 2024, we have had 11% of organic growth. And with one exception, which was the second quarter in 2020, we have had growth every quarter with this product. And that's a very good thing because it's really the core of the core, and it's also having a profitability level that's in relative terms, higher than group average. So here, it's all about continue to grow profitably. There are still customers to chase after. There is still business to win in all regions. So a very strong performance despite the weak markets. And in this case, I would say that we are gaining market share in the market also through the last couple of years. If we then switch over to the warehousing products, which is shelves, dividers, anticollapse systems.

This is a bit of a different journey for the group. So in this case, we -- in 2020, we acquired a Polish company called Natom, which had a phenomenal development through the COVID years where we had exceptional demand. And in 2023, we acquired -- or late 2023, we acquired Garantell, which is not so far away from here. Through these 2 acquisitions, we have gone from being pretty much almost nobody in this business 2019 to being the leading player today. So it's a big shift. Now if we look at the market development and the market dynamics, 2021 and 2022, we had exceptional growth. '23 and '24, it's the backside of the bullwhip, meaning that the markets have been very slow '23 and '24.

Here, I'd say, when we acquired 2 companies, which are pretty much in the same niche in the 2 products. There are, of course, a lot of synergies that we can harvest from that. That could be on the sales side, but that could also equally be on the cost as well as on the capital side. And this is what we're busy doing for the time being, putting 2 of these 2 product offerings together. I'll come back to that in a later slide. I'd also say that if we look at the profitability line on this slide, you can see that it's a decline, and it's, of course, volume driven.

These acquisitions also come at a dilutive profitability to begin with. But here, I'd say that when we return to something that we can consider to be normal or a normalized market, we do all of the job that we're now this with internally, putting the offering together, putting the supply chain together, this business will return to solid and very attractive margins and attractive returns as well. So here, we're in a bit of a restructuring mode from an offering point of view as well as from a supply chain point of view to be ready for when the market picks up again.

All in all, we have seen a 14% growth over this time. Needless to say, it's predominantly driven by acquisitions and not the organic volumes. business wouldn't be anything without its customers. So obviously, we do have probably 20,000 customers around the globe, and we couldn't fit all of them into one page. So we had to select a few. On this page, we have just a selection of customers, and this is to show you a bit of the width that I was describing in one of the slides before. And you'd find -- you probably recognize all of the names on this slide. And with many of them, we also have long-lasting relationships, and we've also grown with these customers. As you can see, there from -- there might be consumer brands, there might be OEM brands, car brands, logistics brands, et cetera, et cetera. And you'd also see that there are from pretty much every corner of the world. So I think this is probably the favorite slide of the whole presentation. I think we can be super proud of this Troax.

I'd also like to bring up this quote, which comes from a Spanish retailer called [indiscernible], which we've been working with for 15 years roughly. And we asked them before this day too, would you mind trying to summarize how you look at Troax. I think this quote says a lot. I think it shows that we've been doing really what we should be doing. We are partnering up with them through the whole process from design to execution. We are delivering the right product quality. We're delivering on time. And we make sure it works for them in reality, the last mile of the process.

So I think this is a very, very good quote, and this is how we want to be recognized by the customers and in particular, [indiscernible] in this case. So with that said, I'll jump into -- with this as a strong foundation, strong customer base. I think we are having a very solid business, even though we're struggling in with the warehousing predominantly as well as with the storage to some extent, volumes, we're in a very good, strong position when we start our next 5-year journey.

So since I came on board a bit more than a year ago, we've spent quite a lot of time with the team internally on our strategy, where to go, what to tweak and so forth. We have also thought about, okay, how do we now best set ourselves up for success, how do we organize ourselves. And we started -- if I start with the internal part before we get into the strategy, we have a new way of organizing the company since the 1st of Jan this year. And I'm born and raised. I come from -- came from [indiscernible] before I joined Troax.

Decentralization and true P&L ownership is important to me. I think it's important for many different reasons. First of all, I think it's important for business reasons. We are, by far, the largest in our niche. When you are large, you tend to become slow. And our business is a lot about speed and agility. So chopping the Troax elephant is -- makes a lot of good sense. Performance management, P&L accountability is also very good for building the new generation of leaders. Another thing that -- which we have put in place is that we are now looking at geography over brand as main dimension for how we measure the business, which means that all of our country managers are using the whole portfolio to extent possible to win the business and gain market share.

So that is both good when it comes to driving sales, but that is also great for making sure that we do this in a cost-effective way. And I'd say we have done a lot of progress during '25 to run this way. And going into 2026, I'm hoping that we will have clarified and put all the last pieces in place to be able to run really according to the model with full speed and enthusiasm. Important here is also that the regions are the result owner. It means setting their own strategy. It means sorting out all of the executional parts and also living with the results. That also means that the regions are the ones who are driving our M&A efforts. So the team in Asia obviously would be better suited than me sitting on this side of the world to figure out what pieces of the puzzle are we missing in Asia.

So it's also a decentralized responsibility to drive not only the organic growth, but also the acquisitive growth. Then we support from a group or headquarters point of view with specific skills could be legal, financial DD, operational excellence when it comes to, for example, manufacturing, et cetera, et cetera. But headquarters is there to support. The main thing that needs to happen and should happen and is happening is surely that our regions are the ones running and driving the business and being accountable for the results. And last but not least, decentralization sounds great, but without clear performance -- without clear targets and without a clear performance model, decentralization will fall flat.

So that's also one thing that we have spent a lot of time on, which will generate good, I think, outcomes going forward. Now it's great to listen to me, and I've met most of you or all of you before. But I think the real heroes of the group is or the real hero is not me. I think it's, in fact, the team and all the 1,100 colleagues that we have across the group. I'd like to take the opportunity to introduce the ones from the group management who are here. So you'd see the nice faces and functions and on the screen here. But perhaps we'd go a quick around the group management to say, hi, Mia, would you like to start? Mia is our Head of HR. Hi, Mia. Who's next?

Camilla, who's Head of Marketing. Thank you. Camilla. Martin. [indiscernible] Christian. Thank you. And then we have Jonas, who you met, who's heading up our new business, and you do a bit of strategy and portfolio development as well. That's right. So double hat and then Anders, you'd introduce yourself when it's your turn. Very good. Great team. Then I think management is super important, especially in a decentralized environment. But I would like to say that nothing in this business would happen without our colleagues, the ones who are working day in and day out to make sure we sell something, we deliver something, we develop products. We make sure the IT platforms run well. We make sure it looks cool on LinkedIn.

So it's really, really about the people and guided by our purpose and vision and mission, guided by our values, this is what guides our promise to the customers. And what we promise our customers is that we do things in a responsible, quick, responsive way that we do things efficiently and also that we are acting with integrity, meaning doing what's right, playing fair, playing just, et cetera. Very important promise that we give our customers as well as our suppliers and, in fact, also ourselves.

Now we get back a bit into our vision and mission. And as you hopefully understand, we're very passionate about safety. And our goal and mission is really to make sure we have zero harm workplaces. Zero harm workplaces, obviously, for all the people that work into the manufacturing and warehousing environments. But surely also, it's zero harm to the business owners when it comes to minimizing productivity, downtime, asset damages, et cetera, et cetera.

So it's a zero harm in a very conceptual way. If we look at our our role in this from 55 until today, we have been doing this mainly through our machine guards, through our partitioning and also through our racking offering. A few years back, we started to dip our toe into something where we can provide our offering and our customers also with sensoring technology, where we can have people and machines talking to each other to make sure that we even prevent the accidents from happening in the first place. And here, we have done a lot of good work in the past couple of years to grow that business and provide value to our customers. But we don't think our mission ends with our mesh products and our active safety solutions. There are other natural parts of this ecosystem where we have a role to play, we think.

A couple of obvious products or solutions would be barrier systems, for example. It's in a way, a version of [indiscernible]. And there is also a lot of value that we can provide our customers by advising them, acting as their partner, training them and equipping them with the right tools. So with this, we can, of course, have cross-selling and make sure they buy more of the right products. But the advice in itself is also a very valuable, highly profitable part of this.

Now that sounds perhaps good and a bit theoretical. If we now look at what is this wider view of taking safety at the center and not the product, what does that do to the addressable market? Well, we looked at these numbers before, and we said the addressable market is roughly EUR 1.5 billion, growing 4% to 6%. If we now add new segments safety driven, we believe that we're looking at the market that's roughly EUR 7 billion big.

And that would be adding active safety components that would be adding advice training tools that would be adding barriers that could be adding also the data center in a sense, which hasn't been seen as core. And if we then look at this EUR 7 billion of, i.e., additional potential, the beauty of this is also that these segments are growing faster than the core. We believe that's 6% to 8% annual CAGR longer term. And this makes perfect sense for our customers.

They are already asking us to do this today. And partly, we do that, but I think there is a lot more that we can do for our customers if we organize and structure ourselves a bit accordingly. So I think this is very promising when it comes to growing and growing Troax profitably. Here, I'd say also when it comes to selecting segments and products and solutions that fit into this vision or this mission purpose, it's important that we select that we are careful. It needs to make good sense for our customers, and it also needs to be products and solutions that provide high value.

Very good. So how do we then get there? Well, we have set ourselves -- I think it's pretty clear why we're here. We're here to make sure that our workplaces are zero harm, that they are safe, both for people as well as machines and assets. We do this by acting as a safety authority towards our customers, being there to help them with advice, being there helping them with design, helping them all the way through the process. And we do that in a beautiful way with the machine guards already today. We have set ourselves 7 focus areas across the group.

And there are 2 fundamental things. The first fundamental in our beautiful strategy house is safety. Obviously, we are a safety company. If we sell safety, we also need to live safety internally. And we can also preach safety and teach our customers safety. The other part is about being sustainable. We've been around for 70 years. We want to be around for at least 70 years more, hopefully even longer. So it's being in business sustainably, but it's also about making our business even more sustainable. So it's there are 2 meanings in this. So it's a very fundamental thing, and I think it's also very well ingrained in the company.

We've been doing a lot of minimizing waste, optimizing transportation, using as little material and as little energy and all of this for many, many years. So it's very much a continuous improvement and a continuous process. The other fundamental part is around our people and our culture, making sure that when we are the biggest that we don't become fat and happy, that we are quick on our feet, that we are speedy with our customers and also that we live our values coming back to being efficient, being accountable and acting with integrity.

So a lot of work and dialogue goes into this with middle management, with our employees, et cetera. So without those 2 fundamentals in place, the 5 boxes on top will not fully work or we won't get full leverage on that. If we then look at the focus areas, we will continue to grow market share in our -- what we have decided to be core segments. We have innovation to be done and also here in 2 ways. There is more innovation and development to be done on our core products, could be big and small things, could be technical innovation, could also be commercial innovation. And the other part of this is to make sure that we develop products and solutions that are more sustainable from a planet point of view. So here, we have 2 avenues, so to speak.

At the center of our strategy, we have our customer experience. Our customers should have the best journey with Troax, Everything from I realize I have a need, we should be easy to get, we should be easy to deal with, and we should make sure that we deliver what we promise and do the after care. So it's the whole customer journey and the whole experience. Now this is something that we -- since we're working 75% with distributors and integrators, this is something that is a bit of a challenge for us practically.

And so here, we do need, I think, to put in quite a lot of effort. We're doing a good job today, but good can always become greater and better. The third or the fourth area is the acquisition agenda. And here, it's about acquiring with care. It's finding companies and niches where we truly believe it makes strategic sense, where it makes financial sense and also where we can find an operational fit where we can work well together because that's really how nice music gets played.

So acquisitions, bolt-ons as well as defining acquisitions are part of the strategy. And as I said, it's also a decentralized responsibility from 1st of January. Last but not least, there -- we are and have been doing a good job when it comes to cost and capital efficiency. This is very much into the spirit of continuous improvement. There is more always that can be done on the cost side, on the efficiency side and how we use our capital. So these are the 7 areas that we're focusing mainly on. So if we start with going for growth, we have set ourselves a target of [ EUR 550 million ] in 2030. And it all starts before we even start about growing with existing customers, growing into new markets, it all starts with delivering good value to our customers and doing that to 100%. So that's the foundation and really where we start. If we start with the map, which you -- which we saw a few slides back, we still have a lot of gray or white spots in the world.

There are new geographies where we can -- which we can move into. In some of the markets, we don't have the market share, we can still grow market share as well, also in existing geographies. There is more room to grow share of wallet with existing customers in all regions, I would say. And we are deliberately also attacking and going after market segments where we have a relatively low share. So if we look at the period where the last 10 years, we've been very busy with automotive, we've been very busy with warehousing, but there is more to be done in the other segments.

So there is more to be done in processing. There is more to be done in parts of the other segments as well. And then, of course, we have our acquisitive agenda. Also here, it's about carefully selected acquisitions that we add over time. Then when it comes to growth potential, I'd like to open up a bit with the data center example. Obviously, this is an area which is very strong for the time being. We started with our data center offering a few years back, so pretty much from 0. And we've grown this niche in the company with -- we've doubled this every year since we started. So we're growing very fast from a low baseline.

Here, we're targeting both the hyperscalers. And here, we do need to get the same recipe as we've had with the automotive guys and with the warehousing guys. We want to get into the specs of the hyperscalers to be part of how they set up their centers. And we have done good progress with this over the past 2 years. So hopefully, this is something we can harvest from going forward. Opportunities exist in all regions. So it's not only Europe or it's not only Spain or France or Sweden or only Singapore or only Saudi or only Texas, it's really all over the place.

Here, I'd say we have a good foundation when it comes to our offering. We have a lot of capabilities and knowledge that we have built in-house over the years. But here, we could also think about perhaps expanding that offering a little bit either through own developments or potentially M&A. So big growth opportunity for the Troax Group.

Coming back to the customer experience. Here, it comes back to having speed and service at the center. We do definitely have the widest offering. We have the best product. We have the best quality. We also need to make sure that the experience, the speed and the service matches the product. And here, I think we can do more. We're not doing this. We are good, but we can become greater, I would say. We can pair the product also with advice and support, could be installation, could be project management, et cetera. We have a great opportunity to open up the e-com and digital channel, both externally to our customers.

We can invite them to do a little bit more in the process. And there is a lot of things we can do internally to support and to pair the customer needs with the product and the offering that we have. So the digital tools have a big portion and role to play when it comes to enriching this whole journey. And we've started this year investing in these tools. In parallel to building an e-com channel and supporting our customers in a quick manner, there is also the portion for the 25% of our business, which is key account management that we do support the large direct customers in a good way. And that needs to be done, that could be done regionally, that could be done globally.

This is also a good area or an essential area, I would say, to be able to grow. And it's really the portion of this that directs whether we grow share with the large customers and that we grow with them globally, that we grow with them in the region and that we support them and that we're truly a partner. So we have a key account program going since a few years back. And also here, we're making really good progress, and we have high expectations on this to deliver value for our customers as well as for ourselves.

The fourth area and something I'd like to pick up is also our M&A agenda. I view M&A as -- I shouldn't say cherry on the top, but it's certainly a natural part of our growth journey. Based on the strategy, we are targeting targets in 4 core areas. We have something we call core expansion, which is really to continue to consolidate the machine guarding markets or the core of the core. We could do like in the Vichnet case, we can acquire a target to get a foothold or a platform.

We can target smaller companies. There are targets in every region, which is more about buying a brand or a customer base and finding either market synergies or cost synergies. Plenty of targets out there. I think we need to be very careful and very selective when we do acquisitions. And I'll come back to the Vichnet acquisition specifically just after here. The second area, which is the service portfolio. And last year, we acquired a company called STNL from the U.K.

This is very much about advisory and machine safety. So it's a very specialized, very niche player that adds to the core. So we add another layer to the onion. What we want to achieve here is more customer -- more touch points with the customers, of course, and we do want to provide more and more value coming from this that also then gets associated with the products and with the core. I think there is also here a few targets where we which we potentially could add to the group.

The third area is adjacent products, which are natural to buy from customers. And of course, there is a safety umbrella or safety touch to that. And here, I think it also comes back to finding the products which really add value to the customer, which are natural for them to buy from Troax, and it should also have a significant contribution to the customers' safety. The fourth area is around active safety. We started our journey back in 2022 with the Spanish company called Claitec, which has had a great development in the Troax Group. But here, there is always new technologies that we could add. There is also an element of critical mass when it becomes electronics more than steel. So from those 2 points, we would look at this. And for all the 4 themes, we do have targets in every region. So I think there's -- we're not lacking opportunities. I think it's more making sure that we select the right ones and for the right reasons.

And I'd like to say a few words about Vichnet, which we announced last Friday. Vichnet is market leader in China for machine guarding solutions and also cable management or wire trays. Last year had a turnover of EUR 26 million and the profitability, which is pretty much like Troax Group to begin with. And now we're in the process between signing and closing, and we aim to close this before the -- before the end of the year. And I think here, this is a beautiful example of where strategic fit, financial fit and also the fact that we like each other really comes together in a very nice way. This means that Troax will become the market leader in the core of the core in Asia. So very strong platform, very strong offering that complements what we already have. In addition to strengthening the machine warding position, we also now get to expand a bit into the data center business. So we're already with the Vichnet at acquisition, making sure that we get more of a foothold into the data center business. So the wire trays for the cable management systems, isn't something we've had in the portfolio and something that we want to add both for data centers, I should say, this is probably the biggest short-term opportunity, but also more in general, that specific applications for wire trays is very attractive for us to have in the portfolio.

Then I'll move over to cost and capital efficiency. And on this slide, you'd find pretty fresh picture from Portland in Tennessee. This is our new North American manufacturing facility, which we will inaugurate next year, sometime midyear. And while we're doing this year, well, we definitely have a higher need for capacity longer term, and we definitely also want to move away from the manual or semi-manual operations that we've had in Illinois, Chicago. So we're bringing the best of breed, so to speak, practices, flows, et cetera, into the North American context, which will provide a lot better efficiency and also profitability eventually when we're up and running. I'm not sure what you guys think, but I think it looks pretty nice.

Then the other topic to cost and capital efficiency comes back to the acquisition, the acquisitions that we made into the racking portfolio. And here, we -- after the acquisition of Natom 2020 and Garantell. We are equipped with 2 half-full factories and partly overlapping offering. The exposure as such, and the market as such long term, is very healthy. We looked at that through e-com and warehousing. But at the same time, we're now having a setup where we have 2 factories. We have 2 offerings. And the question is, does this from a longer-term point of view, does this make sense? And we've come to the conclusion that, well, probably we can fit it all into one place with one management with one ERP system with one combined offerings, so stronger offering. And we're now busy with both going through the portfolio to streamline and prune and fix that. And we're also busy moving the equipment from Poland into the facility that we have some 30 kilometers away from here in Värnamo. So by the end of the year, we will have all of the equipment moved and the factory in Poland closed, bringing everything under one umbrella in Värnamo. So we'll have a fully fledged racking offering consisting of shelves, anticollab systems, and it's all part of the same portfolio on the supply chain. So we're looking forward to this. This makes sense not only from a strategic point of view, but it also makes a lot of sense from a cost and capital efficiency point of view.

Then I'd like to say a few words on one of the fundamental of the foundation in the house. Safety and Sustainability is, in fact, for Troax, nothing really new. We've been -- we've been on this journey for a long time, and we are committed to doing our part. We have submitted our EBITDA commitments, and we're pending for approval. We have EcoVadis Silver. We're aiming for more. You might say, from your point of view, that EcoVadis Silver might not sound like something extraordinary. Well, in our niche and our business, it puts us light years ahead of the others. So it is, in fact, a business advantage. Well, we can always ask for more, but certainly a big achievement by the team.

Another thing that I think is worth definitely worth mentioning is that we are mainly a producer of steel materials or steel mesh. Steel is perhaps needless to say, a very sustainable material. It's highly recyclable. We use probably as little as we possibly could. And we are not only using virgin material and virgin steel. We are to more and more extent adding recyclable material into the mix. So I would say we are in a very competitive position from our niche point of view. But then last but not least, I would say that it's always about making sure that we can always do a little bit better. So hopefully, we're a little bit better today than we were yesterday. And next week, we're a little bit better than this week. And this is an endless process. And of course, we do our part in this. I know Christian is chasing waste a lot or chasing waste as in papers in the offices, we're chasing a lot of things to always become a little bit better, not only from an environmental point of view, but certainly also from a business point of view. And I think here is really where business and sustainability go hand in hand. Perhaps something that might not come intuitively is also the regionalization. So we are, in fact, shipping very little within the region, we are shipping from our factories to our customers, but we're shipping very little cross continental. So we're self-propelled in Asia to a very high degree, were self-propelled Europe and were self-propelled in the U.S. and will be even better next year. And that is, of course, in itself also very good from a sustainability point of view.

Excellent. That being said, Anders, can you make sure we get some decent numbers and returns out of this.

I will try my best. Thank you so much, Martin.

Thank you.

I think I have met you all before, and you know me very well, but for the sake of it, my name is Anders Eklof, I'm the CFO of Troax Group since 8 years. I will now talk a little bit about our financial targets. And before I go into that, since I'm a finance person, and I like to close books, let's close the books of the previous financial targets, looking back over a 5 or a 10-year period.

As you know, we have divided our financial targets into 4 different buckets. The first one is sales growth where we have defined the target as growing more than the market. And as you heard from Martin, we are defining the market growth to be between 4% and 6% on an annual basis. If you look at the last 5 years, we have grown 11%. And if you look at the last 10 years, we have grown 12%. So in that regard, we are by far exceeding the market growth. So we give self a fully meet on that one. When it comes to profitability, we have had a target of exceeding 20% adjusted EBITDA margin over our cycle. And here, we didn't reach the goal all the way through. Over the last 5 years, we have had an average EBITDA margin of [ 19% ]. And if you look at the 10-year period, we reached an EBITA margin of 19.7%. So close but not really there. Here, we have plans to improve. But overall, I would say that we're not extremely unsatisfied with this. Having an EBITDA margin between 19% and 20% over a 10-year period is quite okay anyway, we believe.

When it comes to capital structure, we have said that we should have a net debt in relation to EBITDA of less than 2.5x. And here, we have had many, many years, I think, 7 years or so, with a constant ratio of below 1.5. So we have been way below the ceiling here for quite some time. And last but not least, then the dividend policy. We have had a policy of sending out 50% in annual dividend of net income. That is something we have done if we look at it over a longer period of time. So the last 7 years, in average, we have sent out 50% in dividends, but it has fluctuated between 40% and 59% during that 7-year period. So to summarize the historical financial goals, we have 3 targets that we have met fully, and there is one target where there's a little bit way to go, but still a decent performance over the last 5 or 10 years, whatever you want to measure.

Let's go over then now to the new financial targets. I will go through each and one of them and go a little bit more into details of what we can expect from an activity point of view, how we will reach there. But first of all, I just wanted to mention the sales growth or the growth targets in numbers here. So if we start with the sales growth, we are moving away from a relative target of growing more than the market to a fixed target of reaching above EUR 550 million in 2030. And that means give or take, a 15% CAGR over that 5-year period. When it comes to profitability, we have changed that from exceeding 20% to get at least 20% EBITDA margin. It's a little bit same as we see it. You should not see this as a decrease in our ambition. But we wanted to reflect a little bit what Martin said before. When we look at acquisition targets, they are rarely at 20% as we require them. They are rather perhaps between 15% and 20%. So with a more aggressive M&A agenda, it will give us some room at least to bring these companies into the Troax portfolio and increase the profitability from where they are. So getting to at least 20% EBITA margin will be our target for the next 5-year period.

Capital structure, basically no change. We will still be below 2.5x, but we will give ourselves the opportunity to step over the 2.5x over a shorter period of time, that could be in conjunction with a bigger acquisition, for example, we allow ourselves to go above 2.5x ratio. And when it comes to the dividend policy, we are moving away from the fixed 50% dividend ratio, and we will go over to a range of between 40% and 60%. And as I said before, we have actually performed in that range over the last 7-year period. So you can say we are adjusting our goal to -- more towards how we have performed, and I will come back later on why we do this.

This is a slide that Martin has already shown, so I will not go too deep into this. There are some buckets here that will drive growth to EUR 550 million in 2030. Martin talked about the geographical expansion. You saw all the map. There are some white spaces in that map. We have some of the Eastern European countries. We have Middle East. We have some other countries in Southeast Asia that we can do more in and also in South America. So for sure, there is more to be done on the geographical expansion side. Then we have the growth with the existing customers. As also Martin mentioned, we have 20,000 customers in our customer base. However, very few of them are single sourcing. So that means that in every quotation situation, we have competition. So one way of driving growth is by increasing the hit rate with existing customer. It can also be that we are introducing new products to our existing customers. That could be barriers, for example, that Martin mentioned, it could be active safety products. It could be services. So we can do a lot more with our existing customer to drive growth.

The third bucket here is new segments. Martin also mentioned is that we are strong in warehouse. We are strong in automotive. But when it comes to the core business, there are still industries where we are not so strong and where we can get more sales and growth. And as Martin also mentioned, we have new segments, new industries, the data center industry, for example, which will help us grow also the sales. And last but not least, we will grow through acquisition. It could be smaller bolt-ons when it's applicable. It could also be more of a platform acquisition like we did with line last week. So all in all, with these activities, we hope that we will reach at least EUR 550 million in sales in 2030.

Coming to the next financial target, reaching an EBITDA margin of at least 20% over the period. Here, we also have 4 different buckets that we will drive activities within. The first one is talking about volume, it's talking about price, it's talking about mix. So if we start with volume, you all know that we have had a little bit of a headwind now for some quarters. But when the market will bounce back again, there is a lot of assets that we have in our company right now, both in terms of machinery as well as in people that will drive the sales growth without much addition, I would say. So at the time, the market bounces back, we will get the pretty nice flow-through of additional volume in the beginning.

When I talk about price, it's not that we are not driving price initiatives today, we are, but they can be more done when it comes to customer segmentation, product segmentation, to get more price out of our portfolio. And when we talk about mix, I'm really talking about product mix. We will help our customers choose the products that are most profitable for us. So hopefully, with those activities, we will drive more sales of more profitable products, and we will decrease sales of less profitable products. And it could also be that we are removing some products from the market that are not as profitable as we would like them to be.

Operations improvement in Europe. Martin talked about already. We are closing our Polish factory, and we will save a lot of fixed costs in that transition. No doubt about that. Also, Martin talked about the operational improvements in Americas with a new machinery, in a new factory, it will drive efficiency that will also help the margin. One thing that we have perhaps not talked so much about is the lower sales and admin costs. And that will really come from digital investments. We have been very highly efficient, I would say, in our factory for a very long time. We will try to do the same journey now in our selling and admin expenses by investing in digital tools. We will try to get this efficiency of scale also in the selling and admin costs. So that is -- and that's why you will see more of CapEx going into digitalization tools in the next 5-year period than what you have seen in the past.

The third financial goal is about our net debt ratio. Here, you saw also that I mean, we have been below 1.5 for the last 7 years. Right now, we are at 1.0. So -- and we are utilizing right now [ 80 million ] of our facility. And if you go back -- you can go back to the introduction on stock market, we actually had [ 70 million ] of debt when we went into the stock market. So that means over a 3-year period, all dividends, all CapEx, all acquisitions have been made through cash come from operations. So -- and yes, we have a lot of power to increase debt. And also, we will continue to drive a good cash flow. And those 2 in combination will give us an opportunity to find and acquire those good companies out there. And I can say with a normal multiple of future acquisitions, we can for sure, more than double that debt, and we will still be far below the 2.5x target. So there's a good opportunity for future growth through acquisitions.

And last but not least, I will talk a little bit about utilization of cash flow. As I said before, we are using the free cash flow for CapEx, for dividends and for acquisitions. And when it comes to dividends, the reason why we are changing now from a 50% fixed ratio to a 40% to 60% ratio is to be able to give our shareholders, I would say, an annual growth in dividends in euros because the net income might fluctuate between years, but giving us a range between 40% and 60% will enable us to give you a stale and increasing dividend on an annual basis. I've talked a lot about acquisitions already. And when it comes to CapEx, I would say that with this investment that we are now doing in America, we are very well equipped, both from a capacity standpoint as well as from an efficiency standpoint in all 3 regions. So of course, there will be future CapEx in machinery. It will be -- it will come with the market growth there will be capacity investments. There will also be a need for replacement of old machinery over time. But I think also that what you will see now in the next 5 years that we will move a little bit towards more digital investments to get that efficiency of scale also in the SG&A costs. But overall, I think you can expect from a total CapEx point of view, combining the machinery with their digital tools, I think you can count on approximately the same ratio of CapEx that we've seen in the past. It's just a little bit of shift towards more digital investment and perhaps a little bit less of machinery.

And yes, I think that was all I had. Then I'll hand over again to Martin for closing comments before Q&A.

Thanks, Anders. And then to conclude this part, I would say if we look at to access an investment. We think we've done good today, but there is definitely more to come. takeaways is that we are the leader in our niche, and we're the only global player. That means we have the strongest offering. We had probably the strongest customer value we can provide that to our customers. We are well positioned for organic growth and the macro trends and the markets are turning and are working in our favor. We've set ourselves a profitability target of 20% -- or at least 20% of the cycle. There are improvements underway to improve the profitability, footprint consolidation as well as efficiency improvements into the North American market. We do have a strong financial position. We have a strong balance sheet, which we can hopefully work a bit more actively with, especially on the acquisitive side.

We do see attractive opportunities for M&A in the market. We have a strong pipeline, and we do aim to lead the market consolidation both within our core [indiscernible] but, of course, also drive the industry with safety in mind. And we are long-term committed to sustainability. We're very much in the forefront in our nation, in our industry, and we will continue to be the leader. Thank you so much.

And now I'll hand over to Jonas for Q&A.

Great. Well done. I think we're 7 minutes ahead of schedule. So we have planned a bit of a Q&A session for the next half an hour roughly and see what you -- what questions you have. And after that, we'll go on with the factory tour. When you have a question, if you could ask the question in English and we used the microphone there as well, okay?

Daniel Lindkvist with Danske Bank. So I basically have 2 questions. Could you maybe flip to the graph with the way forward to your financial target? Then looking at that graph, I'm a bit surprised with the organic ambitions you have because the M&A, the part from M&A seems to be very much smaller than I expected. So should we read that bridge as illustrative of the sizes and the parts of it or just an illustration of the components?

I think perhaps you could help me out a bit clear there, Jonas. I think you should get it more as a conceptual thing. I think when it comes to growth, the lion part should be organic growth. I think we have all the means to continue to grow organically. I think what we're saying is that we do think that we could do a little bit more on the acquisitive side perhaps comparing to the previous period. But you should not look at this as we give up on growing organically and then it's all acquisitive -- acquisitive growth and balance sheet. So I think both the lion part of this needs to come and should come from organic initiatives.

Okay. Perfect. So then the other question is a bit on the same theme. If you look at the improvement in EBITDA, I guess now with the capacity utilization of some [ 75% ] something, then I would have expected the scalability on SG&A to be a much bigger part of the improvement in profitability. So how should we view that?

Yes. I think there are there are 2 sides to this. I think there is the relative measure. And I would agree that we get in relative terms, perhaps more help than what you see on the screen. So view it as conceptual. At the same time, I think it's also managing SG&A in absolute terms, which is the other side of the coin. I should be standing here. Thank you. So I think we consider both of them. I think we do need to bring some of the SG&A costs in absolute turn down. But of course, as we grow the top line in relative terms, we'd also get more help from that. I'm not sure, Anders, if you want to add something.

No, I agree with you.

Gustav Berneblad from Nordea. I thought maybe just to start off, if you can elaborate a bit more on where you are in capacity utilization in the different areas. Just to for us to give a better sense of where we can see a sort of swing factor once sort of demand returns?

Yes, I'd say just to high level. I think we're about half here. We're probably about half we're just north of half in Italy. Poland for obvious reasons on its way down. Värnamo a bit below 50%, of course, probably even lower, 30%, 40% perhaps. China, we are somewhere between 40% and 50%. And in U.S., we are given the processes and so forth, we're closer to the capacity ceiling, even though the volumes currently are down. I'm not sure if that's even a fully relevant question given where we are with the factory transfer either.

No, that's fair. And then maybe on the acquisition also you made last week. It will be interesting to hear because what we've heard previously was maybe to look more into distributors to approach the Chinese market and to sort of get access to the larger customers. Now you buy sort of producing company. So it would be interesting to hear your strategy there. What has changed? And also if there's any risk of a capacity situation also in China as you have 2 plants there.

Yes. And I think if we start with the first question on the market channels. In fact, I think Vichnet has built a very good distributor network in combination with their own direct sales force. I do think tapping into that distributor network through the acquisition. So in a sense, I do think it's kind of a little bit similar thinking as to before. When it comes to what we are seeing more longer term in Asia overall and in China, I do think that we are in -- we will be in dire need of capacity looking at the market growth rates and what we believe will happen both in the Chinese market as well as in some of the other Southeast Asian markets. So I think for now, we're not looking at overcapacity in Asia, specifically as the biggest topic.

Jonny Jin from SEB. A couple of questions from me as well. I think we start -- you talked a lot about you entering new market segments and that would increase your addressable market significantly. I'm trying to understand this a little bit better. Could you specify a little bit more what exactly you're trying to add applications and such? And also, can you also say something why you aim so much to go outside your bread and butter business? I mean one mean interpretation could be that limited the growth opportunities or a more mature market in your core segments. So could you maybe elaborate a little bit there?

Yes. No, I think there are 2 -- I think it's a great question, first of all. I think there are 2 sides to this. I don't think you should interpret going widening the offering such as there is less potential in the core. I think we had in the presentation, roughly where we are market share market share wise. So there's still a lot of room to grow in the core. In addition to that, I do think there is also a strategic context to being a niche player versus widening the scope a little bit. And I think we want to make sure that we're strategically stable with other niches and other products. If we look at what the customers want, they really love our core offering and our core products and our machine guarding solutions and the way we interact. At the same time, they are asking us to, okay, can you provide and help us more? Can you -- can you simplify our lives with expanding on that offering? So that would be a natural expansion to core. And I wouldn't even say that Troax pushing ourselves into the market. I would say it's also the market kind of pushing this space a little bit. So I wouldn't interpret that as we're less optimistic about core. That's simply not true. Then when it comes to specific segments. I do think there is both the customer side of segments. So segments where we haven't been able or haven't focused on before. We talked, for example, about processing in this case, food, pharma, beverage, et cetera, are great businesses to be where we have a relatively low market share. There is more room to grow. The other side of the segments or product is coming from what we just discussed before, you can look at data center as a new segment, really quite close to -- from a product point of view and from a capability point of view, it's pretty close to core. In a sense, okay, dimensions are different. Perhaps the mesh is a little different. The customer base might be a little different, but it's quite close to home in in a sense, but it's in a sense, also a new market.

If we look at the active safety, which is a big potential addressable market, very healthy provides a lot of value to our customers. that would also be something to expand into also stemming from the fact that the customers are asking for, okay, is there more. Can we extract more out of this? Can we combine this and that? Can you help us with more with more things on site? So I do think that is also a customer-driven process. Then last but not least, I do think there are some hardware products we talked about, for example, barrier systems, which is a big business in itself. There are different types of barriers. There are still metal barriers, there are plastic barriers, that in itself is also very close to our customers. They usually buy it in connection to our products, that is a natural way for the customers to ask us to provide more, and it's a natural way for us to grow. So with that said, we have one leg in each ditch, so to speak.

And maybe I can add a little bit to that as well. So I mean, of course, you can look at it from our addressable market perspective and an opportunity for us to grow our business. But a little bit like Martin already alluded to that. But from a customer perspective, these are also complementary solutions. And we want to be an industrial safety leader, and there's no one else in that space like someone does machine guarding someone those barriers, some of those active safety. If we take the lead and can provide a full scope solution, like that provides us a competitive advantage, which is also good for our core business. So by doing this, we're also protecting ourselves and trading synergies for the customers. So there's a logic beyond just finding a bigger pie to go after in doing this, I would say.

Okay. Do you see any close or nearby segments that could add aftermarket component to your business? Or is that not possible?

I do think I think this concept of aftermarket, if we look at steel, if we look at our core steel products, they are not much of an aftermarket product. I don't think they should be either. For sure, there are some of these products that are a little more perhaps not aftermarket per se, but more recurring. If we look at some of the active safety solutions, they might be subscription based. They might need upgrades and so forth. So you could say that's kind of a repeat business. with the shorter cycle than the steel. I do think if we look at potential new segments as in barriers, they get probably hit a little bit more than -- or more often than because they are more in positions or places in the warehouse, which gets hit more often. So those are an aftermarket replacement business with shorter cycle as well. So you can say the aftermarket intensity is higher on some of those segments. Now that being said, if we would look at this as -- will this make us an aftermarket-driven business overall? Likely not, at least not short term.

Okay. Fair enough. And then one final from my side. I mean you talked a lot about your investment in Americas, which sounds very promising. Could you say something about the profitability in Americas today and also where you aim to go with that investment?

I think when we have deliberately been quite cautious on this for several reasons. I do think we have good experience with upgrading facilities and seeing what those results are. So I think we do have an internal pretty good view of what we're aiming for. I would be, at this point, a little bit conservative and not give you any numbers. I prefer that you'll see them in the P&L later on. But I'd say that it's substantial. It's a substantial improvement. On Americas, we are not reporting per externally per region. But it's fair to say that the North American operations, both at the current volumes as well as with the current way of running it, it's below group average.

Anna from DNB Carnegie. So my first question is on the original acquisition. Could you tell us a bit on how the historical growth have been? And how much of that has come from the data centers?

Yes. Well, I think if we look at Vichnet, they've gone from EUR 0 to EUR 26 million from 2006 to now. I do think they have grown half of their business in machine guarding over the last 5, 6 years. So very strong growth on that side. On the data or on the cable management system, it's both data center-driven. And of course, also for all the other customers. I think the growth of Vichnet it has not predominantly been today data center-driven. But I think going forward, I do think it's fair to assume a substantial part of that growth coming from data centers.

And then my second one is on -- you've talked a lot about the pool of possible acquisition targets. Could you maybe give us a bit more of your sense of the multiples that you must pay for the high-quality ones and what the general like financial quarters of these are you talked about margins potentially diluting at least in the beginning, et cetera?

Yes. I think I think, first of all, I do think between the different themes, the margin profile is quite different. Both the growth and the margin profile is different. So if we look at active safety targets, usually growing a lot faster as we seen in the market, usually more profitable, okay, then you end up with some kind of multiple and some type of agreement. If we look at core machine guarding, acquisitive or targets, they would be performing. Yes. Well, roughly around the level where we are depending a little bit on the width and then on the complexity in the market. So it varies quite a lot. It varies also whether the companies are well run or whether there are room for improvements and so forth. So I'd say it's a big spread. If we look at acquisitions, into the core of the core. We're talking single-digit multiples without being more specific than so.

And then the final from my side is on the active safety. I'm a bit curious on which customer segments or anything else that could sort of be the ones that are most in demand these new kind of solutions and also how you're experiencing the competitive situation amongst other players who are offering this?

Yes. I'd say I think where we have experienced more interest and also we've had more success is definitely more to the food and beverage side. So the big beverage makers would probably be in the forefront from our point of view. And we could look at the American ones or we could look at the European ones. So I think that's the area where we've been most successful to date. Then when on active safety, the -- it's a pretty scattered marketplace. So we do have the forklift OEMs, this is not really their core business. We do have plenty of startups being more technology product driven, and there is us and a few others. I think what the end customers want to see from this because they trust us with data. They have concerns about liabilities, about the safety, making this work. Are we -- are we now in a sense, collaborating with someone who will be there for the long run, is the support and service and reliability to this. I do think that we're in a good position because we are agnostic from an ecosystem point of view, which helps with the forklift makers and with the customers, especially in the mixed fleet situation. At the same time, we are larger than the smaller technology developers because they are not having the scale and the credibility that we would have. So I do think from that point of view, that we're kind of in a sweet spot from that point of view. We're clearly a safety company. We're listed. We're large enough to provide the security side. So I do think from that port of view, it's we're in a pretty good position. I'm not sure if you want to add something, Jonas.

Well, I could add. I mean, if you look at the machine guarding business, as Martin mentioned in the presentation, that's regulated in the developed markets. So if there's a robotic welding cell today, it needs to have machine guarding, that's already a reality. When you look like the safety, that's not regulated. So that is driven by customers that want to go above and beyond in safety. And if you look at that megatrend that safety is becoming more important, more and more companies will consider active safety, that's a way to take their safety work to the next level. More and more customers will not consider machine guarding, it's already a regulation, right? So that's why that market can grow quicker than the machine guarding market, which requires new robots to be installed, whereas here, we already have thousands of warehouses without active safety. So all it takes, if management decides we want to be lower our incidents. This could be a solution, right? So I think, yes.

Fredrik here from Handelsbanken. I have a question about your historical M&A and what would you say is the greatest learnings or do you take with you going forward?

That's a good question. I think connected to Troax specifically is that the M&A -- doing M&A and getting all the value out of it is complicated, and it takes a lot of work. I think we have learned a lot through the various acquisitions that have been done over the years. I do think also that it comes back a little bit to, I think, the basics. I think it's -- is this makes strategic sense. Do we have the financials on our side? Or can we potentially get there? And it's also getting together with people that you can imagine working with. I think the way I look at this, I prefer targets that are a little bit larger because the small companies, you need to go through all this integration work and get them into the family. If you can acquire companies that are slightly bigger, they've proven themselves. They are also a little bit less dependent on a certain individual, which makes it a lot easier to create value and create value quicker. So I think if there would be anything I'd prefer to do something that's a little bit more sizable. I think the Vichnet acquisition is a great size. I think the Garantell acquisition is also a great size where we have a certain quality on middle management and it's less dependent on a few things. So that would probably be, I guess, one learning. Anders, you want to say something you've been around longer than I have?

No, I agree with you. I totally agree.

And then I have a question about the new organization, and you mentioned KPIs. What's the most important KPIs that you would push on your poses?

We grow. We make money. Simple is that. 50-50, 60-40, 40-60.

We have 10 minutes left. So a few more questions possible.

Yes, just 2 more here from me as well. Maybe on the data center offering, I mean, we all understand the major shifts we are seeing in that space today. But just regarding your offering in this niche, I mean, has that accelerated with the value of servers increasing, so to say, that you need to protect the value of them if you understand my question?

I'm not -- yes, well, I'm not sure I do understand it perhaps. Jonas, I mean, it's your...

When you look at NVIDIA valuation, I mean a lot of data capacity is necessary to do all the computational stuff related to AI, right? And data centers are popping up like mushrooms everywhere. And for every data center, those servers need to be protected from being accessed and tampered with. So fundamentally, it's a similar solution to machine guarding, but you have machine guarding expecting the human from the machine, but here you also need to make sure the human cannot get into the servers, I mean that's the main function. So for example, you have a smaller aperture on the mesh. But then there's also cooling, heating direction of air flows that our product site to as well size.

So is it possible to say how much more mesh and also in data center versus a traditional?

I don't think so. I mean it all depends on the size of the data center, the type of operation of warehouse and so on. But yes, I mean, if you walk into a data center, there's is an IO servers, and they're all encapsulated. So there's a lot of protective structures in a data center.

I think your question is difficult to -- difficult to get to firm reply. I think it's fair to say this, though, that in -- on average -- on the average project, the data centers are larger on average deal value, which is kind of a proxy for content or meters or every square meters or whatever you want to see. So from that point of view, the data center business contains a higher share of large projects, especially comparing to the bread and butter business that we have on machine guarding where the average order size is relatively small.

Perfect. And then my second one is on installation. I think you mentioned that before. Has your view changed on that driving installation business?

No. So I still think installation is a nice complement to our products, and we do quite a lot of installation already today with some of the key customers. I don't think we're going to be the ones providing installation for each and every customer for each and every design. So I do think we do need to work a bit with care. Definitely with large customers, perhaps in areas where we have high density of installations, et cetera, et cetera. But I don't think we would -- we're not going to all of a sudden have a huge installation for us with own ranges all over the globe. I don't think that is not our business. But certainly coming from a customer point of view in terms of being easy to deal with holding their hand through the whole process Certainly, there is an element of installation. Now that being said, since we're having a big portion of our core business being dealt with through integrators and partners, we also need to be very careful to be on the right side of the fence, so to speak, when it comes to not stepping out of the -- from a vertical integration point of view.

So we just look at the acquisitions of Foldengard and Natom historically. In those markets, you had quite some success with your basic Troax offering. Has those offerings been helped by the acquisitions you made in those countries? Or will you have the same success even if you hadn't bought the folding operation?

I think that would become very hypothetical. First of all, I do think we can debate whether a certain acquisition is -- has been successful, has been successful in a certain period of time has been successful in the long run. I don't think that we would have the combined market position if we take North America without adding critical mass. So in a sense, I do think there is a correlation between growth, being able to also get the supply chain in place, critical mass and skills to be able to grow. So I do think there is a connection between those 2 things. Absolutely.

Anna from DNB Carnegie again. So I just figure a bit on the channels to market, and we have 75% through integrators. Are you happy with this current setup? Or would you benefit from having increased ratio of either of those?

Yes. I would like to have more bigger share of the sales straight to the end user for a few -- for a few very obvious reasons. Number one is we get direct feedback on what the market wants. So that connection is easier. If we have a higher share with the direct customers, we also get more touch points. So we get more stickiness in the customer relation that helps additional sales, obviously. And having fewer middlemen along the way, of course, is helpful for the margin. So those would be the reason. So if we can move the needle a little bit more towards the end users or end customers, I think the better.

Is there any region or end segments that you have a higher tilt towards the direct channel or is it very evenly spread out?

I'd say, probably from a -- we would most likely have more to date, I should say, before the Vichnet acquisition. We have a higher share of direct in Asia, in fact, if we look at proportionally than we have in the Europe and the U.S.

And moving the Natom volumes into Garantell, just thinking about how they have their e-commerce set up, is that going to be beneficial from that point of view?

I think for -- I think overall, absolutely, because it's a much better user experience or customer experience, it's smoother, quicker, customers can how much they want to do themselves, how much they want to help with. So from that point of view, I do think it's very positive. Some of that will then go through straight e-channel, and some of this would then also be utilized in the key account structure by our own colleagues as well as the customer. So I do think from a service point of view, it's going to be very beneficial for our customers and also for ourselves in terms of sales, call it, efficiency and smoothness.

Hi, everyone, and welcome to the third quarter interim report for Troax Group. My name is Martin Nystrom, and together with Anders Eklof, our CFO, we will present the numbers and key events for the third quarter. After the presentation, we will open up for a Q&A session, which I will lead. So let's dive into the quarterly numbers.

If I start with the third quarter, I'd say that we were offered a mixed market development, and we had some mixed outcomes. In total, we reported a minus 7% order intake growth and -- but this is distributed very differently. So if we start with the big exclamation point, APAC continued very strongly in the quarter. I think it was also very good to see a broad-based and significant growth in all the countries. So I think this is a good sign and also a good sign of the value proposition that we have also in the Asian markets.

If I look at Europe, we continued largely as we did in the second quarter. Overall, I consider this to be relatively slow and also the long expected recovery is we're still waiting for that to see a broad-based recovery. However, I'd say there are some positive signs during the quarter in Europe. We did see a gradual comeback or recovery for the warehousing segment, and this segment has been fairly or very slow for quite some time. So I do think there are some positive good signs in this segment. This is also our largest segment and exposure in Europe.

The counter side of this is that we also -- we have seen the demand in the automotive side decline a bit. And here, I'd also like to note that we're making very strong comparables from last year, but we do see the automotive sector being somewhat slower in the third quarter in Europe. We continue to experience a slow market in the construction -- in the Nordic construction environment. So all in all, it means that we had a declining order intake in Europe.

On this, I would also like to point out that in the numbers for the third quarter, we also have a negative one-off effect due to the cutoff effects that we get when we now start to transfer the Polish factory and close that down, and we're moving that to Sweden. So there is an impact on the order intake side from this. Last but -- and also not least, in Americas, we continue to see a decline. And I think here, we do see pretty high activity. The quoting activity is very high, but the customers still hesitate to make decisions. And this is then driving the decline in the order intake in the quarter.

If I move over to profitability, we have -- in the quarter, we have low volumes compared to what we have installed capacity for. We were also impacted by the production transfer in Europe. And in the quarter, we also had some operational challenges and issues in the U.S., which lowers the profitability, and we reported 16.1% as EBITA margin. If we dive into the margin a little bit more, I'd say that the gross profit overall is on an acceptable level. We did have the volume drop, factory transfer and of course, the operational challenges in North America. If we try to dissect this margin a bit more, the temporary effect from the factory move from Poland to Sweden diluted the EBITDA by roughly 100 bps.

And in the U.S., due to the hesitancy in the market, we also have struggled a bit with the pricing implementation during the quarter. So in total, this diluted the EBITA margin by 100 bps as well. Here, I'd say we have taken good measures during the quarter going into the fourth quarter. From an activity point of view, I do think we have taken action. Last but not least, supporting the margin is the cost reduction program that we launched in the second quarter, and this is delivering well and as planned. And we do see underlying that the sales and admin costs are starting to come down.

During the quarter, we also delivered a strong cash flow of EUR 12.6 million or a cash conversion of 122%. We continue with good discipline in terms of inventory management, how we collect our accounts receivables and also how we pay our suppliers and our accounts payable. And this means that our balance sheet continues to enable investments, both organic ones as well as acquisitive ones. In the quarter, I'd also say that we've done solid progress on several of our strategic priorities and I will come back to that a little bit later during the call as well as during the Capital Markets Day next week.

So if we then move into how the markets are moving. So all in all, we reported a minus 7% decline on order intake. If I start with the geographical perspective first, in North Europe, we reported a minus 7%. Here, I'd say all segments, but the warehousing segment are down. Automotive has been down. Construction continues down, process others and the whole North European market was down in the quarter. Here, I'd say the promising sign is that we now start to see the warehousing market waking up and also that we start to see that activity moving into order and order intake during the third quarter. So that makes me cautiously positive about the fourth quarter as well as '26.

Moving over to Southern Europe, where we reported a minus 4% on order intake. Here, we also see decline in the automotive and warehousing sectors. But here, there is also a good development on the process side and process is one of the areas where we do think we can gain share and grow in the coming years.

So from that point of view, I do think it's good to see process growing in the quarter. I'd say the big disappointment from our point of view is the development in America. We reported minus 26% during the third quarter. Here, we'd say that all the big segments for us are down. So automotive is down, warehousing is down, and others are down. So here, we see a lot of activity and deals not being lost, but it's been very difficult for us to convert this into orders.

Then last but not least, we have our APAC region, which was up 66%. So we had a very good development during the first half of the year overall, and this continued into the third quarter. Here, I'd say that all segments and all countries are growing nicely, and we have a lot of green arrows here at the bottom. So good to see the development and the continued growth in APAC. And with that, I'll leave that over to you, Anders, for some more digging into the financial numbers.

Thank you very much, Martin. I start with the order intake development. We reached SEK 62.2 million in order intake for the third quarter, to be compared with SEK 67.0 million in the third quarter of last year. That equals a decline of 7%, of which 6% is organic and another percentage point comes from negative FX. Going over to the sales side. Here, we reached SEK 64.2 million in sales to be compared with SEK 690 million in the third quarter of last year. This corresponds to a minus 7% in sales. Also, here, 6% organically, and another percentage point comes from FX.

Moving over to the profitability side. We reached NOK 10.3 million in EBITDA for the third quarter of this year, to be compared with NOK 13.6 million in the third quarter of last year. The EBITDA margin for this quarter was 16.1% to be compared with the prior year's 19.7%. And you can see here on the arrow side that we are trending upwards compared to the first 2 quarters of 2025.

Next one. Cash conversion was good in the third quarter. We had NOK 12.6 million in free operating cash flow, which is 122% of EBITDA. And then on the financing side, we have a good financing situation still. So the net debt, excluding the IFRS 16 impact, is 1.0, and it has been rather stable over quite some time now.

Next, please. And then just to summarize everything, you have this in the table. I have touched everything here, except for the EPS. Adjusted EPS was $0.12 in the third quarter of this year, to be compared with $0.16 in the third quarter of last year. And with that, I hand over again to you, Martin.

Thank you, Anders. And then to conclude the presentation part of the call, I think we had a very mixed market environment during the third quarter as well, similarly to what we've seen in the past quarters. Despite the order intake growth, I do think there are some early good signs when it comes to recovering in the warehousing segment. We also see some of the key markets in Europe improving a little bit in Central Europe.

We do have low volumes, and we are very busy transforming the supply footprint and transforming the group, which has some negative impacts in the quarter of one-time character. And we did deliver a strong cash flow in the quarter. So all in all, a mixed bag of outcomes, but I do think we're also now preparing for being ready when the market recovery hopefully comes. And I do think we will approach that being stronger than ever as a group.

Then, before we move into the Q&A session, I'd like to also come back to the financial targets that we have announced earlier today. And we have set ourselves a set of targets for 2030. So when it comes to sales growth, we have set ourselves a target of at least EUR 550 million by 2030, which corresponds to 15% CAGR in sales growth. This is then the total CAGR, so both organic as well as inorganic.

On the profitability side, we have set ourselves the target to be at least 20% EBITDA margin over the cycle. On the capital structure, we will continue to have a target of net debt to EBITDA over time, less than 2.5. And on the dividend policy, we have a target to be within the interval of 40% to 60% over time. And I would say on the dividend side that this is not an ambition to lower the dividend. This is a way to enable us to have a stable and steadily increasing dividend over time. So it's not a lowered ambition in that sense.

And I'd also like to make a commercial for our Capital Markets Day, which we hold next week in Hillerstorp, will provide some more insights as to the targets, as well as our plans to reach the targets by 2030. So hopefully, I'll see many of you in person next week.

Capital Markets Day for us is next week, where we aim to present our strategy and our plan, our financial targets. You'll get the chance to meet some of the group management members, and we, of course, want you to touch and feel the products and see how they are being made, and also, there is the chance to have a Q&A and a dialogue with me, Anders, and some of the key team members as well.

So with that, we have come to the Q&A session. So I would kindly ask you to raise your hand and then we'll open up the mic.I will then start with Jonny from SEB.

Hopefully, your -- can you hear me? Just a couple of questions from my side. I think I would start with your new target. You mentioned you aim to double sales by 2030, and that imply 15% CAGR from 2025 as baseline. What you implicitly say then is the full year sales for this year of EUR 275 million, and that implies now roughly 11% sales growth in Q4, yet looking at the order intake, it continues down in this quarter. So what makes you believe that sales will suddenly go up double digits next quarter? What can you say there?

I think you should see the 2030 target as a long-term target. I don't think you should read into a specific commitment for the fourth quarter. I know you would really like us to hand you the number on the silver platter for Q4. I think you should see that this as -- you should not see this as something we commit to or forecast for the fourth quarter specifically. I think you should look at the longer-term ambition when it comes to this.

Yes, I understand. But it was just that you written 15% CAGR from 2025 as baseline. So that's why I would like some flavor on that.

Yes. No, we could, of course, have put 14.7% or 15.3% as CAGR, but we thought it was a bit more pedagogical to say 15% on average.

Yes. Okay. Yes. And then on of the 15% CAGR you say, how much should we read is organic? Or should we rather read it that you aim to accelerate the M&A going forward as well? Could you please give us a split there, how we should think?

Yes. I think I wouldn't mention a specific number here today on what's organic and what's inorganic. If we go back the past decade or so, we've had roughly 10% organic over the cycle and 2%, 3% acquisitive. We think that nothing has materially changed when it comes to our exposure. I think we will have years where there might be a little more organic than the average. And I think there will be perhaps during this period, years where we have a bit more of acquisitive growth. So we'll come back to that during the Capital Markets Day and shed some more light on what's in there.

Okay. And then another one on the quarter here. You mentioned weaker automotive in Europe and North America. And looking at the order intake, organic seems to -- or growth seems to decline here and accelerate downwards in South Europe and Americas now. So could the warehouse segment really offset that ahead, do you think? Or how should we view given what you see now, the order trend going forward?

Yes. I think a few points on this one. I think when we look at the automotive sector first, I think it's -- I think it's true that we did have a decline in the quarter. At the same time, I think we had pretty strong comparables still in Europe last year. So from that point of view, the drop looks perhaps in the quarter a bit more severe than what we think the underlying market is sequentially.

At the same time, the warehousing segment is our largest exposure and also so in Europe. So from that point of view, I do think that the warehousing segment can balance some of the shortfall on automotive. But that would then, of course, require that this is a development that is sustainable. So I think it's probably a little bit too early to say that the warehousing segment can compensate the automotive sector in full. That's, of course, what we're hoping for.

In U.S., I think -- or North America, I think the situation is a little different. I do think the market or the decision-making in North America is more hesitant. And I do think that we need to have some kind of external impulse for customers, large scale to start making decisions again before we will see a turn. But for sure, we're really at the bottom of this. And if we put some context to the North American situation, there is a pent-up demand in the U.S., both from '24 as well as '25 in the automotive sector. So I do think that the outlook in automotive in U.S. is probably a little more positive than what we see in Europe for the time being.

Okay. And just a quick final question for me. I think you mentioned some one-off effect here of EUR 3 million in the quarter. If I interpret you correctly, that is affecting orders. So has that order disappeared? Or will it show in Q4?

I think it will be a mix on the orders. And the reason why we have the EUR 3 million is basically that we can't keep receiving orders while we move equipment since this is a very short lead time business. So basically, we do need to cut the orders off for a period of time while we move the equipment. When we then get the equipment up and running again, we can start to we can put the order button on, so to speak, which means that some of those orders might then come in. Some of them might have been lost in that sense during the transfer period. So some might come into Q4, Q1. And otherwise, we'll have the orders coming -- starting to come in for Q1 on this one.

Then next would be Anna Widstrom --

Can you hear me okay? Perfect. So I just have a question on the issue that you had in the Americas. What was that due to? And is something that we should expect potentially partly in Q4 as well or...

Yes. So on the U.S., we have a few different topics. The first one is connected to the hesitant market and the fact that we do need to push for price increases. The raw material market is up in the U.S. that has taken a little bit longer time than we first expected. I do think the actions are being made, but before they hit the books, there is a bit of a delay or a cycle in that. So I do think -- we will gradually see that coming down in Q4.

To that in the U.S., as you know, we have a pretty old facility up in Chicago, and we are now investing for a new facility in Tennessee. The fact is that the equipment in Chicago is getting old, which means that we have more breakdown, we have more maintenance. And in order for us to satisfy our customers, we also need to partly to do some more costly outsourcing.

So I'd say both of these are of temporary nature before we're up and running in Tennessee again.

Okay. And just thinking of some other like costs relating to the move in Europe. Could that be seen in Q4 as well? Or are you very sure that you have done all of these -- taken all these costs already in Q3 now?

Yes. So there are 2 parts of the costs in Europe. There is the costs that are related to the transfer and the move. They are part of the provision that we took in the second quarter. What we're now living through in Q3, and we will have a little bit of that, not as much as in Q3, we think, but there will be also an impact in the fourth quarter given the fact that we're ramping down our delivery step by step and hence, our invoicing.

And we are not able to take all the costs out in a linear way, which means that the -- you could say the revenues disappear a little bit ahead of the costs before we're completely out of Poland. So there was definitely an impact now here in the third quarter or parts of that impact will also be will have some impact in Q4, but it's going to gradually come down before we're completely out of Poland up and running by the end of the year.

Okay. Great. That's very clear. My last question is on Asia because it looks very, very strong on the orders that you talked about. And it seems you've talked about broadly in every country, and it seems all of the end segments are progressing very well. Is there a specific country or end market that is standing out even as it's very like strong in general or...

I'd say I'd say all the countries have developed very well for us. I do think -- not single something out, but I do think China has performed really well this year. And I think really, we've gotten all the pieces together when it comes to also supplying and getting the cost structure right and getting the right team on board.

So I do think China has performed really well this year. I think we're making really good progress in Korea as well. And we have to extent also done very good progress in Australia. If we look back, we already have a pretty solid and stable business in Japan. So from a growth point of view, Japan is very good, but perhaps a little bit more stable from a year-on-year point of view.

Thank you Sörling. And I would like to open the mic for Gustav Berneblad.

It's Gustav from Nordea. So I thought maybe just to come back to the financial targets there and sort of the profitability target because when I look at your website, it basically says that you aim to have an operating margin that excess 20%. And I mean you started reported EBITA first in Q2 2023.

So I guess that refers to reported EBIT then. So when you sort of come out with an adjusted EBITA margin target of 20% above, I mean, it sounds like you're almost lowering it. I mean what's your expectation?

Yes. No, that's not how you should read it, Gustav. I think you should read it as the previous level and with the aim to increase over time. So you should not read this as any type of lowering the ambition.

Yes. Okay. That's fair. But I mean, given all the things you are doing now with sort of the consolidation of the footprint, you're also increasing the automation in the U.S., et cetera. It feels like if you -- if we see a normalization, you should be sort of way above 20%. Is that also what you're thinking when you're reasoning?

Yes. I think now we talk about the 20% EBITDA as an over-the-cycle target. Now we're pretty much what we consider to be rock bottom in the cycle. with all the activities and all the actions that we now put in place and also a bit of help from demand from the market, I do think it's possible to go at peak, certainly above.

But I do think that before we even hit the 20% number. So I do think over the cycle being at least at 20% over the cycle, I think that's a good first step for the group.

Okay. That's fair. And then I thought maybe just on your comment there on Lag Mix as well. I mean it was an acquisition you did a long time ago. And is it possible to just give some sort of indication where sales are today and also the rationale behind the divestment there?

Yes. I think, first of all, Lag Mix is -- was acquired quite many years back, and it's been a a small -- relatively small business in the group. I think we've done a strategic review.

And as you know, we're also looking at, you could say, a strategic review of the portfolio. When you look at what the products and the customer base and the commonality with the rest of the group, I think it's fair to say that the Logimix business does not really fit the mold when it comes to where we want to put our focus and where we have our core, so to speak. So I do think in line with increasing the focus, focusing on core and of course, also then related to strengthening even though very marginally the profitability, I think it makes good logical sense to divest Logimix since it's not core, and we do believe that it's a good business, but we don't think that Troax is the right owner for that business.

And is it possible to say anything about what the sales is today?

Yes. It will be -- Anders help me out here.

On the mix side, EUR 1 million a year, roughly, Gustav. Euro, yes.

And then just on the warehouse side, I mean, that's the positive there on your arrows in Europe at least. But it sounds in the wording in the report like it's more tilted towards 2026. So, just wondering, are you really seeing automated warehouse orders coming through right now? Or is the arrow more forward-looking or?

No, I'd say this that we've talked about a gradual comeback of the warehousing segment in Europe, and we've talked about that for a few quarters. I think we've seen for a couple of quarters now that there has been a lot of presales activity going into the warehousing segment. Previously, I've been cautious to say, well, okay, when will this activity turn into orders from our point of view.

Now I think we did, in fact, see some of that activity turning into orders in the third quarter. And I do think now we are cautiously optimistic that more and more of that activity will come and turn into orders. Whether that will now start to continue in Q4 or whether more of this will come into '26, I think that's a bit more uncertain.

But overall, I think as segment trend, I think we're seeing some positive signs, which we haven't seen in a long time in this space. That being said, I do think, and perhaps a reminder, we had a significant and huge growth going back to '21 and '22. I don't think the warehousing segment will grow at those 30% numbers year-on-year going into '26. But I do think that we are most likely we're past the bottom in this market. That's what I think we see after Q3. But I do think it will be more of a gradual get back than a big catch-up that we saw in '21, '22.

That's very clear. Just one very quick one last one, sorry. Just on your price adjustments here in North America, what can we expect in terms of numbers for that? So is it like mid-single digits you're raising prices? Or is it more?

It's on average, it's high single digits on average.

And is that visible in the order intake today or?

It will be in the fourth quarter, most likely.

Let's see if we have more questions coming from someone. Then I got a question in the chat here saying what underlying market assumptions do you have until 2030? What expectations do you have for '26? And when you say you're cautiously optimistic.

So when it comes to the market assumptions and so forth, we'll have more of a deep dive in the quarter -- in the Capital Markets Day next week, where we go a bit segment by segment what we're anticipating. But I'd say it's fair to say that we have some of the segments growing more GDP-like, such as automotive and construction. We do think it's over average with a few points when it comes to the warehousing segment as well as the Process segment. So we'll walk you through that in our Capital Markets Day in a bit more detail.

And when it comes to '26 specifically, and when I'm saying I'm cautiously optimistic, that comment relates specifically to the warehousing segment compared to 2025.

All right. Good. Are there more questions from the call? There's one more. Is the warehousing growth expected to be e-commerce? And I'd say it's both e-com as well as conventional warehousing. So it's a bit of both, even though they have different characteristics. But part of that is assumed to come from the e-com space, yes.

All right. That concludes the interim report for the third quarter. I'd like to thank all of you for calling in. And hopefully, I'll see some of you in person next week at the Capital Markets Day. And if not, I'll see you in a quarter's time. Thank you, and bye-bye.