Indutrade AB Aktie

Welcome to the Indutrade Q1 presentation for 2026. [Operator Instructions]

Now I will hand the conference over to CEO, Bo Annvik; and CFO, Patrik Johnson. Please go ahead.

Welcome, and good morning on our behalf as well. As usual, let's start with some overall highlights from the quarter. We can begin with the demand situation. Order intake continued to improve versus last year. Organically, the order intake increased with plus 1%, with slightly more than half of the companies showing a positive order intake. The strongest segments were medical technology and pharmaceuticals, energy and parts of the process industry.

Net sales were unchanged from last year, both in total and organically. Contributions from acquisitions improved compared to the last quarters and was at a good level. EBITA margin came in at 13.3%, in line with the underlying margin last year, and we will comment more on this further on in the presentation. Operating cash flow was also in line with last year. Our companies continue to improve management of working capital. Inventories are lower than last year and the inventory in relation to sales is on a historically low level.

In Q1, we managed to acquire 2 larger companies, and we also made one more acquisition in April, adding SEK 625 million in revenue on a yearly basis, and the pipeline is continued strong. We are obviously not satisfied with the overall performance in the quarter. However, there are good progress in several areas, which I will comment more upon throughout the presentation. Looking more specifically at the order intake and sales trends, demand was stronger than last year, but still varied across companies, geographies and segments. Book-to-bill is seasonally strong in Q1 for us, but improved from 105% last year to 107% now.

As mentioned, companies with customers within MedTech, Pharma, the Energy sector experienced a strong demand and also parts of the process industry. Order intake for companies with customers in infrastructure and construction and engineering was aggregated slightly down compared to last year. In terms of sales, acquisitions contributed positively with plus 5%, a sequential improvement from the 4 -- plus 4% we had in Q4 2025. However, currency movements had a negative impact of 5% and organic sales was flat, leading to an unchanged top line development in total.

We had a stronger order book coming into the quarter, but the sales development was impacted by a weak start of the year, mainly due to the challenging weather and also by the composition of the order book with a higher share of orders connected to the Energy sector and the process industry with longer lead times in general. The sales development gradually improved during the quarter, starting with a weak January and ending with a strong March.

Moving into sales per market. In the Nordics, sales was up in Norway, flat in Sweden and Finland and down in Denmark. Flow technology for marine applications, water treatment and the Energy sector were drivers for the positive development in Norway, while the lower sales to Novo Nordisk was the main reason for the decline in Denmark. In the rest of Europe, starting with the Benelux, sales was lower within engineering and in some of the Life Science companies. U.K., Ireland was a good development within, for instance, railway rolling stock.

And in Germany, flat overall, but slightly improved situation in the engineering sector. Switzerland and Austria was weaker, mainly due to lower sales within valve for power generation and within the Construction segment. In North America, sales improved compared to last year due to good development within medical technology. In Asia, sales declined due to difficult references from last year in the Marine segment.

In terms of profitability, total EBITA decreased 2%, corresponding to an EBITA margin of 13.3% compared to 13.6% last year. However, in Q1 last year, we had some positive one-offs. So the underlying EBITA margin was 13.3%, in line with this year's EBITDA margin. The main reason for the EBITA margin not being on a higher level is the organic sales development in combination with slightly higher expenses. Underlying expenses grew around 1%. But on top of this, we also had some nonrecurring costs for downsizing.

Patrik will explain more details in his presentation. But perhaps good to elaborate on the type of companies we have and why some of them haven't reduced more. If we go back to late -- the situation late 2025, then I would say that expectation was that in 2026, we would see better and better order and sales situations. And this could be based on that we had an organic order intake improvement of plus 3%, both in Q3 and Q4 last year.

So most companies had a somewhat positive outlook, I would say, for 2026. And we have, as you know, quite a lot of trading companies, and they are, in general, people lean. It's difficult to find qualified replacements. Hence, there was not sort of on top of their agenda to downsize and there is a hesitation to downside if they don't really need to in order linked sort of to the situation that it is difficult to find really good replacement employees.

In addition to this, we obviously also have a lot of growing companies, and they need to add people in order to manage their businesses in a professional way. So that's a bit of an explanation, I would say, to why we had a plus 1% expense increase year-over-year. Positive, though, that the gross margin was continued strong, amounting to 36%, very well managed. There will be some more challenges going forward now in quarter 2 raw material price increases. But I am optimistic that our companies will handle this in a good way. We have done that for very many years historically.

Looking at the sales development per business area, 2 of them grew organically, Industrial & Engineering and Life Science, mainly as a broad result of the strengthened order book coming into the quarter. In Industrial & Engineering, for instance, railway rolling stock was a sort of positive situation with -- they have had large orders from companies like Alstom, Porterbrook in the U.K. They also had a good situation in terms of specialty chemicals. And I think it's worth to note that they had actually an all-time high order intake in March in the quarter.

In Life Science, particular companies within the medical technology had a good development. We usually comment on the single-use business. I think that's still good. And we made a Spanish acquisition or first company in Spain last year, and they are into single-use and the first quarter was all-time high for them. So a good start this year for them in Indutrade. Just to give some other flavors, we have a broad portfolio of MedTech companies. It's everything from -- we sell communication equipment to Swedish hospitals, and that business has grown really well. We have a growing business in Poland. We sell medical equipment to hospitals, also consumables to hospitals. And that's also a growing situation.

We have companies on Ireland, which sell medical technology to large international customers and in the quarter now sold successfully to the U.S. So it's not sort of a single company. It's a broad base of companies doing well in medical technology. Infrastructure and Construction and Technology & Systems Solutions continues to be weaker due to demand being subdued on the back of the general market uncertainty and lower investment levels in some customer segments. Process, Energy & Water had a good order book coming into the quarter, but there are generally longer lead times within the energy sector and the process industry. So the minus 3% is more of a timing effect. They now have a record high order book and a good condition for stronger development going forward. And March was actually the second best month ever in terms of order intake for Process, Energy & Water.

In general, I would say that the challenging weather in the beginning of the year also impacted the sales development negatively, mainly in Infrastructure & Construction and Process, Energy & Water. If we then turn to profitability for the business areas, it was 3 business areas improving the EBITA margin in the quarter. Industrial & Engineering had the strongest margin development, supported by the gross margin improvements, leverage on the organic sales and margin accretive acquisitions. Infrastructure & Construction has for a longer time, work with restructuring measures and keep costs in a really good way and some divestments to improve its margin.

In Life Science, the gross margin further strengthened due to good sales development within the MedTech cluster, as I mentioned, as well as margin-accretive acquisitions contributing positively. Process, Energy & Water was impacted by the lower sales, as I talked about earlier, and the EBITA margin development in Technology & Systems Solutions was mainly driven by lower organic sales together with slightly higher expense levels.

Acquisitions, positive situation. So far this year, we have acquired 3 companies, of which 2 slightly larger company for us, with a total annual turnover of SEK 625 million. We are very glad to have welcomed Belman, CAT Ricambi and Axotan to the group. They have all good track record of sustainable profitable growth and are also margin accretive to the group.

In 2025, the average company size was slightly lower than a normal acquisition year for Indutrade. And this year, so far, it's slightly higher. This shouldn't be seen as a strategic shift. We are opportunity oriented, as you know, and we act on opportunities we believe to be accretive and successful. Consequently, there will be times when we have periods of larger acquisitions and periods with smaller acquisitions being made. The acquired EBITA was on a high level in quarter 1, as can be seen on the graph to the right, just over SEK 70 million. Also looking at the EBITA margin of the acquired companies, it was on a strong level of 19.5% for the quarter and above 17% for rolling 12 months. Good to note that this includes transaction costs, so the underlying margin is even higher.

Our business areas are successful in the acquisition work, being proactive and building pipeline. Our business segment leaders are spending more time on acquisitions now compared to a year ago and the current acquisition pipeline is on a high level.

By that, I leave the word over to Patrik to comment more on the financials.

Yes. Thank you, Bo. Total growth for orders and sales was 2 -- plus 2% and 0%, respectively, in the quarter. Book-to-bill was positive, as Bo talked about. Orders 7% higher than sales and on or above 1% in all business areas actually, strongest performance in Process, Energy and Water. As previously mentioned, our gross margin was strong at 36% compared to 35.4% last year. Total EBITA declined 2%.

Acquisitions had a strong positive impact of 7%, but this was offset by currency movements and slightly higher expense levels in combination with positive one-offs we had last year. And these ones, they were primarily connected then to earn-outs and amounted to net plus SEK 27 million, which corresponds to around 2.5% on the EBITA. If we comment a little bit more on the sort of the expense situation, the total increase in expenses, fixed currency, excluding acquisitions, was around SEK 45 million, corresponding to 2% on the total expense base. But underlying, as already mentioned, it's only half of this, around 1% -- we have had some one-offs connected to layoffs, personnel reductions in several companies.

And also last year, the cost level was somewhat pushed down actually because of some LTI provision releases we had. So underlying, it is plus 1%. EBITA margin came in for the quarter at 13.3%, which is then the same as the underlying EBITA last year. We are, of course, not satisfied with the margin, but it's important to note that Q1 is historically a seasonally low margin quarter for us. Going down further in the P&L, finance net decreased with 18%, mainly due to lower interest rates. Tax costs actually increased 5%, but it's mainly due to some onetime effects underlying the tax rate, I would say, is the same as before.

Earnings per share was down 4%. Return on capital employed declined slightly to 18%. Capital employed end of the quarter increased with 8% because of the higher acquisition pace since second half of last year and slightly higher working capital, also mostly connected to increased receivables at the end of the quarter. Cash flow from operating activities, seasonally low also then in quarter 1, but was in line with Q1 last year.

All in all, group financial position is still very solid with a net debt-to-EBITDA ratio of 1.5x at the end of quarter. So let's elaborate a little bit more on the cash flow. As mentioned, cash flow is seasonally low in Q1, which you clearly can see from the graph, but it was stable. And after CapEx, it was actually slightly higher than last year. Our companies continue to show progress in the management of working capital. I think inventories are lower than last year and inventories in relation to sales on a rolling 12-month basis is actually now on a historically low level.

Overall, working capital efficiency is also then slightly better than last year. Cash conversion continue to be on a stable high level and even slightly improved versus last year. Continuing to the EPS, earnings per share situation, and that has developed in a bit weak way the last couple of years, as you know. The driver has been a weak organic development, which is mainly due to the general weaker macro situation that we have experienced and the lower general demand from that. But also worth to note that the higher interest rates compared to a few years back and currency headwinds lately has also then had actually a significant impact on the situation.

In the quarter specifically, EPS was down 4% because of the lower operational result and lower interest costs compensated slightly. And we are obviously not satisfied with this -- with the EPS development, but we are now fully focused on coming back to good growth levels in line with our targets. And with that, we will also for sure and deliver EPS growth.

And then lastly, the financial position. The interest-bearing net debt increased versus last year and also slightly sequentially because of the increased acquisition pace. However, the net debt ratios are stable and low from a longer historical perspective. Net debt equity ratio at 45% versus 47% last year. Net debt-to-EBITDA was slightly higher than last year at 1.5x, but still on a comfortable level. And if you exclude earn-outs, it was on 1.3x versus 1.2x last year.

The financial net debt, which is then the part of the debt that relates to borrowing that needs to be refinanced is also historically low on a level of 1x. So all in all, in conclusion, our financial position is very strong, and that creates a good foundation for continued value-accretive acquisitions and also room for organic growth investments and initiatives.

I think I end there and leave back to you, Bo.

Thank you. So let's summarize some of the key takeaways before we open up for questions. The demand situation improved and the order backlog was further strengthened. Good acquisition contribution, but total sales were negatively affected by currency movements and a flat organic development due to a weak start of the year and longer lead times in the order -- in part of the order book. EBITA margin was in line with the underlying margin last year. The gross margin was on a continued high level. So we expect a good leverage on the organic sales growth when the market improves.

Looking ahead, as I said, we have a larger order backlog, and we saw clear improvements throughout the quarter, which is positive. But the general market uncertainty remains on a high level linked to the geopolitical situation. We have a good momentum in terms of acquisitions and a strong pipeline, providing good conditions for a gradual increased acquisition pace. Finally, we are not satisfied with the quarter, but there are positive signs in many areas, and we are fully focused and determined to deliver in line with our financial targets.

By that, we end our formal presentation and open up for potential questions. Thank you.

[Operator Instructions] The next question comes from Oscar Ronnkvist from SEB.

So I have 3 questions. My first one would be on Process, Energy & Water, the longer lead times that you mentioned. Are those lead times are longer than sort of a normalized situation?

No. I would say that we have, as you know, a mix of companies in that business area and the segment in the business area is the Energy segment. And there, we have certain companies who sell to power generation facilities and things like that. And that's a usual sort of lead time of minimum 6 months, I would say, to more 12 months and beyond. So that's -- but that's a normal situation. We've had that for many years. Segment, I would say, is -- has potentially grown more than other segments in the business area. So that's why maybe that there is a bit of a shift like this.

Perfect. And the next question on the cost development going forward. So do you expect to align volumes and costs in the coming quarters? I think you gave some comments about the Middle East situation, but as you see, potential cost pressure on raw mats, et cetera. But do you expect that to align more in the coming few quarters?

Yes. We haven't seen much of those price increases in quarter 1. Obviously, a lot of suppliers have brought forward information about cost increases now towards the end of the quarter and early in quarter 2. But as I said, I'm quite confident that our companies are prepared for this and will manage this and transfer those costs to price increases to the customers. So I'm hopeful that we will manage our gross margins in a good way, also going forward. Was that your question?

Yes, more on the operational expenses side as well, and if you can see anything on that. I think on the gross margin, your comment about the price increases was good.

Yes. No, we are -- were not cost conscious in our culture. And it's a weighing situation for primarily, I would say, our trading companies. So as I said, towards the end of last year, I think most of them had a more positive perspective outlook on 2026 and hence, sort of refrain from certain downsizing. Even if there is now uncertainties linked to the geopolitical situation, there is still some sort of underlying optimism that the markets are improving slightly. So -- but obviously, we will be sort of engaged from the Boards in our companies to manage overhead cost situations actively. So it's definitely not -- if anything, it will improve from -- sequentially from Q1, I would say.

Understood. Just a final short one, but you say a strong M&A pipeline, but just wanted to hear about the geopolitical turbulence, if that has made any changes in the appetite for M&A as we saw like last year following the Liberation Day.

Yes. No, we think -- we take every case, case by case. But in general, we are not in general, hesitant right now, I would say. So the plan is to continue, obviously, being professional, obviously, being cautious in case by case. But it's -- as it looks now going to be a high activity level in quarter 2 and onwards.

[Operator Instructions] The next question comes from Johan Dahl from Danske Bank.

Just a question on the sort of the outlook you presented in Q4. As you know, when you presented the year-end numbers, you talked about the harvesting phase in Indutrade late January, and you conclude now that January was a disappointment to you, guys. Are you able to sort of box in exactly in the beginning of the year what was the disappointment? I mean invoicing is what it is, but was that on cost? Or is that isolated to some certain events? Or was it more broad-based?

It was a very slow market from a sales perspective in January. And I think you can relate to that also. It's not Indutrade specific, at least not in my perspective, it was quite broad in the industry that it was a harsh winter, I think, and bad weather in large parts of Western Europe. installation companies delaying projects. So for some reason, altogether, then sales in January started out very slow. So it was slower than the general market underlying need, I would say. So it was unexpectedly slow in January, and that created a very weak result. And we weren't able to catch up completely from that situation in February and March.

But as you probably have understood by the presentation, March ended in a really strong way, both in terms of order intake sales and profitability. So -- so yes, it's a good trend to have into quarter 2, I would say.

Got you. Just a follow-up on the one-offs you talked about in the fourth quarter '25. Were you able to sort of box those in the -- towards the end of the year? Has that had any follow-on effects here now during the beginning of the year? And could you also talk possibly about sort of quantifying cost savings that you have carried out here in the first quarter?

Yes. I would say that those one-offs were -- they are boxed in, but it was linked to 2 specific companies. And when you experience a situation like that, we have changed management, as I've said. Obviously, the situation in those 2 companies is slower, weaker. They need to restart, and we have definitely done that. We have helped them with everything from restructuring to strategic analysis to strategic activity prioritization, growth-oriented activity, basically a new business strategy. So the new MDs are coming in towards a fairly served table in terms of what to do going forward.

So we have lost momentum, but compared to what it could have been, I think the momentum going forward will still be a lot better based on all that activity we have done. So yes, that had some impact on our Technology & System Solutions business area. Now what was your other question, Johan? Sorry.

If you can talk about sort of how much cost you've taken out in terms of sort of rolling 12-month basis, if it's measurable at all?

Can you comment on that, Patrik?

No we are continuously working with cost and number of employees in entities that are struggling with demand. So that we are doing. I don't know if I have a sort of a relevant number on that. But I think we have -- in those on a rolling 12-month basis since sort of mid last year, we have taken down a number of employees in these type of entities with around 200 people then, which is -- you can always do more, but I mean, it's small companies and so on.

So I think -- and we have some more coming here in quarter 2. So we are continuously pushing on this parameter.

The next question comes from Zino Engdalen Ricciuti from Handelsbanken.

I joined a bit late, so sorry if you have answered this. But looking at high level on the order book, which you have been building up, could you say something about how the composition looks now and what your expectations are in terms of converting into sales?

Yes. So we have a relatively higher share of the order book linked to the Energy segment and some longer lead time Life Science segments. But you will see sort of positive release effects from this in quarter 2 and the further improvement step in quarter 3 and onwards this year. So it's about to happen, a positive step in Q2 and an even bigger step in Q3.

And if I add, if you elaborate a little bit on the order book sort of development and compare it to last year, we have seen order book increases in Process, Energy & Water, Life Science and also Technology & Systems Solutions with the highest increase in Process, Energy & Water. And it's basically flat, you can say, in the Industrial business area and Infrastructure & Construction has actually a lower order book than we had last year. So this sort of this mix change, you can say then, prolongs a little bit the lead time on the order book.

Understood. And just on the similar topic, specifically in TSS, which saw a bigger step-up in the order intake, if it's possible to get some color on expected conversion of that.

Yes, it's not that long in that business area. So it will -- it basically relates to what I said earlier in a bit of a step-up in Q2 and then even more in Q3 and onwards. So it's the same for that specific business area as well, I would say.

Very clear. And just a last question on the gross margin, which continued to be strong. It was just interesting to hear more about the drivers behind that.

I mean it's been strong for many, many years and stable, slightly increasing, and it's part of the Indutrade DNA to really work with pricing and try to manage potential cost increases from suppliers and transfer that to customers, and watch that situation and step-by-step work more and more and more with value-based pricing versus -- yes, just some sort of more simplified pricing approach.

So I also talked a little bit about that the war in the Middle East will drive up and has driven up oil prices, which will affect plastics and other raw materials. So there is going to happen even more in this area, I think, in quarter 2 and onwards, but I'm quite optimistic that we will continue to manage the situation in a good way.

The next question comes from Gustav Berneblad from Nordea.

It's Gustav here from Nordea. I thought maybe just to follow up there on the development in Technology & System Solutions. Was the margin weakness basically only driven by the weaker volumes? And should we then sort of expect them to jump back up now and we see volumes pick up in Q2 as you comment on...

I think they will sequentially improve Q1 to Q2. But it's linked to that -- yes, they are suffering, I would say, as a business area from cautious demand from industrial customers broadly internationally. So it's not going to be a drastically quick pickup and they suffer a little bit from a difficult situation in these 2 U.K. companies and so on. Obviously, we have done the restructuring, as I said, and so on, but it will go -- take some time to improve the situation there to be above average Indutrade levels again.

But sequentially, improvements, but not very quickly. So don't expect that they go from 14% to 18% in 2 quarters. That's not going to happen, I don't think, but they will improve.

That's very helpful. And then maybe on the topic of medical technology, Life Science here. I mean, you comment on the single-use products being quite solid. I mean those sounds more recurring, I would assume. So it sounds like the margins here would be rather sustainable unless there are any larger orders you want to flag?

I think that's a good assumption.

Yes. Is it possible to say anything regarding start to Q2? It sounds like it was a slow start to Q1 and then finished very strongly. So should we anticipate that April started quite solid as well or...

Yes. We ended the quarter 1 in a really good way. And usually, Q2 is seasonally a good sort of demand quarter for Indutrade companies. So...

You have a lot of holidays in April and May, which sort of makes the situation a little bit foggy, but we have no real news of a sort of a demand change. We hope and believe that sort of March 7 will continue with the sort of reservation for holidays, et cetera.

The next question comes from Victor Forss from SB1 Markets.

So just starting off with the nonrecurring downsizing costs. Just wondering if you could break down the split by business area and maybe comment on whether most of those costs are in Technology & Systems Solutions or if they're spread across the board?

No, not that much in Technology & Systems Solutions, to be honest. It's a little bit better. I think most part of that is actually in Life Science. They have -- even though they are trending on a good way, I think they -- as all business areas have a few companies that need to work with costs. So that particular -- those particular one-offs I talked about, they are mostly actually in Life Science. And then the LTI costs I mentioned, but those are on a group level. So that's part of the reason why there's a sort of a deviation compared to last year on group level.

Okay. And should we expect any more of this going forward -- or are you sort of done with the larger part of it?

There will -- I assume always be some smaller restructurings in a difficult market, but I don't expect them to sort of increase at least, if anything, on a smaller level, I would assume.

Okay. Perfect. And then just back to the 2 U.K. companies and Technology & Systems Solutions. Just wondering if we look at the greater picture, is essentially all of the margin pressure coming from those 2 companies still, just given the 4% organic order growth? Or is it sort of spread across the entire segment?

No, there is not like a delta between 14%, 18% coming from those 2 companies, but they have a significant sort of impact. But then there is a broader set of companies who have more of a flat, I would say, sales situation and weaker EBITA margins than normally. But I'm optimistic, as I said, that they will step-by-step improve during this year and onwards. And the plan ambition commitment from that management team is to come back to the previous levels for sure.

Okay. And just a final one on acquisition multiples because I mean in 2024 and 2025, we saw some acquisitions coming in at higher multiples. And then looking at the acquisitions here in Q1, it seems like you're back on the sort of 6% to 7% range. Just any commentary on future multiples would be helpful.

Yes. We are where we are, as you said now. And as we predict right now. I think we will be on that level for -- yes, that's where we can close successful deals currently. And I don't foresee any big multiple level increases in the short or medium term.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Yes. Then we thank you for listening in and asking relevant and good questions. We close the conference and wish you a great day.

Welcome to the Indutrade Q4 presentation for 2025. [Operator Instructions]

Now I will hand the conference over to CEO, Bo Annvik; and CFO, Patrik Johnson. Please go ahead.

Welcome, and good morning on our behalf as well. Let's start with a summary of the year 2025. It was a year with market uncertainty and continued dampened demand, although conditions improved throughout the year. We improved operationally and financially gradually during the year, and we also further strengthened our long-term strategic capability as our new segment structure now is fully established.

In terms of financial numbers, 2% total growth in order intake, organically also plus 2%. Net sales decreased by 1% in total, of which minus 2% organically, driven mainly by backlog reductions during 2023 and 2024. The EBITA margin of 13.8%. Excluding extraordinary one-offs in the year, the EBITA margin came in at 14.1%. The cash flow was continued on a high level and the financial position of the group is very strong.

In terms of acquisitions, we acquired 13 well-positioned and profitable companies during the year with a total annual turnover of SEK 1.3 billion. The Board proposes a dividend of SEK 3.1 per share.

Looking at the Q4 highlights, organic order growth of plus 3% with positive development in many companies and all larger customer segments. Three out of 5 business areas grew organically and the remaining 2 were stable from last year. More than half of the companies had organic order growth. The strongest demand from customer was within Energy, Water & Wastewater and Infrastructure and Construction.

Net sales decreased by 1% in total. Organically, it was unchanged. The reported EBITA margin came in at 13.3% compared to 14.6% the same period last year. However, underlying EBITA margin was strong at 14.9%, excluding the extraordinary one-offs in the quarter. And this we will comment more on later in the presentation. Underlying EBITA margin last year was 14.3%.

Cash flow from operating activities amounted to SEK 1.6 billion, in line with the high level last year, and there were continued inventory reductions from our companies. The acquisition pace was good in Q4 with 4 announced acquisitions, and the pipeline also remains good, both short and long term.

Moving into order intake and sales trends. Demand continued to improve and was stronger than last year with positive development in many companies, customer segments and geographies. Development was generally positive in all larger customer segments, and the strongest performance was seen in the Energy sector, Water & Wastewater and for companies with customers within Infrastructure and Construction. Order intake improved in the majority of the companies and was up 3% organically. Order intake was in line with sales, which is good as book-to-bill is seasonally weaker during the second half of the year.

As you can see on the slide, currency has a large impact of minus 4%, which together with a minus 1% from divestments impacts total growth on orders and sales materially. Adjusted for currency and divestments, the underlying situation is clearly better with plus 7% growth in orders and plus 4% in sales.

Organic sales development was strongest in the Industrial & Engineering business area and also Infrastructure & Construction grew organically, while it was weakest in Technology & System Solutions.

Looking more specifically at the sales per geographical market. Sales to Sweden was flat from last year and down in Denmark due to the high comparables from last year when we still had some deliveries to Novo Nordisk from the large order we received 2 years ago. Finland was stable from last year and Norway stronger. Development in Norway is mainly connected to flow technology products for water and wastewater, aquaculture and marine applications as well as other products for infrastructure customers.

For the rest of Europe, sales growth was strong in Benelux, mainly due to good development within valves for power generation and also single-use products for pharma production. U.K., Ireland and Germany was down as a result of the generally weaker business climate in those areas. Sales growth in Switzerland and Austria was strong with good developments for companies with customers within Infrastructure & Construction and MedTech & Pharmaceuticals. Sales development in North America and Asia is normally slightly volatile but was down compared to last year and, among other things, related to companies within business area Technology & System Solutions having a weaker demand on the back of the tariff situation.

Total EBITA decreased 10% from the same period last year to SEK 1.1 billion, corresponding to an EBITA margin of 13.3%. However, this quarter was strongly affected by extraordinary one-offs, primarily connected to 2 companies in the U.K. within business area Technology & System Solutions. Patrik will elaborate a bit more on this later in the presentation, but I want to highlight that they are non-recurring and extraordinary and you shouldn't expect these type of items from Indutrade.

Adjusted for the one-offs, the underlying EBITA margin was strong at 14.9% compared to the underlying EBITA margin of 14.3% last year. The gross margin was continued at a high level of 35.4% and even stronger than last year if you exclude these 2 U.K. companies I talked about. Organic expenses is under control.

As mentioned earlier, organic sales growth was strongest in the business area Industrial & Engineering with positive development in many companies, for instance, infrastructure machinery and railway rolling stock. Infrastructure & Construction also had a slightly positive development, however, from low levels as the demand has been dampened for many quarters. We saw, for instance, strong development in the Water Distribution segment.

In Life Science, there was a strong development in several areas, for example, single-use companies and broadly in the MedTech segment, but was offset by references connected to sales to Novo Nordisk last year, as I mentioned earlier. Also, Process, Energy & Water had tough references in many companies. And the main reason for negative development in business area Technology & System Solutions relates to project revenue recognition adjustments linked to the U.K. situation I spoke about earlier. Without those adjustments, the organic development was minus 2%, partly connected to the lower sales to the U.S.

Moving into EBITA margin development per business area. As mentioned, the total gross margin was strong, which is driven by multiple factors like mix and currency, but it's also a sign of quality in our product offerings and strong pricing power. Industrial & Engineering improved EBITA margin as a result of the strength in gross margin, but also leverage on the organic sales growth. Infrastructure & Construction was close to last year's level, but was negatively affected by a lower gross margin in a few companies.

Life Science also improved EBITA margin despite strong sales references from last year, mainly due to positive product mix with good sales development from some high-margin companies. Process, Energy & Water and Technology & Systems Solutions had a weaker EBITA margin compared to last year as a result of the organic sales development and slightly higher expense levels. The one-offs in Technology & Systems Solutions I mentioned earlier is recognized as group items outside the business area, so no impact on the EBITA margin from that in the BA.

In 2025, we welcomed 13 profitable and well-positioned companies to the group with a total annual turnover of SEK 1.3 billion. The acquisition pace was lower during the first half of the year, but increased significantly during the second half with 10 acquisitions completed in the second half. In the fourth quarter, we announced 4 acquisitions where the acquisition of ATM Group marked our first acquisition in Spain. ATM is a technical trading company specialized in single-use components for Life Science applications. We have many similar companies in the single-use area in other geographies in Europe. So this acquisition is a good example of our ability to expand into new markets in a controlled yet opportunistic way.

We have gradually strengthened our acquisition resources and our business areas work independently with different projects. This together with business segment leaders being more proactive in the acquisition work and internal pipeline generation is a strong platform to use in gradually increasing our acquisition pace going forward. The pipeline is good, both short and long term, and I look forward to announce the first acquisition in 2026 very soon.

Looking at the longer trend, we are stepwise increasing number of acquisitions, although number of acquisitions per year can be a bit volatile. Looking at the bridge effect from acquisitions over the last 12 months, we have added over SEK 190 million to the group's EBITA in 2025. Furthermore, we can also see that the acquisitions are margin accretive with an accumulated EBITA margin of 16% for the quarter and 16.4% rolling 12 months. Good to note that this includes transaction costs, so the underlying margin is even higher.

By that, I leave the word over to Patrik to comment more on the financial situation.

Thanks, Bo. So let's dive a little bit deeper into the data. Total growth for orders and sales in both the quarter and for the full year was plus 2% and minus 1%, respectively. Positively, book-to-bill is at 1 in quarter 4 and above 1 for the full year. And as mentioned earlier, there is a seasonality in the book-to-bill, where the first half of the year is normally stronger than the second.

In quarter 4, the gross margin was at 35.4% versus 35.7% last year, but impacted by the one-offs in the quarter. Excluding the one-offs, it was higher than last year. And for the full year, the gross margin remains ahead of last year, even including the one-offs actually.

Expenses, not in the table, but they are, as said, under control and increased organically only marginally with around 0.5 percentage point, excluding one-offs. EBITA decreased with 10% in the quarter and 5% for the full year as a result of the one-offs in the quarter.

And talking about the one-offs then. First, we had the non-operational one-offs connected to earnout and goodwill write-downs as we have from time to time, and then the net effect of those was small, minus SEK 3 million. But then in addition, we had an extraordinary one-off items of, in total, SEK 125 million from 2 U.K.-based companies in the business area Technology & System Solutions where we identified the need to reassess projects in terms of cost estimates and also degree of completion, particularly related actually to a few large projects with long lead times that have both new complex technology and customer application areas. Excluding these one-offs in the quarter, the underlying EBITA margin improved to 14.9% versus 14.3% last year.

Moving further down into the P&L. Finance net decreased by 5% in the quarter and 14% year-to-date because of both lower interest rates and lower debt level. Tax costs decreased 10% in the quarter and 1% year-to-date. Earnings per share was also impacted by the one-offs in the quarter amounting to SEK 1.72 in the quarter and SEK 7.03 for the full year. Return on capital employed declined slightly to 18%. Also that's mainly due to the one-offs in the quarter. Operational cash flow was unchanged from the very high levels last year, and I will elaborate some more on that on the coming slides. Net debt-to-EBITDA end of the quarter -- end of the year is at 1.4x, a low level, same as last year.

So let's move on to the cash flow. And that is, as I said, in line with the record high levels of last year, amounting to SEK 1.6 billion in the quarter. Improvements versus last year relates to the strong underlying results in combination with continued good working capital reductions. I think it's good to note that the one-offs in the quarter had no impact on the cash flow. It's a bit of sort of proof that they are truly one-off costs.

The organic inventory levels continued to decline sequentially and in relation to sales, and the ratio is now at a very good level, almost historically low levels. As we mentioned before, our companies are relatively capital light, and there is a continuous strong underlying cash flow reflected in a good cash conversion, as you can see also from the slide. And it continues to trend on a rolling 4-quarter basis on above 130%, which is the ninth -- actually ninth consecutive quarter with a cash conversion on that high level. The working capital efficiency also continued to improve.

Moving on to looking at the earnings per share development over time. And for the quarter, it decreased 14% to SEK 1.72 mainly due to the one-offs we have spoken about. For the full year, it amounts to SEK 7.03, which is a decrease of 7% versus last year. And we are obviously not satisfied with the EPS development. Besides the one-offs, it is, of course, related to a weaker demand and result development in the last 2 years. Full focus is now to come back on good growth levels, and momentum, I think, is good, growth levels in line with our targets, and also with that then deliver earnings per share growth.

And lastly, commenting on the financial position. The interest-bearing net debt decreased both sequentially and versus last year from SEK 8.2 billion to SEK 7.6 billion, driven by the strong operational cash flow. Our net debt ratios are stable and low from a longer historical perspective. Net debt/equity was 44% versus 49% last year. Net debt/EBITDA was, as I said, then 1.4, in line with last year. And if you exclude earn-outs, they were at 1.2 compared to 1.3 last year.

And if you look at the financial net debt, which is the part of the debt that relates to borrowing that needs to be refinanced, that is historically low at 0.9. And in the quarter, we issued a new 5-year bond loan of in total SEK 1.3 billion at a margin of 1.13% against 3 months STIBOR, which I think shows our strong position in the credit markets.

So in conclusion, our financial position is very strong, creating a good room and opportunity for value-accretive acquisitions and also organic growth initiatives going forward.

So thanks from my side, and I leave over back to you, Bo.

Good. And we summarize the key takeaways. Continued organic order growth of plus 3% and stable organic sales, growth of plus 7% and plus 4%, respectively, if you adjust for currency movements and divestments. We had a strong gross margin in the quarter and the expenses are under control, which resulted in an improved underlying EBITA margin of 14.9%.

I also would like to comment -- I also would like to make one additional comment on the projects with the one-off effect we spoke about earlier. The projects are in the absolute final phases of completion. Based on the current information and analysis of the projects, all costs have now been accounted for in a prudent way. The 2 companies are independent from each other, but they have shared a couple of senior managers. There are also indications that they should have realized these deviations and accounted for them earlier. These persons have left the companies during last year. Again, this is an extraordinary situation, which would not be expected in the Indutrade group.

Going forward, the market uncertainty remains. However, a slightly larger order book, higher acquisition pace and lower references provide some comfort about the earnings trend. 13 companies were acquired in 2025, and all business areas operate independently with acquisition projects and with a strong focus on internal pipeline generation. This provides good conditions for a gradually increasing acquisition pace. We are now fully focused on delivering annual growth of at least 10% per year over a business cycle and a stable EBITA margin of at least 14%. We have made deliberate strategic investments in our platform. Now it's time to harvest.

By that, we close the presentation and open up for potential questions.

[Operator Instructions] The next question comes from Zino Engdalen Ricciuti from Handelsbanken.

Just quickly on the projects. The comments you made now, Bo, it sounds like it was maybe a bit related to these individuals. So my question is how you ensure that anything similar does not happen in the rest of the group, so to say?

Yes. I feel certain that this is non-reoccurring. I've been in this role now for almost 9 years and we have had nothing at all similar to this and, as far as I know, Indutrade has never reported anything like this before my time either. We obviously have internal control functions. We have Boards in all companies. We have our external auditors. We have business control functions on business area level, on group level. We have an internal bank. We have a lot of professional sort of control both processes and standards, which eventually will catch up with wrongdoings in different ways, which is also did this time.

But if you have persons who deliberately hide things and they are in responsible positions and they cooperate, it can take some time, which it did.

Very clear. And just lastly, is it then, I would say, the very extraordinary circumstance that you put it in the group items and not the business area?

Yes, exactly, they are reported -- the result effect of this is reported then on group items, and that's correct. But it impacts the gross margins since they are -- it's related to these projects.

Understood. And a question on the Industrial & Engineering, which saw a strong margin. I think you commented that it was from lower levels as well given the business environment they occurred [indiscernible], that they have the ability to deliver on this level going forward as well.

Generally, I'm quite optimistic that all business areas have opportunities to improve organically 2026 versus 2025. So even if there is not a dramatic business cycle improvement around the corner, there is slightly -- I would say, slightly better environment and more optimistic perspectives when we talk to our companies. So I expect a gradual improvement during the year. And we have now seen 2 quarters in a row with organic order intake improvements, so I think we are trending step-by-step in the right direction, and hopefully this will continue in 2026.

And just a last question for me that's M&A related. You previously made some comments about possibly looking into some larger acquisitions and when you maybe also more prioritize the organic growth possibilities of what you acquire. Relating to the average size of the companies acquired in '25, do you make any particular reflection about it?

I would say that they were generally smaller on average than we usually acquire, and it would perhaps be surprising if that would also happen in 2026. So I think it was not a common average size for -- in a full year perspective on Indutrade. Our primary focus is to buy companies around, I would say, EUR 15 million in size, and that will be the intention also going forward. But sometimes, we find companies which are a bit larger. And if we feel that they still are managed by good entrepreneurs who are engaged in their business in the same way as in our general size scope of companies, we are also interested in them.

If we are finding really much larger companies where the owner is not really too engaged and it's more like an externally recruited management team without large financial ownership in the companies, we are, I would say, less interested because that's not the typical type of individuals we would like to have engaged in the companies we buy. So that's a bit of a divide in terms of our interest. But -- so you will probably see mostly, hopefully, the EUR 15 million type of size, but sometimes a bit larger, and then it should be where management has been very engaged in the company also on the ownership side.

The next question comes from Carl Ragnerstam from Nordea.

It's Carl from Nordea. A couple of questions from my side. Looking into the organic pace, the sales pace, you grew orders 3% above sales organically. On the other hand, Q4 is a bit of a small order quarter, book-to-bill is still at 1. So could you help me a bit understand the backlog dynamics and how comfortable you are in the organic sales trending up here, I guess, from Q1 and onwards?

Quite confident that, that will happen. So there is a better order backlog, as you say yourself, and we see an organic momentum which is positive and has been positive for the autumn and fall here now. And I think the -- also governments in a lot of Western European countries are step-by-step increasing their infrastructure investments, defense investments. So it's not going to be a super significant step-up in Q1, but this trend -- I assume this trend will continue and at some point order intake will also be realized in sales. And yes, so I'm having an optimistic outlook for 2026 in that perspective.

That is very clear. And on the gross margin, looking at the underlying gross margin, I assume that it's around 36.5%. You mentioned divestitures, you mentioned acquisitions, you mentioned mix effect. So could you help me unpack a bit on an adjusted basis these levers? And I would also assume that Life Science was an important gross margin driver. You mentioned single-use coming back strongly. So how do you look at the sustainability of this quite good gross margin as you have on an adjusted basis in the quarter?

Do you want to start, Patrik, from your side, and then I can finalize with some comments...

Yes. Yes. I mean we don't have a sort of a full detailed bridge on that, but sort of the gross margin improvement is sort of driven by multiple factors, and you mentioned a few of them. And we are –- I mean, our companies -- as we've talked about for a long time, our companies are good with pricing in general. So I think that's sort of the starting point. But then you have on top of that, I think you have favorable mix effects. And I think Life Science is a good example with the single-use area growing with good margins, and also many of our MedTech companies have good margins. So that's also increasing the underlying margin. And then actually currency then, because we have a lot of trading companies in Sweden benefiting from the stronger SEK.

So those are the drivers. I can't give you sort of a breakup of that. Is it sustainable? I think it is. And also, you mentioned also acquisitions and divestments, those impacting. So I think it is sustainable. But of course, it will be difficult sort of to push it dramatically more up, I would say.

Yes, I agree with Patrik. And I think that's been one of the key trademarks of Indutrade for a very, very long time that we have had stable gross margins. And I've spoken about this in a lot of other calls also that the DNA of an Indutrade Managing Director is really to protect gross margin, and I think they do that in a really good way.

The risk factor at some point is maybe the currency. Otherwise, I think we are handling things really well. But I think we will handle that also well. But if that swings against us in this perspective with several percentage points, that will be maybe demanding in some situations. But no, I think this will continue at a good and stable level.

And if I sort of -- only one additional input. I think the currency is, of course, one if you talk about risks in the gross margin. Maybe also there is still a dampened -- we don't have a super strong business cycle and it's a little sort of dampened market still and fewer larger deals projects in the market than you would see in a higher growth environment. And when you have more daily business rather than bigger deals projects, the margins are slightly better. So good business cycle with more projects is maybe slightly dampening gross margins.

Very clear. Coming back to SG&A, you touched upon it a bit. It seems to have flattened out quite nicely. So if organic growth comes back, as you alluded to before here, how much could you hold back on cost? Is it more low performers you're working with perhaps fully offsetting the needs of hiring in some other growing companies?

Yes. We have worked with SG&A and expenses quite actively, as you know, over the last 2 years, and we have had our ups and downs. And the culture within the group is the glass is half full and they are opportunity driven. I think we collectively have learned to watch certain parameters, and, not least, headcount I think is even higher on the agenda than it perhaps was before. So I think there's going to be a resistance in the system somehow to add headcount, which is going to be more obvious now than perhaps it was before. So some learnings from what we have experienced and some benefits from that going forward. So there, we will keep track on cost versus sales ratios and things like that in a good way.

Very good. And the final very quick one, sorry for that. Organic growth -- sales growth minus 1% in Life Science. What is it adjusted for the Novo Nordisk comps roughly?

In the quarter, I think, roughly 3% almost, I think, or something.

Yes, almost. I think you have to correct it with around 3%, and so plus 2%.

The next question comes from Opeyemi Otaniyi from GS.

Do you mind just talking through sort of outlook for margins from here? Performance in Q4 was quite strong. And so do you mind just talking through what's driving that? But also are you done with the cost, are you done here today, as we've talked through for most of last year?

I must apologize, but I didn't exactly hear your question. Which business area did you refer to?

No, sorry, it was just on margin for group. So Q4 was quite strong. And so should we extrapolate that as we look forward into 2026? And so were there any key things driving margin? Was it sort of just the strong gross margin? Or was it the M&A accretion as well?

Yes. I think you have picked it up yourself in a good way in that sense. It was a good gross margin and M&A is also accretive and costs are under control. So I would say that all those factors have implications on that, obviously.

And if you -- I mean, if you look ahead into quarter 1, I think in general you have a seasonality during the year, which is good to understand that quarter 1 is normally slightly weaker. And then margin normally comes back a bit in quarter 2 and is the strongest in quarter 3. And then quarter 4 is maybe sort of an average in line with quarter 2. So that's the normal seasonality. Then you could, of course, have things affecting that. But you start there, I think, then. So normally slightly lower in quarter 1 than quarter 4.

Then, of course, it depends on -- organic development is sort of one key driver. And here, we have a slightly higher backlog supporting us going into the year, but still no sort of super strong cycle yet. So -- but again, slightly higher backlog.

Great. Understood. And maybe just switching gears and talking about M&A. Could you give any updates on the phasing of deal activity through the year? So is it kind of coming down from the pace you saw in Q3 and Q4? And could you also just give an update on divestment activity? I know it's a few minor transactions, maybe largely related to construction, but any updates on divestments would be appreciated.

Yes. If you look at Q3, Q4, we are basically adding around SEK 0.5 billion or EUR 50 million on sales values in those quarters and approximately 5 acquisitions per quarter there. And I definitely think that pace will continue in Q1 and onwards in 2026, and medium term will even increase versus this. But short term, that this pace will continue into the next coming quarters.

Divestments, should not really expect any divestments. It can happen. It probably will happen, but it's not very common. And I think we have done those we wanted to do relating to this business cycle situation and so on. So not a very active divestment sort of agenda going forward.

Great. And maybe just lastly, Technology & Systems Solutions organic growth there minus 6%. Do you mind just talking to the drivers there? Was that related to the situation in those 2 businesses you've talked about? Or were there other trends driving that?

Yes. So if you exclude that U.K. situation, they were at minus 2%. And they -- that's our most international business area. So they have sales into North America and, not least, the U.S., and also to China, Asia. And there has been some weaker sales short term into the U.S. linked to the tariff situation. There has also been some impact in China. They have had more of a buy local policy since a couple of years, as you probably know. But I think most of our companies have realigned, yes, replaced some of that in -- and found other geographies and opportunities. So I think step-by-step, also TSS will improve in terms of both order intake and sales, and that will happen during 2026.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Well, then we thank you for participating and asking good questions and wish you a good continued day.

Okay, everyone. Once again, a warm welcome. May I have your attention? Can you hear me? Hello? Hello?

Once again, a warm welcome to Indutrade's Capital Markets Day for 2025. I hope that you enjoyed the lunch and had many fruitful discussions around your table. I also know that today was quite crowded in terms of capital markets events. So we are, of course, very glad that you were able to attend ours.

My name is Marten Svanberg. I am the Head of Investor Relations and External Communications at Indutrade. And hopefully, we also have many visitors joining online. So a warm welcome to all of you as well. Looking at today's agenda, we will start off by listening to our President and CEO, Bo Annvik, who will talk more about the strategic direction for the group. And he will then be followed by our CFO, Patrik Johnson, who will share some more details about the financials. And after these 2 sessions, we will have a Q&A session. So remember to pencil down your questions, and we will take them after both Bo and Patrik has presented. And for you watching online, if you have, you can find at the right hand side of your screen, there is a button there that says Ask a question, you can click on that and write-down your questions and they will become visible to me here at the stage.

Yes. And after the Q&A session then, we will have a short break of about 20 minutes. And there will be coffee served at the back of the premises here. And when we return, we will listen to our Head of Acquisitions, Gustav Ruda, and he will also then be joined by Andrea Imbriani, who works with acquisitions in Italy; and Richard Denlin, who is a business segment leader. We will also hear from our business area Manager, Joakim Skantze, who heads up the Life Science business area, and he will talk more about the Life Science business area, but maybe more importantly, how it is to operate our business area within Indutrade. And then the last agenda point is a panel discussion, and I will present that more in detail when we arrive to that point.

So yes, I think we're ready to kick off, and I welcome our President and CEO, Bo Annvik, up to the stage.

Thank you, Marten. Great to see all of you here, a full room with interest in Indutrade. We appreciate that very much. And also you online, very welcome to the presentations. We feel that we have a really good story. We feel that we have a compelling story in terms of Indutrade's way forward, and that's what we will share with you today, both myself and also the colleagues that Marten mentioned.

We had our last Capital Markets Day in 2022 and one before that in 2018. And in conjunction with both those conferences, we have launched new updated group financial targets. In 2018, we changed our EBITA margin target from 10% to 12%. And in 2022, we changed from 12% to 14%. We are, to some extent, breaking that tradition today. We are not launching new targets. We will reconfirm the targets we already have. We feel that they are relevant for our way forward. And I just want to make clear for everyone in the room and also in the webcast that our priority is profit growth -- sustainable profit growth going forward. That's fundamentally what really creates value. And we are really geared to drive that forward, and we feel that we can do that with the financial targets we already have.

So with that said, we get started. And the key to all companies is people. People really make the difference. And I'm very fortunate to have a great management team to work alongside me, and they are a true asset. We have 5 business area presidents, and you see them on top of the slide here. Per-Olow has been with Indutrade 30 years, vast experience. We have Joakim, he's been with Indutrade approximately 10 years, also very experienced. Juha Kujala around 20 years; Göte Mattsson, 25 years. So those 4 collectively, they really know what Indutrade all is about.

Then we have a newcomer in, Peter Laveson. We were fortunate enough to be able to attract him, recruit him earlier this year. Peter has very relevant experience in terms of being a part of Indutrade. He has been founding and leading and building a mini Indutrade called Svik Industries, and he's also been the CEO of a public company. He's been an Investment Director. So he really needs what -- or he really knows what this role is all about. Perhaps most important, Peter, is -- you started out your life in a farming family and farmers really know what entrepreneurship is all about and solving problems with little sort of help from others. So great to have Peter also on board.

Then we have Patrick and Ã…sa, they came on board shortly after myself. And last but not least, Gustav, who has been with Indutrade running acquisitions now. You've been with the group for more than 10 years, I think, as well. So great team. Personally, I've been with the group for 8.5 years, so quite some time as well. And I'm only the third CEO since Indutrade started in 1978. So that also says something about the group's stability.

We will have an additional change next year. I said that Dr. Per-Olow had been with the group for 30 years. He's approaching retirement age, and we started a recruitment process. We are really keen to try to promote and recruit internally. But it's a big step to go from running an Indutrade company with maybe SEK 100 million, SEK 200 million in sales to running a business area of SEK 8 billion international, you need acquisition experience and so on and so forth. So I think we are grooming these people step by step, not least with the business segment leader roles now, which I will come back to.

But this time, we finally chose an external person again, and it's Per Lidström. Per is sitting here in the middle. You can stand up. Per is now the CEO of Cibes Lift Group, an elevator company, and he has been instrumental in building the group, leading the group, driving organic growth, innovation, but also doing a lot of complementary acquisitions into the group. So he also understands the model we work with. Appreciate decentralization and giving people autonomy. And before Per went into Cibes, you were with the Sandvik Group in different senior positions and have great industrial experience. So very glad to welcome Per eventually in the beginning of second quarter next year.

We will mostly speak about the future, but let's start with the history. I joined Indutrade in 2017. At that time, we had sales of SEK 15 billion. Our EBITA margin was 10.9% that year. And we have step-by-step delivered, I would say, on profit growth in a stable and strong way. You can see on the slide here that our sales is now above SEK 32 billion. Our profit margin for the last 5 years in average, 14.6%. The last 5 years, we have had organic growth of 5%, and we have acquired approximately 70 companies. And if we look at the last 5 years, sales growth CAGR of 12% and EBITA of 15%.

So I think we have a good track record. Both myself and the team around me, we know how to deliver profit growth. We have proven that. We have doubled the size of Indutrade, and that's what we are about to do once again. But if we look short term, we have a more sort of problematic situation. We are not fully reaching our financial targets. If we start with EBITA, we are doing quite okay. In 2024, we came in at 14.4%. Year-to-date, Q3 this year, we are at 14%. So we are basically ballpark around our target level, but we are not really delivering profit growth in absolute terms. 2024 was a bit flat, and this year is also a bit flat in that perspective. So that's what we need to focus on and come back to deliver profit growth.

What has happened short term? We all know that we are in a more recessionary business situation. So to grow organically is more difficult for our companies. So it's been a more flat organic development recently. On top of that, you all know that the geopolitical situation is disturbing around the world. And then on top of that, the different sort of trade barriers implemented in the U.S. came about earlier this year. And that led us to basically think a little bit deeper in terms of acquisitions. We wanted to deliberately prolong some acquisition processes in order to really make sure that we bought the profit streams we intended to buy or thought we were buying. We wanted to go a bit deeper in the order books and understanding the company situation a bit better to be completely sure that these acquisitions were accretive when they were joining our group, and it was at the level we are value them for and paying for.

Now recently, in the third quarter, you have seen that we have pushed the acquisition button and started to deliver on them. It's a bit more stable is perhaps the wrong word, but better visibility, I think, in terms of the trade situation. So we have felt certain that those we have decided to do, we are comfortable that they will deliver in a good way. And we will continue to deliver acquisitions also in quarter 4 now before year-end. So I think we will end fairly close to where we were last year. So a recessionary situation, business climate. We have been a bit hesitant in terms of making acquisitions in order to be sure that we buy accretive businesses.

Thirdly, we have also pruned, I think, handful of companies in the last 2 years. And by that, I mean that we had a portfolio where some businesses were underperforming. We obviously try to turn them around. We work with the leadership. We work with supporting from the Board. We take in people we need to support them in different ways. But at some point, you need to realize that Indutrade is not the right owner, and we have had a couple of situations like that. So our model is buying companies, not divesting, but we have divested a few the last 1.5 years now, and that's obviously taking down our profit growth.

Fourthly, we went into a new group structure in the beginning of 2024, and we will -- and predominantly myself will present that in more detail later on in the presentation here. And that's building a better platform. But when you go from one organization to a different one, it creates a little bit of turmoil. Even if we wanted to do that very evolutionary, quite slow implementation. We didn't take out the chairperson sort of quickly and moved in a new one. We let the current chairpersons remain for some quarters and slowly introduced new people into the Board and had a gradual change. But even so, we had a lot of new companies to the business area heads. They were familiarizing themselves with these companies, traveled around a bit. And -- perhaps that took some time from active acquisition work and active other type of business development work for some time.

Difficult to put sort of a number on that, but it obviously had a little bit of impact. So I would say that these 4 reasons are the main reasons for why we haven't really delivered strong profit growth during 2024 and in the first quarters here of 2025. But we will definitely do that going forward.

Indutrade's business, has some fundamental characteristics, which are important to understand and which are important for us in order to be successful. The first is to have profitable companies and that these companies generate cash flows. And you can see that on these blue bars in this diagram. That's the cash flow we have delivered in the years on the slide there. Then it's obviously super important to use that cash flow wisely and acquire good, profitable, stable companies. And I think we have done that in a good way. It's a risk to acquire a company and sometimes you go wrong. With our collective experience, we seldom go wrong, but we have gone wrong also in the last couple of years sometimes.

And the green bars there are the money we have put into acquisition work. And then we have dividends. We are a public company. We have a dividend policy. We want to grow dividends year-over-year in absolute terms, and we have also done that. And this needs to be managed in a good way in terms of the balance sheet and have a healthy risk profile. And you see the blue curve there, which is our EBITDA -- net debt to equity or EBITDA to -- net debt-to-EBITDA ratio, which is actually slightly going down over time. So I think we are managing the model well year-over-year in a good way.

Acquisitions has been a key part of Indutrade since we started, still is, will be also going forward. And I think we have strengthened our capability over the years. You can express acquisition capabilities in different ways. A quite simple way to do it is to see how many acquisitions do we make per year, and that's what this graph is demonstrating. You see the blue bars, and that's the number of acquisitions in any given year here. And we started out some years ago with around 10 per year. We worked our way up to 12 and the recent years, we more have been on 15, even above 15 per year. So I think step by step, we have increased our capability in a good way.

2011 stands out as a very high bar there, as you can see, that year, we actually bought a holding of around 5 companies in Switzerland. So we met an entrepreneurial family in Switzerland. They had 5 Indutrade-like companies, which we appreciated, and we were able to acquire them at the same time. So that's why it was standing out really high in 2011. But otherwise, it's step-by-step an increase in terms of capability.

And as I said, this year, we started out slow. We have increased in the third quarter, and we will also finish off in a good way here in quarter 4, and Gustav will speak more about that later on.

The group has also evolved in other perspectives. We predominantly focus on 2 types of categories when we buy companies. The core is basically technical trading companies, but we also buy what we call product companies with proprietary products, own development, own manufacturing. And these 2 types of companies have different sort of pros and cons. The technical trading companies, they are people light, capital light. They might be a little bit hindrant in terms of growing geographically. They are mostly focused on a local market or a few local markets. And the theoretical EBITA margin potential might be slightly lower than a company with a proprietary product.

But those companies, the proprietary product companies, they are a bit more heavy in terms of people, a bit more heavy in terms of capital, but they can grow basically globally as they desire and as they choose. And they theoretically might have a bigger potential for EBITA profit margin. But all in all, they basically deliver the same return on capital. So both types of companies are good to have, and we appreciate both sort of categories, and we will continue to invest in both categories. Right now, it's almost 60% technical trading companies and 40% proprietary. And I think that's a balance which will also hold going forward.

We have also internationalized our sales. We started out in Sweden, Scandinavia, the Nordics. We grow early on into the Netherlands, into the U.K. and then southwards down in Europe. And Sweden was a bit more than 30% of our sales. Now it's more 20%. And the sort of outside Nordic part of the cake has grown. But we have grown. We have made acquisitions in Sweden. We have been very successful in Denmark. We have grown in Norway, also in Finland. So you will see Indutrade making acquisitions in all of these countries going forward. The pond is full of fish in all these markets to make some sort of analogy. So there is no shortage of potential companies for us to buy.

We are also less dependent on large companies. So 10 years ago, 30% was what our 10 largest companies represented. And now it's, as you see on the Slide 19. So we derisk Indutrade as we become bigger and grow geographically and grow into different segments.

When I came to Indutrade 8.5 years ago, we had 6 business areas, and it was a mix of product-oriented business areas and some geographic business areas. fairly soon thereafter when we felt that we basically had to broaden the number of business areas because we had too many companies per business area. So we made a reorganization and 1 of the 6 business areas had a substructure of geographies. So we took away the business area and basically promoted those geographies into group management. And we got U.K., we got Benelux and we got the DACH business area up into the group structure. So there was still then a mix of geographic business areas and some product business areas.

And that structure has worked well, I would say. We have delivered on our targets with that structure. But we have grown and scalability is something you need to work with as a management team when you work with a growth company. And in the later part of 2022, 2023, we felt that we had to do something. The span of control became too big. You have 8 business areas and 200 companies, means approximately 25 companies per business area. And our model, as most of you know, is that each company has a Board, each company has a Chairperson. So it meant that the business area had -- was almost chairperson in 20, 25 companies, and that's impossible to do that job in a professional way.

So those business area heads, they started to ask managing directors who were experienced to be on board to also chair companies. But we came to a situation where both span of control was an issue, and we also wanted to fuel growth in a better way, increase our acquisition growth and also try to increase the organic capability. And we started to discuss how can we organize ourselves in a better way. There is no right or wrong how you organize a company, obviously. You just need to do it in an effective way, efficient way.

And we felt that let's do it more outside in, in a market sector perspective. And we simulated different ways and set ourselves up for 5 sector-based business areas. And I will go through them one by one very quickly, but they are implicitly quite easy to understand what they are all about.

Another problem we have in the past was that it was not that easy to understand what Indutrade was an organization like Indutrade U.K., what is that? Now we can talk about life science or we can talk about industrial and engineering or we can call -- or we can talk about process, energy and water. It's quite easy to understand what Indutrade is all about now for investors like you, but also for customers and suppliers who are interested in being partners to our companies. So we set out to form these 5 business areas. But more importantly, we needed and wanted to establish a mid-layer between the business area and the companies. So we formed something called business segments.

We now have 30-plus business segment, and they are led by business segment leaders, experienced Indutrade persons. When we appointed these business segment leaders, their average experience with Indutrade was 18 years. So they know our values, principle, our culture, our way of working, our models in a really good way.

At first, we didn't appoint 30 business segment leaders. We have also done that in an evolutionary way. So some business segment leaders held their MD role, Managing Director role in addition to being a segment leader, some became full-time business segment leaders. And we have tried to sort of take it step by step and made the relevant moves when it was time to do them.

So we have 30 segments and 220 some companies, which means that it's approximately 7 companies per segment. That means that there is a little bit slack in the system, you can say. A business segment leader should be able to manage 10, maybe 15 companies in their segments. It's intended that there should be a little bit slack, if I call it so, in order for them to actively work with acquisitions. And that's a key sort of dimension into this organizational change, which I will build on in a bit.

Brief presentations on the business areas. So we start with Industrial and Engineering. You understand what that's all about. Industrial components, automation, transmission type of systems equipment. It can be chemical products after -- automotive aftermarket products and things like that. This is our largest business area, around SEK 8 billion in size, 65 companies, 9 segments. And you see that they have had a nice growth, both in terms of top line and EBITA margin development.

Infrastructure and Construction, also easy to relate to products going into different types of infrastructure projects and construction companies being customers. SEK 5 billion, so slightly smaller, but still a big business area, 8 segments, 41 companies. Then we have Life Science, a deliberate acquisition-focused areas, something we decided to build. We had a smaller core, and we decided to really look for life science companies some years ago and step-by-step, this business area has been built. Almost the same size as Industrial Engineering, SEK 7.5 billion last year, even actually bigger in terms of absolute profit, 35 companies, 7 segments. And you will hear more about this business area when Joakim presents it.

Process Energy & Water, it also, I think, easy to understand products going into the process industry, the energy sector and water, wastewater sectors. Also a large business area, almost SEK 8 billion last year, 44 companies. And we have a strong position here. Valves is actually the biggest product group of all product groups within Indutrade. We also have a lot of instrumentation and other types of solutions offered in this area.

And last but not least, Technology and System Solutions. It's perhaps our technically most advanced business area, more electronics, more digitalization, a lot of sensors, measurement type of products. Also our most international business area. Our companies are selling in North America. Our companies are selling in Asia, having subsidiaries in Asia and also a high profit margin and growth-oriented area.

So we feel that we have really built a strong base for Indutrade going forward. It's a new structure, deliberate investment for better acquisition growth and also better organic capability with support from these segment leaders into our companies going forward.

So by the foundation we already have, we have a strong culture. We have values in terms of being entrepreneurial, having this decentralized structure, we are long-term oriented and people-centric. And this we have nurtured for 47 years. And on top of this now, we have invested in a new platform, in a new organization with some extra management resource, which we really haven't had before. So now we are set to double the size of Indutrade again.

The baseline for Indutrade is our companies, and it's really built on our individual managing directors. In a decentralized organization, it's very, very much about people, having the right people in the right roles. And when we buy a company, our model is really built on that we keep the owner, we keep the Managing Director because we only buy successful companies. They have done something successful with their companies. So let's continue to build on them.

Give them autonomy, let them continue to feel that it's their company. It's very little sort of change to the employees, to the company after we have bought the company. They have a lot of autonomy. They run their P&L, their balance sheet, their product offering and so on and so forth. To support them, we dedicate a Board, we dedicated Chairperson, Board members, knowledgeable persons who can support them. We ask the Managing Director, what type of Board capabilities do you want? And we try to build the Board together with the Managing Director to make the company as successful as possible.

You should take the opportunity to talk to our Managing Directors here today. I think they will say that before Indutrade, life was quite lonely. Very few of them have professional boards, engaged chairpersons, helping Board members. They are quite lonely. They have an auditor, they go to the bank, but very little sort of professional Board support. They get that when they get into Indutrade in a strong way. They also get colleagues in their segment, maybe 7, 8, 10 colleagues. They can discuss with, compare with, benchmark with, learn from and they have 220 other colleagues who they can ask for in terms of whatever question they might have.

So it's very helpful for them to have an engaged supportive Board and this knowledge sharing in their segment, broadly in the company in terms of basically all situation. If you are to build a new factory, there are other companies who have built new factories in Indutrade. If you should implement a new ERP system, we have a lot of companies who have done that. So the list is long, and they can really rely on the knowledge sharing in a good way.

And we have also built, you can call it an academy over the years. We have tailor-made development programs for Indutrade MDs, for Indutrade management team members. We have functional trainings linked to value-based pricing or capital efficiency or purchasing or whatever it might be that you need as an Indutrade company. There is a smug board that you can take part of. It's on a voluntary basis, very little is mandatory top-down in Indutrade. You need to report on a quarterly -- on a monthly basis. You obviously need to live up to all kinds of regulations. But otherwise, you have a lot of autonomy to run your company and you choose what you engage in, in the Indutrade system. So that's how it is briefly to run an Indutrade company, and that will be further developed later on today as well.

In terms of acquisition strategy, we basically build on the same base. It's an opportunistic approach. We don't sort of deliberately say that it's only in these 3 areas or 4 areas or 5 areas we're going to buy companies going forward. We are open-minded. We look for really great companies with great leaders to join the Indutrade Group. So we look for opportunities broadly.

We have strengthened our acquisition specialist resources. We have a team here in Stockholm, but we now have specialists in the business areas. We have some specialists in the main countries, and you will hear from Andrea later on what it is about to sort of have that role within Indutrade.

We also have these business segment leaders being much more active in acquisition work, proactive internal lead generation going forward. If we look back, we have mostly been, I would say, built on that brokers come with potential opportunities to us, and we choose between them and we buy good companies. The internal lead generation has also been there. We have always kept our eyes open, looked for opportunities, but perhaps not worked in a really structured way with internal lead generation. Now we are building that structure with the business segment leaders, and I will come back to that, and you will hear from some of them also going forward. So that's a key asset we really haven't had before in the same way.

So strengthened our acquisition resources in several ways, and we continue to be prudent in terms of pricing. We -- our model is not working if we pay too much. We have a group financial target to deliver a return on capital employed of 20%. That basically means that you can only buy on a valuation 5x EBIT or EBITDA. And we buy at 6, 7-ish, which means that we buy a little bit more expensive than the return target sort of says. So we need our companies to grow into their valuation. But it's also a benefit to have companies which were bought earlier and already have grown into their valuation. So we have a model which works, but we need to stay valuation-wise on a prudent basis, more or less where we are today.

Going into the business segment role a little bit more then and reiterate a little bit what I said. Organically, I think it's a key strength for our company to have a really engaged dedicated chairperson. And that Chairperson knows the industry, the sector the company works with. And we also build the Board with relevant capabilities, experiences to the specific company. So the interplay between the Managing Director and the Chairperson and the Board is very important. Mostly the Board is there to support the Managing Director. And the system basically works for that -- it's the Managing Director who asks for, I would say, dialogue meetings, communications. We don't want chairpersons who take time from the Managing Director if they don't really have the interest. It needs to be a pull system from the Managing Director to the Board.

But the Board also has a role to constructively challenge the Managing Director, obviously. That's also important. So there is enough ambition, enough drive. So there is a really meaningful value-creating dialogue between those 2 different roles. And I think we are mastering that in a really good way.

And then this segment leader is sometimes inviting to segment meetings, gathering the 7, 8, 9, 10 companies in the segment. It's not mandatory. You can join if you want to. And there, you decide on an agenda. It's about learning, knowledge sharing. And most companies join, I would say, because it's relevant. If you talk about the specific segment, take the process industry, Scandinavia, for example, they share customers, they share suppliers, they share technology trends. So it's relevant to understand how -- what type of sort of perspective do you have on the next 6 months or the next 2 years or next 5 years or whatever it might be. It's a relevant meeting to be part of, but you choose if you want to be part of it. So organically, I think a step-up in terms of benefit for the companies.

If we then look at the acquisition work where the segment leader is involved, there is an example of the slide here where there is 6 companies in the segment. The companies are located in 3 markets, the dark blue markets. I think in this case, it's Sweden and Denmark and the Netherlands. That means this particular segment have no company in 9, 10 large European countries. So the segment leaders are now asked to build what we call the white spot analysis, identify what potential companies you could acquire in the light blue markets. You can do that desktop-wise. You can do it by networking. You can quite easily now with AI and all other types of tools, identify what type of companies could you find with sales between EUR 10 million and EUR 30 million, profitable, strong in their niche.

Let's say, hypothetically, it's 5 companies in these light blue markets. It means it's 50 companies in this segment that we potentially can buy. When we have that map, we can start to contact these companies, build relations. You can do that via suppliers, via customers via your network. And eventually, you put yourself in pole position for acquiring that company when the time is right for that. This way, we haven't really worked before. It's a big asset for us to be able to work with internal lead generation in this structured way.

Again, a theoretical example, 50 companies to potentially buy in this segment. We have 30 segments, 30 times 50, 1,500 companies which we potentially can start to have a dialogue with. Big, big asset for us. We have a history of right now buying around 15 companies per year. If you think that we have 30 segments, I think it's reasonable to say that someone who has worked with Indutrade for 18 years with a business of almost SEK 1 billion should be able to buy company per year at some point. Then we go from 15 to 30 companies acquisition-wise.

It's a big potential step up in terms of acquisitions by the platform we have built now. It's not going to happen tomorrow, not next year. But medium, long term, this is definitely going to generate acquisition growth for us. I'll give you a real example. 1994, we acquired a company called Alnab. There was a very driven Managing Director in that company. His name is Peter Eriksson. He's in the room here. You can stand up, Peter. Peter is a former Business Area Head and also currently an adviser to myself and the management team.

Peter started to work with acquisition growth, and he used -- he basically built a list of companies he wanted to buy. And eventually, he bought 5 companies from that list. One of those 5 generated 2 more companies. Another of those 5 generated another 3 companies, 1/3 of those 5 generated 1 company and that company in itself generated 1 company.

And then he spoke to his suppliers, asked for advice, what companies could we potentially buy, generated 8 companies, 1 of those 8 generated another company and another of those 8 generated 2 companies. And then he continued using customers, networking and so on and so forth, buying 30 companies by being proactive in his acquisition work, a bit in the same way as we want the segment leaders to do also going forward.

So fantastic experience by Peter, very difficult to maybe reach 30 in this time frame, but you can maybe reach 5 and then 10. So it's possible to work this way. I think we have demonstrated it in -- within the group.

It's important for us to be lean. We are not building a lot of staff. We have an head office of 25 persons. It's been quite small since I joined. It's increased a little bit. The big increase has been in the business area, business segment structure, where it says 55 on the slide there. So it's basically the 5 business areas, some support staff and the business segment leaders. All in all, 80 persons in relation to almost 10,000 employees. So you can say employees who are not operationally involved in our companies is less than 1.8%. So we are very lean. We will stay lean, but we have made a deliberate investment in our platform to grow going forward.

Sustainability. Our approach to sustainability has been to drive business, and we have not done it to sort of save the world. Our framework is basically built on people, operations and product and customers, different ways to gauge that we have engaged people, which you obviously see that we have. Operations, we want to be efficient, also a low CO2 sort of footprint. And in terms of customers, we want to deliver value, and we also want our products to have a low footprint in terms of environmental impact.

So our companies appreciate our framework. They use it in their business strategies, and they use the framework towards their customers and this places them in pole position versus their competitors. Very few SEK 100 million companies have a strong sustainability sort of framework, business oriented as we do. So I think it's appreciated by both our customers and our companies.

Ending with our financial targets. As I said, we are not changing them. We are reconfirming them. We think they are relevant. minimum 10% growth, EBITA margin of at least 14%, ROCE of at least 20%, and then we have our financial stability objective and also our dividend objective. They are all relevant, and they all basically drive towards double the size of Indutrade top line, bottom line in a good way. So we didn't really see the need to update them right now. But we have a continuous improvement philosophy within the group. So at some point, I'm sure we will come back and increase change our financial targets, but it's not happening today.

It's also important to state that these are the group financial targets. Every individual company have their individual targets, making them relevant. But the key for them is to generate profit growth. Their short-term bonus is basically to a very large majority based on profit growth. The same with group management, the same with myself, my bonus is based on generating profit growth to a very large extent. So that's what we are geared to going forward.

So to summarize, we've been in business 47 years. We have a very strong culture. We have very strong values and principles. This is something to build on, and we are nurturing this going forward. We have made a deliberate investment in a new organization with some additional resources to be deployed in organic growth help and not least in acquisition pipeline growth going forward. We definitely think this will also generate organic growth, and we are always finding ways to continuously improve how to make sustainable profitable growth going forward.

So by that, I end my presentation, and we will open up for questions, but we will do that after the next speaker. So I welcome Patrik Johnson, our CFO, to the stage.

Okay. So great to be here. Good to see you, everyone. My name is Patrik Johnson, and I've been in the Group 7.5 years. So I've been -- I came on board slightly after Bo. And I will start with only one slide, one short comment on the short term, and then I will stay more time on the more long term and build on a few of the things that Bo spoke about, the fundamental elements in our financial model that I think is really important for you to understand.

Yes. So let's jump ahead. So short term then, as many of you know and also Bo commented on, our growth development has not been very strong than the last year basically, and it has been weaker than we wanted to be. And the main reason there are -- both spoke about this, but one major driver of this is, of course, the generally weaker market. And on the back of the weaker growth development, we also see then slightly weaker profit development.

But I think as you could see them from our latest quarterly report, I think the short-term trends then point in the right direction now, definitely. Book-to-bill, 102 then year-to-date. That's a positive development. Quarter 3 organic order intake was up 3%. And the majority of our companies, more than 50% of our companies actually show an organic growth increase in the quarter. So I think it points in the right direction, also then a strong gross margin. We've seen that for several quarters. And I think quarter 3 actually was the strongest gross margin ever for quarter 3.

And the cost side, it's definitely under control. That's my message. And if you look at the A&S cost in relation to sales, it's going sequentially down even though sales is still dampened. So I think that's definitely under control.

So short term in the right direction. So our focus is now very much as we said, to get the growth momentum going.

Yes. And so let's leave the short term and move on to a little bit more long-term elements in our financial model. And the first area I want to touch with is how we define and work with what I call the value creation, long-term value creation. And our definition of that is to grow with stable and high returns. And as Bo talked about, the growth has been very strong over many years. And as you can see from this slide, we've managed to deliver that with also very high returns over many years at or slightly above or maybe some years slightly lower than the 20%. And the decline you see in the last couple of years, it's back to the reasons Bo talked about, mostly the slightly weaker market. I would say the fundamental model still works.

And to continue to deliver high stable returns going forward, there are a few things that we need to work very consistent and disciplined with. Smart capital allocation, and I will touch upon these areas in the coming slides, some more. Smart capital allocation, we need also to complement the acquisition growth with good organic growth. That's super important for us. Prudent acquisition pricing is also critical for us and also to get some kind of operational return on the organic growth, it's also important. So all these things are critical.

So let's dig a little bit further into these then. And start with acquisition pricing, very important. And we talk in this area often about multiples, which is then the price -- acquisition price in relation to the EBITDA or the profit in the company that we buy. And Gustav will talk some more about this later on. But I state here that we are really disciplined and prudent on pricing. And if you -- I think this graph illustrates that from 2 perspectives. And the orange yellow line is the pre-calculated EV in relation to the acquired EBITDA then.

So this is an internal measurement. So it's not maybe easy for you as externals to follow and monitor that. But it has been very stable. This graph is for 7, 8 years, and it has been very stable on this 6 to 7x EBITDA, as Bo mentioned. But what you can calculate and follow based on data in our quarterly and annual report. That's, however, more a rough post acquisition multiple, the first year after the acquisition.

And how do you do that then? Well, you take the price, which we have available in the total price, we have that available in our quarterly reports and you deduct the earn-outs, you deduct potential acquired cash. And then you also need to -- when you look at the EBITDA, take away transaction cost. So then you get a rough, I would say, post-acquisition multiple, the first year after acquisition. And then you get -- you arrive at these blue bars. Those are sort of accurate rate from the quarter reports. And a bit more volatile, as you can see, but it's also so that sometimes an acquisition overdeliver, delivers fantastically already the first year. And sometimes it's -- maybe they deviate slightly negative. And you have a couple of examples of that. 2021, we had a couple of companies with a very strong pace already direct left at the acquisition and '22, you have deviation on the other direction then.

But all in all, I think both these graphs show clearly that we are very prudent and disciplined on pricing, especially if you exclude these outliers, then it's -- they are very similar, the pre-calculated and the post-acquisition multiples.

Yes. So that's the first area, super important, acquisition pricing. Then I move over to the next area, which is what we focus on when it comes to company performance. Within Indutrade, there is a very strong profit culture among the MDs and all companies. And this is, of course, super good and something we don't want to change that we want to keep. But the last years, we have talked more and more also about capital. And from an operational company perspective, then it's a lot about the working capital.

And for us, inventory is maybe the most important thing, but also receivables and payables and customer advances. And then also machine and equipment, especially in the companies we have that are producing. So all this is we think is super important when we talk about return and value creation. And in Indutrade, we have a measurement since some -- many years back, but I think we put extra emphasis on it the last few years, ROWC. And we use this widely in the group, I would say, and it's very important for us.

And if we take it one step further and look on the development of this, I think we have succeeded in a good way to increase the awareness and the focus, attention to capital aspect during the last 5, 7 years. And the ROWC has actually taken a good step, 5, 10 percentage points as much as that, which is good. And I think partly comes from the increased focus in this area. We've pushed it very broadly, I would say. In all the internal follow-up, the standard reports we have in our common BI systems, we -- in the benchmark, which many of you that have followed us for a long time, they know we have a bit of benchmark -- internal benchmark competition between the companies.

We've added more capital dimension into that benchmark. It's -- we have a lot of training programs, both on the finance side, but also general training programs where capital aspects is growing in importance. STI is, as Bo said, mostly focused on profit improvement, but we have also done since a few years back, also capital dimension now. When we look at new acquisitions, we have -- Indutrade has always looked on the capital aspect, but I think we push it slightly more now. I don't think that's very -- I see Gustav nodding here. So I think that's super important to look also on the return aspects and the capital aspects.

So next area, which I think is super important and for -- as an element in our financial model that's the continuous improvement mindset. I think Bo also talked about that a little bit. And I repeat a little bit here, we pay then around 6 to 7x EBITDA, and that means that we start off then with a return on capital employed at maybe 14% to 16% for a newly acquired company. And that's not enough then if you want to deliver our 20%.

So from this point on, every company needs to have an ambition to grow into their valuation, you could say. So that's why it's super important to focus on organic growth, on organic margin improvement, organic capital improvements on all levels, company, segment, business area and also on group level. So key for us. And we do this in various ways. Most importantly, of course, in individual company boards, setting the right type of targets between the Board and the MD, ambitious targets.

We focus mostly on year-over-year improvement, deemphasize the budget. Budget is not an unimportant process, but I think it's most important to deliver continuous improvement versus the history and embedded in the incentives and embedded in the benchmark also this area with continuous improvement. So we work with this broadly to get a bit -- to get a broad mindset on this continuous improvement.

So at the core of the model is then cash flow generation, of course, and then a clever use, clever deployment of this cash that we generate. And there is a very strong underlying operational cash flow from our companies. We speak about that a lot. And I think also facts show that free operating cash flow, actually, increased 7% on average per year the last 10 years. I think that's an impressive number. And that comes from the increased profit, but also good capital management and also the fact that we are lean on CapEx.

The CapEx to sales ratio is below 2% as an average the last 10 years. And another important measurement in this area is cash conversion, how much of the net profit is then turned into cash. And that's shown in the yellow line here and defined as free operating cash divided by net profit. And the average is actually above 100 the last 10 years and most of the single years as well. So I think we have a strong underlying cash flow for sure.

And then moving on to how we use that cash on a sort of a more strategic and overview level, it's, of course, very important to have a bit of a strategy, a plan, balanced thought around this and to have a view on what's a reasonable debt level, what's the reasonable dividend level and what's the reasonable reinvestment level. And I think this graph illustrates on how we have the aggregated cash or funds deployment over the last 5 years.

And more than 85% of the deployed cash, the used cash is or was internally generated, as you can see from the far left blue bar, the white section there is the increased debt. So not a high portion, most of it, 85%, more than that, internally generated. Of all those funds, 20% to 25% used internally, you could say them for CapEx and working capital requirements, which means then that almost 80% available for more strategic deployment. And of that, more than 70%, the more lighter blue area here used for acquisitions. And if you calculate the reinvestment rate, acquisition spending divided by free operating cash, it's 71%.

So to summarize it, I think strong underlying cash flow, strong cash flow generation and also then a high [ offensive ] reinvestment rate. Moving on, looking at another important area, how do we allocate time, resources, capital internally between companies? How do we prioritize between companies? And how do we have a common view on this? Super important question for us, of course. And we have, since some years, a common framework for this. We call it then our portfolio model. And it helps us categorize companies in terms of financial capability, but also organizational capability. And we use them then for clever capital allocation decisions, but also adaptation of the coaching. Not every company needs the same type of an amount of support, of course.

And it's -- the model is based on a very basic concept that you should always try to establish reliability in the basics and then good product profitability before you should go for bigger growth investments. So those are the sort of the basics in the model. And if you look at the model more in detail, this is how it looks like then. And it has then 6 categories, as you can see. And it is in 3 different sort of sections or layers with profitability and operational return thresholds on where you sort of qualify.

And also in the top section, where we have 3 different categories, there's also a qualitative assessment on the organizational capability of the company, what type of product offering they have, what type of competitive position they have and then organizational capability like management team, system processes. So all these things are important to understand where the company is and what type of potential they have.

And of course, the actual objectives and plans and strategy for each company is, of course, unique and individual and is decided in the company board together with the MD. But I think this portfolio model categorization serves as a really good starting point so that you are not very sort of far from each other in those discussions. You start that you have a common view to look at things. And it also helps the business area management and the business segments leader to look at their company portfolio in a bit of a standardized way to see where they have most potentials and where they need to put their time and money.

And I mean, maybe it's self-evident. But I mean, of course, in the top section, it's super important with ambitious growth objectives and activities plans connected to growth because all the sort of other fundamental criterias are in place. And investments and coaching should be geared towards those areas, of course. The mid-field, stable good performers. Here, it's the continuous improvement mindset that should be in focus and objectives may be mostly focused to profitability. but also areas like productivity, capital efficiency, those areas are super important.

Yellow red area here, a quick turnaround is, of course, important and the objective should, of course, be related to that. And here, also the engagement from the Board should be higher and closer to make sure that MD gets the support he/she needs. And it's also important that not -- this is not only sort of for each and every company individually that it's also, as I said, important for the business area and the segment to have their view of the total portfolio.

And there are discussions, there are agreements in each and every business area management team on how their portfolio looks like and where they have their different companies. So this is a super important tool for us. Then lastly, tying things together, looking at the balance sheet and the strength of the balance sheet. And even though we've had, as I talked about, a really high reinvestment rate, the strong underlying cash enables us to maintain a really strong balance sheet.

Net debt has, as you can see in absolute value, step-wise increased over the years, for sure, but the profits have actually grown faster or more, which means then that the net debt to EBITDA is actually going down slightly, and we are at the level of end of 2024 on 1.4 from a historical perspective, actually a low level. And besides the numbers, I think we have worked a lot with other factors also impacting our sort of financial position.

We have stepwise increased our bank group. We have more banks -- we are working together with more banks here in the Nordics, in Sweden, but also then have added European banks in our sort of -- as corporation partners. We work a lot with cash pooling, making sure that cash is sort of available for every need in the group at simultaneously is super important. So cash pool structures. We have -- we are stepwise improving that, expanding that.

And besides that, we have also then since 4 years back an investment-grade rating from S&P with a stable outlook. So that also helps us creating a strong financial position. And all in all, I think from the financial side, we have everything in place then to continue to grow both organically and with acquisitions.

So by that, I summarize. And I talked about value creation and talked about that we sort of try to broaden the view on performance. We don't only look at profit, profit is super important, but we look at growth. We also talk about capital, talk about total value creation. We are a prudent and disciplined buyer. We have been for many, many years. We still are, and we will still continue to be that.

Continuous improvement in our model. We buy companies at 6 to 7x EBITDA, and then we need to continuously improve to grow into the valuation, so continuous improvement. We have a very decentralized environment, MD is fully in charge of their companies, but we also want to be a professional owner and give the MDs all the support they need, and we want to do that in a structured way. So here, the portfolio model is one of our most important tools.

So to conclude, I think the financial model has worked for almost 50 years now, and it's well functioning and the strong underlying cash generation and way of working will ensure that we can continue to grow.

Thank you. Thank you very much, Patrick, and I welcome Bo up to the stage as well for a Q&A. [Operator Instructions].

It's Carl here from Nordea. A couple of questions from me. Firstly, regarding the financial targets. I definitely think it's sensible to keep the sales target as well as [ return capital ] employed. However, on the margin side, given that your margin target is over a cycle, you are at a hopefully trough margin of 14% last 5 years, 14.5% above. What keeps you from sort of raising it given that M&A is accretive, you get leverage on up cycle? And what -- does it send any message to the organization of the -- how ambitious you are over the coming 5 years?

As I said, if you talk to the different managing directors, they are obviously aware of our group financial target. But their life is around their company and their targets. So they don't really work less or focus less on improving their profit just because we raise our group targets. So I think there is obviously a correlation, but not as strong as you potentially think.

It's a signal to those companies below 14% that well, now it went to 14% plus even. So we need to do something better. But the message we have to them is to compete with themselves, do better next year. So it has an impact, but I think it's more for group management segment leaders, steering our acquisition work a bit and also perhaps being, if that's possible, slightly more decisive on improvements, but it's not so fundamental for us.

Okay. Very good. And very good to hear about the segment leaders, the M&A ambition of them. If you look at the 30 business segment leaders you now have, how many of them were internally sourced, I mean, recruited? And secondly, how many of them had experience from working with M&A when you hired them? And how does it look today? Are all of them up to speed to do M&A?

As we launched a new organization in the beginning of 2024. And at the time of the launch, it was 100% internally sort of promoted managing directors or experienced persons who took those roles. Since then, we have added 2 external recruits into segment leaders. But it's very much internally sourced. And as I said, at the time of their appointments, I think the average tenure was 18 years with Indutrade.

I don't think all of them had made complete sort of acquisitions by themselves. But I think they had been around acquisitions in some sort of role, either as add-on acquisitions to their own companies or being part of due diligence work or other type of work. Their role in acquisitions is not to be acquisition specialists that we have other persons sort of to do that job to do valuation work or due diligence work or SBA negotiations and things like that.

Their work is more to find targets who would fit their segments and then make the strategic and commercial assessment of the company, you can say, and also assessing people. And I'm sure they have -- all of them have that capability since 18 years sort of with Indutrade. And then they have the support on the acquisition professionals, I would say.

Okay. And the final one, if I may, is around -- you talked about being opportunistic around M&A in your slides, Bo. Are you more opportunistic today than you were 5, 6 years back? Or is it a general description of who Indutrade used to be even 10 years back?

Difficult to answer. I think we have pretty much the same opportunistic approach as we have always had. We are open-minded. We don't sort of turn things down. We take a look and have an optimistic perspective, sort of an opportunistic perspective. So I think it's fairly similar, I would say.

[indiscernible].

Karl Bokvist, ABG. So one part that you highlighted several times here during the presentation is the number of acquisitions that you have pursued and aim to do and step up. The other part of that equation is the size of the acquired business. So just a bit curious to hear your thinking about the average size going forward.

Gustav will also elaborate on this. But to simplify for you, Gustav, I can say that we basically -- we keep the context where we are good. So EUR 10 million, EUR 20 million, EUR 30 million around there is our sweet spot. And we don't really have the desire to go up to EUR 50 million, EUR 60 million or EUR 100 million. We want -- we are good at buying these companies, and that's going to be the core going forward as well.

And as a follow-up to that, do you see similar in terms of percentage contribution growth opportunities for all the segments?

No, that can probably vary and also vary in cycles. Sometimes a different segment is a bit stronger than others. But all segments have future opportunities and possibilities that I'm sure of.

And the final one is the last Capital Markets Day you held, you also talked about the ambition to strengthen organic growth opportunities and also looking into businesses with perhaps a bit higher underlying growth potential, so to say? And how would you say that this is then reflected in the multiples you are willing to pay, talking about the kind of growing into the final paid multiple?

Yes. We -- I think over the last years, we have been a bit more open-minded to pay up a little bit more for clear organic growth opportunity. But it's still prudent, if I say so. So let's say that the average is 6.5 , 7-ish, maybe we don't go up to 7.5 or 8 or something like that. We don't go to 11, 12, 13 or something like that. So we are taking some steps, but they are in the big picture, fairly small, I would say.

Zino Engdalen Ricciut from Handelsbanken. A question on how you incentivize these business segment leaders to accelerate the internal lead generation and how you balance their incentives with the organic responsibilities they have as well.

They're also incentivized on profit growth. And the benefit for them is that they can actually include the acquired company in their profit growth. So it's a huge benefit for them to buy one company per year. So there is no sort of financial driver to generate white spot analysis or the mapping, but the benefit comes when they strike sort of an acquisition and fulfill an acquisition, then it's a big benefit to their sort of segment P&L.

And how do you see that when you -- of course, you centrally have the responsibility on executing. But how do you see that when, of course, their benefit is that they make an acquisition compared with, yes, if they would have made it. How do you see that when you have built this incentive structure?

I'm not sure if I fully understand what you're asking now, to be honest.

So they, of course, benefit when they actually make an acquisition in that sense. So more is better, but maybe that would -- if you see that maybe then they would generate leads, which maybe aren't as qualitative as they might have been if you incentivize them in another way. So you balance it with volume, so to say.

But it's not that easy to make an Indutrade acquisition. It needs to be a successful company. It needs to be successful in a historic perspective. It needs to be leading in their niche. It needs to be good people. I mean we have a big sort of list of requirements in order for them to finally make that acquisition. So -- and we have 47 years experience to manage risk in that perspective. So it's not -- it sounds easy just to make an acquisition, but you need to qualify the company before you are able to do that.

And as it is now then, I mean, of course, you need to have a full support from your business area and normally, Bo and also the Board is involved in the decision. So there's a mandate, also mandate question that ensures that the relevant companies are bought.

Thank you. Any more questions? No, I think we're good for now. We have one more.

Mats Liss, Kepler Cheuvreux. You have these 5 verticals in your business structure now. And is this sort of an optimal structure? Or do you feel that in a few years, you like to split it up in maybe 7 or 10 just to make your opportunities more visible?

Maybe not to make the opportunities more visible, more in a scalability perspective if we sort of grow dramatically and need sort of a broader structure, we might introduce a different or a new business area. But we can, in a first step, go up to 300 companies in the group without any structural change in terms of segments or business areas. And I think we can go strongly beyond that also. So it's not likely that there will be a business area or an additional vertical short term or not even medium term. In my book, that's really good because it's always a bit of a distraction to change structure.

And then coming back to the first question regarding the margin target. I mean, you certainly operate above the 14% now. But is it also a way to sort of ease the momentum of acquisitions? I mean it's margin target could be a hurdle for you to make acquisitions. And should we see it as a package, I mean?

But that's one dimension into that decision. We have -- I don't know what average [ EBITA ] we have bought at now. It's clearly above 14, but...

We've been accretive on an acquisition the last 5, 7 years. So for sure, it's an element.

But we could potentially buy a company at EBITA margin level 12%. And if we see a strong plan, committed management, which we really believe in and go from 14% to 16% EBITA margin target, obviously has some impact on the acquisition strategy. So there is an element of that, Mats, in it, I would say.

Max Packer from SEB.

Just a short question once again on the financial targets. I mean you have talked a lot here today that it's profit growth that drives Indutrade and the variable salary for both you and many of the subsidiaries, [ CEOs ] is linked to profit growth. Wouldn't it make sense also for the group to have financial targets related to profit growth instead of sales growth? Any thoughts on that?

I think if you have organic growth or growth as we have and then combine it with a stable margin, you get profit growth as well. So between the lines, you have it, I would argue.

Perfect. Thank you very much. So we end the Q&A session there, and we actually go on a short break now. So there will be coffee served in the back, and we will meet again here at 14:50. Thank you.

[Break]

Hello. Thank you. So time flies by, and it's time to jump directly into the next presentation. And I welcome up Gustav Ruda to the stage, our Head of Acquisitions and Business Development.

Thanks for the introduction. Hello, everybody. Great to be here today. I'm going to start off with telling about my journey to and within Indutrade. A couple of words about my background. I'm an engineer from university, that is. I've never worked as an engineer. I have about 20 years of professional experience.

I started my career in consulting for a few years, and then I moved on to a newly started private equity fund here in Stockholm, focusing on the Nordic small-cap segment. I worked there for about 7 years. And during the time, I was analyzing a lot of companies, Nordic companies and I realized that most of them did not fit the private equity model. They wouldn't double or triple in sales or double or triple profits in 3 to 5 years.

So I started to think, could there be a structure where such companies could be acquired and could be owned over a longer period of time. I did some research and I found Indutrade and then later on, as a coincident, I met with Indutrade in an acquisition process. I met with [indiscernible], who was quite a character. And I will use the picture here of the small boats that we used for many years. And we started to discuss, could we work together. And this was like an acquisition process. It took about 6 months.

We had a couple of meetings. We had a few phone calls, and then we met again and then we started to discuss and later on, we decided to try how it would be to work together. And that was 10 years ago. And Bo, you said that you are the third CEO in 47 years. I've had the privilege of working with 2 generations of management within Indutrade. First, with John [indiscernible] for a couple of years. getting to know Indutrade from the inside, understand the history, the culture and the power of decentralization. And then later on, together with Bo and Jonas, where the strategy has been refined.

We have structured the company more, and we have prepared for future growth. And there are other senior people in this room and outside of this room who I've also worked with in senior management. What is it that we would like to acquire? What are we looking for? That's a fairly simple question because the acquisition criteria has remained stable over the years. It has been tweaked, fine-tuned a little bit. But to simplify this, we look for a type of company. It should only be business-to-business companies. It could be technical trading or manufacturing companies, et cetera, et cetera. It should be a company and the market that we already understand or have the potential to understand going forward.

And also very, very important that the product or the offering of the company should have a limited piece price and a repetitive need. Then we have the financial criteria. It should have sales of SEK 50 million to SEK 500 million, a healthy gross margin, indicating that they actually add value to their clients, their customers, stable earnings and then a decent return on operating working capital.

But then more important, people. Our due diligence starts with a first handshake when we meet a new company. And preferably, it should be family-owned companies where the seller, the owner cares about the company's future, cares about the company's brand, cares about employees and the future. It should also be people that we believe will thrive within Indutrade, down-to-earth people, high flyers will most likely not be happy within Indutrade.

And I said that we have tweaked the acquisition criteria over time. So gradually, we have focused more on organic growth and operating working capital. If we take a deeper dive into this, yes, we have a long list of preferred characteristics of a company. But I can tell you that not any acquisition opportunity will tick all criteria on such a list.

So we have to be open-minded and look for not only already what we own, there are so many niche industry segments that we don't know already. And we are opportunistic, just like we have heard before. And now we have defined our segments. It's very important that we, going forward, will not limit ourselves to the segments. You don't know what will show up. You don't know like a company in Denmark called [ Crysberg ], providing management of irrigation systems at golf courses.

We didn't know that such a company existed before we met them in 2016, '17. And then how do we do that? We meet with many potential targets. We meet with many companies. That's how you can judge whether it's a good company or not meet with a lot of people. We build relationships. We focus on what is important, what matters. You could do a due diligence, take several months, and you can dig into any area.

And afterwards, you realize that why did we do this? So focus on what is important. We are transparent and disciplined. We always tell it as it is to the entrepreneur, to the sellers. But still, it is about to get the acquisition done. That's the ultimate goal. So we also need to be pragmatic and flexible and solution-based. And then Indutrade, people have always been a little bit different. And it takes some courage.

You need to be brave to stick to that and be different. which leads us to the next topic, why do people? Why do entrepreneurs sell to Indutrade? Why do they sell to us? Well, first, they think about the new owner, the price tag is important. It should be a fair price, a decent price. But then if you care about the future of your company, you think about a new owner that is long term, provides stability, has a good history, has core values, good culture and also have experience of one, buying the company; and two, owning and developing it over time.

And this boils down to our good reputation in the market. Our best ambassadors are the people who have sold their companies to us. There are quite a few of you in this room who recently or historically sold your companies. And the best proof that we can get, that I can get if I have done a good job is a seller that comes to me after a year, 2 years and said, Gustav, you described to us what it is like to work within Indutrade to be part of Indutrade.

But now after a year, we have realized that it's even better to belong to Indutrade than you explained. So why do entrepreneurs sell to Indutrade? Well, people do business with people. People sell to people. So the companies that we acquired, the sellers, they have sold it to individuals within Indutrade. Yes, the umbrella is Indutrade, but to individuals. So relationship and trust. In the past 5 years, we have made roughly 70 acquisitions, and we are always open for new acquisitions. Sometimes, we can slow down the processes like Bo just explained what we did in the first half of this year. And we are extremely selective in the acquisition processes we pursue.

And if you look at individual quarters, it can be a bit lumpy, but you don't need to -- we don't need to panic about that because we have a very good -- continuously a very good pipeline that we work with. If you look into the companies that we have acquired, 70 companies, all business areas have made acquisitions in this period of time. And we have deliberately acquired more life science-oriented companies, even before we had the business area today called Life Science.

Where are the companies located? In the middle pie chart here, we can tell that roughly 50% of the companies are located in the Nordic region. Netherlands, Germany, U.K. have been markets for Indutrade for quite some time. They account for about 35%. And then we have other interesting companies. We have acquired 3 companies in Italy, which we will speak about in a few minutes. We have acquired 3 companies in Ireland. Opportunistically, we have acquired companies in Czech Republic and Poland.

And if you look at the right-hand side, you can see that 50% of the companies are technical trading companies and 50% are manufacturing companies. Looking at the long-term trend at the pace, the number of acquired companies over time is step-wise increasing and so is the EBITA contribution, adding some SEK 200 million to SEK 300 million in EBITA in the past 4 years. And this will continue.

So we are now at roughly 15 companies per year. And the idea, the strategy is to go from 15 to 20 from 20 to 25 from 25 to 30. It will not happen next year. It's a gradual improvement or step up. We look at some 300 companies per year. We fill our funnel with ideas from our well-developed broker network and with ideas from our 200-plus companies. That is from our business areas and from our business segments. Rather quickly, we sort out about 2/3 of the 300 companies that we look at.

And when we enter a due diligence process, we are pretty sure that we want to acquire that company before we spend money on lawyers and potentially other external advisers. Most of the due diligence is done in-house. And there, we take the support of financial people. We have financial controllers that are super good at evaluating the companies. This is -- if you look at the boxes here in the slide, this is an example of the year 2024. So we looked at 300 companies, we sorted out 200 companies. We initiated 21 due diligence processes, and we ended up acquiring 18 companies.

And if you pay attention going back to a slide before, you noticed it said 16. This includes 2 smaller earn-outs, which we didn't announce with the press release. And in this specific year, 75% of the acquired companies were internally generated, 75%. And when we have the idea and approach a company, we decide whether we want to buy it or not, most likely, of course, then there can be discussions about price.

But we decide we can meet over a longer period of time. Sometimes we meet over years to get to learn each other. Sometimes it is a bit quicker. Patrick, you said that we have a prudent or a disciplined price. How do we value our companies? We have a fairly simple multiple-based valuation model that we share across the organization. We scrutinize the plan that the seller provides, and we focus on a few key metrics. The multiples we pay range between 5 and 8. We want the company to grow into the valuation. So within a period of 3 to 5 years, it should reach a return of 20% and the acquisition should be EPS accretive. Then we are disciplined.

We have -- we don't need to look in databases for comps. We have some 200 relevant benchmarks from acquired companies. We use an earn-out to protect our downside and to bridge any value expectation gaps with the seller to share the upside with the seller and protect our downside. And we work with a clearly defined walkaway price. We do not engage in bidding wars. We know where our threshold is. But in most situations, our business model, our culture and our people differentiate and the seller or the sellers, they decide to sell to us. And that is something that we learned fairly early in the process.

We don't pay the same multiple for all acquisitions. We differentiate it even more now than 10 years ago, differentiate based on size, type of industry, growth potential, et cetera. Also, the situation can determine what we pay. About 10 to 15 years ago, acquisitions were handled by the Acquisition manager, the Head of Acquisitions and the group CEO together with the business area managers. Then step-wise, capabilities have been refined. It started with -- I was the first one then to be employed in the head office, working with acquisitions together with the Head of acquisitions at the time.

And then we added acquisition specialists some 3 years ago. We added acquisition specialists in selected countries 2 years ago, 1 and 2 years ago. And since 2 years, we have the business segment leader, the business segments contributing. This is a pretty crowded slide, but to explain a little bit on how we work. So on group level, we have the overall responsibility for the strategy and to handle the pipeline, both internal and external leads. We own the process and develop the toolbox, and we also work with quality assurance. And then you can realize for each and every business area and for each business segment, they have their own strategy, and they work with internal lead generation. The countries, in particularly in Italy and Germany, you work with lead generation, you develop the broker network in that specific country and provide extremely important local knowledge in the processes.

And then going through this slide, all people engaged work with due diligence in various forms. A couple of years ago, could it be 6 or 7 years ago, Bo you mentioned at the AGM that we were thinking about Italy. One shareholder, he asked, are you kidding me? No, we were not. But since 5 years, we are interested in Italy. In 2021, we acquired our first company close to Milan, Italprotec. And since 2 years, we have Andrea working with us in Italy. Welcome, Andrea.

Thank you, Gustav. Thank you all. And my name is Andrea Imbriani, and I follow acquisitions in Italy. I'm also an engineer with an MBA, and I have 25 years of working experience about 10 years in strategy consulting and 15 years in corporate, mainly focused on M&A and strategy.

So the first question is why Italy? Why has Indutrade decided to enter in Italy? Italy is the second largest industrial economy in Europe. It's 14% of the industrial production. This is especially true if you look at midsized companies, small, midsized companies. Italy normally is quite famous. We don't have large companies, and we have a lot of midsized family-owned companies. And this is the target of Indutrade, and that's why it's very interesting to be in this country.

Now a bit of geography. Italy is divided in 20 regions. And the map shows the regions divided in terms of GDP with equal spending power. And the blue regions are the ones with the highest GDP. So you see the circled area, which is North and Italy. And Northern Italy actually has the same GDP level of Central Europe and Northern Europe. So it's a very wealthy part of the European region.

Some examples are Lombardi, quite famous because of Milan, definitely is the financial district, but also very strong in terms of industry. Then south of Lombardi, you have a region called Emilia-Romagna, the capital city is Bologna and Bologna and Emilia-Romagna are very strong in the mechanical sector and also in the med tech. So that's very interesting for us.

Another example is Veneto that's east of Lombardi. And Veneto is not only Venice, Veneto is also Padova, Vicenza, Verona, and these are very wealthy districts. So it's very interesting to be in these regions. Another factor is that Northern Italy is very similar to Central Europe and also Northern Europe in terms of culture and productivity. And this is the reason why we're focusing in this region to grow in our country.

Now a bit more in industry. Italy, we did some statistics. Italy has 180,000 manufacturing companies. So when I was talking about small, medium enterprises, this is what I was talking about. And if we look at the chart, the 2 middle bars, these are companies between 10 and 250 resources. These are the small, medium enterprises. There are 67,000 small, medium enterprises. And of these, 2/3 are located in Northern Italy. So there's a huge potential in terms of companies that we are looking at. Even more, 80% of these companies are family-owned.

This was also said by Gustav before. Our priority is family-owned companies. These are companies with whom you meet the founder or the entrepreneur who has inherited the company. It's very important to establish a dialogue with these people, and this is the priority in terms of companies we look at. And so it has been a journey in '21, as we were saying before, we purchased the first company in Italy and '23, the second.

Last week, we did the closing of the third company. And looking at these statistics, but not only the statistics, looking at what we've done in the last 2 years, the activity, we have a target of 50 acquisitions in the mid, long term in Italy. I mean there's really a lot of potential. And so how are we doing this?

This is coherent with everything which has been discussed today. The first approach is working with business areas and segments. We have regular contacts with business areas, especially with the segment leaders, we are working a lot. We have a lot of meetings, video conference with segment leaders to understand which are the customers, suppliers, peers, which have activities in Italy. So we have a list of companies, and we are trying to contact these companies on a regular basis.

These are the best companies to contact because normally, you have direct access. So you have a salesperson, you have someone to contact in the company. And then even more important, when we start analyzing a company, the segment leader or very often the MDs of our companies are involved to better understand the company. Second thing is scouting. Financials in Italy are public. So it's possible to do long list of companies. And we then regularly analyze these long lists. We do short list based on financial targets and business areas in which we want to focus.

And we have contacts with industrial associations. We have local networks, and this is the scouting activity we're doing. And in some cases, we contact entrepreneurs and find the right moment to contact them and initiate a discussion about M&A.

Finally, the brokers. In these 2 years, we established a broker network in Italy. Indutrade is known by more than 50 brokers. The brokers we work with are typically midsized boutiques, auditors or sometimes small brokers. The smaller ones are more regional and the larger ones in the capitals. And we are in continuous contact with the brokers. It's really a continuous contact e-mail and at least twice a year, we have regular meetings with them.

And this has brought us to sign more than 50 NDAs since '24, showing quite a lot of activity in terms of M&A potential. Finally, how is Indutrade seen in Italy, especially since when we started to be more present and talk about Indutrade. Well, the long-term investor model is a bit more a model characteristic of the Nordics. It was less known in Italy. And both the brokers, but especially the entrepreneurs really like the alternative, which is not the financial investors, typically the private equity or the strategic industrial.

And so they see a new model and a new solution for their company. And especially for entrepreneurs, they like the values of Indutrade. They identified themselves in being entrepreneurs, but especially the decentralized model, the long-term model, they find a solution for their company to continue to keep the name, to keep the values and very careful to their people. So they really appreciate the values of Indutrade. The Indutrade organization, the new Indutrade organization is very helpful. Typically, when we meet an entrepreneur, the first thing he looks at is, well, where will my company fit with whom can I work and where can I have knowledge sharing. So that really helps both to explain Indutrade, but also to fit the company in an organization.

Finally, Italy, not everyone speaks very good English, especially the older entrepreneurs. And so having a local organization, which understands the culture, the business culture and also speaks the same language helps a lot. Very often, we are visiting companies with myself and colleagues, which are segment leaders, MDs to better understand the company.

So there -- overall, I have to say there has been a very positive feedback of Indutrade in Italy, both by the financial community, especially, I would say, by the entrepreneurs with whom we are working on a continuous basis. Thank you very much.

And another colleague of ours, you have been working within the Flow Technology business for some 20-plus years, Richard, welcome.

Yes. Thank you very much, Gustaf. Thank you.

Glad to be here. As Gustaf mentioned, I've been with Indutrade for quite some years, and I'm here to tell you a little bit about that journey, but also how I work with acquisitions in my role as business segment leader. My journey began in 2003 when I began at [indiscernible]. I started out with sales and product management, selling valve and instrumentation solutions to everything from Coca-Cola and Tetra Pak to the mines in the north, the chemical industry on the West Coast, pulp and paper and our Swedish nuclear power plants. So that was a great school.

In '21, I became the Managing Director of the company and hop in '24, I was appointed Business segment leader, Process and Energy. As you already heard today, my key focus as a business segment leader is to really support our companies to thrive within the Indutrade family to create sustainable profitable growth over time. But it's also to acquire new companies into the segment to grow the segment and broaden the portfolio.

I have a clear objective, and that is to acquire at least one new company into my segment every year. And in order to do that, I work with a strategic acquisition plan, both short term, looking at possibilities here and now, assessing companies, but also a long-term perspective, looking into new markets, new product groups and new subsegments into my Energy segment. In this, I develop and maintain a pipeline of internal leads.

I proactively build relationships with a lot of companies and potential targets. And I support the acquisition team in the acquisition projects. And here, my role is really to take ownership of the commercial, the strategical and the culture evaluation of these companies. And for me, this is crucial, of course, because I will be responsible for these companies post acquisition. And so what am I looking for here? Well, from my perspective, coming into this as a business segment leader, I, of course, want to understand the market and the potential in the market these companies are in, the products, the portfolio they have, the business model.

But more importantly is actually the strategical plan moving forward, of course. But the key thing and most important thing for me is the culture of the company. And that's maybe also the hardest thing to assess many times. But I listen, what I hear, what I see and what I feel when I talk to these companies, really trying to understand, are they passionate about growth? Are they passionate about their people and their employees? Do they have values and do they have -- use their values and their skills and their behaviors in order to contribute to their customers. So these are the things I try to find out about the companies. But then how do I find acquisition targets?

Well, my role is to find internal leads -- and I have many assets actually. One is that I have been working for a long time in one of our companies, which means I know what it takes to be an Indutrade company. But I also have 20-plus years in the industry, as Gustaf said, and that is also, of course, very valuable in order to understand markets, products and companies. But my greatest asset by far is the network I've built over the years, both externally with customers, suppliers, industry experts -- but even more importantly, the internal network of managing directors, which I work very close together with, but also the people in our companies.

They are a great asset in this work. And obviously, the Indutrade team with both the acquisition team, but also other people within our business. So this is really a team effort finding new targets. And I use and get support from this network, both when it comes to opportunistic leads. They feed me with continuously good prospects that I can look into. But they also are a great support in the strategic work trying to find new targets. For instance, I work together with our companies in order to explore acquisition prospects near our existing companies, like B was talking about the white spot analysis, trying to find maybe similar companies in other geographical markets. We look into the -- sorry, the company's suppliers, the customers, but also the suppliers and customers' distribution network. Here, we can find great many targets and actually probably most -- I would say, for me, it has been the best way of finding new companies so far. But we also look at a more long-term perspective, looking into new markets, new products and subsegments within energy in my case. For instance, I've been looking at electrification of the industry and what components and products do we need them. H2 production, steam production, of course, and products in these areas.

Lately, and right now, I'm actually looking quite a lot into heat exchangers. So these are also the long-term things trying to build new possibilities for the future. Employing AI has certainly sped up this process. It's much easier today to make good market analysis and also actually creating long lists of companies. It's easy to get companies out of AI. This can actually also help you in a large way of sort of qualify them to some extent. But what they can't do, they can't tell me that -- AI can't tell me that much about these companies' culture or their strategic initiatives moving forward. So once again, I would like to emphasize that our employees are our superior quality control mechanism in order to secure high-quality internal leads. And I would like to just end up with a few examples. It's always fun to talk about examples, trying to make you understand a little bit how my daily work can look into this.

And the first one is this summer, me together with a team within Indutrade, me and a colleague another BSL, we made contact with a few of our companies, and we sat down and we started to figure, okay, how can we break into the aquaculture business in a better way. Some of these companies we talk to, they had a footprint to that and we're selling quite a lot. We were strong with valves, hoses and pipes, but we started to look into what other products are there. And we find quite a few interesting product areas where we thought here, we could actually probably find good companies.

So once again, we used AI to identify a whole list of companies. And I was probably evaluated 1,000 companies. But then we brought that down to about 40 companies that have the right owner structure the right size and attractive profitability. Then we sat down with this and looked at it in the team, trying to find out, okay, do we know this company in one way or the other? And here is the key for me. I personally have a little bit tough with making cold calls trying for 40 companies hoping to find a lead. So instead, we sat down, really realized that we do actually have contacts one way or the other with these companies or some of them. And then we started with those. Fortunately, for me, most of them are actually also participating in a large exhibition in Norway. So I could just go to that exhibition and learn much more about the companies there, talking to the people, getting to know them, understand the culture, et cetera. So now we have a couple of interesting leads in this area, which we are pursuing for the future.

Finally, sort of an interesting fun story for me was an add-on acquisition we made beginning of this year. It's a small company we acquired Pima OS to one of our existing companies, [indiscernible] OS in Norway. The whole story started with 2 employees meeting at an exhibition, started talking, realizing that, wow, we have a lot in common. We have complementary product portfolios. We are strong in different geographical areas of the Norwegian market. Maybe we could support each other and work together. Long story short, they went back and a contact was made between the owner of Pemak and the Managing Director of Fagerberg. And they put together a business plan where they're looking at the merger of these 2 companies. They presented it to me, and I thought it looked really interesting, ending up in an acquisition about 18 months after the initial meeting of the exhibition. So that is in practice how it can work.

Thank you very much, and I'll leave over to you, Gustaf, to summarize.

Yes. To sum up a little bit, Indutrade is about evolution rather than revolution. So the most important message here is that we stay the course. The acquisition characteristics have remained more or less stable over time, and we will continue to acquire Indutrade-like companies. We stick to the concept of being opportunistic and open-minded. We will not change that. We have invested in the team. We have more acquisition specialists. So we will leverage that going forward, and we do already. And we will strengthen our proactive lead generation through -- primarily through our business segment leaders. And that means that we step-wise will increase the number of acquisitions per year and the EBITDA contribution over time. Thank you.

Thank you. Thank you very much, Rickard, Andrea and Gustaf. And yes, we actually need to jump straight to next presentation, and I welcome up Joakim Skansse, our Business Area Manager for Life Science.

Thank you very much, Marten. It's a great pleasure to be here. And I just want to start to say by that to be the BA manager in Indutrade is most likely the best job you can have. You are really a tight team that works together to achieve a goal. And what you do is to develop companies and do acquisitions. Can you do something better? And then you interact with MD, high-performer MDs as you, Jacob, back in the seat there.

And I think we really have to emphasize that the people that makes the most value from Indutrade are our MDs. They are really important, and they work very hard in their companies. And then from my perspective, to follow all these 35 companies within a year with all the situations is very inspiring. And then it comes to acquisitions. And now Andrea just slipped away, but he arranged a closing dinner actually last week. And those closing dinners can be quite emotional. The seller talks about that he has grown up with this company. He has been there down and upwards. He has finally decided to sell his company, and he has told his employees that I actually sold my company and decided to sell it to Indutrade.

And then you feel that, okay, we Indutrade, we actually take over someone's baby, and we're going to be the lifelong parent of this baby. So it's really a strong commitment, a strong responsibility. And I think this gives us a specific purpose in the job we actually do. But the main purpose is, of course, to create shareholder value. And the purpose of this presentation is to give you some insight how to run a business area. In my short background, I'm also an electrical engineer. I worked a couple of years within Accenture.

Then I joined my family company during 10 years. I was part of the fourth generation, and we sold equipment and consumables to the graphic art industry. We were about SEK 300 million turnover company with 100 employees, typical trading in the trade company actually. Then I moved over to Traction, which is a smaller investment company. But the thing with traction was that Traction always invested in minority shares because we strongly believed in the driving force of the entrepreneur. And I think that is one of the key within Indutrade do not destroy the driving force of the entrepreneur.

But within traction, we actually worked with more of turnaround cases or what we thought that we're going to build value by working with low-performing companies and create value. But after experience here in Indutrade, I think it's much better, much easier to create value from already existing good cultures where you know how to price, when you know how to compete, when you know how to be profitable and a winning team. So I really prefer the model of buying already good companies. The first year -- the first 8 years, I was responsible for the industrial components.

I think we had a good growth, but we also had a good growth from a team perspective. I think we started to build a good way of working as a team. And we did -- I think we had that travel also within the management team in Indutrade. If I take some time to reflect on Indutrade today and Indutrade when I started, I think we had the same values of the entrepreneurial drive, the decentralization and things like that. But I think we are more of a professional owner today. I think we are more of a strategical partner to our companies and MDs. I think we are we are using or getting out the dynamics of the networking and the experiences within the family in a better way today. I think we have a better idea how to grow companies from SEK 80 million to SEK 150 million.

That's quite a huge step from an organizational point of view. I think we have a better view how to grow companies from SEK 150 million to SEK 300 million and SEK 300 million to SEK 500 million plus. And then I think also the infrastructure in Indutrade with the leadership training programs, portal and so forth are also a big improvement as well as actually driving business value out of sustainability. Why Life Science? Well, the MedTech portfolio, we had the MedTech portfolio already within industrial components. That was a quite a small portfolio, but it's grown and we developed it well. And also now, it's a very small portfolio. There are a lot of opportunities. It's a dynamic market segment and a lot of white spots. So for me, we added the pharma companies, and that was new for me, more of an international challenge.

So I'm very proud of taking care of the Life Science business area. Then if you talk about development opportunities, I think it's quite clear. Industrial -- the size of a business segment today is the size of industrial components. So if we are able to create the business segments as engines as industrial components and other BAs, I think there is a great future of development here. So I think our task is actually to make the business segment leaders, the business segments very dynamic in their growth. Okay, shortly about Life Science. We have 2 major business segments, the pharma segment and the medical. Pharma, you have huge -- it's a huge market, huge players.

The customers are the big pharma companies, pharmaceutical and biotech companies. The pharma manufacturing is well spread over Europe. We are positioned also very well spread over Europe. The medical part of the business is more subsegments. We have the med tech, we have the lab tech portfolios. We have the diagnosis area. And our customers there are the hospitals, the care centers, the labs, the diagnostic centers. So it's totally different areas. Pharma is slightly larger. Medical has slightly higher EBITDA percentage. About 40% is consumables, 35% process components, 20% equipment and 5% service. And I would say also that the pharma part of the business is more project-oriented than medical.

So compared to industrial components, I think that Life Science is a bit more volatile in the short perspective, but has a very good underlying growth. Okay. Within the pharma business, I think we have a very strong cluster within the pharma companies. We have -- you hear Bo and Pik talk about the single-use companies. They actually sell flow components and single-use assemblies. And we have about 10-ish companies and 11 clean room. And they work very tight with each other in that sense, they share same suppliers. They have some -- they have share experiences and news.

And I also think that, that group of companies we have is very well spread over Europe. So we are a very attractive supplier to other suppliers. Then I should also mention that the pharma production, that's really a quality-driven process. It's not a process-oriented process. It's very quality driven. So you have certifications, validations, live up to GMP standards, which means that there is more no mistakes, no contaminations. That means also that our customer validates our processes and approves that. So when you are in a process, you are in. They never change you. And also the same, if you are a qualified supplier, you will always get requests further on if you do a good job. And I think we are in a very good position there with good positions on our main customers. Some examples, [indiscernible], they supply the single-use systems to [indiscernible] 450, which is a purification equipment. And these single-use assemblies are exchanged every batch, and they are then produced in a clean room in a certified process.

This is a [indiscernible] application from Ultrapure, also used in sterilization verification processes. That's a heat system with valves and pumps from ESI and the green line. And the last one is a skid, which actually produces high purified water to steam processes. The medical companies, they are a bit smaller, more different, and we have more small subsegments. So our task here is actually to build those small subsegments larger. So we work very actively with add-on acquisitions or acquisitions around those subsegments. Here, we are much stronger in the Nordic area, but we have companies also in Poland, Czech, U.K. and now Italy as well.

This is a very good group of companies with good EBITDA growth potential. Some examples. Rubin Medical provides pumps and CGM systems to type 1 diabetic care. The good part here is that a pump has a warranty of 4 years, meaning that we sell consumables for 4 years, reservoirs, injection sets and also this glucose sensor here. So a very good business. AMA is a smaller company that's communication and alarm systems to hospitals. [indiscernible] has their systems, and we are a market leader in Sweden for that. Labema is another interesting company in Finland. They supply equipment and consumables to labs and diagnostic centers. This is a Hamilton robot for liquid handling connected with AI analytic platform from SOPHiA GENETICS to detect early diseases. Okay. So our team. I think we have a fantastic strong team and the organizational setup is the same from each BA. We have some business segment leaders. We have a business controller.

We have a financial controller. We have a dedicated proactive M&A resource, a people person and also sustainability person. So this is the lean organization for a turnover of SEK 7.5 billion. And I think it's also worth saying that what you have said earlier, I think we, as a business area, has a very Bo is letting us drive this as mean Indutrade. We are very self-independent. We set our own targets. We have a clear responsibility to develop the business areas, and we have good support from the Indutrade infrastructure of the trainings, the portal, M&A knowledge, expertise from finance and so forth. So the main task we have is to develop and acquire. Acquire, we acquired 7 companies last year, 4 stand-alones and 3 bolt-ons. This year, we have acquired 6 companies, 2 stand-ons and 4 bolt-ons. And our target is, of course, to increase this pace, but it has to be said that we do that without jeopardizing our quality in looking for companies.

And I think it has been mentioned as well by both that we don't have a specific EBITDA percentage target, but it should be quality companies with the potential to grow. It could be a 12% EBITA company or a 30% EBITDA company. Then you can ask what targets do we have then for organic development? Well, as a BA, we have in Life Science, high targets, but the targets is actually set in the companies themselves. So our target is mainly a sum of the BA targets. But still, I think we should be able to grow more than average within Indutrade with the underlying growth we have. I think also that it is important to say that our ambition is to buy organic growth, also increase our organic leverage year-by-year. Then if you ask yourself, okay, what are the critical success factors to optimize organic growth? The #1 answer is, of course, to have the right MDs and the right management teams in the companies. That means that our most important processes are the MD recruitment processes, the succession planning and the training of people.

Then I would say that the # 2 answer is to develop companies towards an idle company and optimize its potential without destroying the driving force of the entrepreneur, of course. And here, I think the BSS has a key role to coach, encourage and act in different business challenges and in different -- with different MDs. So good leadership skills are essential. Patrik showed this portfolio model. I think this idea model is quite simple, but very useful as well. So when we try to identify the growth potential in the company, then we actually look into these parameters. Do we have the market opportunities? Do we have the right focus and offer in each company? Do the price right? Do they add value right? Do they have the internal structure? Do they measure what they do? Do they follow up what they do? Do we have obsoles in inventory, good cash management? Do we have the good BI systems? Internal structure, I think, lacks a lot in companies that we acquired from the start and has to be improved over time.

Then, of course, the leadership in the company is very important. Do we have a leader that encourage, drive performance, let other people grow in an organization and also a management team. Very often when we acquire a company, at least a smaller company, the entrepreneur has maybe one key person. But if you want to grow a company larger, you have to create your internal engines and engagement from the whole company.

So I think these parameters actually summarize what's the growth potential you have in the company. And many of the companies do this exercise themselves, of course, but we also do it to map and see what we should coach and what we think is good to do over time. Then I think there is another interesting perspective, and that is that the culture in the company, I think, can either be growth-oriented where you have a vision, a sales-driven leader, gladly do investments. And then on the other side, you have the profitable-driven companies where you focus on EBITDA, high gross margin, careful in costs, no risk taking.

And I think both of those cultures are fine and very good in the company. And from a portfolio perspective, we can have both. And if I look into Life Science, I have more growth-oriented cultures in my portfolio, while in IC had more on the other hand. So I think these tools actually are quite good in mapping and understanding how you want the company to develop. And as I said, to develop people is a key process for us to develop people is the same to develop companies. And I'm very proud that we have a very strong actually leadership training within Indutrade.

Then we do succession planning, and you can also discuss whether you would prefer to do internal recruitments or external. I think that if you want a company to keep its culture and you build on existing success, of course, the internal candidate is better to prefer. But if you want to change a culture, maybe there are in a company which is very profitable driven, huge potential to grow, maybe you would like to have an external -- my with some more growth-oriented experience.

And also, of course, if you want to do a step-up in a company, you prefer to do an external recruitment. We talked a lot today about acquiring. I would say that -- we do -- as been explained here, we have the bottom-up approach where the business segment leader sits down with the MD, go through the market, suppliers, have a student do a long list, short list. We have actually done 2 acquisitions this year on this approach, Nordic Labs in Finland, which was an add-on to Lama and also Optimed add-on to 0. Then we have the top-down approach where we actually look into areas where we are not today, but where we want to be. And Matrix is a good example where we actually had a long list, short list and contacted that company in a very specific good area, and it took less than 12 months to actually conclude that deal.

And then, of course, I think we should have the opportunistic view as well. But as I said, if you go into the total new market where we don't have the knowledge, then it's very important that we actually acquire a company with good knowledge in it with a good market, more of a low-risk company where we really feel comfortable, and we can grow on. I think we've done 2 good opportunistic acquisitions. I categorize you, Fredrik, [indiscernible], as for our perspective, not a key area from before, but you really added some knowledge and a fantastic company. We also acquired Mihow last year, which is also a very successful company for us. Then me as responsible from business area, we have some kind of structure in the way from a yearly calendar perspective.

We normally have 3 Board meetings periods for the companies. And then the business area, we actually do once a year this portfolio model and growth analysis on our companies. We have our own strategy meeting to set our targets, our priorizations where we can be better. We have one with a focus on the people development. We go through what succession candidates do we have, what development plans should we have for the MDs and also the people under the MDs are the key people that we really would like to see develop.

And then the fourth meeting is more of a last year evaluation and put activities to the next year. We have one BA conference a year, and then it's up to the business segment leaders to have cluster meetings. Very much the cluster meetings we have today is a bottom-up approach. They actually contact themselves and work together. Okay. This will be my summary slide. Yes, we have a strong position in both Pharma and the Medical segment with significant growth potential. Yes, we have full responsibility for developing our companies and value-accretive acquisitions. Yes, we have a lean international team driven by a strong purpose. Thank you for listening.

Thank you very much. Thank you, Joakim. Before you leave, I just want to check if anyone have any questions they would like to ask Joakim. Thank you very much, Joakim.

Thank you. Okay, everyone. So the last agenda item today is actually a panel discussion. So I welcome Jan Erik Larsson, Fredrik Alexanderson, [indiscernible] [indiscernible] Field up on the stage. And.

Yes, as have been highlighted during this presentation, the core of Indutrade is, of course, the individual companies, and that is then why we also have invited 2 managing directors and 2 business segment leaders to have them share their perspective.

So first of all, we have Fredrik Alexanderson, who is the MD of [indiscernible]. It's a Swedish company, a Swedish technical trading company with an offering of products for safe microbiological processes in clean room environments. And then we have Jan Erik Larsson, who is the MD of [indiscernible], which we heard Bo talk about earlier. It's a highly successful company as well. And you -- Jan Erik, you have been the MD for over 20 years now.

Yes. Third one only. The third one as well as in the industry.

And then we have the 2 business segment leaders, Declan Field and [indiscernible]. Declan, you are the Co-Founder of ESI Technologies in Ireland and the U.K. And you were previously the Operations Director, and we approached the company back in 2010, and it was later sold to us in 2013.

That's correct. Yes.

And you then became the MD as well, but now have moved to the business segment leader role. And Anders, you're having a shared responsibility, partly being the MD of the Danish company, [indiscernible] within the automotive aftermarket and also being a business segment leader then. So a warm welcome.

And if we start off then maybe with a question to you, Fredrik. You quite recently sold your company to Indutrade, but what made you choose Indutrade and what factors were important to you when you was your new owner?

Yes. Good questions. First of all, before you take a decision to sell a company, it's not easy because I founded the company in '96. So it's not just a decision you take a wake up one day now and to sell the company. So it's a long process for me. But anyway, I took a decision a couple of years ago to sell the company based on the premise that the company and the employees should continue to operating in the same procedure as before.

So -- and then I were in contact with several companies and one of them were Indutrade. And the information I received from the Indutrade made me very impressive. Their philosophy is that the company they acquired shall continue to operate in the same spirit as before as well as they are acquiring companies that are leading in their industries. Bottom line went into contract discussion and due diligence was made on the 2nd of July last year, I sold the company. And right on, they created a Board with professional from Indutrade and me as an MD in the Board. The Board meetings are well organized, well-planned meetings. And to my opinion, the strategy Board meeting is the most important because now we are challenged by 2 professionals that has extended experience from the business in our strategy that has helped us a lot. Another thing, and I call it a toolbox, Indutrade has a toolbox of support in different processes like sustainability, legal, HR, finance, and they're also offering education of the employees. So in general, I would say that the company today that I sold 1.5 years ago is much more professional run company.

And this is from my heart. I'm super happy that I really sold the company to Indutrade.

And I mean, knowledge sharing is, of course, one big part of our offering to MDs, but how often do you interact with the business segment or other MDs within the group?

Yes. Good thing. I'm part of the Life Science division, and I have over 30 years of experience in life science industry. And now I'm meeting up during our MD meetings, life science MD meetings, where I'm meeting up with other MDs that has the same background like me, that we can exchange experience, sharing success stories. And for example, me as an MD, I always have some challenge in my day-to-day operations that I can address with other MDs during this meeting. And if we look into the meeting we had in Milan, Italy this year in June, Indutrade has also invited key speaker in different subjects that also support us.

And Jan Erik, you have been with Indutrade for quite some time. Could you elaborate a bit on your view on the development of Indutrade during these 20 years that you have been the MD of [indiscernible]?

Yes. The most obvious thing is that we have, during this time, I think, grown at least 10x. So that comes a lot of changes, of course, around that. But most importantly for me is what has not changed as well, the decentralized organization, entrepreneurial spirit and the long-term perspective, which is very important for us MDs. But what I feel lately is the focus on organic growth. We have seen in several slides now the colored circles where we have positioned our companies.

And obviously, everyone would like to be on the top, but it's important to know where you are and where you want to take your company and extremely good for us. And also what we have heard many times before today is the knowledge sharing, I must say. I feel like we have grown some kind of continuous learning culture which is very important. And also very welcoming is the new organization, I would say, as well with fewer divisions and the segments.

Yes. I was about to ask that as well. I mean, how has the group -- the new group structure, the new 5 business areas, how has that impacted your role as MD, if any?

In all good ways, I want to say. It's I have a much better or better -- a faster access to my chairperson. We have our segment meetings, which is also very important where we can help each other depending on where you are in this portfolio that we have seen, we can help each other. And I see also that the BAs must have done a fantastic job as well to organize the different segments.

It's not -- we have not put all the company names in a hat and just draw. There is a really good composition, I think the right word is, in each and every segment, which is very important. So we can really help each other there in a much, much better way.

Declan and Anders, what's your take and reflections on the group structure and your new role as business segment leader?

Well, I work in Life Science. I work with [indiscernible]. I look after U.K. and Ireland predominantly. So working with the companies, I find that it takes a lot of time, but in a good way. So collaboration is what we try to instill. So we create a platform of collaboration. We can actually get the companies talking together. And when you think about -- it's all about the people. So if we're there and we're available, as you said, then it does support the companies.

And you're closer to the companies, you can make quicker decisions. And if you know what the company does, then you don't waste time talking about or explaining the issue. You already know where it is and you're better able to make the decision with the MD.

And I also think from both, there has been a clear direction for us as segment leaders to really work with the acquisitions, both, of course, in the way that we do the white spot analysis, finding out what possibilities do we have being active in this market. And when we are active, we also see that we will get more of what we call the opportunistic opportunities that we should also get much, I think, in a very, very fast way.

And I mean, the relationship between the MD and the chairperson or business segment leader is, of course, crucial. But could you elaborate a bit on how you working with that balance of not interacting too much with the MD and yes, but at the same time, challenging them.

I think the MD is clean or clean of their own castle. And I think it's very important not to destroy the culture or the ownership. I think our support -- our role is very much in the support role. But the MD can be a very lonely position. You can be isolated sometimes trying to make all the decisions yourself. Now you're open to a Chairman or a BSL who can help you make those decisions or just be that [indiscernible] Board, but also put you in contact with companies that may have taken the journey before. So you might have an opportunity to say, well, I need to build a clean room.

How do I do it? Hang on a second. We have companies who have done that. Let's put you in contact with them and get that collaboration going. So it's very much about working with the company, encouraging the company and the management team and Joachim again alluded to that, it's not just about the MD, it's about the depth and strength behind the MD, and that's where the management team comes in. And I would like to see promotion from within. I think a very strong message within the company is that if we can promote from within, we have good people working for us. It's a good place to work. And the succession planning here.

Succession is easier now being a segment leader because I think we have a chance to be much, much closer to the companies than with the old structure.

Yes. And if we understand what the companies do, so you're shoulder to shoulder with the management team, the MD. So you're walking that journey as long as they want you to walk with them. And I've yet to get rejected on that because I bring experience, I bring knowledge and then we have a network ourselves that we work across. So we're not just limited within our own segment or even in some cases, within our own business area. So it's a much more focused approach, but it works very well for me. And also, I think, generally.

I can only agree. I mean, earlier, we had -- when we had an MD meeting, we were 40, 50 people. When we have an MD meeting in the segment, now we are 8 to 10 people, and we can create much more value together faster. And we often see our sailing ships navigating in the [indiscernible]. I don't know if it was Gustaf who showed it. I can feel as an MD now that we have some new great tailwinds actually navigating there. I wish I was 30 again, to be honest.

And these last 2 years, it's been quite a special or challenging market situation. And -- but how do you ensure sort of the right balance between making decisions that deliver sort of short-term values and those that create long-term values. Maybe you can start as business segment leaders from your perspective.

I think it's a good supporting tool for us is to our portfolio model because looking at the portfolio model, if you're up high in the growth companies, we have a better chance to look at it long term where you go down and a problem company, then I think the short term, which will be a much bigger part of driving that business. I think the understanding of that with the portfolio model is at a very good level.

But I think we are actually a long-term owner. We should have and focus on a long-term strategy. So when we do employ short term, it's for that kind of turnaround situation or an opportunity when the market that presents itself. We have situations that particularly in blue-chip customers in growth areas where they may come to us for one of our companies, we have an opportunity. We need to react quickly. How do we do it? So that would be a short-term decision, but always looking more long term. So yes, engage in short term, but look long term.

Any reflections from you, Jan Erik or Fredrik?

No. The only thing I can say is that just continue to work hard. And I used to say excellent can always be better. So that's my philosophy.

Agree. [Operator Instructions] I agree. That's good. I want to see do anyone have any questions they would like to ask to the panelists.

So I'm just a bit curious here since we have 2 business segments leader up here. When the new structure was launched, how did it come about? Were you just encouraged to throw your name in a hat -- or how was the selection handled?

Well, the BSL as such is not really a new idea. I have the privilege of working in ESI Technologies Group. And years ago, I knew if I needed to grow, I needed to create many companies within NSI. So if you take our growth, we went from a turnover of maybe EUR 18 million in 2014 to, I think I can be correct in this EUR 85 million in 2023. To get that -- and then what we had to do within that is obviously we need the people. So we created business units within that. So that was then taken -- I take the privilege by Indutrade and the bold structure was created, which was like a cluster MD looking after 2, 3, 4 companies.

So it was very much a tested system before Bo and his team rolled it out. And then I was approached earlier on. And it ticked 2 boxes for me. It gave me a segment of companies with like-minded product groups, people across Ireland and U.K. and it was biopharma and med tech. So yes, it was an interesting. I jumped at it.

For me, I would say I was fortunate enough to manage one of the larger companies in Indutrade for some years, quite successful. And slowly, my BA gave me more opportunities to work with the Boards. And then when the new organization came up, actually had into my BA and with Bo as well. And then I also had previous experience from a different segment with 12 years experience from that segment and then ended up getting this role, which is now a dual role right now.

Thank you. Any more questions from the audience? One more from Carl.

Thank you, again. But what you mentioned about the bolt-ons, we touched a little bit about it in terms of the prior presentations with M&A and so on. But we view either as managing directors of one particular company or now as business segment leaders of several. How do you look upon the kind of encouragement from the industry structure to look at growth opportunities in terms of a bolt-on rather than as a business segment leader to acquire a kind of complementary company.

If I understand you correctly, you're saying, particularly a question is on bolt-ons. So where we find a company that we bolt on to an existing company, is it -- -- that comes from within the companies themselves, I find that the MDs, we challenge -- I mean, part of the Board structure is we challenge the companies every year to grow.

We make sure they realize their potential. We're not -- we all want to be up there in that portfolio mapping. We want to -- so to do that, you will get opportunities. I'm working on one at the moment where it's a bolt-on. It's -- but the MD is driving it. So we would encourage that. We're just going through the process. So yes, I would encourage bolt-ons, yes, if that's your question.

Yes. So basically, like are the bolt-on ideas stemming from the individual companies or encouraged from the business segment leader?

It could be both, I would say both.

It's like when you do a budget in the company, it can be bottom-up budget where you look at your products and you look at your customers and then you come up with a figure. The companies themselves will be pushing for growth. And there's 2 ways you can do that. You can grow organically or if you want to get an opportunity comes up, you take it, and that's a bolt-on.

Perfect. Thank you very much. I think we end the panel discussion here.

And lastly then, welcome to the stage. And now you have the possibility to ask any final questions you might have. So do we have anyone wanting to ask a question? Crystal clear. Crystal clear.

Perfect. But from my side, thank you very much for participating today, and I leave over to Bo for any closing remarks.

Also thank you from my side. I think it's been really good on our side. We have tried to be comprehensive, transparent and give you an insight into how we think in terms of the group management, but also in a business area perspective, business segment perspective, management or managing directors, the functional area in terms of acquisitions. So try to be open, transparent showing our way forward. We have made a deliberate investment in a new structure. We have added some resources.

And these resources work in terms of the business segment leaders in a new way. They support their companies, try to strive for organic growth together with the MDs and also have a clear target in terms of acquisition growth and pipeline building. And altogether, we are set for growth. And our ambition is, as I said, to again double the size of Indutrade, work with both top line and more importantly, bottom line and create value also going forward. And we have the structure now to double the size more or less without a big new reorganization. Now it's delivery, it's focus and sort of moving forward. So by that, thank you. Hope you enjoyed the afternoon here, and please stay on for another while if you want to chat with any of us or look at the exhibitions and so on. Thank you very much.

Welcome to the Indutrade's Q3 presentation for 2025. [Operator Instructions] Now I will hand the conference over to CEO, Bo Annvik and CFO, Patrik Johnson. Please go ahead.

Welcome, and good morning on our behalf as well. As usual, let's start with the overall highlights of the report.

In terms of the demand situation, the order intake improved versus last year. Four out of five business areas and more than half of the companies grew organically. Demand from customers within medical technology and pharmaceuticals was strong, and we also saw improvements in several of the larger customer segments. Net sales decreased 2% in total, organically minus 1%. The EBITA margin came in strong at 14.6%. Our companies were also successful in terms of working capital efficiency and the inventory reductions continued during the quarter.

We had a very successful quarter in terms of acquisitions, welcoming six companies during the quarter. Ten acquisitions completed so far in 2025 and the pipeline is still good.

Looking more specifically at the order intake and sales trends. Demand was stronger than last year with improvements in many companies, customer segments and geographies. Despite the high order intake, book-to-bill was slightly negative, partly because of seasonal variations. There were still continued variations between companies and segments with the strongest growth within medical technology and pharmaceuticals.

The demand within the energy sector was at a high level but aggregated slightly lower than last year. Notably is also that order intake for companies with customers in Infrastructure & Construction and Engineering improved compared to last year. Plus 3% organic order intake is the best level since quarter 4, 2023.

In terms of sales, it declined minus 2% during the quarter, as an effect of currency headwinds, divestments and a minus 1% organic decline, while acquisitions contributed positively. No impact from number of working days during the quarter. The organic sales development is primarily explained by the strong references within business area Life Science. The strong reference is linked to sales to Novo Nordisk, which had an organic sales impact of 2% on the group in the quarter. Excluding sales to Novo Nordisk, the organic growth would have been plus 1% on group level. Aggregated more than half of the companies grew organically during the quarter.

Moving into sales per geographical market. Sales to Sweden was up compared to last year with improvements in most of the larger customer segments. Sales in Denmark was down mainly due to strong sales to Novo Nordics the same period last year. Finland and Norway was aggregated flat year-over-year. For the rest of Europe, sales growth was strong in the Benelux within the Process, Energy & Water sectors. U.K., Ireland also improved with slightly better demand within general engineering and good development within flow technology products.

Sales development was flat in Germany, Switzerland and Austria. In North America and Asia, sales is slightly volatile and the development can fluctuate with single projects. In North America, we had a challenging reference due to larger deliveries of valves for power generation in the same period last year. And some of the companies in BA Technology & Systems Solutions continue to have a weaker development on the back of hesitation from U.S. customers due to the tariff situation. Sales in Asia improved versus last year due to strong sales of valves for power generation and also within the Marine segment.

The total EBITA decreased minus 3% in total to SEK 1.1 billion, corresponding to an EBITA margin of 14.6%, slightly lower than 14.8% last year, but still a high level and a clear step-up sequentially from 13.7% in Q2. We had a record high Q3 gross margin of 35.5%. Margin accretive acquisitions and divestments reported as well, but the EBITA margin was dampened by the lower organic sales and somewhat higher organic expenses.

In terms of the organic expenses, around a percentage point year-over-year increase in absolute numbers. I would say that the expense situation overall is in control. There is still a cluster of companies which can improve somewhat. However, a majority of the companies are growing, and it's likely to see some expense increase linked to this.

Looking at the net sales per business area. As mentioned, the same number of working days in the quarter but a slightly lower order book coming into the quarter and strong references resulted in a slightly negative organic sales development for the group as a whole. Organic sales was up 3% in business area Process, Energy & Water. For instance, many of the Swedish companies had a good development and the development within the finished process industry also improved. In Technology & Systems Solutions, sales was unchanged. Infrastructure & Construction and Industrial & Engineering continued to be impacted by the weak general business climate.

Business area Life Science had a 5% organic sales drop due to the strong sales to Novo Nordisk the same period last year. Excluding this, Life Science would have had a positive organic sales growth of 6%. The business area had a continued good development with single use -- within the single-use area and also the medical technology distribution during the quarter.

The EBITA margin improved in two of the five business areas with the most significant improvement in Infrastructure & Construction, mainly due to acquisitions and divestments. Life Science managed to improve the margin despite the lower organic sales. They had a strong gross margin development due to a favorable product mix, some currency tailwind, but also good work on pricing in many companies. In the other three business areas, the EBITA margin was basically in line with last year.

Since the beginning of the year, we have added 10 new companies to the group with total annual sales of approximately SEK 1.1 billion. After a somewhat slower start of the year, the acquisition pace improved in the third quarter with six acquisitions completed. In quarter 4, we have so far welcomed one company. We are working with several projects in different stages. So we look forward to welcome a few more companies in the remainder of the year. Our new organization with business segment leaders are also generating more internal leads than before.

Looking at the longer trend, more importantly, we are stepwise increasing the number of acquisitions per year, as can be seen in the yellow line to the left, although number of acquisitions per year can be a bit volatile. Looking at the bridge effects from acquisitions over the last 12 months, we have added SEK 140 million to the group's EBITA in 2025. Furthermore, we can also see that the acquisitions are margin accretive with an accumulated EBITA margin of 16.4% for the quarter and over 17% rolling 12 months.

By that, I leave the word over to Patrik to comment more on the financials.

Yes. Thank you, Bo. Yes, total growth for orders and sales in the quarter was plus 3% and minus 2%, respectively. Year-to-date orders have also increased by 3% and sales is slightly down, minus 1%. Book-to-bill close to 1%, slightly below, but as Bo said, impacted by seasonal variations during the quarter. Year-to-date, it is above 1%. In quarter 3, we further improved the gross margins reaching 35.5% versus 34%. So a really good improvement. However, last year's figure was impacted by inventory write-downs in a few companies. So the underlying improvement was not as high as shown in these numbers, but still a clear improvement.

On a year-to-date basis, our gross margin remains ahead of last year's level. EBITA decreased with 3% in the quarter and also 3% down year-to-date. If we look at the margin, the EBITA margin for the quarter, that was 14.6% compared to 14.8% last year. Good improvement, really good improvement then from quarter 1 and quarter 2.

We had some nonoperational one-off items during the quarter connected to earn-outs and goodwill write-down as we have from time to time, but the net effect during the quarter was close to 0. As a side note, as maybe a few of you have noted, group items appear as unusually high this quarter. I would say this is, however, a wrong conclusion. It's a bit unfortunate, but that it actually relates mostly to our routine concerning management fee, which before -- for tax reasons push out to the business areas. This was last year done in quarter 3, which lowered group items last year. So that's the main reason for the increase.

Yes, continuing further down in the P&L. Finance net decreased 31% in the quarter and 16% year-to-date because of both lower interest rates and also a lower debt level. Tax costs increased 17% in the quarter and 3% year-to-date. The higher tax costs is due to an unusually low tax level last year that came from the one-off situation, operational one-off situation we had last year.

Earnings per share decreased with 4% in the quarter and also year-to-date, and I will show a graphical trend on the following slides. Return on capital employed is at 19%, and that's unchanged from last year, but slightly below our targets. Operational cash flow was unchanged at a good high level, and I will also elaborate on that one on the coming slides. Net debt to EBITDA end of the quarter is at 1.4 versus 1.6 last year, so an improvement in that area as well.

So moving on to the cash flow. Cash flow, as I said, was unchanged from the same period last year and at a good level. Total organic working capital was down in the quarter versus last year. And despite more normalized inventory levels, our companies actually managed to reduce it further sequentially and also compared to last year. Cash conversion is continued on a high level, right now trending on a rolling 4-quarter basis at a level of 133% compared to net profit less CapEx, that's a good and strong level. We're closely monitoring the working capital efficiency and despite the lower organic sales, the ratio in relation to sales improved again during the quarter compared to last year.

Continuing to the earnings per share amounted to SEK 1.85 compared to SEK 1.92 last year. The decline is, of course, mainly related to the lower operational result. Lower interest costs continued to compensate, but was offset by the higher tax costs I talked about earlier. Zooming out, looking at the longer perspective, the average growth in the 3- and 5-year rolling 4 quarter perspectives was plus 2% and 10%.

And lastly, the financial position, which we think remains strong and solid. The interest-bearing net debt decreased versus last year from SEK 8.8 billion to SEK 8.1 billion, mainly due to the strong operational cash flow, combined with slightly lower acquisition pace during the year. And our net debt ratios are stable and low from a historical perspective. Net debt to equity ratio was at 48% compared to 56% last year. And net debt to EBITDA was 1.4 versus 1.6. And if you exclude earnouts, it is then 1.3 end of quarter 3 this year and 1.4 last year.

To summarize, our financial position is strong, and that is, of course, a good fundament for continued value-accretive acquisition and also organic growth initiatives. Then I leave back over to you, Bo.

Thank you. We have also included a slide elaborating a bit on, you can say, the broader cost situation and linked to headcount. So as we have talked about for some quarters, demand and sales in some of our companies have been challenging and expenses, headcount and productivity have increased in focus. All of these companies are running cost reduction activities, including headcount reductions. However, more than half of our companies are still growing. And for these companies, it is sound to continue with growth plans and to selectively add headcount and cost.

This slide shows the organic change in FTEs among companies growing, respectively, declining order intake. By the end of Q3 headcount is reduced with 6% compared to the last year in the companies. With a declining order intake, further reductions are planned for Q4. In the companies with a positive order development, we have increased headcount with 2%. In a decentralized organization like Indutrade, there is not a one size fits all approach, rather individual actions are being implemented continuously. Overall, our companies and MDs are managing the challenging market situation in a good way. However, there is also a strong principle embedded in our culture to continuously improve.

By that, we sum up the key takeaways of the presentation. The positive demand development continues. Order intake up 3% organically, slightly lower organic sales mainly due to challenging references, strong EBITA margin of 14.6%. Companies continue to work actively with adapting costs to their respective market situations. Market uncertainty remains for the upcoming quarter, slightly larger order book and higher acquisition pace provides some comfort about the financial performance trend. Ten companies acquired so far in 2025 and still a good pipeline.

All in all, a strong platform for long-term sustainable profitable growth. By that, we say thank you and open up for potential questions.

[Operator Instructions] The next question comes from Carl Ragnerstam from Nordea.

It's Carl from Nordea. A couple of questions from my side. Firstly, thank you for sharing Slide 14, quite interesting. Can you talk a little bit about your plans ahead on this slide as well? I mean we can see minus 6% as the companies with declining order intake. It sounds like you would like to continue to take down it even further. And also on the companies growing by 2% I mean, with positive order intake growth, would you try to keep it at around 2%? Or will it -- yes, what is the plan there? Obviously, you want to achieve operating leverage. I guess you will try to keep it as low as possible, right?

Good questions and relevant question. It's -- the answer I mean, broadly, Indutrade is a big aggregation of 200-and-plus companies, as you know. And it's sometimes difficult to have a clear elaborate view to convey to you linked to this. But as you say yourself, we will continue to reduce cost expenses in some companies with a challenging market situation. There have been steps taken already up until now, but there are actually situations where actions were taken perhaps already in Q3 now and the effects of those actions will be seen more in Q4.

And yes -- so there is a cluster of companies where cost reductions will continue. And for the majority of the companies, there is small clusters of clear growth cases, and they grow, yes, quite significantly. We have a handful of companies which have added full shifts in their perspective, quite a lot of new colleagues, but the broader majority is, as you say, call, that we will probably grow with inflation, more or less, I would say, in that cluster, where there is or more normalized sort of organic growth development.

Okay. That is very clear. And on order intake, it's good to see that orders are picking up in pace. I guess two questions on that is, of course, firstly, if you see the quite healthy momentum continuing so far also -- I mean, both during the latter part of the quarter, but also now so far in October? And secondly, we saw quite strong order intake in Life Science. If you can try to help us divide it by subsegments there?

Yes, we are all eagerly waiting on the market pickup more broadly and really look for signs to hold on to and build on. And as you know, the broad Indutrade organization is -- the glass is half full, so they are more -- definitely more optimistic than the other way around. I would say that it's slight, slight, slight sort of anyway positive views, attitudes towards the market broadly. But there are still more of a flattish broad trend also. Few segments decreased now, I think. So it's more a sideways movement, but still some optimistic points here and there.

And I think you already know most of them, apart from Life Science, which I will comment on more separately, as you asked for, I would say, for us, there are pockets in the energy sector, which is clearly positive. There are pockets in water, wastewater, which are clearly positive, defense-related areas, aerospace-related areas. And now I would say that inventory levels broadly in a lot of segments have gone down. So even if projects have been moved forward, a lot of companies within complicated process industries and so on, they need to move on with some definitely maintenance projects, but also improvement projects in order to run their operations efficiently.

So there are maybe not greenfields, but definitely brownfield improvements, which needs to take place here and there. We see that a little bit more and more, I would say. So yes, I don't want to say that the market has turned broadly, it's more a sideways movement, but still a little bit more optimism, I would say, when we talk to our companies.

In terms of Life Science, it's clearly the single-use segments where also the inventory levels have decreased, and they are ordering -- and there is a -- there are a number of sort of more complicated diseases, which needs lower volumes both developed and produced in the single-use systems in the life science area. So I think there is a good underlying growth for several years to come in that area. But then they're also in the medical technology area, we see also good momentum, I would say, but that's difficult to express in segments because we have -- it's more a collection of individual companies rather than clear segments we have there. So it's a little bit more broadly medtech related, I would say.

That's very clear. And the final one, if I may, is on Life Science again here. Strong margin development despite the tough orders comps clearly. Of course, you touched upon single use as one effect. Could you help us give any insights into how much it grew organically in the quarter, single use, either on orders or top line, but also what effect it gave on margins?

We -- I can't give you sort of numbers on that specifically, but it's not only single use which is contributing to this, it's also clearly the med tech area. So it's a combination, I would say. And I should also comment on Novo Nordisk. So we have -- it's absolutely less than five companies relating to Novo Nordisk in a big, significant way. And our companies are still -- even if volume has gone down significantly to that customer, those companies are still on an above Indutrade average EBITA margin. So they are still managing the situation in a good way margin-wise.

And in terms of Novo Nordisk, what we are picking up is that the large factory capacity building projects they have in Kalundborg where some of our companies are involved will continue. So there will also going forward be some significant order intake at some point linked to further capacity expansion projects, actually. So it's not all -- some day-to-day business with Novo Nordisk is significantly down because they have reduced, what is it, 5,000 headcount in Denmark. Our companies don't have the same relationships. It's a little bit wait-and-see mode for some of those projects. But some of the key big capacity-building projects will move on as we understand it.

The next question comes from Karl Bokvist from ABG Sundal Collier.

My first question is on, I would say, both PEW and TSS. It seems like especially in TSS order intake has been good both in Q2 and Q3. And I was just curious to hear about the comments I believe you made early in the year right after Liberation Day in terms of customer decision inertia, if we call it that, and if this has then improved.

It's a relevant question for that business area. It's our most international business area and the business area with most sort of customers into the North American market, U.S. market, and they still feel that there are some difficulties to close projects linked to the tariff situation. Most of that business is indirect for us, I would say. So it's more that maybe we have Western European customers who sell into the U.S. than direct sales. But there is also some direct and there is little bit wait-and-see type of mode on -- in that market still, I would say.

So I think as a business area, they are picking up, but also from slightly lower references, I think. So they are moving in the right direction. But a lot of those customers TSS are tending to is industrial and engineering-related companies. So it's still not going to be a super significant pickup, I don't think, but somewhat improving market situation, hopefully, as the tariff situation are stabilizing and at least companies can plan for certain investments with more reliability around it.

Understood. And my second question is just regarding M&A and the acquisition landscape. Any particular regions you find particularly active and/or interesting at this point in time?

I would say that it's Western Europe broadly. Nordics still very interesting. Germany, we see a growing effect from Indutrade becoming more and more known step by step. And we have also full-time resource in Germany now since a while back, our segment leaders are more and more in Germany. And also Northern Italy, we have also a full-time resource there since some time back, and he is providing more and more leads every quarter, I would say. We are maybe a little bit more geographically hesitant to the U.K. But otherwise, I would say Western Europe is -- there are pockets of opportunities everywhere there.

The next question comes from Zino Engdalen Ricciuti from Handelsbanken.

Yes, I've also got a couple on M&A. Just following up why you're hesitant a bit to the U.K., if it's -- so say, related to their underlying market?

Yes, I think there are less and less winning -- industries, winning larger engineering industrial companies in the U.K. in a regional global perspective. So I think you need to be in a context where the broader environment makes money, is successful. It's growing. And unfortunately, I think it's a little bit less of that in the U.K. than other Western European countries. So it is more linked to that, I would say. But there are obviously -- we can still find really jewels in the U.K. as well. So it's not that we have completely shut down in terms of looking for companies in the U.K., but bit more broadly business environment, which is a little bit more challenging, I think.

Understood. And also on the M&A side, when we look at the acquisition pace, which has been quite good in Q3, especially compared with the first half of the year. If we relate this to the last time you passed the acquisition machines, let's say, at the end of '23, we saw a bit of a catch-up effect in the beginning of 2024 or would you say that what we're seeing now is part of a catch-up?

Yes. I think it's partly been a catch-up, which we have also communicated earlier that we expected that in quarter 3. But we also, as I very briefly I think commented on in my presentation that the new organization with a new platform of defined segments and appointed segment leaders since a bit more than 1.5 year back now, they get more and more sort of warm in their clothes, to use a Swedish expression, and have had more time to build pipelines, create relationships and so on and so forth.

So I feel maybe comfort is the wrong word, but I'm optimistic in terms of what this investment in resource organization is potentially generating now going forward. So it's two things. It's a catch-up and it's, to some extent, also an effect going forward now of a stronger acquisition resource machinery.

Very clear. And regarding the new organization, would you say that in recent times that your expectation on when they are, so say, fully up to speed has changed? Or is it a couple of years until that is fully operational?

Yes. It's people. They're all individual, some pick up extremely fast, have a little bit more experience since before and some are a little bit more new into the situation. So yes, it's probably difficult to say a time on it. But we are not -- definitely not at full sort of speed linked to this right now. That's still to come.

And also, if I can comment, internal lead generation is sort of a really long-term work, not all companies you contact are, of course, for sale and you need to build up the pipeline and over time, it generates more and more acquisitions then. So it's sort of even if they are working in the really right way with good pace, it takes time for it to end up in closed transactions.

That's correct.

The next question comes from Johan Dahl from Danske Bank.

Just two quick questions. First, on the gross margin. You talked about, Bo, your pricing actions in Life Science, but looking at the other parts of the group, is that also, so do you see a positive trend? Or is it flat or perhaps even more challenging in those parts? Secondly, I was just wondering on the portfolio. I saw you made some divestiture here in the quarter. Is there more sort of portfolio pruning actions going on in Indutrade right now?

I think our companies, in general, are extremely good at transferring costs to the customers and defending gross margin. So I think we -- I expect us to be at a good gross margin level also going forward. So nothing dramatic to plan for in terms of all of a sudden, a decline again or something like that. So I think we are at a good level, and we will hopefully defend and stay at a good level.

In terms of pruning, divestments, I think we have probably done most of that short term. So you can never say never, but most have been done short term and not the same sort of number or effects going forward.

Johan, if I elaborate on the gross margin a little bit. I think we saw a positive development in the majority of companies in most business areas. So maybe Life Science stand out a little bit, but for sure, not the only contributor. And then pricing is, of course, one important thing, and then mix. And I think we've seen a positive mix with stronger gross margin company sectors have been improving slightly more than others. That's an important piece in the parcel. And then also currency, actually then since we have a lot of trading companies in Sweden with a stronger currency positions now importing goods products in dollars and euros, improving the margin slightly. So that's also a contributor.

The next question comes from Robert Redin from DNB Carnegie.

Patrik, I just wanted to come back to that parent group or overhead cost in the EBIT table, SEK 82 million. You said last year, it was low due to some internal, yes, cost development, so -- but it is still a high number. Is this a number we should be expecting going forward on the slide?

Yes. It's -- I would say that it is more relevant sort of ongoing quarter level. I would say maybe slightly high. Maybe it is around SEK 70 million or so would be sort of a quarterly level that's sustainable, I would say.

All right. Perfect. And then generally, on SG&A costs, you had that slide showing the [FTE] reductions. But in Q3, did you have much of an impact from those reductions? I mean that was the reduction from a year ago. When did that take effect? And in terms of year-over-year cost development, did it have full effect or half effect or not so much in Q3 this year?

I'm not sure if I fully understood your question. But if you look at total cost -- total overhead cost and SG&A, but also then more sort of operational or manufacturing-related overhead, which we included when we spoke about the development of overhead costs, they increased somewhat during the quarter compared to quarter 3 last year, like 1% or something like that. So yes, ideally, we want this to go down slightly further, but I think we have it under good control, and I think you should expect it to be going sideways going forward.

All right. Yes, because my question was if you bunched together all of the SG&A cost items between gross margin and EBIT, they were growing quite a lot year-over-year. So I was thinking this 6% FTE reduction you had in the businesses with weaker demand that, that maybe didn't have so much of a cost effect in Q3, but because of the timing.

I think the reduction of the people that's end of quarter 3 compared to end of quarter 3 last year. So that's sort of the timeframe on that slide, that number. But I mean, even -- and we have also more things on the headcount side that we have initiated and that will be sort of implemented or executed during quarter 4 and these things will, of course, also have a cost effect, yes, during the quarter.

So I think from that perspective, we will have lower cost. But then there are also other things on companies that are growing. They are also doing slightly more things, et cetera. And the net of all this, I don't want you to sort of expect big reduction during quarter 4. So I think it's more fair realistic to estimate sort of a sideways movement of costs.

[Operator Instructions] The next question comes from Mats Liss from Kepler Cheuvreux.

Yes. Three short ones from my side. You mentioned different things that affected your orders and stated price/mix, currencies. Could you be a bit more specific about price and volume?

I think it's difficult for us to be more specific there, Mats.

But in general, we can say I think our companies are still increasing prices, but it's not the levels that we saw during -- if you go back a couple of years, it's more sort of -- I think that sort of price -- pricing routine is more normalized now. So it's more of the normal 1% to 3% increase per year. That's embedded in the numbers, but we don't have an exact sort of quarterly number, no.

And then -- well, just for support, going forward, and what's your feeling about comps going forward in the fourth quarter, year-over-year comps there? How do you feel about that?

The quarter, if you look at top line, I think the references are normal to slightly lower, no sort of significant change, but slightly lower, I would say.

Great. And finally, I mean, you mentioned the opportunities there and the list of acquisitions you have and you mentioned geographical opportunities. But could you say something about opportunities in the different business areas, where are you? I understand not so specifically.

Yes, but we obviously see opportunities, work with opportunities in all business areas and sometimes they play out differently over time a bit. I would expect Life Science to -- I mean, they have a good momentum, good pipeline. All of them have a better pipeline, but yes, Life Science is strong. I think Process, Energy & Water is strong. Industrial & Engineering is also strong. Maybe somewhat -- there are good pipelines in all five areas, but maybe those three stand out a little bit.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Then we thank you for listening in and asking good questions, and wish you a good day. Bye-bye.

Welcome to the Indutrade Q2 presentation for 2025. [Operator Instructions] Now I will hand the conference over to CEO, Bo Annvik; and CFO, Patrik Johnson. Please go ahead.

Welcome, and good morning on our behalf as well. As usual, let's begin with the overall highlights. Starting with the demand situation. The order intake was stable organically unchanged from last year despite fewer working days and the uncertain market situation. So underlying, it was stronger than last year. Around half of the companies had organic order intake growth with good demand from customers within the energy sector. Demand within medical technology and pharmaceuticals was aggregated on a high and stable level.

Net sales decreased 4% in total, organically also minus 4%, and I will soon comment more on this. The EBITA margin came in at 13.7%. We continued to reduce inventory during the quarter. Four acquisitions completed so far in 2025. We have prolonged some of the acquisition processes due to the general market uncertainty, but the pipeline now is very strong.

Looking more specifically at the order intake and sales trends, demand was underlying stronger than last year, considering the number of working days during the quarter. We had a positive book-to-bill also this quarter with orders being 2% higher than sales. It's the second quarter in a row with a positive book-to-bill. There were continued variation between companies, segments and countries with the strongest growth in the energy sector. The demand within medical and pharmaceuticals was high and stable. Demand within infrastructure and construction, general engineering and the process industry was weaker.

In terms of sales, we declined 4% during the quarter as an effect of currency headwinds and a minus 4% organic decline, while acquisitions contributed positively. The organic sales development is primarily explained by the lower order backlog coming into the quarter as well as strong references, especially for business area, Life Science and fewer working days. I think visually, you can actually see at the net sales bar diagram that quarter 2 2024 stands out with an all-time high sales of SEK 8.5 billion. I think it's also good for you to understand that if we exclude the 2 companies with the highest sales to Novo Nordisk, that has a 2% impact on sales this quarter. So instead of minus 4%, it will be minus 2%. And if we exclude the working day effect, it's also around 2%. So with those 2 sort of adjustments, it's a flat sales situation, basically perhaps giving you a better understanding of the overall situation within the group.

Moving into sales per geographical market. Sales to Sweden was overall flat with good demand within, for example, the energy sector and infrastructure-related business, while it was lower in medical technology and pharmaceuticals, mainly due to challenging references. Sales in Denmark was down due to strong sales to Novo Nordisk the same period last year. Also Finland and Norway was aggregated down year-over-year. For rest of Europe, sales development was stable in the Benelux, U.K., Ireland and Switzerland and Austria. Sales growth was strong for single-use products, but lower for infrastructure construction-related business and general engineering, especially in Germany.

Sales to North America and Asia is slightly volatile and the development can fluctuate with single projects. In North America, we had a strong development within valves for power generation, while some of the companies in the business area, Technology & Systems Solutions had a weaker development on the back of hesitation from U.S. customers due to the tariff situation. All in all, it was flat from last year and down in Asia.

EBITA decreased 11% in total to SEK 1.1 billion, corresponding to an EBITA margin of 13.7%, an improvement sequentially from 13.3% in Q1, but lower than 14.8% last year. The organic sales development of minus 4% is, of course, the main driver of the underlying EBITA margin decline versus last year. The gross margin was stable and high at 35.3%, basically in line with last year. We also start to see some effects from our company's efforts in terms of adapting costs to the situation prevailing in their markets with organic expenses being flat compared to the same period last year and also lower than the first quarter. This is a positive development effort and the work will obviously continue also into Q3 and Q4.

If we then comment on the net sales per business area, as mentioned, some headwinds in terms of fewer working days, strong references and a lower order book coming into the quarter, resulting in a negative organic sales development for all business areas. The main explanation for the organic sales drop in business area Life Science is that they had very strong sales during the same period last year connected to diabetes-related products in the Nordics and production equipment to Novo Nordisk in Denmark. We saw continued good development within the single-use area during the quarter and over half of the companies in the business area had organic growth in both sales and orders.

If we do the same exercise for business area Life Science and exclude the 2 companies with the highest sales to Novo Nordisk in the quarter, the organic sales would go from minus 4% to plus 4% for the business area. So big impact from very few companies, but also good to know that those companies are 2 very good companies, and you will see that they will have a positive impact also order intake-wise and sales-wise going forward.

Process, Energy & Water was impacted negatively by weak development within the Finnish process industry and the weak general business climate continued to impact Infrastructure & Construction, Industrial & Engineering and Technology & Systems Solutions. As mentioned, for Technology & Systems Solutions, it was primarily sales to North America and Asia that was weak. I can also mention that we have appointed a new Head of Business Area Technology & Systems Solutions, Mr. Peter Laveson, an external recruit who will start towards the end of August with a very relevant background.

If we then turn to EBITA margin by business area. As mentioned, we had stable high gross margin and positive expense development. However, all business areas had a declining EBITA margin in the quarter. In addition to the organic sales development, slightly higher expenses had a negative effect in Industrial & Engineering and Life Science. Infrastructure & Construction had a slightly lower gross margin, but was impacted positively by acquisitions, divestments and restructuring activities. Process, Energy & Water had the weakest margin development compared to the same period last year. However, they had the best improvement from quarter 1. Technology & Systems Solutions was impacted negatively by some one-offs connected to, for instance, layoffs in addition to the organic sales decline. Sequentially, the EBITA margin improved versus Q1 in all business areas, except for Technology & Systems Solutions.

If we then turn to acquisitions. So far this year, the acquisition pace has been somewhat lower with 4 acquisitions completed adding approximately SEK 425 million in annual revenues to the group. Due to the general market uncertainty that also intensified in April with the tariff announcements from the U.S., we decided to prolong some of our acquisition processes. We do, however, remain very opportunity oriented and are looking for a wide range of companies in many different geographies and end segments. The pipeline is now very strong, and we are working on several projects in different stages. So we are confident that the second half of this year will be successful in terms of acquisitions.

Looking at the longer trend, more importantly, we are step-wise increasing the number of acquisitions per year, as can be seen in the yellow line to the left, although number of acquisitions per year can be a bit volatile. Looking at the bridge effects from acquisitions over the last 12 months, we have added over SEK 100 million to the group's EBITA in 2025. Furthermore, we can also see that the acquisitions are margin accretive with an accumulated EBITA margin of 17.3% for the quarter and also over 17% on a rolling 12-month basis.

Then I hand over the word to Patrik to comment more on the financials.

Yes. Hello, everyone, and thanks, Bo. Looking at the financials in more detail. Total growth for orders and sales in the quarter was plus/minus 0% and minus 4%, respectively. Year-to-date orders have grown 3% and sales is in line with last year. Book-to-bill above 1% in the quarter and also for the first half year. So that's encouraging and good. In quarter 2, we continue to have a stable high gross margin development, 35.3% versus 35.4% last year. And year-to-date, we are slightly ahead of last year.

EBITA decreased with 11% in the quarter and is minus 3% year-to-date. Quarter 2 EBITA margin was 13.7% compared to 14.8% last year. And as Bo commented, a slight improvement versus Q1 when we had then 13.3%, excluding one-offs. Finance net decreased 17% in the quarter and 8% year-to-date, mainly because of the lower interest rates. Tax costs are down 10% in the quarter and down 4% year-to-date, basically in line with the result movement. So underlying tax rate is therefore in line with last year at around 23%.

Earnings per share decreased with 12% in the quarter and 4% year-to-date, and I will show and talk around the graphical trend on the following slides. Return on capital employed is at 19%, which is slightly below last year and also slightly below our target. Operational cash flow was down in the quarter, and I will also elaborate a bit further on that on the coming slides. Net debt-to-EBITDA end of the quarter is at 1.5x versus 1.7x last year.

So let's look at a few more details on starting then with cash flow. Cash flow, as I said, is down during the quarter. And the drivers here are the lower result, of course, but also less favorable working capital movements. We have had then 2 years of very strong cash flows, as you can see from the slide, supported by large working capital releases, mainly connected to inventory. We have, of course, an ambition to improve the capital efficiency further, but inventory levels are now more normalized, I would say, and further working capital releases will be sort of marginal.

During the quarter, we also had less favorable cash flow movements in the more project-like businesses we have with less advances and more project buildups which also impacts the cash flow somewhat. However, if you look specifically at the inventories, they declined organically slightly since last quarter and the total organic working capital is also lower than last year. Cash conversion has continued on a good high level right now trending on a rolling 4-quarter basis at 131% compared to net profit less CapEx. As I said earlier, the working capital efficiency is a focus area for us going forward. And despite the lower organic sales, the working capital ratio in relation to sales has improved since last year.

Moving on to looking at earnings per share. That amounted to SEK 1.71 (sic) [ SEK 1.75 ] in the quarter compared to SEK 2.00 last year. And decline is, of course, mainly an effect of the lower operational result. The lower interest cost, they compensate slightly. The interest net has otherwise been a headwind if you look at the more longer development the last 2 years, '23 and '24, but they have come down now somewhat to a more, call it, a normalized level. Looking at the longer perspective and the average growth in the 3- and 5-year rolling 4-quarter earnings per share, they are at 4% and 12%, respectively.

And then ending with the financial position that is still very strong. The interest-bearing net debt decreased versus last year from SEK 9.5 billion to SEK 8.4 billion, mainly as a result of strong cash flows the last year, but also then a lower acquisition pace. Net debt, however, increased seasonally compared to the first quarter due to the dividend payout. And if you look at the net debt ratios, they are stable and low from a longer historical perspective. Net debt equity -- net debt-to-equity ratio was 52% compared to 63% last year. And the net debt-to-EBITDA ratio was 1.5x, as I said earlier, then compared to 1.7x last year. And if you exclude earn-out liabilities, the net debt-to-EBITDA ratio is 1.4x compared to 1.6x last year.

So to conclude, the financial position is strong and that, of course, creates good conditions for continued value-creative acquisitions and also organic growth investments. By that, I leave over back to Bo.

Then we conclude with key takeaways. We had a good underlying order intake and have had a positive book-to-bill 2 quarters in a row now, strengthening our order book. The sales and profit levels were down during the quarter, impacted by lower backlog, fewer working days and challenging references, but good to see that we are sequentially improving from quarter 1 to quarter 2. And also within quarter 2, we ended the quarter in terms of the month of June in a stronger way.

Expenses down versus Q1. Many companies continue to work actively with adapting costs to their respective market situations. Market uncertainty remains for the upcoming quarters, and we still have a slightly lower order backlog. Very strong acquisition pipeline. We are working with several projects and look forward to welcome many more companies in the second half of the year and strong platform for long-term sustainable profitable growth going forward.

By that, I say thank you for listening. And now we will open up for questions and answers.

[Operator Instructions] Next question comes from Carl Ragnerstam from Nordea.

It's Carl from Nordea. A couple of questions from my side. Firstly, starting off with M&A perhaps, as you mentioned, you're pausing the discussions due to a soft macro, as you said, of course, stands out a bit versus your sector colleague. Also remember when I listened to former CEOs of Indutrade Sectors, the best M&A was done in sort of a muted macro, which typically entails a healthy M&A, EBITDA upside once macro turns. So could you help me a bit understand your thinking there when you decided to pause the discussions? Is it all discussions paused? Is it just certain exposures? And also, when do you plan to restart the dialogue? Because I guess the uncertainty is still here, right? So yes, your thinking there would be good.

Yes. I think pause is maybe the wrong terminology. We are more prolonging discussions in order for us to understand the pace and momentum in the companies. So when you finally take ownership, you don't really want to have 2 quarters in the beginning of the ownership to see declining performance. So it's more to build certainty around the customer situation, the order intake, the order book and yes, so more certainty around the broader situation leading to that the acquisition becomes accretive when we become owners.

So it's more prolonging. Sometimes you need a couple of more months. And even if there is a general uncertainty continuing, you might have good enough sort of confidence to finalize the acquisitions based on knowledge you have gained in these discussions. So it's not pausing. It's more taking some more time to build confidence, I would say.

And when do you plan to restart the dialogue?

Again, we don't restart. They are ongoing. And from what we can see now, we have a lot of projects, which hopefully will be finalized in the second half of this year.

So then it suggests that you have better visibility of the macro from here on then?

I would say better micro project by project.

Okay. Perfect. Also looking into the cost side as we discussed this before, of course. But yes, if I remember correctly, you have low single-digit organic cost development in Q1. If I read it correctly, it is now flat in Q2. The ambition is, as I remember, to take it to negative territory. So could you help us a bit how the organic cost developed, for instance, in late Q2 or early Q3 to get more of a better picture into the organic development here from Q3 and onwards of the cost?

Do you want to take this, Patrik, or should...

Yes, I can comment. But you're right, we have worked a lot with the cost, and they are coming down. If you look sequentially, they are down versus Q1 and flat versus last year. And we expect sort of that trend to continue further down. And also maybe mention that we have some one-offs in the quarter connected to layoffs primarily. So if you exclude those, it would actually have been then slightly lower than last year. But that will continue and hopefully then end up being negative territory as you expressed it.

Is it low single-digit negative already in Q3 then? Or should we expect flat in Q3 as well? Or -- yes, could you help us a bit with the timing?

No, I don't have a specific number, but we will push on with this, and it will -- cost will come down in quarter 3 and quarter 4. I mean I think that's the only guiding we can give.

That is very clear. And I think it's, of course, positive to see the book-to-bill being positive second quarter in a row, but the backlog is, of course, not fully restored seemingly as you expressed it in the report. Could you give any insights into how the backlog looks at the end of Q2, especially in comparisons to Q2 last year?

Should you continue, Patrik or...

Yes. Let's see if we can help each other answer in a good way. I mean we have -- it's difficult having a sort of a super good transparency of the backlog. So we have so many companies, and it's spread over so long time. But it's almost restored to the levels we had last year. Then it's, of course, not only for invoicing in quarter 3 and quarter 4, it is then spread over, I would say, spread over, I don't know, 12 months or so. So it is quite long. But I mean, it indicates that sales level will pick up in quarter 3 and quarter 4. I don't know if you want to express it in another way, Bo.

No, I think that's generally a good explanation on a group perspective, then it differs business area to business area, obviously. I would say that Life Science has broadly a good situation. Process, Energy & Water is also a good situation. For several quarters, we have hoped that Infrastructure & Construction would have bottomed and see stronger order intake buildup, but that seems to be a more problematic situation. So probably Q3, Q4 will be a bit challenging for them also going forward here.

And then Industrial & Engineering and Technology & Systems Solutions have similar order intake patterns, I think, mostly industrial customers broadly being their customer base. And yes, there, it is a little bit more hesitant. There is order intake growth on consumables, if it's more CapEx-related projects, more hesitations in the market. So -- but all in all, the sentiment is a little bit more positive in towards -- sequentially, you can say, Q2 to Q3 and H2. So you also saw that within quarter 2, a sequential improvement. So yes, hopefully, that will continue and be realized as we think and see right now.

That's very clear. And the final one, if I may, is on Infra & Construction, quite hefty leverage on the 2% negative organic growth. So could you just explain a bit what happened there? You touched upon the gross margin in the report. But of course, you've also done divestitures that should have helped the margin or underlying it's maybe even worse. So what happened in the quarter in Infra & Construction would be super helpful to get more flavor on that.

Yes. They have -- like in all business areas, it's a mixed situation with companies in different positions and with different performance. But they had a cluster for some time now of companies which have had super weak performance, unfortunately. And we have seen it beneficial to divest a part of them, and we are divesting another one basically as we speak here, which also will be an accretive sort of decision going forward here.

But after that now is done, I think there is no obvious perhaps more divestment case there, more continued organic growth and improvement work. And we have -- and they have worked quite a lot with their expense levels. So as soon as we see some light there, I think we will see a lot of good profitability improvements and return improvements. But we need a slightly better top line in order for that to come still.

And Patrik, the quite big leverage there on the -- because the organic growth was just negative 2%, right? So it's a big deviation versus what we saw in Q1.

They have some one-offs. I think we wrote that in the report as well. So we have some one-offs and the divestiture case Bo is speaking about also had some problems in the quarter. If you take away that, it would have not been as dramatic, I would say. So...

How big are they?

Sorry?

How big are the one-offs?

No. I mean, it's in total, it's around SEK 10 million, I would say, in total, if you put all of these things sort of together.

For the segment or group, sorry?

In the business area.

The next question comes from Karl Bokvist from ABG Sundal Collier.

A follow-up on the -- just a clarification here because my line was a bit bad. But the one-off cost items here that you talked about, was this for like the entire Indutrade Group in this quarter, a negative SEK 10 million figure?

No. I talked about Infra, then it's maybe double that amount for the group in total.

Understood. Then going to the divisions. If we go back just one quarter, for example, TSS was one division where you saw a bit slower order development and also some declining margins. But now in this quarter, it was a very strong plus 10% organic order increase and another quarter of positive book-to-bill. So would you say that this division was perhaps only affected by the kind of early April uncertainty and then activity has resumed again. I'm just thinking a little bit about the type of businesses in this division and perhaps also that similar comments could be said about PEW.

I think those 2 business areas are actually quite different. If you take Technology & Systems Solutions, it's our most international business area with around 20% of sales to North America and a fair extent also to Asia, China. So they have -- the tariff uncertainty has impacted their business area more, I would say. And part of that business area also have companies with fairly large CapEx orientation with also more hesitations lately. But it was good to see that they had order intake growth. So we will see going forward here. But most of the customer base in -- towards that business area is larger engineering, industrial companies globally, I would say. So they are not that different from industrial and engineering, but they are more European in their scope geographically, I would say.

Process, Energy & Water is also much more Northern Europe, Western Europe oriented and have a completely different customer base, which is much more process industry and obviously, water, wastewater, both in industrial companies, but also municipalities and those types of customers with, I would say, a good underlying situation now. So they should have a stronger Q3, Q4, hopefully, going forward here.

Understood. And then when it comes to the tough references for these 2 particular businesses in Life Science, how many more quarters should we consider that when we look into the second half?

Yes. It's very difficult to say and be very clear about that. It's a bit volatile when their orders are entered into the system. So but there will, for sure, be some fairly large orders into those companies during the second half. So yes, I cannot be more specific than that right now.

If I comment -- history, they had also good deliveries during quarter 3 and quarter 4. So sort of from historical references, those will be a bit challenging also quarter 3 and quarter 4. But we hope to fill up with new orders as Bo says.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Then we thank you all for good participations, good questions and wish you all a nice summer.