Beijer Ref — Call Transcript 2025

Welcome to the Beijer Ref Q3 presentation for 2025. During the questions and answers session, participants are able to ask questions by dialing 5 on their telephone keypad. Now, I will hand the conference over to the CEO, Christopher Norbye, and CFO, Joel Davidsson. Please go ahead. Hi, everyone. Christopher and Joel here. We'll, as usual, take you through some slides, and then we'll get into some Q&A. Maybe if we move to the first slide so you can see it. Summarizing Q3 a little bit on the high level, a very solid quarter in all segments and areas, I would say. As you can see, we had a good organic growth of 5%, acquisition growth of 3%, and then a negative currency around 6%. All in all, we'll come back to the segments, and the geography is growing and also putting up very good numbers. On the profit side, we have another record margin here in Q3, 11.7%. We would say a very good development in our regions to support that margin. Cash flow continues to be strong, which is also now moving into the season where we realign inventory. As we said before, we are working more proactively to set a better structure on the inventory side. We expect this to continue. Of course, that relates to a very good position on the balance sheet that Joel will come back to. Very nice EPS growth of 11% despite 6% currency. A very solid financial quarter in a still not very strong market, but I would say we continue to take market share, improve the business model. The global business model we have continues to improve. Also worth mentioning, we made an acquisition here some days back, buying the leading HVAC distributor in the Baltics. A very nice business, a good market position, good potentials to continue to develop together with us. That will fit very nicely into the portfolio for us. We'll come into the next slide a little bit, also doing a consolidation program over the next couple of quarters. If you turn to the next slide, you'll see some more details on it. It's more related to driving a more efficient structure, mostly in our European setup, as doing acquisition for many years. We also have a lot of overlapping structures. We are consolidating warehouses and some back offices to make a more efficient setup. During the years, we're invested in more automated warehousing, which means that we can move in more products, more inventory efficiency. We're doing that in different areas in Europe and closing down old, more inefficient buildings. All in all, this will further accelerate the availability of products for our customers, faster service levels around in these markets, and also a wider product offering as we put this together. Of course, there's a positive savings of doing that. The main reason for the program is more related to improve our business model as we've grown a lot over the last years. The financials of it is that we'll take a one-off here in Q4, SEK 150 million, and we expect about SEK 100 million of savings as we go through next year. The cash effect is about SEK 50 million of this. It's for us a very good project to improve the business model for our customers, but also nice savings, of course, when we do it. Moving on to the next slide, focus a little bit on the group. As I said before, solid organic growth in the quarter led by segment HVAC of 6%. We could see that being nice in Europe, EMEA, in the U.S., and also APAC continues to be driven by Australia. This is our second biggest quarter of the year. Q2 and Q3 are our main quarters. If you put together this season for Beijer Ref, it's been a solid Q2 and Q3. We see a nice result of the work we've been doing to drive growth in our big quarters on there. We also see a nice effect on the SEM Freegan Fenergy, our green OEM, continuing to grow double digits and also continue to build a nice backlog in their business. Also worth mentioning, got our first orders for Fenergy in Germany. That has the potential to become a huge market for us over the next five years. We also have another CO2 project in the U.S. We continue to have our technology being tested on CO2-based cooling racks in the U.S. and also continue to have success in that model. We also had a nice stable growth on the refrigeration side of 4%. All in all, putting this together, I think the best word to describe it is a solid quarter, as I said before. Moving into more of the division to give you a little bit more flavor. In EMEA, I would say also on the growth side, stable and good, driven here also by the HVAC side, but also the OEM side ramping up their sales driven here by Fenergy and SEM Freegan that continue to do well. It's good for us and that the green side has continued to grow at double-digit pace, and we expect that to continue. Margin stable in line with last year, but very good margins, 12% in Q3. Of course, also Airway will be consolidated into the EMEA organization, the Nordics and the Baltics. We look forward to driving and supporting that asset as we clear the competition authorities during this year sometime. I think a positive quarter in EMEA. We have some signs of markets improving a little bit. It'll be interesting to follow this as we move into 2026. Moving on to APAC, it continues with nice growth, more stable quarter. Our main markets in APAC, of course, are more interesting as we move into Q4 and Q1, as that's the summer season for us. We clearly continue to take market share in this region, again driven a lot by the largest market in Australia. On the OEM side, we've seen a limited growth over the last couple of quarters, but we also see some tendency of more quoting, better backlog. We expect also there in Q4 to start seeing some more growth in the OEM segment. We continue to do very well on developing the margin. Again, another record quarter on the margin side all across the areas in APAC. We are very proud of them moving over to running the business on an annual basis over the 10%, as we stated a couple of years ago. We're moving in that direction for us. Worth mentioning also, we opened a new decanting facility in New Zealand, which means that we're going to be taking care of all the refrigerants as we do in Australia. We invested in this quite a lot, and it just opened here towards the end of the quarter. It'll be interesting to follow that journey as we move into 2026. Also a solid quarter in our APAC division. Moving over to North America, a lot of things happening there, as you probably are aware of if you follow the U.S. market. Worth calling out, of course, is that we are at the end of the transitioning into the new products based on a more A2L refrigerant. We are about 90% complete as we go out of Q3 and will be completed transition here during Q4. I would say we're doing very well in the U.S., posting an organic growth of 6%, posting record margins. We can see the platform we are developing in the U.S. is, of course, working well. We are taking market share. We're opening new branches. We're launching our private label in the markets. We're adding commercial refrigeration. As you can see, that grew 12% in a flattish market. I also expect on the volume side that the HVAC market is probably down. Also alluding to, as we stated for two, three years as we entered the U.S. with this asset, that it is a very good asset focused on aftermarket service replacement. There are more repairs in the market when it's a little bit tougher. That's part of our business model in the U.S. Of course, we can see the result of that in a quarter like this, both on the sales side and the margin side. Very satisfied with the U.S. Q3 and a very good quarter. Also worth calling out, good pipeline on the acquisition side. We expect to close some acquisitions here in Q4. You'll be aware of that hopefully soon. For us in the U.S., it continues to develop very well. Just a summary on the sales, you can see the 5% organic growth, so a good rolling 12 organic growth. I would expect not a very strong market across the world. I think that's worth mentioning as we play in 45 countries across the world. We have a very good model to cover ups and downs in different regions. You can see that in our numbers. We continue and push forward on the sales side. Finally, on the margin side from my side, a good quarter building on a very solid Q2. These are, as you can see, our two main quarters and very well executed in a more flattish market. I think it just proves the business model works, the platform is there, and we'll continue to build on that as we move into 2026. With that, I'll hand over to Joel. All right. Thank you very much, Christopher, and good morning, everyone. As always, I jump straight into our EBIT of SEK 1,079 million, which is up 4% compared to last year. Again, despite quite significant FX headwinds here in the quarter, our financial net continues to develop well, stable sequentially, and SEK 25 million below Q3 of last year. On a comparable basis, now interest costs are roughly SEK 35 million lower in the quarter compared to last year. On the tax side, the tax expense in the quarter was SEK 214 million, which is representing an effective tax rate of 23%, slightly lower than last year. All in all, I would say thanks to improved operating result, lower interest rates, and improved tax position, we deliver a net profit in Q3 of SEK 736 million, which is an increase of 11%. Moving over to the EPS. EPS in the quarter of SEK 1.44 per share, which is then again up 11% compared to last year, despite the 6% currency headwind that's been mentioned. EPS for the first nine months amounts to SEK 3.94, which is an increase of 13% despite the 4% of currency headwind. Moving over to the cash flow, as Christopher mentioned, very strong cash flow in Q3, SEK 1.6 billion, which is roughly SEK 300 million above last year. Main driver of that, as you see, is lower working capital tied up compared to last year, which is an effect of lower inventory and the result of the work we are doing in that part of the business. In comparison to last year, cash flow from inventory is roughly SEK 500 million better. On the next slide here, you see that we continue to develop strong cash flow over time. The year-to-date cash flow is SEK 2.7 billion, which is roughly an increase of half a billion compared to last year. Of course, moving over to leverage, thanks to our strong cash flow, we continue to improve our credit metrics. The net debt measured, excluding pension and leasing, has improved and is now down from SEK 1.9 billion-SEK 1.6 billion sequentially and 0.4x lower than a year ago. This leaves us with a very strong balance sheet to execute on the M&A pipeline going forward. With that, I hand back over to Christopher for a summary. Yeah. We covered Q3. I think it's a very straightforward, strong quarter with solid growth, good profitability, and also on good cash generation that we've seen. Record margins, record cash flow. I think it's a very good base to continue to build on and improving the business model, of course. If you look more going forward on trends, it continues to be a strong underlying market. Trends on driving the cooling side, OEM on natural refrigerants being present in more than 45 countries around the world. We can see the leverage of that. We're also coming into the end of the transition in the U.S. on refrigerants. We can see the platform in the U.S. showing good drive and good development in the U.S. market, both on the day-to-day business, new branches, private label products, commercial refrigeration systems that we can see, of course, in our growth and margin numbers in the U.S. As Joel ended up, pipeline looks good across the globe, which we look forward to both in Q4 and 2026 will be an active year on the acquisition side with some very good opportunities for us. The balance sheet plays in. We also expect in Q4 a good cash flow to support our business and activities into 2026. With that, we are ready for Q&A. See if we can help you clarify anything that's not clear in this fantastic quarter. If you wish to ask a question, please dial 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial 6 on your telephone keypad. The next question comes from Gustaf Schwerin from Handelsbanken. Please go ahead. Yes. Good morning. I have two. First, if you start in North America and the organic print you're showing here, can you maybe help us a bit on the price contribution versus Q2? I think related to that, maybe some early thoughts into next year. You mentioned it. We also heard from one of the U.S. OEMs the other day that Q3 has clearly seen more repairs versus replacement. Are you in any way worried about the growth trajectory into next year or maybe some pent-up demand here and more replacement? That's the first one. Yeah. I would say the pricing effect in Q3 is, in the numbers, more close to 4%-5%. I can't remember what the Q2 number was, but I'm sure we have it written up. It was 2%-3% or around 2%+. That's, of course, as we transition into today to A2L side and remembering the equipment is around 40% of our business in the U.S. and then 60% is parts and supply. I think if you follow the U.S. market, you know we're in a pretty good position with our business model to handle also a market that today is, of course, different as you know EM because we need to restock the different as we transition into the A2Ls. Also, on the distribution side, you know it's a solid result in a challenging market. I think it more proves the initiatives and model we have that will continue to drive and improve. Of course, there is a pent-up demand coming. Is it coming in 2026? Depend on interest rates, renovation, housing sales. All those KPIs have been very weak the last two to three years. Despite that, I would say our model is very solid on both sides of the fence. Of course, as the market improves, it'll be a nice tailwind for us. In the meantime, we'll continue to focus on building out the platform, driving our initiatives, acquisition, and look forward to that tailwind. I would say that this model, of course, also proves the strength of being focused on the aftermarket service replacement in the U.S. Perfect. Can you maybe share some thoughts on what kind of cash conversion we should be expecting for the full years? I mean, working capital release last year looked a bit hampered by the inventory bill. Thank you. Yeah. I mean, what you saw in Q3 here, I think we had some buildup also last year on that, which was similar. We had a similar buildup for the transition in the U.S. in Q3 and Q4. From that perspective, that's not going to do this year. I think that's the guidance that I can give. Very clear. Thank you. The next question comes from Adela Dashian from Jefferies. Please go ahead. Good morning, gentlemen. Two questions from me. Firstly, on this decision to initiate on the strategic consolidation program. I'm fully understanding of the fact that you have completed a lot of acquisitions in the past five years, but at the same time, this year has been a bit more muted. I guess I'm just trying to understand timing-wise why already now in Q4, especially if, I mean, you mentioned here during the call that you think that the pipeline is building and that there will be additional deals announced in the fourth quarter. Thanks. Yeah. No, but we've been, maybe to answer it in this way, we've been looking at these types of setups for many years. Also, part of the triggers to do this is that we've been investing in these regions on automating warehousing and structures, which means that we are freeing up space and capacity to drive this type of consolidation. Also investing in new warehousing and upgrading it. For us, this has been more of when we're going to move over. It's been discussed and strategically been part of our plans for quite some time. When you go into mode of do it, our assumption or our strategy is that we'll do it over a six-month period, as we said, and then we're going to restructure and consolidate some of the back office. We're also moving more product into the platform instead of keeping it separate so we can service our customer better. Also, the digitalization and access to inventory, service levels, etc., this type of program will improve those things. Like I said on the call, the side effect is that we are saving money, which is great. The main reason for doing this is to create a better, efficient platform to service our customers. It's more a synergy that we're ready now to execute on in the business. Okay. That makes sense. Maybe if I can follow up on the question around North America and the volume versus price breakdown. I mean, many of the OEMs have pretty weak outlooks for H2 and potentially also going into 2026, but the 6% organic growth is quite outstanding then relative to that. I mean, I would assume that your large exposure to the renovation market or aftermarket is really driving this. In terms of big volumes, aren't you to some extent also dependent on maybe not larger projects, but just overall better momentum in the U.S. market? I can see your profitability being positively impacted by this sort of trend or the current development that is. What's your view more long-term to really get those volumes back on track? Yeah. I think it becomes tricky, and I know you know this, to relate to the OEMs. If you go back to Q2, Q3 last year, their volumes were probably up 20%, 30% because we, as a distributor, had to carry both the new launch of the product and also build up on the old one to manage this. I'm a little bit surprised that they were expecting a different trajectory than this because we, of course, are more servicing than demand in the business. We will continue and destock through Q4 and Q1 next year. We're going to start building a normal pattern and start ordering our products in the end of Q1 for the summer season. I think it's very hard to relate to the OEMs when it comes to the volume side in the business. My point is more related to that as the market improves, of course, that's going to be a nice tailwind for our business. In the meantime, it's more that when you look at Beijer Ref and Heritage in the U.S., it's an underlying very stable platform in these types of times as well. We do expect to do better. It'd be very nice when also the housing market and renovation market picks up, mostly related to interest rates because it hasn't really been strong for two, three years. It's the underlying platform, as I said, that produces stable numbers in this type of environment, which is very encouraging, but also something we saw as we entered this market and acquired this platform. On top of that, it's driving the initiatives that we can. We have opened five, six, seven branches over the last 12 months. We have launched refrigeration in different areas. I think you maybe should see it as we continue to develop this stable platform in tougher times. Of course, as the tailwind starts improving, hopefully next year, it'll be a very nice development. We're not there yet, as you said. I think that the OEMs for us, it's hard to relate to right now because we're in a completely different phase because of the transition into A2L refrigerants. I guess to your point then, can we see the organic growth development in Q3 as being somewhat still held back by the market conditions? Or do you feel like this was, you know, the optimal level? No, no. Q3 is a tough market in the U.S., for sure. It's not a booming market. As you said, it's also we're moving in out to Q4 and Q1. That, you know, it's more heating. It's more low season for us and not very big quarters. As the U.S. market housing sales start improving, that will also drive renovation, which is a huge segment for us. If you take our numbers in the U.S., out of that 6%, 4% or 5% is price, right? For us, it's still good times ahead when the market starts turning on the housing sales because that hasn't been, I mean, it's been at all-time lows for like two, three years. We expect to do better because, of course, having these type of numbers, we're taking market share for sure. We're opening branches. We're adding products. We are, of course, driving some of the growth on our own without having the market support on it right now. Yep, perfect. Thank you very much. Thank you. The next question comes from Carl Ragnestam from Nordia. Please go ahead. Hello. It's Carl here from Nordia. A couple of questions from my side as well. Firstly, obviously, we are exiting high season in Europe and the U.S. Maybe a good time to focus a bit on what is happening in Australia and APAC. We're entering, I think, summer in the month here in Australia, for instance, one of the biggest markets. What is your view on those markets when we are entering high season? What is the dynamic there right now, you think? Yeah. We're just about the cusp between when the summer starts, it's September to mid-October, end of September, mid-October. We're just in the beginning of it. The way you would look at APAC being the main markets, Australia and New Zealand, moving into summertime, and then you have Southeast Asia that's a little bit smaller and more focused on refrigeration. I think we see the same trends as we did before. Both markets are pretty flattish in general, and we continue to take market share. There's no big change yet in those markets. I would say New Zealand is a little bit weaker than Australia. Interest rates are starting to come down. There are green leaves or whatever out there. I would say it continues to be a stable development, positive in Australia and stable in New Zealand and Southeast Asia. No big changes, but continue to be good markets. We continue to drive the margins and invest in the portfolio in these regions. We feel pretty good about the APAC region. Okay. That's very clear. In Europe, we saw growth of 18% in HVAC. I guess weather effect is one of several factors, I guess. Historically, I think we've seen a spillover effect after such a period. Do you see anything of that entering Q4 of the HVAC Europe sales, or is it back to a more sort of sluggish market again? No, I think it's, yes, you had some early heat waves. That's always good in July. I don't think August, September were anything special. If you catch up the quarter, I think it was slightly positive on the weather, but nothing extraordinary. I would say it's more a stable business. EMEA is more about the regions. We're in 20+ countries. You have Eastern Europe, you have Nordic, you have Southern, you have Central Europe. I think in general, the market that's been not as strong over the last couple of years has been Southern Europe, which is a big market for us, France in particular. We see a little bit better development in the South, but it's still early days to see that. As you said, now it's more moving into replacement. We're also doing some more heat pumps as we move in here to Q4 and Q1. In general, no big shifts, I would say, in EMEA at this moment. Okay. Very clear. A quick final is on the pricing component you discussed around, I mean, what you said, mid-single-digit 4% or 5% in the U.S. in the quarter. Do you expect a slight uptick as you'll sell more of the A2L products into Q4, or is it roughly 4% or 5% we expect going forward as well, I mean, Q4, Q1? Yeah, that's roughly what we'd expect as we move into Q4 and Q1. Perfect. Thank you. Thank you. As a reminder, if you wish to ask a question, please dial 5 on your telephone keypad. The next question comes from Carl Deijenberg from DNB Carnegie. Please go ahead. Thank you very much. Good morning, guys. A lot of focus on the U.S. I just had one follow-up here, and that is on the margin. I mean, yeah, we talked a little bit about the acquisitions you've done, Young Supply and so forth, being a little bit margin diluted for the region as a whole. I guess, you know, we're seeing further margin expansion here in Q3 again. Obviously, you also have a lot of ongoing organic initiatives, which I guess carry some incremental OpEx as well. Could you talk a little bit about the plus 14% margin here? Is there any impact from the A2L transitioning? I thought that was only on price relative cost being fairly neutral, but is it a positive on the margin there as well? Yeah, I mean, yeah, no, I think it's a fair question. My easy answer is that we're very good. We are now doing better in the margin. If I take the view on it, it is a good margin in Q3, and we're happy about it. It's also part of the initiatives we have ongoing. As you said, opening branches are dilutive, you know, adding investments in private label and commercial lease. We are investing quite a bit, as you said, on the OpEx side. As I said before, when we build this platform, we do put synergies in place to drive margin on the gross margin side, on purchasing side, and also some more efficiency in the business and higher margin on private label and other initiatives. I would say that it's early days, right? It's one quarter we can see here. For sure, the underlying improvement in margin is coming through in these initiatives. Let's continue that drive as we move into Q4 and next year. Maybe worth mentioning is that we do expect when we do this acquisition to be dilutive, as we said, with Young Supply and other ones. We also expect as we go through the 12 to 24 months that we will improve the margins. We can see that as we run through Q3. Very clear. I just wanted to follow up also. I mean, I appreciate the color on Europe, and you didn't seem too alarmed there. I just wanted to ask a little bit, you know, geographical differences in Europe. Maybe if you could talk a little bit about France. I guess that's obviously a key market for you with Toshiba and so forth. I guess consumer signals with the government crisis and so forth have not been super positive since the summer. Could you share? I mean, the development you're reporting here in Q3 is obviously very stable from an EMEA perspective. Is there clear differences in between as well to be aware of? No, not really. I mean, we expect it to continue to be stable. We don't see any changes. Even countries like France, we find ways to grow in our business model. There's no signal on it. I think we're more bullish long-term now as interest rates are coming down. We see a little bit more investments across. We do expect markets to improve. The question is, you know, when? Is it 2026 or not? It's more of also saying, you know, in the meantime, we expect continuing growth and also do well as we did in Q3 in muted markets. I don't see any short-term changes to that. Of course, long-term, if you move into 2026, etc., let's see where the market goes on those segments. There are positive signals, but I think it's too early to call it out in that sense. Okay. Fair enough. Thank you very much. Thank you. The next question comes from Karl Bokvist from ABG Sundal Collier. Please go ahead. Thank you. Good morning. Most questions have been asked. Regarding this back office and warehouse efficiency program, you talked about savings in terms of P&L. Could we expect anything in terms of inventory efficiency as well here? If possible, how should one think about it in perhaps average inventory levels, how they looked like before the pandemic, and where you expect them to get back to? Yeah. I would say the answer is a little bit the same as we have communicated. I mean, as you all know, we have been on elevated levels for quite some time, coming out of COVID and the supply chain crisis and so on. We have reduced inventory, part of the excess inventory, so to speak, that we have carried for a number of years. The next phase is clearly to be more efficient in what we do to get back to historical levels to start with. These initiatives here, consolidating the platform, a warehouse structure, and so on, are part of that plan. It is an ingredient of many actions. Still, the long-term or medium-term plan is to continue to be more efficient in inventory gradually. I don't expect it to be a significant change here short-term. It is more of a medium-term strategy to improve on different aspects and parts of our business. Understood. My second question is on EMEA and the fact that you have a strong market position in this region. If I just reflect on some press releases you've sent out on acquisitions, they have been, on a couple of occasions, subject to anti-competitive approval and those kinds of due diligence processes by regulators. What are your kind of how do you think about the M&A landscape in EMEA going forward and how we should think about lead times when you close a deal or announce a deal to it being closed due to these regulatory processes that they have to go through now? Yeah. I will answer in this way, Karl. Like we said before, in certain areas on the refrigeration side, I would expect us we're not focusing on acquisition, as we said before. On the HVAC side, it's still a long runway for us. I don't see any issues with competition authorities. It's specific cases I would allude to. For example, now when we do the Baltics, you know, one of the countries, I think Estonia, you have to do competition authorities if your sales is over EUR 5 million. It has nothing really to do with competition. It's just the threshold. It takes 30 days, and it's going to be done. A lot of these are more academic processes. You'll have the same actually in Australia and others. It's more an academic than a structure. I think the only process we've been on HVAC, where we had a longer process, if you remember, we did Cool4U in Hungary. That was more because the company we bought had a very good market share in the country. We had to clarify that. In general, I would expect on the HVAC side, if there is a process, it's probably 30 days. Understood. Thank you. I think it'd be good if the EU could align this instead of every country having different rules. Maybe you can't fix that either. Yeah, it seems like more of a longer-term issue here. There are no more questions at this time. I hand the conference back to the speakers for any closing comments. Thank you for listening. Thank you for good questions. Of course, if there's anything else we can do to clarify your questions, we're available to do that. Thank you for your time. Hope you have a good weekend when it comes. Thank you very much.

Speaker 5: Welcome to the Beijer Ref Q3 presentation for 2025. During the questions and answers session, participants are able to ask questions by dialing 5 on their telephone keypad. Now, I will hand the conference over to the CEO, Christopher Norbye, and CFO, Joel Davidsson. Please go ahead. Welcome to the Beijer Ref Q3 presentation for 2025. welcome to the beijer ref q3 presentation for 2025 During the questions and answers session, participants are able to ask questions by dialing 5 on their telephone keypad. during the questions and answers session participants are able to ask questions by dialing 5 on their telephone keypad Now, I will hand the conference over to the CEO, Christopher Norbye, and CFO, Joel Davidsson. now i will hand the conference over to the ceo christopher norbye and cfo joel davidsson Please go ahead. please go ahead

Speaker 3: Hi, everyone. Christopher and Joel here. We'll, as usual, take you through some slides, and then we'll get into some Q&A. Maybe if we move to the first slide so you can see it. Summarizing Q3 a little bit on the high level, a very solid quarter in all segments and areas, I would say. As you can see, we had a good organic growth of 5%, acquisition growth of 3%, and then a negative currency around 6%. All in all, we'll come back to the segments, and the geography is growing and also putting up very good numbers. On the profit side, we have another record margin here in Q3, 11.7%. We would say a very good development in our regions to support that margin. Cash flow continues to be strong, which is also now moving into the season where we realign inventory. Hi, everyone. hi everyone Christopher and Joel here. christopher and joel here We'll, as usual, take you through some slides, and then we'll get into some Q&A. we'll as usual take you through some slides and then we'll get into some q&a Maybe if we move to the first slide so you can see it. maybe if we move to the first slide so you can see it Summarizing Q3 a little bit on the high level, a very solid quarter in all segments and areas, I would say. summarizing q3 a little bit on the high level a very solid quarter in all segments and areas i would say As you can see, we had a good organic growth of 5%, acquisition growth of 3%, and then a negative currency around 6%. as you can see we had a good organic growth of 5% acquisition growth of 3% and then a negative currency around 6% All in all, we'll come back to the segments, and the geography is growing and also putting up very good numbers. all in all we'll come back to the segments and the geography is growing and also putting up very good numbers On the profit side, we have another record margin here in Q3, 11.7%. on the profit side we have another record margin here in q3 11.7% We would say a very good development in our regions to support that margin. we would say a very good development in our regions to support that margin Cash flow continues to be strong, which is also now moving into the season where we realign inventory. cash flow continues to be strong which is also now moving into the season where we realign inventory As we said before, we are working more proactively to set a better structure on the inventory side. We expect this to continue. Of course, that relates to a very good position on the balance sheet that Joel will come back to. Very nice EPS growth of 11% despite 6% currency. A very solid financial quarter in a still not very strong market, but I would say we continue to take market share, improve the business model. The global business model we have continues to improve. Also worth mentioning, we made an acquisition here some days back, buying the leading HVAC distributor in the Baltics. A very nice business, a good market position, good potentials to continue to develop together with us. That will fit very nicely into the portfolio for us. As we said before, we are working more proactively to set a better structure on the inventory side. as we said before we are working more proactively to set a better structure on the inventory side We expect this to continue. we expect this to continue Of course, that relates to a very good position on the balance sheet that Joel will come back to. of course that relates to a very good position on the balance sheet that joel will come back to Very nice EPS growth of 11% despite 6% currency. very nice eps growth of 11% despite 6% currency A very solid financial quarter in a still not very strong market, but I would say we continue to take market share, improve the business model. a very solid financial quarter in a still not very strong market but i would say we continue to take market share improve the business model The global business model we have continues to improve. the global business model we have continues to improve Also worth mentioning, we made an acquisition here some days back, buying the leading HVAC distributor in the Baltics. also worth mentioning we made an acquisition here some days back buying the leading hvac distributor in the baltics A very nice business, a good market position, good potentials to continue to develop together with us. a very nice business a good market position good potentials to continue to develop together with us That will fit very nicely into the portfolio for us. that will fit very nicely into the portfolio for us We'll come into the next slide a little bit, also doing a consolidation program over the next couple of quarters. If you turn to the next slide, you'll see some more details on it. It's more related to driving a more efficient structure, mostly in our European setup, as doing acquisition for many years. We also have a lot of overlapping structures. We are consolidating warehouses and some back offices to make a more efficient setup. During the years, we're invested in more automated warehousing, which means that we can move in more products, more inventory efficiency. We're doing that in different areas in Europe and closing down old, more inefficient buildings. All in all, this will further accelerate the availability of products for our customers, faster service levels around in these markets, and also a wider product offering as we put this together. We'll come into the next slide a little bit, also doing a consolidation program over the next couple of quarters. we'll come into the next slide a little bit also doing a consolidation program over the next couple of quarters If you turn to the next slide, you'll see some more details on it. if you turn to the next slide you'll see some more details on it It's more related to driving a more efficient structure, mostly in our European setup, as doing acquisition for many years. it's more related to driving a more efficient structure mostly in our european setup as doing acquisition for many years We also have a lot of overlapping structures. we also have a lot of overlapping structures We are consolidating warehouses and some back offices to make a more efficient setup. we are consolidating warehouses and some back offices to make a more efficient setup During the years, we're invested in more automated warehousing, which means that we can move in more products, more inventory efficiency. during the years we're invested in more automated warehousing which means that we can move in more products more inventory efficiency We're doing that in different areas in Europe and closing down old, more inefficient buildings. we're doing that in different areas in europe and closing down old more inefficient buildings All in all, this will further accelerate the availability of products for our customers, faster service levels around in these markets, and also a wider product offering as we put this together. all in all this will further accelerate the availability of products for our customers faster service levels around in these markets and also a wider product offering as we put this together Of course, there's a positive savings of doing that. The main reason for the program is more related to improve our business model as we've grown a lot over the last years. The financials of it is that we'll take a one-off here in Q4, SEK 150 million, and we expect about SEK 100 million of savings as we go through next year. The cash effect is about SEK 50 million of this. It's for us a very good project to improve the business model for our customers, but also nice savings, of course, when we do it. Moving on to the next slide, focus a little bit on the group. As I said before, solid organic growth in the quarter led by segment HVAC of 6%. We could see that being nice in Europe, EMEA, in the U.S., and also APAC continues to be driven by Australia. Of course, there's a positive savings of doing that. of course there's a positive savings of doing that The main reason for the program is more related to improve our business model as we've grown a lot over the last years. the main reason for the program is more related to improve our business model as we've grown a lot over the last years The financials of it is that we'll take a one-off here in Q4, SEK 150 million, and we expect about SEK 100 million of savings as we go through next year. the financials of it is that we'll take a one-off here in q4, sek 150 million and we expect about sek 100 million of savings as we go through next year The cash effect is about SEK 50 million of this. the cash effect is about sek 50 million of this It's for us a very good project to improve the business model for our customers, but also nice savings, of course, when we do it. it's for us a very good project to improve the business model for our customers but also nice savings of course when we do it Moving on to the next slide, focus a little bit on the group. moving on to the next slide focus a little bit on the group As I said before, solid organic growth in the quarter led by segment HVAC of 6%. as i said before solid organic growth in the quarter led by segment hvac of 6% We could see that being nice in Europe, EMEA, in the U.S., and also APAC continues to be driven by Australia. we could see that being nice in europe emea in the u.s and also apac continues to be driven by australia This is our second biggest quarter of the year. Q2 and Q3 are our main quarters. If you put together this season for Beijer Ref, it's been a solid Q2 and Q3. We see a nice result of the work we've been doing to drive growth in our big quarters on there. We also see a nice effect on the SEM Freegan Fenergy, our green OEM, continuing to grow double digits and also continue to build a nice backlog in their business. Also worth mentioning, got our first orders for Fenergy in Germany. That has the potential to become a huge market for us over the next five years. We also have another CO2 project in the U.S. We continue to have our technology being tested on CO2-based cooling racks in the U.S. and also continue to have success in that model. This is our second biggest quarter of the year. this is our second biggest quarter of the year Q2 and Q3 are our main quarters. q2 and q3 are our main quarters If you put together this season for Beijer Ref, it's been a solid Q2 and Q3. if you put together this season for beijer ref it's been a solid q2 and q3 We see a nice result of the work we've been doing to drive growth in our big quarters on there. we see a nice result of the work we've been doing to drive growth in our big quarters on there We also see a nice effect on the SEM Freegan Fenergy, our green OEM, continuing to grow double digits and also continue to build a nice backlog in their business. we also see a nice effect on the sem freegan fenergy our green oem continuing to grow double digits and also continue to build a nice backlog in their business Also worth mentioning, got our first orders for Fenergy in Germany. also worth mentioning got our first orders for fenergy in germany That has the potential to become a huge market for us over the next five years. that has the potential to become a huge market for us over the next five years We also have another CO2 project in the U.S. we also have another co2 project in the u.s We continue to have our technology being tested on CO2-based cooling racks in the U.S. and also continue to have success in that model. we continue to have our technology being tested on co2-based cooling racks in the u.s and also continue to have success in that model We also had a nice stable growth on the refrigeration side of 4%. All in all, putting this together, I think the best word to describe it is a solid quarter, as I said before. Moving into more of the division to give you a little bit more flavor. In EMEA, I would say also on the growth side, stable and good, driven here also by the HVAC side, but also the OEM side ramping up their sales driven here by Fenergy and SEM Freegan that continue to do well. It's good for us and that the green side has continued to grow at double-digit pace, and we expect that to continue. Margin stable in line with last year, but very good margins, 12% in Q3. Of course, also Airway will be consolidated into the EMEA organization, the Nordics and the Baltics. We also had a nice stable growth on the refrigeration side of 4%. we also had a nice stable growth on the refrigeration side of 4% All in all, putting this together, I think the best word to describe it is a solid quarter, as I said before. all in all putting this together i think the best word to describe it is a solid quarter as i said before Moving into more of the division to give you a little bit more flavor. moving into more of the division to give you a little bit more flavor In EMEA, I would say also on the growth side, stable and good, driven here also by the HVAC side, but also the OEM side ramping up their sales driven here by Fenergy and SEM Freegan that continue to do well. in emea i would say also on the growth side stable and good driven here also by the hvac side but also the oem side ramping up their sales driven here by fenergy and sem freegan that continue to do well It's good for us and that the green side has continued to grow at double-digit pace, and we expect that to continue. it's good for us and that the green side has continued to grow at double-digit pace and we expect that to continue Margin stable in line with last year, but very good margins, 12% in Q3. margin stable in line with last year but very good margins 12% in q3 Of course, also Airway will be consolidated into the EMEA organization, the Nordics and the Baltics. of course also airway will be consolidated into the emea organization the nordics and the baltics We look forward to driving and supporting that asset as we clear the competition authorities during this year sometime. I think a positive quarter in EMEA. We have some signs of markets improving a little bit. It'll be interesting to follow this as we move into 2026. Moving on to APAC, it continues with nice growth, more stable quarter. Our main markets in APAC, of course, are more interesting as we move into Q4 and Q1, as that's the summer season for us. We clearly continue to take market share in this region, again driven a lot by the largest market in Australia. On the OEM side, we've seen a limited growth over the last couple of quarters, but we also see some tendency of more quoting, better backlog. We expect also there in Q4 to start seeing some more growth in the OEM segment. We look forward to driving and supporting that asset as we clear the competition authorities during this year sometime. we look forward to driving and supporting that asset as we clear the competition authorities during this year sometime I think a positive quarter in EMEA. i think a positive quarter in emea We have some signs of markets improving a little bit. we have some signs of markets improving a little bit It'll be interesting to follow this as we move into 2026. it'll be interesting to follow this as we move into 2026 Moving on to APAC, it continues with nice growth, more stable quarter. moving on to apac it continues with nice growth more stable quarter Our main markets in APAC, of course, are more interesting as we move into Q4 and Q1, as that's the summer season for us. our main markets in apac of course are more interesting as we move into q4 and q1 as that's the summer season for us We clearly continue to take market share in this region, again driven a lot by the largest market in Australia. we clearly continue to take market share in this region again driven a lot by the largest market in australia On the OEM side, we've seen a limited growth over the last couple of quarters, but we also see some tendency of more quoting, better backlog. on the oem side we've seen a limited growth over the last couple of quarters but we also see some tendency of more quoting better backlog We expect also there in Q4 to start seeing some more growth in the OEM segment. we expect also there in q4 to start seeing some more growth in the oem segment We continue to do very well on developing the margin. Again, another record quarter on the margin side all across the areas in APAC. We are very proud of them moving over to running the business on an annual basis over the 10%, as we stated a couple of years ago. We're moving in that direction for us. Worth mentioning also, we opened a new decanting facility in New Zealand, which means that we're going to be taking care of all the refrigerants as we do in Australia. We invested in this quite a lot, and it just opened here towards the end of the quarter. It'll be interesting to follow that journey as we move into 2026. Also a solid quarter in our APAC division. Moving over to North America, a lot of things happening there, as you probably are aware of if you follow the U.S. market. We continue to do very well on developing the margin. we continue to do very well on developing the margin Again, another record quarter on the margin side all across the areas in APAC. again another record quarter on the margin side all across the areas in apac We are very proud of them moving over to running the business on an annual basis over the 10%, as we stated a couple of years ago. we are very proud of them moving over to running the business on an annual basis over the 10% as we stated a couple of years ago We're moving in that direction for us. we're moving in that direction for us Worth mentioning also, we opened a new decanting facility in New Zealand, which means that we're going to be taking care of all the refrigerants as we do in Australia. worth mentioning also we opened a new decanting facility in new zealand which means that we're going to be taking care of all the refrigerants as we do in australia We invested in this quite a lot, and it just opened here towards the end of the quarter. we invested in this quite a lot and it just opened here towards the end of the quarter It'll be interesting to follow that journey as we move into 2026. it'll be interesting to follow that journey as we move into 2026 Also a solid quarter in our APAC division. also a solid quarter in our apac division Moving over to North America, a lot of things happening there, as you probably are aware of if you follow the U.S. market. moving over to north america a lot of things happening there as you probably are aware of if you follow the u.s market Worth calling out, of course, is that we are at the end of the transitioning into the new products based on a more A2L refrigerant. We are about 90% complete as we go out of Q3 and will be completed transition here during Q4. I would say we're doing very well in the U.S., posting an organic growth of 6%, posting record margins. We can see the platform we are developing in the U.S. is, of course, working well. We are taking market share. We're opening new branches. We're launching our private label in the markets. We're adding commercial refrigeration. As you can see, that grew 12% in a flattish market. I also expect on the volume side that the HVAC market is probably down. Also alluding to, as we stated for two, three years as we entered the U.S. Worth calling out, of course, is that we are at the end of the transitioning into the new products based on a more A2L refrigerant. worth calling out of course is that we are at the end of the transitioning into the new products based on a more a2l refrigerant We are about 90% complete as we go out of Q3 and will be completed transition here during Q4. we are about 90% complete as we go out of q3 and will be completed transition here during q4 I would say we're doing very well in the U.S., posting an organic growth of 6%, posting record margins. i would say we're doing very well in the u.s posting an organic growth of 6% posting record margins We can see the platform we are developing in the U.S. is, of course, working well. we can see the platform we are developing in the u.s is of course working well We are taking market share. we are taking market share We're opening new branches. we're opening new branches We're launching our private label in the markets. we're launching our private label in the markets We're adding commercial refrigeration. we're adding commercial refrigeration As you can see, that grew 12% in a flattish market. as you can see that grew 12% in a flattish market I also expect on the volume side that the HVAC market is probably down. i also expect on the volume side that the hvac market is probably down Also alluding to, as we stated for two, three years as we entered the U.S. also alluding to as we stated for two three years as we entered the u.s with this asset, that it is a very good asset focused on aftermarket service replacement. There are more repairs in the market when it's a little bit tougher. That's part of our business model in the U.S. Of course, we can see the result of that in a quarter like this, both on the sales side and the margin side. Very satisfied with the U.S. Q3 and a very good quarter. Also worth calling out, good pipeline on the acquisition side. We expect to close some acquisitions here in Q4. You'll be aware of that hopefully soon. For us in the U.S., it continues to develop very well. Just a summary on the sales, you can see the 5% organic growth, so a good rolling 12 organic growth. I would expect not a very strong market across the world. with this asset, that it is a very good asset focused on aftermarket service replacement. with this asset that it is a very good asset focused on aftermarket service replacement There are more repairs in the market when it's a little bit tougher. there are more repairs in the market when it's a little bit tougher That's part of our business model in the U.S. that's part of our business model in the u.s Of course, we can see the result of that in a quarter like this, both on the sales side and the margin side. of course we can see the result of that in a quarter like this both on the sales side and the margin side Very satisfied with the U.S. very satisfied with the u.s Q3 and a very good quarter. q3 and a very good quarter Also worth calling out, good pipeline on the acquisition side. also worth calling out good pipeline on the acquisition side We expect to close some acquisitions here in Q4. we expect to close some acquisitions here in q4 You'll be aware of that hopefully soon. you'll be aware of that hopefully soon For us in the U.S., it continues to develop very well. for us in the u.s it continues to develop very well Just a summary on the sales, you can see the 5% organic growth, so a good rolling 12 organic growth. just a summary on the sales you can see the 5% organic growth so a good rolling 12 organic growth I would expect not a very strong market across the world. i would expect not a very strong market across the world I think that's worth mentioning as we play in 45 countries across the world. We have a very good model to cover ups and downs in different regions. You can see that in our numbers. We continue and push forward on the sales side. Finally, on the margin side from my side, a good quarter building on a very solid Q2. These are, as you can see, our two main quarters and very well executed in a more flattish market. I think it just proves the business model works, the platform is there, and we'll continue to build on that as we move into 2026. With that, I'll hand over to Joel. I think that's worth mentioning as we play in 45 countries across the world. i think that's worth mentioning as we play in 45 countries across the world We have a very good model to cover ups and downs in different regions. we have a very good model to cover ups and downs in different regions You can see that in our numbers. you can see that in our numbers We continue and push forward on the sales side. we continue and push forward on the sales side Finally, on the margin side from my side, a good quarter building on a very solid Q2. finally on the margin side from my side a good quarter building on a very solid q2 These are, as you can see, our two main quarters and very well executed in a more flattish market. these are as you can see our two main quarters and very well executed in a more flattish market I think it just proves the business model works, the platform is there, and we'll continue to build on that as we move into 2026. i think it just proves the business model works the platform is there and we'll continue to build on that as we move into 2026 With that, I'll hand over to Joel. with that i'll hand over to joel

Speaker 8: All right. Thank you very much, Christopher, and good morning, everyone. As always, I jump straight into our EBIT of SEK 1,079 million, which is up 4% compared to last year. Again, despite quite significant FX headwinds here in the quarter, our financial net continues to develop well, stable sequentially, and SEK 25 million below Q3 of last year. On a comparable basis, now interest costs are roughly SEK 35 million lower in the quarter compared to last year. On the tax side, the tax expense in the quarter was SEK 214 million, which is representing an effective tax rate of 23%, slightly lower than last year. All in all, I would say thanks to improved operating result, lower interest rates, and improved tax position, we deliver a net profit in Q3 of SEK 736 million, which is an increase of 11%. Moving over to the EPS. All right. all right Thank you very much, Christopher, and good morning, everyone. thank you very much christopher and good morning everyone As always, I jump straight into our EBIT of SEK 1,079 million, which is up 4% compared to last year. as always i jump straight into our ebit of sek 1,079 million which is up 4% compared to last year Again, despite quite significant FX headwinds here in the quarter, our financial net continues to develop well, stable sequentially, and SEK 25 million below Q3 of last year. again despite quite significant fx headwinds here in the quarter our financial net continues to develop well stable sequentially and sek 25 million below q3 of last year On a comparable basis, now interest costs are roughly SEK 35 million lower in the quarter compared to last year. on a comparable basis now interest costs are roughly sek 35 million lower in the quarter compared to last year On the tax side, the tax expense in the quarter was SEK 214 million, which is representing an effective tax rate of 23%, slightly lower than last year. on the tax side the tax expense in the quarter was sek 214 million which is representing an effective tax rate of 23% slightly lower than last year All in all, I would say thanks to improved operating result, lower interest rates, and improved tax position, we deliver a net profit in Q3 of SEK 736 million, which is an increase of 11%. all in all i would say thanks to improved operating result lower interest rates and improved tax position we deliver a net profit in q3 of sek 736 million which is an increase of 11% Moving over to the EPS. moving over to the eps EPS in the quarter of SEK 1.44 per share, which is then again up 11% compared to last year, despite the 6% currency headwind that's been mentioned. EPS for the first nine months amounts to SEK 3.94, which is an increase of 13% despite the 4% of currency headwind. Moving over to the cash flow, as Christopher mentioned, very strong cash flow in Q3, SEK 1.6 billion, which is roughly SEK 300 million above last year. Main driver of that, as you see, is lower working capital tied up compared to last year, which is an effect of lower inventory and the result of the work we are doing in that part of the business. In comparison to last year, cash flow from inventory is roughly SEK 500 million better. On the next slide here, you see that we continue to develop strong cash flow over time. EPS in the quarter of SEK 1.44 per share, which is then again up 11% compared to last year, despite the 6% currency headwind that's been mentioned. eps in the quarter of sek 1.44 per share which is then again up 11% compared to last year despite the 6% currency headwind that's been mentioned EPS for the first nine months amounts to SEK 3.94, which is an increase of 13% despite the 4% of currency headwind. eps for the first nine months amounts to sek 3.94 which is an increase of 13% despite the 4% of currency headwind Moving over to the cash flow, as Christopher mentioned, very strong cash flow in Q3, SEK 1.6 billion, which is roughly SEK 300 million above last year. moving over to the cash flow as christopher mentioned very strong cash flow in q3, sek 1.6 billion which is roughly sek 300 million above last year Main driver of that, as you see, is lower working capital tied up compared to last year, which is an effect of lower inventory and the result of the work we are doing in that part of the business. main driver of that as you see is lower working capital tied up compared to last year which is an effect of lower inventory and the result of the work we are doing in that part of the business In comparison to last year, cash flow from inventory is roughly SEK 500 million better. in comparison to last year cash flow from inventory is roughly sek 500 million better On the next slide here, you see that we continue to develop strong cash flow over time. on the next slide here you see that we continue to develop strong cash flow over time The year-to-date cash flow is SEK 2.7 billion, which is roughly an increase of half a billion compared to last year. Of course, moving over to leverage, thanks to our strong cash flow, we continue to improve our credit metrics. The net debt measured, excluding pension and leasing, has improved and is now down from SEK 1.9 billion-SEK 1.6 billion sequentially and 0.4x lower than a year ago. This leaves us with a very strong balance sheet to execute on the M&A pipeline going forward. With that, I hand back over to Christopher for a summary. The year-to-date cash flow is SEK 2.7 billion, which is roughly an increase of half a billion compared to last year. the year-to-date cash flow is sek 2.7 billion which is roughly an increase of half a billion compared to last year Of course, moving over to leverage, thanks to our strong cash flow, we continue to improve our credit metrics. of course moving over to leverage thanks to our strong cash flow we continue to improve our credit metrics The net debt measured, excluding pension and leasing, has improved and is now down from SEK 1.9 billion -SEK 1.6 billion sequentially and 0.4x lower than a year ago. the net debt measured excluding pension and leasing has improved and is now down from sek 1.9 billion -sek 1.6 billion sequentially and 0.4x lower than a year ago This leaves us with a very strong balance sheet to execute on the M&A pipeline going forward. this leaves us with a very strong balance sheet to execute on the m&a pipeline going forward With that, I hand back over to Christopher for a summary. with that i hand back over to christopher for a summary

Speaker 3: Yeah. We covered Q3. I think it's a very straightforward, strong quarter with solid growth, good profitability, and also on good cash generation that we've seen. Record margins, record cash flow. I think it's a very good base to continue to build on and improving the business model, of course. If you look more going forward on trends, it continues to be a strong underlying market. Trends on driving the cooling side, OEM on natural refrigerants being present in more than 45 countries around the world. We can see the leverage of that. We're also coming into the end of the transition in the U.S. on refrigerants. We can see the platform in the U.S. showing good drive and good development in the U.S. Yeah. yeah We covered Q3. we covered q3 I think it's a very straightforward, strong quarter with solid growth, good profitability, and also on good cash generation that we've seen. i think it's a very straightforward strong quarter with solid growth good profitability and also on good cash generation that we've seen Record margins, record cash flow. record margins record cash flow I think it's a very good base to continue to build on and improving the business model, of course. i think it's a very good base to continue to build on and improving the business model of course If you look more going forward on trends, it continues to be a strong underlying market. if you look more going forward on trends it continues to be a strong underlying market Trends on driving the cooling side, OEM on natural refrigerants being present in more than 45 countries around the world. trends on driving the cooling side oem on natural refrigerants being present in more than 45 countries around the world We can see the leverage of that. we can see the leverage of that We're also coming into the end of the transition in the U.S. on refrigerants. we're also coming into the end of the transition in the u.s on refrigerants We can see the platform in the U.S. showing good drive and good development in the U.S. we can see the platform in the u.s showing good drive and good development in the u.s market, both on the day-to-day business, new branches, private label products, commercial refrigeration systems that we can see, of course, in our growth and margin numbers in the U.S. As Joel ended up, pipeline looks good across the globe, which we look forward to both in Q4 and 2026 will be an active year on the acquisition side with some very good opportunities for us. The balance sheet plays in. We also expect in Q4 a good cash flow to support our business and activities into 2026. With that, we are ready for Q&A. See if we can help you clarify anything that's not clear in this fantastic quarter. market, both on the day-to-day business, new branches, private label products, commercial refrigeration systems that we can see, of course, in our growth and margin numbers in the U.S. market both on the day-to-day business new branches private label products commercial refrigeration systems that we can see of course in our growth and margin numbers in the u.s As Joel ended up, pipeline looks good across the globe, which we look forward to both in Q4 and 2026 will be an active year on the acquisition side with some very good opportunities for us. as joel ended up pipeline looks good across the globe which we look forward to both in q4 and 2026 will be an active year on the acquisition side with some very good opportunities for us The balance sheet plays in. the balance sheet plays in We also expect in Q4 a good cash flow to support our business and activities into 2026. we also expect in q4 a good cash flow to support our business and activities into 2026 With that, we are ready for Q&A. with that we are ready for q&a See if we can help you clarify anything that's not clear in this fantastic quarter. see if we can help you clarify anything that's not clear in this fantastic quarter

Speaker 5: If you wish to ask a question, please dial 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial 6 on your telephone keypad. The next question comes from Gustaf Schwerin from Handelsbanken. Please go ahead. If you wish to ask a question, please dial 5 on your telephone keypad to enter the queue. if you wish to ask a question please dial 5 on your telephone keypad to enter the queue If you wish to withdraw your question, please dial 6 on your telephone keypad. if you wish to withdraw your question please dial 6 on your telephone keypad The next question comes from Gustaf Schwerin from Handelsbanken. the next question comes from gustaf schwerin from handelsbanken Please go ahead. please go ahead

Speaker 6: Yes. Good morning. I have two. First, if you start in North America and the organic print you're showing here, can you maybe help us a bit on the price contribution versus Q2? I think related to that, maybe some early thoughts into next year. You mentioned it. We also heard from one of the U.S. OEMs the other day that Q3 has clearly seen more repairs versus replacement. Are you in any way worried about the growth trajectory into next year or maybe some pent-up demand here and more replacement? That's the first one. Yes. yes Good morning. good morning I have two. i have two First, if you start in North America and the organic print you're showing here, can you maybe help us a bit on the price contribution versus Q2? first if you start in north america and the organic print you're showing here can you maybe help us a bit on the price contribution versus q2 I think related to that, maybe some early thoughts into next year. i think related to that maybe some early thoughts into next year You mentioned it. you mentioned it We also heard from one of the U.S. we also heard from one of the u.s OEMs the other day that Q3 has clearly seen more repairs versus replacement. oems the other day that q3 has clearly seen more repairs versus replacement Are you in any way worried about the growth trajectory into next year or maybe some pent-up demand here and more replacement? are you in any way worried about the growth trajectory into next year or maybe some pent-up demand here and more replacement That's the first one. that's the first one

Speaker 3: Yeah. I would say the pricing effect in Q3 is, in the numbers, more close to 4%-5%. I can't remember what the Q2 number was, but I'm sure we have it written up. It was 2%-3% or around 2%+. That's, of course, as we transition into today to A2L side and remembering the equipment is around 40% of our business in the U.S. and then 60% is parts and supply. I think if you follow the U.S. market, you know we're in a pretty good position with our business model to handle also a market that today is, of course, different as you know EM because we need to restock the different as we transition into the A2Ls. Also, on the distribution side, you know it's a solid result in a challenging market. Yeah. yeah I would say the pricing effect in Q3 is, in the numbers, more close to 4%- 5%. i would say the pricing effect in q3 is in the numbers more close to 4%- 5% I can't remember what the Q2 number was, but I'm sure we have it written up. i can't remember what the q2 number was but i'm sure we have it written up It was 2%- 3% or around 2% +. it was 2%- 3% or around 2% + That's, of course, as we transition into today to A2L side and remembering the equipment is around 40% of our business in the U.S. and then 60% is parts and supply. that's of course as we transition into today to a2l side and remembering the equipment is around 40% of our business in the u.s and then 60% is parts and supply I think if you follow the U.S. market, you know we're in a pretty good position with our business model to handle also a market that today is, of course, different as you know EM because we need to restock the different as we transition into the A2Ls. i think if you follow the u.s market you know we're in a pretty good position with our business model to handle also a market that today is of course different as you know em because we need to restock the different as we transition into the a2ls Also, on the distribution side, you know it's a solid result in a challenging market. also on the distribution side you know it's a solid result in a challenging market I think it more proves the initiatives and model we have that will continue to drive and improve. Of course, there is a pent-up demand coming. Is it coming in 2026? Depend on interest rates, renovation, housing sales. All those KPIs have been very weak the last two to three years. Despite that, I would say our model is very solid on both sides of the fence. Of course, as the market improves, it'll be a nice tailwind for us. In the meantime, we'll continue to focus on building out the platform, driving our initiatives, acquisition, and look forward to that tailwind. I would say that this model, of course, also proves the strength of being focused on the aftermarket service replacement in the U.S. I think it more proves the initiatives and model we have that will continue to drive and improve. i think it more proves the initiatives and model we have that will continue to drive and improve Of course, there is a pent-up demand coming. of course there is a pent-up demand coming Is it coming in 2026? is it coming in 2026 Depend on interest rates, renovation, housing sales. depend on interest rates renovation housing sales All those KPIs have been very weak the last two to three years. all those kpis have been very weak the last two to three years Despite that, I would say our model is very solid on both sides of the fence. despite that i would say our model is very solid on both sides of the fence Of course, as the market improves, it'll be a nice tailwind for us. of course as the market improves it'll be a nice tailwind for us In the meantime, we'll continue to focus on building out the platform, driving our initiatives, acquisition, and look forward to that tailwind. in the meantime we'll continue to focus on building out the platform driving our initiatives acquisition and look forward to that tailwind I would say that this model, of course, also proves the strength of being focused on the aftermarket service replacement in the U.S. i would say that this model of course also proves the strength of being focused on the aftermarket service replacement in the u.s

Speaker 6: Perfect. Can you maybe share some thoughts on what kind of cash conversion we should be expecting for the full years? I mean, working capital release last year looked a bit hampered by the inventory bill. Thank you. Perfect. perfect Can you maybe share some thoughts on what kind of cash conversion we should be expecting for the full years? can you maybe share some thoughts on what kind of cash conversion we should be expecting for the full years I mean, working capital release last year looked a bit hampered by the inventory bill. i mean working capital release last year looked a bit hampered by the inventory bill Thank you. thank you

Speaker 8: Yeah. I mean, what you saw in Q3 here, I think we had some buildup also last year on that, which was similar. We had a similar buildup for the transition in the U.S. in Q3 and Q4. From that perspective, that's not going to do this year. I think that's the guidance that I can give. Yeah. yeah I mean, what you saw in Q3 here, I think we had some buildup also last year on that, which was similar. i mean what you saw in q3 here i think we had some buildup also last year on that which was similar We had a similar buildup for the transition in the U.S. in Q3 and Q4. we had a similar buildup for the transition in the u.s in q3 and q4 From that perspective, that's not going to do this year. from that perspective that's not going to do this year I think that's the guidance that I can give. i think that's the guidance that i can give

Speaker 6: Very clear. Thank you. Very clear. very clear Thank you. thank you

Speaker 5: The next question comes from Adela Dashian from Jefferies. Please go ahead. The next question comes from Adela Dashian from Jefferies. the next question comes from adela dashian from jefferies Please go ahead. please go ahead

Speaker 1: Good morning, gentlemen. Two questions from me. Firstly, on this decision to initiate on the strategic consolidation program. I'm fully understanding of the fact that you have completed a lot of acquisitions in the past five years, but at the same time, this year has been a bit more muted. I guess I'm just trying to understand timing-wise why already now in Q4, especially if, I mean, you mentioned here during the call that you think that the pipeline is building and that there will be additional deals announced in the fourth quarter. Thanks. Good morning, gentlemen. good morning gentlemen Two questions from me. two questions from me Firstly, on this decision to initiate on the strategic consolidation program. firstly on this decision to initiate on the strategic consolidation program I'm fully understanding of the fact that you have completed a lot of acquisitions in the past five years, but at the same time, this year has been a bit more muted. i'm fully understanding of the fact that you have completed a lot of acquisitions in the past five years but at the same time this year has been a bit more muted I guess I'm just trying to understand timing-wise why already now in Q4, especially if, I mean, you mentioned here during the call that you think that the pipeline is building and that there will be additional deals announced in the fourth quarter. i guess i'm just trying to understand timing-wise why already now in q4 especially if i mean you mentioned here during the call that you think that the pipeline is building and that there will be additional deals announced in the fourth quarter Thanks. thanks

Speaker 3: Yeah. No, but we've been, maybe to answer it in this way, we've been looking at these types of setups for many years. Also, part of the triggers to do this is that we've been investing in these regions on automating warehousing and structures, which means that we are freeing up space and capacity to drive this type of consolidation. Also investing in new warehousing and upgrading it. For us, this has been more of when we're going to move over. It's been discussed and strategically been part of our plans for quite some time. When you go into mode of do it, our assumption or our strategy is that we'll do it over a six-month period, as we said, and then we're going to restructure and consolidate some of the back office. Yeah. yeah No, but we've been, maybe to answer it in this way, we've been looking at these types of setups for many years. no but we've been maybe to answer it in this way we've been looking at these types of setups for many years Also, part of the triggers to do this is that we've been investing in these regions on automating warehousing and structures, which means that we are freeing up space and capacity to drive this type of consolidation. also part of the triggers to do this is that we've been investing in these regions on automating warehousing and structures which means that we are freeing up space and capacity to drive this type of consolidation Also investing in new warehousing and upgrading it. also investing in new warehousing and upgrading it For us, this has been more of when we're going to move over. for us this has been more of when we're going to move over It's been discussed and strategically been part of our plans for quite some time. it's been discussed and strategically been part of our plans for quite some time When you go into mode of do it, our assumption or our strategy is that we'll do it over a six-month period, as we said, and then we're going to restructure and consolidate some of the back office. when you go into mode of do it our assumption or our strategy is that we'll do it over a six-month period as we said and then we're going to restructure and consolidate some of the back office We're also moving more product into the platform instead of keeping it separate so we can service our customer better. Also, the digitalization and access to inventory, service levels, etc., this type of program will improve those things. Like I said on the call, the side effect is that we are saving money, which is great. The main reason for doing this is to create a better, efficient platform to service our customers. It's more a synergy that we're ready now to execute on in the business. We're also moving more product into the platform instead of keeping it separate so we can service our customer better. we're also moving more product into the platform instead of keeping it separate so we can service our customer better Also, the digitalization and access to inventory, service levels, etc., this type of program will improve those things. also the digitalization and access to inventory service levels etc this type of program will improve those things Like I said on the call, the side effect is that we are saving money, which is great. like i said on the call the side effect is that we are saving money which is great The main reason for doing this is to create a better, efficient platform to service our customers. the main reason for doing this is to create a better efficient platform to service our customers It's more a synergy that we're ready now to execute on in the business. it's more a synergy that we're ready now to execute on in the business

Speaker 1: Okay. That makes sense. Maybe if I can follow up on the question around North America and the volume versus price breakdown. I mean, many of the OEMs have pretty weak outlooks for H2 and potentially also going into 2026, but the 6% organic growth is quite outstanding then relative to that. I mean, I would assume that your large exposure to the renovation market or aftermarket is really driving this. In terms of big volumes, aren't you to some extent also dependent on maybe not larger projects, but just overall better momentum in the U.S. market? I can see your profitability being positively impacted by this sort of trend or the current development that is. What's your view more long-term to really get those volumes back on track? Okay. okay That makes sense. that makes sense Maybe if I can follow up on the question around North America and the volume versus price breakdown. maybe if i can follow up on the question around north america and the volume versus price breakdown I mean, many of the OEMs have pretty weak outlooks for H2 and potentially also going into 2026, but the 6% organic growth is quite outstanding then relative to that. i mean many of the oems have pretty weak outlooks for h2 and potentially also going into 2026 but the 6% organic growth is quite outstanding then relative to that I mean, I would assume that your large exposure to the renovation market or aftermarket is really driving this. i mean i would assume that your large exposure to the renovation market or aftermarket is really driving this In terms of big volumes, aren't you to some extent also dependent on maybe not larger projects, but just overall better momentum in the U.S. market? in terms of big volumes aren't you to some extent also dependent on maybe not larger projects but just overall better momentum in the u.s market I can see your profitability being positively impacted by this sort of trend or the current development that is. i can see your profitability being positively impacted by this sort of trend or the current development that is What's your view more long-term to really get those volumes back on track? what's your view more long-term to really get those volumes back on track

Speaker 3: Yeah. I think it becomes tricky, and I know you know this, to relate to the OEMs. If you go back to Q2, Q3 last year, their volumes were probably up 20%, 30% because we, as a distributor, had to carry both the new launch of the product and also build up on the old one to manage this. I'm a little bit surprised that they were expecting a different trajectory than this because we, of course, are more servicing than demand in the business. We will continue and destock through Q4 and Q1 next year. We're going to start building a normal pattern and start ordering our products in the end of Q1 for the summer season. I think it's very hard to relate to the OEMs when it comes to the volume side in the business. Yeah. yeah I think it becomes tricky, and I know you know this, to relate to the OEMs. i think it becomes tricky and i know you know this to relate to the oems If you go back to Q2, Q3 last year, their volumes were probably up 20%, 30% because we, as a distributor, had to carry both the new launch of the product and also build up on the old one to manage this. if you go back to q2 q3 last year their volumes were probably up 20% 30% because we as a distributor had to carry both the new launch of the product and also build up on the old one to manage this I'm a little bit surprised that they were expecting a different trajectory than this because we, of course, are more servicing than demand in the business. i'm a little bit surprised that they were expecting a different trajectory than this because we of course are more servicing than demand in the business We will continue and destock through Q4 and Q1 next year. we will continue and destock through q4 and q1 next year We're going to start building a normal pattern and start ordering our products in the end of Q1 for the summer season. we're going to start building a normal pattern and start ordering our products in the end of q1 for the summer season I think it's very hard to relate to the OEMs when it comes to the volume side in the business. i think it's very hard to relate to the oems when it comes to the volume side in the business My point is more related to that as the market improves, of course, that's going to be a nice tailwind for our business. In the meantime, it's more that when you look at Beijer Ref and Heritage in the U.S., it's an underlying very stable platform in these types of times as well. We do expect to do better. It'd be very nice when also the housing market and renovation market picks up, mostly related to interest rates because it hasn't really been strong for two, three years. It's the underlying platform, as I said, that produces stable numbers in this type of environment, which is very encouraging, but also something we saw as we entered this market and acquired this platform. On top of that, it's driving the initiatives that we can. We have opened five, six, seven branches over the last 12 months. My point is more related to that as the market improves, of course, that's going to be a nice tailwind for our business. my point is more related to that as the market improves of course that's going to be a nice tailwind for our business In the meantime, it's more that when you look at Beijer Ref and Heritage in the U.S., it's an underlying very stable platform in these types of times as well. in the meantime it's more that when you look at beijer ref and heritage in the u.s it's an underlying very stable platform in these types of times as well We do expect to do better. we do expect to do better It'd be very nice when also the housing market and renovation market picks up, mostly related to interest rates because it hasn't really been strong for two, three years. it'd be very nice when also the housing market and renovation market picks up mostly related to interest rates because it hasn't really been strong for two three years It's the underlying platform, as I said, that produces stable numbers in this type of environment, which is very encouraging, but also something we saw as we entered this market and acquired this platform. it's the underlying platform as i said that produces stable numbers in this type of environment which is very encouraging but also something we saw as we entered this market and acquired this platform On top of that, it's driving the initiatives that we can. on top of that it's driving the initiatives that we can We have opened five, six, seven branches over the last 12 months. we have opened five six seven branches over the last 12 months We have launched refrigeration in different areas. I think you maybe should see it as we continue to develop this stable platform in tougher times. Of course, as the tailwind starts improving, hopefully next year, it'll be a very nice development. We're not there yet, as you said. I think that the OEMs for us, it's hard to relate to right now because we're in a completely different phase because of the transition into A2L refrigerants. We have launched refrigeration in different areas. we have launched refrigeration in different areas I think you maybe should see it as we continue to develop this stable platform in tougher times. i think you maybe should see it as we continue to develop this stable platform in tougher times Of course, as the tailwind starts improving, hopefully next year, it'll be a very nice development. of course as the tailwind starts improving hopefully next year it'll be a very nice development We're not there yet, as you said. we're not there yet as you said I think that the OEMs for us, it's hard to relate to right now because we're in a completely different phase because of the transition into A2L refrigerants. i think that the oems for us it's hard to relate to right now because we're in a completely different phase because of the transition into a2l refrigerants

Speaker 1: I guess to your point then, can we see the organic growth development in Q3 as being somewhat still held back by the market conditions? Or do you feel like this was, you know, the optimal level? I guess to your point then, can we see the organic growth development in Q3 as being somewhat still held back by the market conditions? i guess to your point then can we see the organic growth development in q3 as being somewhat still held back by the market conditions Or do you feel like this was, you know, the optimal level? or do you feel like this was you know the optimal level

Speaker 3: No, no. Q3 is a tough market in the U.S., for sure. It's not a booming market. As you said, it's also we're moving in out to Q4 and Q1. That, you know, it's more heating. It's more low season for us and not very big quarters. As the U.S. market housing sales start improving, that will also drive renovation, which is a huge segment for us. If you take our numbers in the U.S., out of that 6%, 4% or 5% is price, right? For us, it's still good times ahead when the market starts turning on the housing sales because that hasn't been, I mean, it's been at all-time lows for like two, three years. We expect to do better because, of course, having these type of numbers, we're taking market share for sure. We're opening branches. We're adding products. No, no. no no Q3 is a tough market in the U.S., for sure. q3 is a tough market in the u.s for sure It's not a booming market. it's not a booming market As you said, it's also we're moving in out to Q4 and Q1. as you said it's also we're moving in out to q4 and q1 That, you know, it's more heating. that you know it's more heating It's more low season for us and not very big quarters. it's more low season for us and not very big quarters As the U.S. market housing sales start improving, that will also drive renovation, which is a huge segment for us. as the u.s market housing sales start improving that will also drive renovation which is a huge segment for us If you take our numbers in the U.S., out of that 6%, 4% or 5% is price, right? if you take our numbers in the u.s out of that 6% 4% or 5% is price right For us, it's still good times ahead when the market starts turning on the housing sales because that hasn't been, I mean, it's been at all-time lows for like two, three years. for us it's still good times ahead when the market starts turning on the housing sales because that hasn't been i mean it's been at all-time lows for like two three years We expect to do better because, of course, having these type of numbers, we're taking market share for sure. we expect to do better because of course having these type of numbers we're taking market share for sure We're opening branches. we're opening branches We're adding products. we're adding products We are, of course, driving some of the growth on our own without having the market support on it right now. We are, of course, driving some of the growth on our own without having the market support on it right now. we are of course driving some of the growth on our own without having the market support on it right now

Speaker 1: Yep, perfect. Thank you very much. Yep, perfect. yep perfect Thank you very much. thank you very much

Speaker 3: Thank you. Thank you. thank you

Speaker 5: The next question comes from Carl Ragnestam from Nordia. Please go ahead. The next question comes from Carl Ragnestam from Nordia. the next question comes from carl ragnestam from nordia Please go ahead. please go ahead

Speaker 7: Hello. It's Carl here from Nordia. A couple of questions from my side as well. Firstly, obviously, we are exiting high season in Europe and the U.S. Maybe a good time to focus a bit on what is happening in Australia and APAC. We're entering, I think, summer in the month here in Australia, for instance, one of the biggest markets. What is your view on those markets when we are entering high season? What is the dynamic there right now, you think? Hello. hello It's Carl here from Nordia. it's carl here from nordia A couple of questions from my side as well. a couple of questions from my side as well Firstly, obviously, we are exiting high season in Europe and the U.S. firstly obviously we are exiting high season in europe and the u.s Maybe a good time to focus a bit on what is happening in Australia and APAC. maybe a good time to focus a bit on what is happening in australia and apac We're entering, I think, summer in the month here in Australia, for instance, one of the biggest markets. we're entering i think summer in the month here in australia for instance one of the biggest markets What is your view on those markets when we are entering high season? what is your view on those markets when we are entering high season What is the dynamic there right now, you think? what is the dynamic there right now you think

Speaker 3: Yeah. We're just about the cusp between when the summer starts, it's September to mid-October, end of September, mid-October. We're just in the beginning of it. The way you would look at APAC being the main markets, Australia and New Zealand, moving into summertime, and then you have Southeast Asia that's a little bit smaller and more focused on refrigeration. I think we see the same trends as we did before. Both markets are pretty flattish in general, and we continue to take market share. There's no big change yet in those markets. I would say New Zealand is a little bit weaker than Australia. Interest rates are starting to come down. There are green leaves or whatever out there. I would say it continues to be a stable development, positive in Australia and stable in New Zealand and Southeast Asia. No big changes, but continue to be good markets. Yeah. yeah We're just about the cusp between when the summer starts, it's September to mid-October, end of September, mid-October. we're just about the cusp between when the summer starts it's september to mid-october end of september mid-october We're just in the beginning of it. we're just in the beginning of it The way you would look at APAC being the main markets, Australia and New Zealand, moving into summertime, and then you have Southeast Asia that's a little bit smaller and more focused on refrigeration. the way you would look at apac being the main markets australia and new zealand moving into summertime and then you have southeast asia that's a little bit smaller and more focused on refrigeration I think we see the same trends as we did before. i think we see the same trends as we did before Both markets are pretty flattish in general, and we continue to take market share. both markets are pretty flattish in general and we continue to take market share There's no big change yet in those markets. there's no big change yet in those markets I would say New Zealand is a little bit weaker than Australia. i would say new zealand is a little bit weaker than australia Interest rates are starting to come down. interest rates are starting to come down There are green leaves or whatever out there. there are green leaves or whatever out there I would say it continues to be a stable development, positive in Australia and stable in New Zealand and Southeast Asia. i would say it continues to be a stable development positive in australia and stable in new zealand and southeast asia No big changes, but continue to be good markets. no big changes but continue to be good markets We continue to drive the margins and invest in the portfolio in these regions. We feel pretty good about the APAC region. We continue to drive the margins and invest in the portfolio in these regions. we continue to drive the margins and invest in the portfolio in these regions We feel pretty good about the APAC region. we feel pretty good about the apac region

Speaker 7: Okay. That's very clear. In Europe, we saw growth of 18% in HVAC. I guess weather effect is one of several factors, I guess. Historically, I think we've seen a spillover effect after such a period. Do you see anything of that entering Q4 of the HVAC Europe sales, or is it back to a more sort of sluggish market again? Okay. okay That's very clear. that's very clear In Europe, we saw growth of 18% in HVAC. in europe we saw growth of 18% in hvac I guess weather effect is one of several factors, I guess. i guess weather effect is one of several factors i guess Historically, I think we've seen a spillover effect after such a period. historically i think we've seen a spillover effect after such a period Do you see anything of that entering Q4 of the HVAC Europe sales, or is it back to a more sort of sluggish market again? do you see anything of that entering q4 of the hvac europe sales or is it back to a more sort of sluggish market again

Speaker 3: No, I think it's, yes, you had some early heat waves. That's always good in July. I don't think August, September were anything special. If you catch up the quarter, I think it was slightly positive on the weather, but nothing extraordinary. I would say it's more a stable business. EMEA is more about the regions. We're in 20+ countries. You have Eastern Europe, you have Nordic, you have Southern, you have Central Europe. I think in general, the market that's been not as strong over the last couple of years has been Southern Europe, which is a big market for us, France in particular. We see a little bit better development in the South, but it's still early days to see that. As you said, now it's more moving into replacement. We're also doing some more heat pumps as we move in here to Q4 and Q1. No, I think it's, yes, you had some early heat waves. no i think it's yes you had some early heat waves That's always good in July. that's always good in july I don't think August, September were anything special. i don't think august september were anything special If you catch up the quarter, I think it was slightly positive on the weather, but nothing extraordinary. if you catch up the quarter i think it was slightly positive on the weather but nothing extraordinary I would say it's more a stable business. i would say it's more a stable business EMEA is more about the regions. emea is more about the regions We're in 20+ countries. we're in 20+ countries You have Eastern Europe, you have Nordic, you have Southern, you have Central Europe. you have eastern europe you have nordic you have southern you have central europe I think in general, the market that's been not as strong over the last couple of years has been Southern Europe, which is a big market for us, France in particular. i think in general the market that's been not as strong over the last couple of years has been southern europe which is a big market for us france in particular We see a little bit better development in the South, but it's still early days to see that. we see a little bit better development in the south but it's still early days to see that As you said, now it's more moving into replacement. as you said now it's more moving into replacement We're also doing some more heat pumps as we move in here to Q4 and Q1. we're also doing some more heat pumps as we move in here to q4 and q1 In general, no big shifts, I would say, in EMEA at this moment. In general, no big shifts, I would say, in EMEA at this moment. in general no big shifts i would say in emea at this moment

Speaker 7: Okay. Very clear. A quick final is on the pricing component you discussed around, I mean, what you said, mid-single-digit 4% or 5% in the U.S. in the quarter. Do you expect a slight uptick as you'll sell more of the A2L products into Q4, or is it roughly 4% or 5% we expect going forward as well, I mean, Q4, Q1? Okay. okay Very clear. very clear A quick final is on the pricing component you discussed around, I mean, what you said, mid-single-digit 4% or 5% in the U.S. in the quarter. a quick final is on the pricing component you discussed around i mean what you said mid-single-digit 4% or 5% in the u.s in the quarter Do you expect a slight uptick as you'll sell more of the A2L products into Q4, or is it roughly 4% or 5% we expect going forward as well, I mean, Q4, Q1? do you expect a slight uptick as you'll sell more of the a2l products into q4 or is it roughly 4% or 5% we expect going forward as well i mean q4 q1

Speaker 3: Yeah, that's roughly what we'd expect as we move into Q4 and Q1. Yeah, that's roughly what we'd expect as we move into Q4 and Q1. yeah that's roughly what we'd expect as we move into q4 and q1

Speaker 7: Perfect. Thank you. Perfect. perfect Thank you. thank you

Speaker 3: Thank you. Thank you. thank you

Speaker 5: As a reminder, if you wish to ask a question, please dial 5 on your telephone keypad. The next question comes from Carl Deijenberg from DNB Carnegie. Please go ahead. As a reminder, if you wish to ask a question, please dial 5 on your telephone keypad. as a reminder if you wish to ask a question please dial 5 on your telephone keypad The next question comes from Carl Deijenberg from DNB Carnegie. the next question comes from carl deijenberg from dnb carnegie Please go ahead. please go ahead

Speaker 2: Thank you very much. Good morning, guys. A lot of focus on the U.S. I just had one follow-up here, and that is on the margin. I mean, yeah, we talked a little bit about the acquisitions you've done, Young Supply and so forth, being a little bit margin diluted for the region as a whole. I guess, you know, we're seeing further margin expansion here in Q3 again. Obviously, you also have a lot of ongoing organic initiatives, which I guess carry some incremental OpEx as well. Could you talk a little bit about the plus 14% margin here? Is there any impact from the A2L transitioning? I thought that was only on price relative cost being fairly neutral, but is it a positive on the margin there as well? Thank you very much. thank you very much Good morning, guys. good morning guys A lot of focus on the U.S. a lot of focus on the u.s I just had one follow-up here, and that is on the margin. i just had one follow-up here and that is on the margin I mean, yeah, we talked a little bit about the acquisitions you've done, Young Supply and so forth, being a little bit margin diluted for the region as a whole. i mean yeah we talked a little bit about the acquisitions you've done young supply and so forth being a little bit margin diluted for the region as a whole I guess, you know, we're seeing further margin expansion here in Q3 again. i guess you know we're seeing further margin expansion here in q3 again Obviously, you also have a lot of ongoing organic initiatives, which I guess carry some incremental OpEx as well. obviously you also have a lot of ongoing organic initiatives which i guess carry some incremental opex as well Could you talk a little bit about the plus 14% margin here? could you talk a little bit about the plus 14% margin here Is there any impact from the A2L transitioning? is there any impact from the a2l transitioning I thought that was only on price relative cost being fairly neutral, but is it a positive on the margin there as well? i thought that was only on price relative cost being fairly neutral but is it a positive on the margin there as well

Speaker 3: Yeah, I mean, yeah, no, I think it's a fair question. My easy answer is that we're very good. We are now doing better in the margin. If I take the view on it, it is a good margin in Q3, and we're happy about it. It's also part of the initiatives we have ongoing. As you said, opening branches are dilutive, you know, adding investments in private label and commercial lease. We are investing quite a bit, as you said, on the OpEx side. As I said before, when we build this platform, we do put synergies in place to drive margin on the gross margin side, on purchasing side, and also some more efficiency in the business and higher margin on private label and other initiatives. I would say that it's early days, right? It's one quarter we can see here. Yeah, I mean, yeah, no, I think it's a fair question. yeah i mean yeah no i think it's a fair question My easy answer is that we're very good. my easy answer is that we're very good We are now doing better in the margin. we are now doing better in the margin If I take the view on it, it is a good margin in Q3, and we're happy about it. if i take the view on it it is a good margin in q3 and we're happy about it It's also part of the initiatives we have ongoing. it's also part of the initiatives we have ongoing As you said, opening branches are dilutive, you know, adding investments in private label and commercial lease. as you said opening branches are dilutive you know adding investments in private label and commercial lease We are investing quite a bit, as you said, on the OpEx side. we are investing quite a bit as you said on the opex side As I said before, when we build this platform, we do put synergies in place to drive margin on the gross margin side, on purchasing side, and also some more efficiency in the business and higher margin on private label and other initiatives. as i said before when we build this platform we do put synergies in place to drive margin on the gross margin side on purchasing side and also some more efficiency in the business and higher margin on private label and other initiatives I would say that it's early days, right? i would say that it's early days right It's one quarter we can see here. it's one quarter we can see here For sure, the underlying improvement in margin is coming through in these initiatives. Let's continue that drive as we move into Q4 and next year. Maybe worth mentioning is that we do expect when we do this acquisition to be dilutive, as we said, with Young Supply and other ones. We also expect as we go through the 12 to 24 months that we will improve the margins. We can see that as we run through Q3. For sure, the underlying improvement in margin is coming through in these initiatives. for sure the underlying improvement in margin is coming through in these initiatives Let's continue that drive as we move into Q4 and next year. let's continue that drive as we move into q4 and next year Maybe worth mentioning is that we do expect when we do this acquisition to be dilutive, as we said, with Young Supply and other ones. maybe worth mentioning is that we do expect when we do this acquisition to be dilutive as we said with young supply and other ones We also expect as we go through the 12 to 24 months that we will improve the margins. we also expect as we go through the 12 to 24 months that we will improve the margins We can see that as we run through Q3. we can see that as we run through q3

Speaker 2: Very clear. I just wanted to follow up also. I mean, I appreciate the color on Europe, and you didn't seem too alarmed there. I just wanted to ask a little bit, you know, geographical differences in Europe. Maybe if you could talk a little bit about France. I guess that's obviously a key market for you with Toshiba and so forth. I guess consumer signals with the government crisis and so forth have not been super positive since the summer. Could you share? I mean, the development you're reporting here in Q3 is obviously very stable from an EMEA perspective. Is there clear differences in between as well to be aware of? Very clear. very clear I just wanted to follow up also. i just wanted to follow up also I mean, I appreciate the color on Europe, and you didn't seem too alarmed there. i mean i appreciate the color on europe and you didn't seem too alarmed there I just wanted to ask a little bit, you know, geographical differences in Europe. i just wanted to ask a little bit you know geographical differences in europe Maybe if you could talk a little bit about France. maybe if you could talk a little bit about france I guess that's obviously a key market for you with Toshiba and so forth. i guess that's obviously a key market for you with toshiba and so forth I guess consumer signals with the government crisis and so forth have not been super positive since the summer. i guess consumer signals with the government crisis and so forth have not been super positive since the summer Could you share? could you share I mean, the development you're reporting here in Q3 is obviously very stable from an EMEA perspective. i mean the development you're reporting here in q3 is obviously very stable from an emea perspective Is there clear differences in between as well to be aware of? is there clear differences in between as well to be aware of

Speaker 3: No, not really. I mean, we expect it to continue to be stable. We don't see any changes. Even countries like France, we find ways to grow in our business model. There's no signal on it. I think we're more bullish long-term now as interest rates are coming down. We see a little bit more investments across. We do expect markets to improve. The question is, you know, when? Is it 2026 or not? It's more of also saying, you know, in the meantime, we expect continuing growth and also do well as we did in Q3 in muted markets. I don't see any short-term changes to that. Of course, long-term, if you move into 2026, etc., let's see where the market goes on those segments. There are positive signals, but I think it's too early to call it out in that sense. No, not really. no not really I mean, we expect it to continue to be stable. i mean we expect it to continue to be stable We don't see any changes. we don't see any changes Even countries like France, we find ways to grow in our business model. even countries like france we find ways to grow in our business model There's no signal on it. there's no signal on it I think we're more bullish long-term now as interest rates are coming down. i think we're more bullish long-term now as interest rates are coming down We see a little bit more investments across. we see a little bit more investments across We do expect markets to improve. we do expect markets to improve The question is, you know, when? the question is you know when Is it 2026 or not? is it 2026 or not It's more of also saying, you know, in the meantime, we expect continuing growth and also do well as we did in Q3 in muted markets. it's more of also saying you know in the meantime we expect continuing growth and also do well as we did in q3 in muted markets I don't see any short-term changes to that. i don't see any short-term changes to that Of course, long-term, if you move into 2026, etc., let's see where the market goes on those segments. of course long-term if you move into 2026 etc let's see where the market goes on those segments There are positive signals, but I think it's too early to call it out in that sense. there are positive signals but i think it's too early to call it out in that sense

Speaker 2: Okay. Fair enough. Thank you very much. Okay. okay Fair enough. fair enough Thank you very much. thank you very much

Speaker 3: Thank you. Thank you. thank you

Speaker 5: The next question comes from Karl Bokvist from ABG Sundal Collier. Please go ahead. The next question comes from Karl Bokvist from ABG Sundal Collier. the next question comes from karl bokvist from abg sundal collier Please go ahead. please go ahead

Speaker 4: Thank you. Good morning. Most questions have been asked. Regarding this back office and warehouse efficiency program, you talked about savings in terms of P&L. Could we expect anything in terms of inventory efficiency as well here? If possible, how should one think about it in perhaps average inventory levels, how they looked like before the pandemic, and where you expect them to get back to? Thank you. thank you Good morning. good morning Most questions have been asked. most questions have been asked Regarding this back office and warehouse efficiency program, you talked about savings in terms of P&L. regarding this back office and warehouse efficiency program you talked about savings in terms of p&l Could we expect anything in terms of inventory efficiency as well here? could we expect anything in terms of inventory efficiency as well here If possible, how should one think about it in perhaps average inventory levels, how they looked like before the pandemic, and where you expect them to get back to? if possible how should one think about it in perhaps average inventory levels how they looked like before the pandemic and where you expect them to get back to

Speaker 8: Yeah. I would say the answer is a little bit the same as we have communicated. I mean, as you all know, we have been on elevated levels for quite some time, coming out of COVID and the supply chain crisis and so on. We have reduced inventory, part of the excess inventory, so to speak, that we have carried for a number of years. The next phase is clearly to be more efficient in what we do to get back to historical levels to start with. These initiatives here, consolidating the platform, a warehouse structure, and so on, are part of that plan. It is an ingredient of many actions. Still, the long-term or medium-term plan is to continue to be more efficient in inventory gradually. I don't expect it to be a significant change here short-term. Yeah. yeah I would say the answer is a little bit the same as we have communicated. i would say the answer is a little bit the same as we have communicated I mean, as you all know, we have been on elevated levels for quite some time, coming out of COVID and the supply chain crisis and so on. i mean as you all know we have been on elevated levels for quite some time coming out of covid and the supply chain crisis and so on We have reduced inventory, part of the excess inventory, so to speak, that we have carried for a number of years. we have reduced inventory part of the excess inventory so to speak that we have carried for a number of years The next phase is clearly to be more efficient in what we do to get back to historical levels to start with. the next phase is clearly to be more efficient in what we do to get back to historical levels to start with These initiatives here, consolidating the platform, a warehouse structure, and so on, are part of that plan. these initiatives here consolidating the platform a warehouse structure and so on are part of that plan It is an ingredient of many actions. it is an ingredient of many actions Still, the long-term or medium-term plan is to continue to be more efficient in inventory gradually. still the long-term or medium-term plan is to continue to be more efficient in inventory gradually I don't expect it to be a significant change here short-term. i don't expect it to be a significant change here short-term It is more of a medium-term strategy to improve on different aspects and parts of our business. It is more of a medium-term strategy to improve on different aspects and parts of our business. it is more of a medium-term strategy to improve on different aspects and parts of our business

Speaker 4: Understood. My second question is on EMEA and the fact that you have a strong market position in this region. If I just reflect on some press releases you've sent out on acquisitions, they have been, on a couple of occasions, subject to anti-competitive approval and those kinds of due diligence processes by regulators. What are your kind of how do you think about the M&A landscape in EMEA going forward and how we should think about lead times when you close a deal or announce a deal to it being closed due to these regulatory processes that they have to go through now? Understood. understood My second question is on EMEA and the fact that you have a strong market position in this region. my second question is on emea and the fact that you have a strong market position in this region If I just reflect on some press releases you've sent out on acquisitions, they have been, on a couple of occasions, subject to anti-competitive approval and those kinds of due diligence processes by regulators. if i just reflect on some press releases you've sent out on acquisitions they have been on a couple of occasions subject to anti-competitive approval and those kinds of due diligence processes by regulators What are your kind of how do you think about the M&A landscape in EMEA going forward and how we should think about lead times when you close a deal or announce a deal to it being closed due to these regulatory processes that they have to go through now? what are your kind of how do you think about the m&a landscape in emea going forward and how we should think about lead times when you close a deal or announce a deal to it being closed due to these regulatory processes that they have to go through now

Speaker 3: Yeah. I will answer in this way, Karl. Like we said before, in certain areas on the refrigeration side, I would expect us we're not focusing on acquisition, as we said before. On the HVAC side, it's still a long runway for us. I don't see any issues with competition authorities. It's specific cases I would allude to. For example, now when we do the Baltics, you know, one of the countries, I think Estonia, you have to do competition authorities if your sales is over EUR 5 million. It has nothing really to do with competition. It's just the threshold. It takes 30 days, and it's going to be done. A lot of these are more academic processes. You'll have the same actually in Australia and others. It's more an academic than a structure. Yeah. yeah I will answer in this way, Karl. i will answer in this way karl Like we said before, in certain areas on the refrigeration side, I would expect us we're not focusing on acquisition, as we said before. like we said before in certain areas on the refrigeration side i would expect us we're not focusing on acquisition as we said before On the HVAC side, it's still a long runway for us. on the hvac side it's still a long runway for us I don't see any issues with competition authorities. i don't see any issues with competition authorities It's specific cases I would allude to. it's specific cases i would allude to For example, now when we do the Baltics, you know, one of the countries, I think Estonia, you have to do competition authorities if your sales is over EUR 5 million. for example now when we do the baltics you know one of the countries i think estonia you have to do competition authorities if your sales is over eur 5 million It has nothing really to do with competition. it has nothing really to do with competition It's just the threshold. it's just the threshold It takes 30 days, and it's going to be done. it takes 30 days and it's going to be done A lot of these are more academic processes. a lot of these are more academic processes You'll have the same actually in Australia and others. you'll have the same actually in australia and others It's more an academic than a structure. it's more an academic than a structure I think the only process we've been on HVAC, where we had a longer process, if you remember, we did Cool4U in Hungary. That was more because the company we bought had a very good market share in the country. We had to clarify that. In general, I would expect on the HVAC side, if there is a process, it's probably 30 days. I think the only process we've been on HVAC, where we had a longer process, if you remember, we did Cool4U in Hungary. i think the only process we've been on hvac where we had a longer process if you remember we did cool4u in hungary That was more because the company we bought had a very good market share in the country. that was more because the company we bought had a very good market share in the country We had to clarify that. we had to clarify that In general, I would expect on the HVAC side, if there is a process, it's probably 30 days. in general i would expect on the hvac side if there is a process it's probably 30 days

Speaker 4: Understood. Thank you. Understood. understood Thank you. thank you

Speaker 3: I think it'd be good if the EU could align this instead of every country having different rules. Maybe you can't fix that either. I think it'd be good if the EU could align this instead of every country having different rules. i think it'd be good if the eu could align this instead of every country having different rules Maybe you can't fix that either. maybe you can't fix that either

Speaker 4: Yeah, it seems like more of a longer-term issue here. Yeah, it seems like more of a longer-term issue here. yeah it seems like more of a longer-term issue here

Speaker 5: There are no more questions at this time. I hand the conference back to the speakers for any closing comments. There are no more questions at this time. there are no more questions at this time I hand the conference back to the speakers for any closing comments. i hand the conference back to the speakers for any closing comments

Speaker 3: Thank you for listening. Thank you for good questions. Of course, if there's anything else we can do to clarify your questions, we're available to do that. Thank you for your time. Hope you have a good weekend when it comes. Thank you for listening. thank you for listening Thank you for good questions. thank you for good questions Of course, if there's anything else we can do to clarify your questions, we're available to do that. of course if there's anything else we can do to clarify your questions we're available to do that Thank you for your time. thank you for your time Hope you have a good weekend when it comes. hope you have a good weekend when it comes Thank you very much. Thank you very much. thank you very much