Good morning, and welcome to Cambi's Q3 2026 Results Presentation. I am Dragoș Tâlvescu, Senior Corporate Relations Manager. CEO Per Lillebø and CFO Mats Tristan Tjemsland will take you through the quarter, covering the main operational developments, financial performance, and other updates. The presentation should take around 30 minutes. We will then open for questions. You can submit questions at any point during the presentation by scanning the QR code on the screen or clicking on the Submit Questions link. We will also pick up questions received during the silent period that could not be addressed at the time. Before we begin, please note that today's presentation may include forward-looking statements based on current expectations and assumptions. Actual outcomes may differ due to risks and uncertainties. Per, over to you.
Good morning, everyone, and welcome to Cambi's presentation of the Q3 2026 results. Let me start with the key highlights for the quarter. Revenue increased to NOK 269 million. We had a very high level of project execution activity in the technology segment in the quarter. We had an EBITDA of NOK 45 million, which is slightly above the EBITDA in the same quarter in 2025. The order intake came in at NOK 346 million, which we were okay with, quite satisfactory. The order backlog stands at NOK 1.556 billion, which we are also satisfied with. We entered into contracts in Egypt and Norway and Ireland, and that was what lifted the order backlog to the present level.
In the last Board meeting, the Board decided to declare further dividends to the shareholders, NOK 0.45 per share, as an additional dividend based on the 2025 annual accounts, and this will be paid in November. Let me go to the next slide. We were awarded three contracts or secured three contracts across three markets. The main one was the contract in Egypt, which I would describe as a major win for Cambi. This is a new market, but it is a very, very big market. We have been looking at Egypt for several years. They have one of the largest wastewater treatment plants in the entire world, and this one is a very prestigious one. What impresses me the most on our own behalf is that we are able to win contracts even in countries with relatively weak drivers.
The project is partly financed by EBRD and Egyptian national funds. We have started with the engineering on this contract. The order to proceed will be given later, but we are confident that the order to proceed will be declared. Cannot say exactly when. Cambi's scope will be to do the entire THP system, and in addition, our daughter company, CNP, is now working together with Cambi to also do engineering on the digester. That may give us some further contracts or turnover. We were also awarded a contract in Ireland, Celtic Anglian Water, as a minor upgrade of the existing plant that we already supplied to Dublin City. Grønn Vekst was also awarded a contract with the municipality of Eidsvoll in Norway. Let me try to explain to you expected improvements from the Alexandria West THP project.
I would say that the project has probably been won by the strong volume reduction that our technology offers the final customer. The high-quality improvement is another strong driver. Maybe in this case, one of the strongest drivers would be the need for far less digester capacity. With the Cambi technology installed, eight digesters will be enough compared to solution, and up to 50% higher biogas production with Cambi as well. Let me also try to explain to you the main difference, where Cambi has the main impact, and that is where we are treating the WAS only. This is the biologically created sludge, so to speak. Primary sludge is the organic waste we remove from the water, while secondary sludge is mainly the bacteria we grow to clean the water. Wastewater treatment produces two main types of sludge.
It is primary sludge in the organic waste that settles naturally to the bottom of a tank, and secondary sludge is mainly bacteria that we grow to consume the remaining pollution in the water. Both contain valuable organic material and energy, but secondary sludge is generally much more difficult to digest because much of its organic material is contained within microbial cells. This is where our technology, such as thermal hydrolysis, really can make a big difference. In this Egyptian project, we only treat the WAS. This means that if it had been a complete full Cambi project, it would have been double size. I can also here maybe remark that in India, all of the sludge is what we call WAS only. That should really be a very good market for Cambi.
The main drivers is, as I already mentioned, much more efficient digestion, smaller footprint, and drier solids. The alternative in Egypt would have been open-air composting from untreated or conventionally digested sludge. I hope this was a bit clarifying. The strong arguments for Cambi is when you are working with WAS only in markets like Egypt. This is the treatment solution for wastewater treatment that we see in most, say, more around the equator, the warmer parts of the world. Technology segment and installation and commissioning. One THP system entered operation and four projects completed installation. There has been a high activity. Our main focus, or what most of our work has been focused on, has been FREVAR. This is a plant in Norway at Fredrikstad, where we are doing the entire plant. We are the EPC supplier.
We did not do the civil construction, et cetera, but the entire system, excluding civil, as mentioned. The plant is now fully in operation, and it seems to have been a really good success for Cambi. Four projects completed installation, and that was San Francisco, Honolulu, Palma de Mallorca, and Singapore was also completed installation. In addition, both Perth and Wellington in New Zealand, are ready for commissioning. CNP is working on a project with digester mixing in Jordan with installation. Technology segment, engineering and manufacturing. As I mentioned, four projects in manufacturing are in manufacturing. We are learning from the lessons learned so far in India. We are working on two projects. One is under production in India, and one is under an engineering phase. Ellesmere Port and Blackburn in U.K. are under production.
CNP is delivering a full wastewater treatment plant for a potato chips factory in Germany. We are doing engineering for Malad, that is one of the Mumbai projects, and Auckland. We are also working on engineering for a project, one in North America and one in South America, in addition to Alexandria in Egypt. This is a technology segment operational snapshot overview of Cambi, where we are working. This slide mainly illustrates our global activity. I think it gives a good overview and explanation of how far stretched we are able to work. We work now from Hawaii to New Zealand, and we are able to do projects in all these countries. I have to say that I am pretty impressed myself by our global reach. Solutions segment services. This is a growing business area for Cambi. We have a constantly high activity in this area.
The business area so far has mainly been Europe and U.K., but we are gradually expanding also in the U.S. and also in Asia Pacific. We continue to deliver smaller upgrades. We have just signed now a first contract in America for a full yearly shutdown, which is a major breakthrough in that market. I think we will have around 12 plants in America, and this has become a very important business for Cambi over the last years. We will continue to deliver small upgrades on all the plants that we have supplied over the years. I think we now stand at 98 plants that are either in full operation or under construction, so we are getting closer and closer to 100 plants. Solution segment, Grønn Vekst. Say a few words about that. I am glad to see that Grønn Vekst has now definitely returned to profitability.
We are done with the bagging facility. It is not completely. Some of the costs are still carried by the company, but we hope to be completely finished with that part of the business. I like to mention that the bulk soil sales was around 56,000 tons. We are working from three composting sites and 17 soil production sites around Norway. We are handling around 120,000 tons of biosolids. This is sludge from wastewater treatment plants yearly, and this represents 30%-40% of the biosolids handling market in Norway. Quite high market share. There is no one else having the same market share as Grønn Vekst in the Norwegian market. In addition, maybe you shareholders are not aware of that, but we are also a big, big producer of soil based on, this is mainly peat-free soil in addition.
220,000 tons of soil is what we expect to produce in 2026. We estimate, we do not know for sure, but that this is 40%-50% of the total Norwegian market. Grønn Vekst has also been able to extend ongoing contracts for the further. They are relatively long- term, many of the contracts that they have now. Gjøvik Municipality is one of the contracts that has been extended, for example. The same with the contract servicing the city of Bergen, Western Norway. Events after the reporting period. Maybe the main win has been Feiras in Portugal. This is a wastewater treatment plant operated by Águas de Portugal. Águas de Portugal is the national wastewater treatment company, state-owned in Portugal, treating around 80% of all wastewater in Portugal. This has been on our target list for many, many years.
The good thing about Portugal is that if you do a good job towards the main customer in Portugal, the opportunities should be there for more work, and this is what we believe. It is about volume reduction, it is about the sludge center, and it is about digester volume. These are the main arguments again for Águas de Portugal investing in our solution. Grønn Vekst continues to secure long-term contracts. This one is another one with Follo Ren, which is a municipality, an inter-municipality company east of Oslo, southeast of Oslo. In addition, we have decided, as I mentioned in the beginning, the Board of Directors resolved to declare an additional cash dividend of NOK 0.45 per share for a total disbursement of NOK 72 million.
Last day with dividend rights will be November 5, ex-date will be November 6, and record date will be November 9, payment, or we assume to be around November 18. The payout is based on a mandate given to the Board at the Annual General Meeting in May 2026. Outlook. Let me say that it is long-term infrastructure investments and regulations that shape Cambi's future. This is what is driving our business. It is not subsidies, it is mainly regulations and a need to do something all over the world. The AMP8, we call it, the asset management period in the U.K., is now well underway. Another regulation that may impact our business going forward is EU's Urban Wastewater Treatment Directive. This drives definitely the market in our direction.
Egypt and Portugal, as I mentioned already, are major wins for Cambi and should hopefully be a good sign for the future. Grønn Vekst has restored its profitability, which is also very good. Many of Cambi's ongoing construction projects are close to commissioning, and most revenue of these contracts has already been recognized, and further progress depends on customer site readiness. Two ongoing projects require notice to proceed. We are confident that backlog will be converted into revenue. Also mention that, of course, currency hits us a bit. The Norwegian krone is strong now. It has been weak for many, many years. But right now, we are hit by a stronger Norwegian krone, as most of our revenue is in other currencies like EUR, USD, et cetera. But some of our cost base is also in other currencies like the USD, GBP, EUR, et cetera.
I would say that the backlog gives us a good visibility on future activity level, and we are developing and investing in the organization to be able to handle even higher activity going forward. This is what I can say about the outlook for the time being. As I mentioned, the board remains confident of Cambi's long-term growth outlook and market position. Well, then I will hand over the floor to Mats, if you are ready.
Good morning, everyone. I will now take you through the financial performance for the third quarter of 2026. Let me start with some financial highlights. Revenue was NOK 269 million, up 5% from the same quarter last year. Gross margins remained broadly stable, both at group level and also within the segments. EBITDA was NOK 45 million compared to NOK 42 million in the same quarter last year. This corresponds to a margin of 17%. Order intake was NOK 346 million, with contributions from both technology and solutions.
The order backlog increased to NOK 1.6 billion, which is at its highest level since the first quarter of 2024. This provides good visibility into future activity levels, now with a higher share of longer-term recurring revenues. The cash position remains strong at NOK 360 million. Operating cash flow was -NOK 29 million in the quarter, mainly reflecting the timing of milestone payments from ongoing construction contracts.
I will get back to these topics in more detail. First, let us take a look at the consolidated income statement. As mentioned, revenue of NOK 269 million compared to NOK 257 million in the same quarter last year. This reflects good progress on ongoing construction contracts and high activity within solutions. Gross margin was 49%, unchanged from the same quarter last year. In absolute terms, gross profit increased from NOK 127 million to NOK 132 million. As in previous quarters, the reported margin reflects the mix of activity, both between segments and projects.
Operating expenses were NOK 87 million compared to NOK 85 million last year. Payroll expenses increased to NOK 60 million, while other operating expenses decreased to NOK 27 million. Overall, the cost base remained broadly stable and was slightly below recent quarters. EBITDA was NOK 45 million, corresponding to a margin of 17%. This compares to NOK 42 million and a margin of 16% last year.
It is also an improvement from the NOK 26 million in the previous quarter. Depreciation and amortization were NOK 4 million, giving an operating profit of NOK 41 million compared to NOK 38 million last year. Net financial items were -NOK 6 million compared to a +NOK 1 million last year. This is mainly related to foreign currency effects from a stronger NOK, as Per mentioned. Profit before tax was NOK 35 million and net profit was NOK 28 million.
Moving on to the technology segment. Revenue was NOK 181 million, broadly in line with NOK 183 million in the same quarter last year, and up from NOK 169 million in the second quarter. We continue to convert our order backlog into revenue as work progressed across the project portfolio, as Per mentioned. Gross margin was 55%, unchanged from the third quarter last year, and up from 48% in the second quarter.
As mentioned in previous presentations, the project mix within technology can vary quite significantly between quarters. Different projects have different margins, and we continue to have ongoing EPC projects with extended scope, which also affect our reported gross margin. Operating expenses were NOK 66 million, unchanged from the same quarter last year, and down from NOK 73 million in the second quarter. EBITDA was NOK 35 million, with a margin of 19%. Both were in line with the third quarter last year.
In the technology segment, foreign exchange movements influenced the reported figures when translated into Norwegian kroner. Let us take a look at the solutions segment. Revenue was NOK 88 million, up from NOK 73 million in the third quarter last year. Both services and Grønn Vekst increased revenue by 20%. Revenue was below the second quarter, which is normally a high- activity period for the segment.
Gross margin was 36% compared with 35% last year. In both periods, low activity within THP upgrades affected the reported gross margin. Operating expenses were NOK 21 million compared to NOK 19 million last year. The increase reflects higher expenses in services, partly offset by lower expenses in Grønn Vekst. EBITDA increased to NOK 11 million from NOK 7 million last year. This corresponds to a margin of 12% compared with 9%. The improvement mainly comes from better profitability within Grønn Vekst, as Per mentioned.
Let us talk about the order intake. Order intake was reported at NOK 346 million in the third quarter compared to NOK 422 million in the same quarter last year. Technology contributed NOK 242 million, including the announced contract in Alexandria in Egypt, which Per mentioned earlier. Solutions contributed NOK 104 million. This includes the mentioned services upgrades in Dublin and Grønn Veksts new biosolids handling here in Norway.
As usual, the order intake also includes spare part sales, bulk soil sales, variation orders, other services contracts, and also contracts which is below the threshold for stock exchange announcements. The reported figure of order intake also includes foreign exchange movements affecting the value of the order backlog from quarter to quarter. Although the order intake was lower than the same quarter last year, it remained above the revenue for the quarter, meaning that we continued to increase our order backlog.
Let us have a look at the order backlog. It ended the quarter at NOK 1.6 billion. This is 41% higher than one year earlier and up from NOK 1.5 billion at the end of the second quarter. The backlog is now at its highest level since the first quarter of 2024.
A stronger NOK reduced the reported backlog by NOK 63 million compared to the exchange rates one year earlier. Most of this effect relates to the technology segment, where much of our foreign currency backlog sits. The technology backlog was NOK 897 million, up 39% from one year earlier.
New contracts more than offset the revenue recognized on ongoing construction contracts. The solutions backlog was NOK 659 million compared to NOK 457 million last year. The increase mainly reflects Grønn Veksts portfolio of very long-term biosolids handling contracts.
At quarter end, 94% of the solutions backlog is from the remaining value of Grønn Veksts biosolids and garden waste handling contracts. The backlog has become more diversified. Solutions now accounts for 42% of the total backlog, compared to only 15% back in the first quarter of 2024 when it was hired.
This adds a larger base of longer- term and recurring revenue alongside our technology projects. Following the end of the quarter, as mentioned, a medium-sized contract was awarded for technology and a small contract was awarded for solutions, adding more work to our order backlog. Let us have a look at the order backlog distribution. Around 13% of the current backlog is expected to be delivered in the fourth quarter of 2026, and a further 32% is expected in 2027, with the remaining 55% expected in 2028 and beyond.
The larger backlog strengthens our visibility longer into the future. However, a significant part of the backlog is scheduled for delivery for 2028 and later. The timing of new orders and their execution remains important for activity in 2027. It is also important to note that 38% of the backlog is conditional.
This includes technology construction contracts where we need an order to proceed to manufacturing. It also includes extension options in Grønn Veksts contracts with Norwegian municipalities. These municipal extension options have historically been exercised consistently. Looking at currencies, 45% of the backlog is in Norwegian kroner. Euros account for 37%, British pounds 10%, Indian rupees 5%, and US dollars 3%. In other words, 55% of the backlog is in foreign currencies.
Exchange rate movements therefore continue to affect our reported backlog in Norwegian kroner, as well as revenue and financial performance as we deliver on these contracts. Let us move to the balance sheet. Cash and cash equivalents were NOK 360 million at quarter end. This is up from NOK 224 million one year earlier, but down from NOK 388 million at the end of the second quarter, reflecting negative cash flow generation in the third quarter.
Accounts receivable were NOK 122 million, significantly below NOK 302 million in the same quarter last year, following the collection of outstanding invoices. Earned but not invoiced project revenue increased to NOK 177 million from NOK 157 million in the second quarter and NOK 126 million one year earlier. At the same time, accrued project costs, provisions, and deferred revenue decreased to NOK 112 million. This compares to NOK 153 million in the second quarter and NOK 120 million one year earlier.
These movements reflect the timing of project activity and invoicing. Accounts payable were NOK 67 million compared to NOK 51 million one year earlier. Total equity was NOK 509 million, and Cambi had no long-term debt at quarter end, and we continue to have a strong balance sheet. Let us take a look at cash flow. Operating cash flow was - NOK 29 million in the third quarter, as I mentioned earlier.
This compares with a + NOK 81 million in the same quarter last year. The main negative item this quarter was NOK 61 million in change in project accruals. As we have discussed before, operating cash flow is affected by the timing and size of milestone payments. These payments depend on reaching the milestones agreed in each contract, and they can vary significantly between quarters.
For the first nine months of the year, operating cash flow was + NOK 122 million. This puts the negative cash flow in the third quarter into context of the strong cash inflow in the second quarter. Cash flow from investing was limited. This compares to an outflow of NOK 13 million last year, which mainly reflects to the acquisition of a controlling stake in CNP CYCLES. There was no cash flow from financing activities in the third quarter.
Overall, cash decreased by NOK 29 million during the quarter and ended at NOK 360 million, as I mentioned earlier. Before moving to the Q&A session, a short comment on dividends. At this meeting on the 3rd of November, the board used part of its authorization given by the Annual General Meeting in May to declare an additional cash dividend. The dividend will be NOK 0.45 per share, and this comes in addition to the NOK 0.30 , which was paid in May.
The decision is based on the 2025 annual accounts and takes into account the developments in order intake and project milestones since May, as well as our capital needs going forward. The approach balances returns to shareholders with prudent cash management. As mentioned, record date is 9th of November, and payment is expected around 18th of November.
The Board does not intend to use the remaining authorization for further additional dividends. The next consideration of dividends will be in connection with the 2026 annual accounts, with any further distribution subject to approval by the Annual General Meeting in 2027. With that, we are ready to move over to the Q&A session.
Thank you, Per and Mats Tristan. We will now move on to the Q&A session. Under the video screen, there is a QR code and a button saying, "Submit your question," so you can still submit questions live while we start taking the ones that we have already received. I will start with one addressed to Per. Looking only at new upcoming THP contracts, there are several public processes for Beckton, Peel, Arlington, with decisions due around the turn of the year. Without commenting specifically on individual projects, should we expect a relatively quiet period for new awards in the fourth quarter and the first quarter of next year, and larger wave coming later in 2027, or do you have a different perspective?
Well, let me start again by repeating the obvious, that we have decided to stay away from any kind of guiding. I am afraid that if we started to do that, you would lose confidence in us. For sometimes it is as difficult for us to predict exactly when new contracts are awarded and signed as it is for you. What I know is that we are working on several prospects all over the world, and we do all we can to have them signed as soon as possible. So, we are working on all these names that was mentioned here, that is correct. But I cannot say when new contracts will be awarded. That is impossible for me to say exactly. So, I cannot help you there, unfortunately.
Thank you, Per. The next question may be still addressed to you. In the U.S. and China, you already have large installed bases. So going forward, is the priority in these two large markets to sell new THP systems or more on servicing and upgrading the existing fleet?
Yeah. When it comes to China, it is correct that we have six projects in mainland China, and we have one in Hong Kong. To be frank, I look upon Hong Kong as an actually more interesting market short term than mainland China. There are several issues with mainland China, and one of them is that the sludge in China actually contains a lot of inorganic material. In Beijing, that is not the case, but in most part of China, anaerobic digestion does not have a good reputation. For the time being, there are not many projects that Cambi is following in China, but we have some big projects that we are aiming for longer term. What we are mainly doing in China now is, as I mentioned, following up Hong Kong, but also to service the ongoing projects.
The situation in America is absolutely opposite. America, the American market is big. It continues to develop. We develop our servicing, definitely. I just mentioned in the presentation here that we are now starting to do yearly shutdown in America, and we do more and more servicing of our customers. When it comes to new projects, we are, of course, chasing all kind of projects. We are meeting different kind of competition in America, and that is other ways of treating the sludge or wastewater sludge. The main competitor so far has been thermophilic digestion, which we consider to be a clearly inferior system because of its instability. Of course, some customers are choosing that as well. We look positive at the American market going forward, and we do all we can, and maybe we should even invest more in the American market going forward.
Thank you, Per. I think the next question could be addressed to Mats. Could you provide more details on the phasing of the backlog with 2027 execution?
Sure. So, each quarter, we provide guidance. This is the only guidance that we give, actually. It is the backlog distribution. So this is based on our best estimate each quarter from all project managers and all projects on how we expect the project to proceed according to the status in each project. So, we don't buffer anything on this guidance. This is reflecting the actual estimate that we believe in. It can fluctuate from quarter to quarter as we see the future go. So this will be a combined status on all ongoing projects and also the biosolids handling contracts for Grønn Vekst. Right now, 32% of the current backlog is what we expect for 2027, and we don't break that down into the different quarters. So, this will be up to the next quarter to give a new status on the 2027 phasing.
And of course, we signed now additional contracts after the close of the quarter, which adds further comfort or further work for the 2027 year.
Thank you. Right now, we have one question that is unanswered. So if there's any questions that you would still like to ask, please submit them now. I would let you two choose who wants to take this question, but it is regarding changes in the annual recurring revenue from services and spare parts. How do we see growth in this part of the business?
Well, we have seen a very surprisingly stable growth. Maybe not surprisingly, really, because the number of plants are increasing, and we have become better and better at servicing plants that we have delivered and commissioned. So we look very positive at this business area. I think the growth rate there has been around 13%-15% annually, and we will continue to add on new products and new offerings. And by the end of this year, I hope that we are able to invite customers to our new web shop that will be open by the end of this year. It's nearly finished now, and will be interesting to see how this will be received by our customers.
Thank you, Per. We don't have any more questions, so this concludes Cambi's Q3 2026 Results Webcast Presentation and Q&A session. The recording and transcript will be available on our investor portal as soon as possible later today. And any follow-up questions can be directed to the Investor Relations team. Thanks for joining us today, and have a good day.
Okay. Bye-bye.