Good morning and welcome to our third quarter presentation. My name is Rolf Barmen, Head of Elmera Group. Today I have, as usual, with me our CFO, Henning Nordgulen, and also Head of Investor Relations, Morten Opdal, who will take questions during our presentation and address them to Henning and myself during our Q&A session. We are very, very satisfied with the group's performance in this quarter. The net revenue came in strong, with a significant growth year-on-year driven by increased core margins from all our electricity retail segments. Accordingly, EBIT adjusted was also strong in the quarter, accelerated by year-on-year reduction in our operating expenses. We continue to see good effects from our cost program, and the OPEX development is in line with our financial targets from our Capital Markets Day, so I think that we are on track. Volume sold and deliveries developed quite steadily.
As for deliveries, I am particularly satisfied with the development in the Nordic segment, where we have succeeded in growing our customer base through organic sales activity. The previously announced refinancing process was concluded by the end of the quarter, and through our bank syndicate, we now have credit facilities in place that are designed to support the group's updated sourcing model, which will take effect from May the 1st, 2025. Over to the segments which all perform well in the quarter. First off, the consumer segment, where volume sold was stable year-on-year. Given the context of price change announcement in second quarter, we are very happy with the stable development in number of deliveries quarter -on -quarter. We are also able to increase our EBIT adjusted, and this is, of course, due to our cost saving program.
So EBIT adjusted came in very strong compared to the same quarter last year. The business segment continues its strong and stable performance. Volume sold was stable, and number of deliveries was stable quarter -on -quarter. Still, net revenue increased through increased core margins, resulting in an improvement of operating profit year -on -year. The new growth initiatives performed in line with our expectations for the quarter. The decrease in net revenue and operating profit year -on -year must be seen in connection with the very strong comparable figures from our mobile business last year, which benefited from extraordinary positive revenue effects due to the network migration. In the Nordic segment, we experienced a strong growth in the number of customers in the quarter, as I said, particularly in the B2C segment, where we are reaping the benefits from our increased in-house sales capacity.
The Nordic segment represents an important growth opportunity for us, and we are well positioned for taking this opportunity the coming years and the coming quarters, obviously. So to summarize my take on the quarter, we are very satisfied with both the financial and the operational performance. I know Henning is very eager to present the numbers, so please, Henning, the floor is yours.
Thank you, Rolf, and good morning to all of you. The group has delivered another quarter with solid operations and strong financial performance. We are growing the top line. We have documented tight cost control, and we have secured capital for growth. We are very pleased to deliver a significant improvement in EBIT adjusted in three out of the four segments in the third quarter. Net revenue adjusted ended at 368 million NOK compared to 350 million in the third quarter of 2023. EBIT adjusted was 79 million compared to 50 million in Q3 last year. The improvements year-on-year were primarily driven by margin increases and cost reductions in the consumer segments. Operating expenses at group level were 289 million compared to 297 million in the third quarter of 2023.
The reduction year-on-year was a result of the cost program implemented in 2023, with effects continuing into 2024. Our targeted flat normal cost development in 2024 is intact. The net working capital was reduced by NOK 99 million year-on-year due to the low Elspot prices in the quarter, and the free cash flow in the quarter was strong. Some of you may have noted that in the quarterly report, we have made a restatement in book equity per 1st January of 2023 of NOK 35 million. We have also recognized a NOK 30 million increase in direct cost of sales in the third quarter of 2024.
These amounts relate to a failure by our key supplier, Statkraft, to invoice our subsidiary, Switch Nordic Green, under a bilateral trade volume relating to a B2B customer in Finland in the period from late 2019 until this was discovered in 2024. In the quarter report, we have disclosed the background for the changes in note one, the figures and further detail in the consolidated statement of equity and in note two. The event purely has an impact on historical figures and does not affect our EBIT adjusted guidance for the full year 2024 and 2025, and it does not affect our targets and ambitions for the Nordic segment going forward. So let's go back to the positive developments in this quarter and start with market development. On the left-hand side, you can see that we experienced lower average prices in the third quarter as compared to Q3 of 2023.
We have also seen less volatility in prices following a wetter than normal third quarter this year. To the right, you can see the monthly supplier changes in Norway. Supply changes in the quarter were below the comparative level in 2023 and on a similar trend as last year. This environment supports a continued moderate sales and marketing spend, and the annualized CPO spend level of around 140 million NOK is maintained. In the consumer segment, the number of deliveries stabilized after the price changes in the second quarter this year and going back to Q2, we also lost approximately 4,000 B2C customers in the quarter after implementing a necessary risk mitigating change in the terms of the virtual battery product, Solkonto. Improved product margins drove an increase in net revenue, which was up by over 10% year -on -year.
We were also back to a positive LTM trend in volume sold in the quarter, which, of course, is the basis for delivering on top line growth. Operating expenses were down by NOK 16 million year -on -year, leading to an increase in EBIT adjusted in the segment from NOK one million to NOK 33 million. In the business segment, the number of deliveries was marginally up year -on -year, while the volume delivery was stable. Over the last 12 months, volume has increased by 3%. With active product management, core margins in the segment increased, resulting in an increase in net revenue of NOK 13 million year-on-year. Operating expenses increased by NOK 5 million, resulting in an increase in EBIT adjusted of NOK 8 million year-on-year. In the Nordic segment, the strengthening of our internal sales capabilities contributed to a marked customer growth, as Rolf explained, particularly in the B2C segment.
Still, the continuing phase out of legacy fixed price products led to a volume reduction of 25% year-on-year. Net revenue adjusted increased by 10 million NOK year-on-year due to improved margins. OPEX increased year-on-year, primarily because we are moving from less external to more internal sales capacity, and EBIT adjusted was overall fairly level from Q3 of 2023. Within the new growth initiative segment, the volume sold in the Alliance concept increased by 9% compared to Q3 of 2023 when taking all decimal points into account. The number of mobile subscribers also remained stable in the quarter. We had a reduction in net revenue year-on-year as Q3 2023 benefited from the extraordinary positive effects due to the network migration with mobile to Telia. Overall, the segment is performing as planned.
The net working capital at quarter end was in line with seasonal level, reflecting also the low Elspot prices and lower volumes in the quarter. And on the right-hand side, net interest-bearing debt decreased by 178 million NOK. The cash generation also this quarter was strong. EBIT adjusted was 144 million NOK. CAPEX came down to 15 million NOK, and payments to obtain new contracts were 39 million NOK. Cash EBIT adjusted accordingly in the quarter was 90 million NOK. And I then give the floor back to you, Rolf.
Thank you. Thank you very much, Henning. We held our Capital Markets Day in June, where we provided in-depth overview of our strategic considerations and ambitions, and for those of you interested in a more comprehensive review, I recommend you to watch the CMD webcast. However, I would like to spend some minutes now to summarize both our financial targets and our key investment highlights that we presented at that point of time. When it comes to our financial targets for 2024 and 2025, we target growth in net revenue in all of our segments and a stable OPEX, adjusted in line with 2023, and we uphold these targets, obviously. When it comes to EBIT adjusted, our target is between NOK 550 million and NOK 600 million, with a positive trend throughout the period, and also this target is upheld.
Our dividend policy remains unchanged with a payout ratio of 80%, so all our financial targets from our CMD stand. When it comes to our key investment highlights, I will take the opportunity to repeat those for you. As you know, we are operating in the attractive Nordic electricity market with a stable demand and growth opportunities, particularly in Sweden and Finland, where our market share still is quite minute. Our value proposition and our product offerings are sought after, empowering customers towards sustainable and efficient electricity consumption. We are the largest player in Norway with strong brands, and with our leading IT platform, we do support economies of scale, and we also do support further growth across the Nordics. We also are the largest power purchaser in Norway, and this gives us significant potential to optimize COGS as volatility will prevail in the future energy markets.
The insourcing of our power purchasing activities is well on track. Our Pan-Nordic IT platform gives us also excellent opportunities for bolt-on acquisitions, and also in Sweden and Finland going forward. And at last, but not least, our financial profile is attractive with a high cash conversion rate and a limited capital requirement, resulting in a solid dividend capacity. So that's all for us for now. Morten, do you have any incoming questions for us?
We have a couple of questions, Rolf, and we can begin with this one. Can you elaborate a bit on how the Fjordkraft brand in the consumer segment has developed this year in terms of loyalty, reputation, and customer satisfaction? And a follow-up question. On your Capital Markets Day, you announced that you will launch the Fjordkraft brand to the business market in Sweden and Finland during the first quarter next year. Can you confirm this timeline?
Okay, that's a long question. First things first. According to the group's own service, the Fjordkraft brand has developed very well this year. The brand perception and the brand reputation among our own customers is on an all-time high level, and the customer satisfaction is also on a very high level, and obviously, as you probably have seen, the churn rates are historically low, so I think that the Fjordkraft brand is developing very well, and in this respect, it is also fair to mention that Fjordkraft's involvement and cooperation with the consumer authorities when it comes to revised customer contracts has proven to be very fruitful, so all in all, I am really, really proud of the development of the Fjordkraft brand, so what was the follow-up question?
The follow-up question was regarding the launch of the Fjordkraft brand in the business market in Sweden and Finland and the timeline.
Yes, I can confirm that we will launch the Fjordkraft brand for the business segment in Sweden and Finland. First in Sweden and then in Finland the coming year, and we will start off this first quarter. Yes.
Okay, we have a couple of questions on guidance, and I can take the following one. Regarding your outlook, you state that an EBIT adjusted range of NOK 550-NOK 600 million for 2024 and 2025 with a positive development throughout the period. Taking into consideration that last 12 months ended on NOK 572 million, is it fair to believe that you are a bit ahead of schedule?
We upheld our target without any further granularity, but we are obviously very satisfied with the last 12 months' performance. And I can say that we work very hard to copy the quite strong comparable we had fourth quarter last year. So I think that will do.
Okay, a question on M&A. You didn't mention anything about M&A activities in your presentation. When can we see any progress and where?
We can confirm that we continuously have our eyes on prospects both in Norway, Sweden and Finland. Up to now, the price issue has not been possible to overcome, but we have financing, we have scale advantages, and we possess the necessary know-how to make deals profitable, so we are prepared as soon as we find the right target.
Thank you. We have a question on the unallocated revised net revenue in the quarter of NOK 12.6 million. If we can explain what created that effect.
Yes, this relates to the operational deviations in the invoicing from Statkraft that I mentioned during my review, so the way this is accounted for, the historical, it accrued over a period from 2019 to 2024. 2019 to 2022 is implemented by way of a restatement of book equity, and the rest of NOK 12.6 million is an increase of the direct cost of sales in the third quarter, so it relates to this single and non-recurring contract event.
We have one question on the business margin, which was strong in the third quarter. What is driving this, and should we expect this to continue?
Yes, so as we said, it's active product management, and it's by using opportunities in the business market to optimize the margins, and the business team has been successful in doing so over the last quarter, and we have a positive outlook on their margins going forward.
Thank you. The next question. Payments to obtain contracts were up in the third quarter. What should we expect going forward?
With the current supplier change statistics that we have, as I said, this is a benign environment for us. There is less supplier changes. This enables us to maintain a moderate level both on market and sales spend. So as I said, the level of around NOK 140 million is a good indication for the time being on an annualized level.
Thank you, and this is the last question. Can you give a status of the initiatives regarding the optimization of cost of goods sold that you mentioned on the Capital Markets Day?
In the power trading section. Yes, yes. We are recruiting manpower. We are now more or less full when it comes to the know-how that we had to recruit. So I would say that we are highly on track, and we are really looking forward. We have already started a bit now, and we are really looking forward to take over the entire model from Statkraft by the 1st of May. We are very excited, and we see really opportunities here to benefit from having this operation in-house from the 1st of May in 2025.
Okay, that concludes the question and the Q&A session. So we would like to thank you all for your attention and wish you all a nice day.