Hello, everyone, and welcome to FjallraCast Third Quarter 2020 Results Presentation. My name is Morten Uptal, Head of Controlling and Investor Relations at FjallraCast, and I'll have the pleasure of guiding you through today's presentation. Once again, this is a digital event due to the current pandemic. We will be doing our presentation and then we will end it with a Q and A session. And you have the opportunity to submit your questions through the webcast player.
We encourage you to do this during the presentation and as there is some time lag on the presentation. We are starting off with Mr. Wolk Palmer.
Thank you, Morten. Good morning, everyone. It's time for our quarterly presentation once again, also this time a digital event only. We hope that society will be going back to coronavirus and keep our business as usual. We will start off at Page 3 of the presentation on the highlights for the Q3.
For fuel costs, the Q3 has been a quarter with strong growth, both financially and when it comes to number of customers. Net revenue is up 10% year on year and EBIT adjusted is up 25% year on year. We have seen an organic growth of almost 6,000 activity deliveries within consumer and business segments, in addition to almost 5,000 new mobile subscribers in the period. The deliveries from the Inlandscop transaction are included as of the 30th September. This makes the total growth in deliveries more than 240,000 in the quarter and volume is up 4% year on year and this is all organically.
That is exclusive in Manns Kraft. According to Kantar's 3rd quarter survey, PureCloud is still number 1 when it comes to top of mind and brand awareness in the industry. We are in line with the industry average shown customer satisfaction, but well above peers like 4th term, Nordics Energy and Hofstra. I'm also very pleased by the fact that we acquired Switch Nordic Green in October. Switch Nordic Green is a Nordic retailer with operations in both Sweden and Finland.
On the following slide, I will emphasize a few key highlights from the transaction. Please go to the next slide, Page 5. As mentioned, S&G, with its commercial brand, Nordic Green Energy, is a Nordic electricity retailer with operations in both Sweden and Finland, and 167,000 electricity deliveries, of which 100,000 in Finland and 67,000 in Sweden. They are present in both the Consumer and Business segment and have an estimated market share of 2.8 in Finland and 1.2 in Sweden, representing an annual consumption of around 3.3 terawatt hour. The acquisition positions for further growth in the Nordics as the markets become more similar and competition becomes increasingly paranoid and we see increased activity in the Pan Nordic business segment, a potential for increased sale of value added services following this transaction.
The purchase price is based on an enterprise value NOK 375,000,000 on a cash and debt free basis. In addition to the enterprise value of $375,000,000 there are tax losses carried forward in Target and its subsidiary. The exact value of these are to be decided through S and G's tax assessment for the fiscal year 2020. We expect underlying EBIT to be around SEK50 1,000,000 per year, close to closing took place on November 10th and this is also when asset view will be included in the group's financial figures. Please go to next slide, Page 6.
A few comments on the Inland Skov acquisition. Implementation is developing as planned. Was completed on the 22nd September and we have made the necessary organizational changes to support the synergy realization. Severance packages have been offered to all employees affected by the reorganization, a total cost of NOK 13,000,000, which will be accrued in the Q4 as a one off costs. The 8 SIPA customers customers will be converted to the Fiorecoff brand during the first half of twenty twenty one, while Gilbar Stellanashi will continue to exist as a separate fighting brand.
The transaction costs amounted to NOK 10,500,000 and implementation costs are estimated to approximately RK11 1,000,000. Synergy realization is starting in Q1 2021 and are expected to have full effect from the Q4 2021. We are also confirming that we are well on track towards the previously communicated SEK30 1,000,000 in cost synergies. This also applies for the COGS and networking capital synergies, which will be realized when 8 CIG and Girdbonds are energy are included in fuel cost power purchase through Stotkoff's sales. Next slide, please go to Page 7.
I would also like to give an update on COVID-nineteen and the Consumer Council Litigations. As many of you are aware of, Norway has been struck with a second wave of COVID-nineteen, which has resulted protective measures from the government. As a response to this, we have stopped our door to door and stand sales activities in order to limit spreading of COVID-nineteen. We also expect activity by electricity retailers to be somewhat lower than normal this fall, and Christmas shopping will probably be affected. These issues are expected to have a short term negative impact on our organic growth figures.
We monitor our accounts receivable closely. However, the protective measures are expected to increase credit risk. Reduced activity might also have a short term negative impact on the business segment. As for our telecom activity, we expect voice traffic to remain on a higher level than normal, affecting the profitability of the segments. The health and safety of our employees and customers are of the utmost importance, so we make sure that employees in high risks, in the ready risk areas are working from home.
Sales activity is, as mentioned, reduced and we make sure operation resume as close to normal as possible, even while working from home. The Consumer Council allegations to all 29 electricity retailers, including Furoquft, regarding contracts that add purchasing costs to the L SPOT price have been getting attention from the media. And we made a statement on the 27th October. This statement is still valid. We disagree with the criticism from the Consumer Council on the matter.
Our customer information is in line with industry standouts and current rules and regulations. That being said, we are in dialogue with the Consumer Authority and we will fully cooperate with them on the matter. We welcome increased transparency and have been working on creating an improved industry standard of sales and marketing of electricity together with and as you know away since long before these allegations were made. We also emphasized that the allegations from the Consumer Council and possible actions from the consumer authorities will have a minimal impact on the group's profitability and further growth. Next slide, please go to Page 8.
Let's move on to the recent market development. L spot prices have been volatile in the quarter. In July, prices continued at a historically low level, but then increased through August and reached the spike in early September before they fell again. The temperature was colder than last year in the 1st 2 months in the quarter, but September, which usually represents the month with the highest consumption in the quarter, was warmer than last year. Next slide, please go to Page 9.
Number of electricity deliveries in the Consumer segment increased by 217,000 deliveries in the quarter, of which 5,225 was organically. At the end of the Q3, the segment comprised 7 61,000 deliveries, which represents a growth of 290,000 deliveries year on year. The volume sold in Q3 2020 was 1.288 gigawatt hours, which is an increase of 5% from the 3rd quarter with Oat in Landscraft. The increase is driven by both increase in number of deliveries and increased average consumption per delivery. The FuelCraft app has been welcomed by our customers and recently reached 150,000 registered users.
We continuously work on improving functionality, and we will be launching EV charging functionality and real time consumption features very shortly. Please go to next slide, Page 10. The business segment comprised 104,000 electricity deliveries at the end of the 3rd quarter, which 634 organically. The volume sold in the Q3 2020 was 1.104 Gigawatt Hours, an increase of 3% compared to Q3. Also this, of course, without innerskraft.
The increase is driven by growth in number of deliveries. Next slide, please. In the NGI segment, the number of mobile subscribers was 120 2,000 at the end of Q3, which represents an organic growth of 4,691 subscribers from the 2nd quarter. Alliance volume in the 3rd quarter was 689 gigawatt hours, which is up 2% year on year. I'm very happy to say that we have a strong pipeline of both owner and extended alliance partners to be implemented in the Q4.
So moving on to the financial review, I will leave the floor to Ulyan Lagueness.
Thank you, Wolf, and good morning, everyone. I'm once again delighted to present the financials for you today, giving the strong results we disclosed this morning. I will start off at Page 13 with the net revenue. As Rob said, the Q3 turned out to be another strong quarter with an adjusted net revenue of NOK 284,000,000 on Blue Buffalo. This is up 10% from Q3 of 2019 and the growth is driven 2 thirds by margin improvement and 1 third by volume growth.
The asphalt prices were low in the first half of the quarter followed by both the price increase and then decrease in September. Looking at the last 12 months adjusted net revenue on the right hand side, we see a new all time high of NN 1,450,000,000. This represents an increase of 19% driven by margin improvement. Next slide, Page 14. Moving on to the EBIT adjusted slide.
We see an EBIT improvement of $16,000,000 from Q3 of 2019. This brings us up to $79,000,000 which represents an improvement of 25%. As you can see in the chart at the left hand side, the consumer segment is the main driver for the increase. The EBIT growth represents an increase in adjusted EBIT margin of 4 percentage points from 24% in Q3 of 2019 to 28% in Q3 of 2020. The increased OpEx is driven by sales and marketing costs and administrative costs.
Looking at the last 12 months, on the right hand side, we see that the adjusted EBIT on group level is up $138,000,000 from $450,000,000 in Q3 of 2019 to $588,000,000 in Q3 of 2020. This represents an increase of 31%, which takes the LTM adjusted EBIT margin up to 41% on group load, up 4 percentage points year on year and 1 percentage point from the last quarter. Next slide, Page 15. In this slide, we break the numbers down to reporting segments. Starting off on the left hand side with the consumer segment, we see that the adjusted net revenue is increasing 14% year on year to a nominal level of 205,000,000 dollars The net revenue improvement is driven by a seventy-thirty split from margin improvement and volume growth.
The nominal EBIT adjusted level of $57,000,000 is an increase of $19,000,000 year on year. This gives an adjusted EBIT margin of 28%, which represents an increase of 7 percentage points year on year driven by net revenue growth. Moving on to the business segment in the middle. We have a nominal adjusted net revenue of $72,000,000 This represents an increase of 3%, which is driven by volume growth. The nominal EBIT adjusted level is $34,000,000 which gives an adjusted EBIT margin of 47%.
This is stable compared with Q3 of 2019. Continuing to the new growth initiatives on the right hand side, we see an 18% decrease in adjusted net revenue year on year, bringing us down to a nominal level of $7,500,000 in the Q3 of 2020. The nominal EBIT adjusted decreased by $3,000,000 and the decrease is primarily from reduced margins within mobile in connection with COVID-nineteen, which have increased the voice activity. In addition, increased prices from Telenor is driving the cost of goods sold in mobile markets. As stated earlier by month, we had a solid growth in mobile segment and we had around 122,000 subscribers at the end of Q3 of 2020.
Next slide, Page 16. A quick look at the net working capital slide tells us that the net working capital is decreasing by $114,000,000 from last quarter to a nominal level of negative $173,000,000 dollars There are some variations in invoicing pattern and payables that affects the net working capital, but continuous improvements and focus on invoicing process is also affecting a positive development. Compared with last year, the net working capital is down NOK 109,000,000 NOKs. Page 17, quick look at the cash generation tells us that the cash generation is still strong and the cash EBIT adjusted, as you see inside the frame, is SEK 71,000,000 in 3rd quarter. Around 50% of the acquisition of Inland Staff in Q3 was financed through cash.
And in total, this brings us to a net cash position of $266,000,000 at the end of Q3 of 2020. Page 18. On the back of the strong results in Q3, we make a positive revision of our organic outlook. At Groupon, we increased our guidance and expect a slightly higher EBIT margin than the targeted 36% to 38% in 2020. Apart from this, we keep our revisions as stated in the Q2 presentation.
And on to Page 19, my last page for today. When it comes to the effects from the Inlandscaft acquisition, we expect Inlandscaft contribution to the group EBIT adjusted in 4th quarter to be in the area of $25,000,000 to $30,000,000 We also show the depreciation profile of the acquisition in this slide, with the highest depreciation in 2021 followed by gradually decreasing depreciations the following years. In the Capital Markets Day in February 2021, we will publish our new outlook for 2021 to 2023 including both InlandSoft and our newest acquisition of Switch Nordic Green. That's all from me for now, and Morten will facilitate the Q and A session.
Thank you, Oliver. We have received a couple of questions, so we will go through them, and we encourage you to submit them also as we are answering these questions. The first one is related to the S and G acquisition and is like this. What are the current largest differences in Sweden, Finland versus Norway? Are the net revenue margins like what we see in Norway?
How fragmented are these markets? Yes, go ahead.
Yes. Thank you for the question. It's an interesting question. It is differences also between Finland and Sweden. Of course, the consumption in Sweden is lower per electricity deliveries than in Norway.
We also see that the margins are somewhat lower in Sweden, but we are very familiar with how to expand these margins. Going to Finland, the margins are fairly much the same as here in Norway. It is a fragmented industry, both in Sweden and Finland with a lot of smaller players as it is in Norway. It is we look upon both these two markets as where we know where we were a couple of years ago actually. And so there will be good opportunities for us to also consolidate in both those markets, I would say.
But yes, there are differences from the Norwegian market, but there is also differences between the Finnish market and the Swedish market.
Okay. We have another one, which is on the consumer segment. Have you seen an effect on churn following the allegations made by the Consumer Council?
No. And we monitor, of course, this very closely. We also monitor how much how many of the calls and chats that origins from these allegations. And there's next to nothing actually compared to the high amount of calls and chats we get. So in our view, it's a very small number of it's a very small number, both when it comes to calls that happens to occur from this situation.
And we cannot see anything at our churn numbers for now.
We have another question, which is on the OpEx, which shows lower growth than what it has done the last couple of quarters and if we can give some added comments on that.
Yes. The OpEx, I would say, it's mainly a seasonal effect in Q3 of 2020. But then we also have due to COVID-nineteen, we have lower costs with sick pay and payroll payroll taxes. And I would also say, of course, due to COVID-nineteen, we have lower travel expenses. So that would be the main reason.
Good. Another question here. We have a 27% market share in Norway, and the question is how big are you allowed to be?
We think that we can grow a bit more. We have said before that we think that we are allowed to go to 35%. We have said that we have a target or a goal in the era of 30% to 35%. So we have still plenty of headroom to go through M and A here in Norway.
Good. Another one on the M and A or growth opportunities in Sweden and Finland. Should we expect more M and A in Sweden and Finland? Or will you grow mainly organically?
I think that we will go both organically and through M and A. So the answer will be both.
And the last question is on Nolascoff and the synergies. And you say that realization will start in Q1 2021 with full effect in Q4. Should we expect the NOK $40,000,000 to be evenly distributed between the 4 quarters in 2021? I can take that one. The synergy realization will be happening gradually as we do the organizational changes and implement the customers into the fuel kraft system and factory.
And in 2021, there will be a gradual inclusion of them. So fairly evenly distributed would probably be a fair assumption of that. Okay. That was the questions we received. And we'd like to thank you for your attention and wish you all a nice day.
Bye.