Welcome to Fjordkraft's third quarter results presentation. My name is Morten Opdal, Investor Relations at Fjordkraft, and I will be guiding you through today's presentation. Today's presentation will be presented by our CEO, Rolf Barmen, and our CFO, Birte Strander, and we will be conducting a Q and A section at the end of the presentation. We are starting off with Mr. Rolf Barmen.
Thank you very much, Morten. Welcome everyone. For Fjordkraft, this has been a good quarter in extraordinary market situation. Spot prices have been increasing throughout the quarter from a level around NOK 0.5 per kWh in the southern part of Norway at the beginning of the quarter, reaching a high of more than NOK 1.2 per kWh in September 2021. For the reference, the Norwegian area price at the end of September 2020 were at an all-time low, around NOK 0.02 per kWh. This has been a rollercoaster. The increasing spot prices at the level that we now see represent a more challenging market sentiment.
Despite this challenging market, we have been able to grow net revenue, both through acquisitions, of course, but also through the hedging strategy on variable contracts. Net revenue increases 29% year-on-year, and EBIT adjusted increases 13% year-on-year. After a couple of challenging quarters, the organic growth in the Norwegian market is positive. The Skymobil customer portfolio was migrated to Fjordkraft systems on the first of October. The final purchase price will be settled in December this year when we know the number of customers that have paid the first invoice. We'll come back to that later. The first batch of retailers have now been certified in the Trygg Strømhandel, in English, Safe Electricity Purchasing Certification Program.
All Norwegian brands in the Fjordkraft group have been successfully certified in accordance with DNV GL's certification process. It has been a very comprehensive process of certification with requirements that go much further than the mandatory Norwegian legislation on several matters. Some of these matters include employee training, deviation handling, and standardization of terms and conditions. In order to monitor a further increase in focus on compliance going forward, a customer compliance officer has been employed in our organization. We have also initiated what we call a happy call program. This is a program where we follow up new customers by phone asking them about their experience joining Fjordkraft. This program will, on an annual basis, contact close to 30,000 customers.
As you probably know, we have issued a writ regarding the termination of Fjordkraft's payment solution, Full Control, which is a service that enables the customers to pay the same amount each month in order to even out fluctuations. The service is in line with EU regulations, the EU directives, that is expected to be implemented also in Norway. The service is supported by BEUC, the European Consumer Organisation, and we are honestly very surprised that the Norwegian Consumer Authority, for some reason, is negative to such an arrangement, obviously colliding with their international colleagues on this matter. From our perspective, it is clear that we have to adapt to the EU directive and neither the regulator or the appeal committee seem to have considered the EU regulations when suggesting termination of the service.
I know for our foreign investors, there has been some media attention around the electricity and gas retailers in U.K. that have defaulted due to regulations on a maximum price they are allowed to charge their customers. Just to be clear, there are no maximum price regulations in the Nordic markets that we operate in. The market situation is for the time being extraordinary. No doubt about that. Third quarter was no exception with a very high export price level and increasing prices throughout the quarter. As I said, this represents a challenging market situation. There has also been significant area price differences all over the Nordic market due to limited transmission capacity, particularly between the southern part of Norway and northern part of Norway.
Despite these challenging factors, we have succeeded in mitigating potential negative financial effects through our hedging strategy, and Birte will come back to that later. The number of electricity deliveries in the consumer segment increased by 1,000 deliveries in the quarter, and we are quite satisfied with this development after a couple of challenging quarters. That being said, in such a market with a very high price sentiment and with a lot of price hunters, it is more likely that growing through M&A activity will be the profitable way of growing instead of chasing organic growth. At the end of the third quarter, the segment comprised 726,000 deliveries.
The volume sold this quarter was 1,556 GWh, which is a 21% increase from the third quarter 2020, and this is driven by M&A growth. Going to the business segment, the organic growth in the business segment continues, and at the end of third quarter, the business segment comprised 112,000 electricity deliveries, representing a growth of 7,000 year-on-year. The volume sold in third quarter was 1.225 GWh, an increase of 11% compared to the third quarter last year, and the increase is also here driven by volume growth from M&A.
When it comes to the Nordic Segment, this is from this year our new reporting segment, comprising Switch Nordic Green, with the brand Nordic Green Energy operating in Sweden and Finland. At the end of third quarter, the segment comprised 166,000 deliveries. This is a decrease of 2,000 in the quarter, and the decrease was related to tender customers with low profitability. Volume sold was 616 GWh in the quarter, and the performance this quarter is according to plan. Going to new growth initiatives segment, the number of mobile subscribers was 131,000 at quarter end. This is a slight decrease from last quarter.
However, we have migrated the Skymobil customer portfolio, as I said, to our systems from the 1st of October, so the current number of subscribers is quite a bit higher. The final purchase price is, as I said, conditional to payment of first invoice in December, but purchase price per subscriber is NOK 1,025. In December, we will launch an MVNO pilot in order to start testing the planned transition to the MVNO platform. This is an important step in order to increase profitability in the segment. Alliance volume in third quarter was 803 GWh , which is a 17% year-on-year increase.
This is driven by the inclusion of volume from Innlandskraft, the Innlandskraft transaction, while extended alliance deliveries was quite stable from last quarter. Okay, now I would like to give the word to our CFO, Birte Strander, who will present the financials. The floor is yours, Birte. Thank you.
Thank you, Rolf. As always, I will start to make some comments on the net revenue development. Our net revenue has increased with 29% or NOK 83 million nominally year-over-year. The main driver for this is the acquisitions that we did last year. As you also can see from the graph, all the segments are contributing positively to the growth, despite market being extraordinarily challenging, with both increasing high spot prices and historically high prices this quarter. We have been able to manage the situation quite well, both through close price management, but also tailwind from positive financial effects from our hedging strategy on the variable contracts. The last 12 months, our adjusted net revenue growth has been 19%, driven by the acquisitions done last year.
EBIT adjusted is NOK 89 million, up 13% year-on-year or NOK 10 million in nominal numbers. All segments are contributing positive except the Consumer segment. The third quarter 2020 is a very strong comparable with 645% lower price than this quarter. Consequently, we are pleased with our EBIT-adjusted performance. Moving on to some details on the segments, starting with the Consumer segments. Both the numbers and the main drivers I've already touched upon, but to repeat them, net revenue is up 12% year-on-year, and EBIT adjusted is down 26% year-on-year. Beating last year's performance has not been within reach, but, as mentioned earlier, we have been able to manage a difficult situation quite well. EBIT adjusted is down 10 percentage points to 18% year-on-year.
Just to give you a reference, EBIT adjusted margin in third quarter 2019, which was a quarter with a more neutral market development, was 21%. Last 12 months, EBIT adjusted margin is now 30%, which is in line with our guidance for 2021. On the right side of this page, you see the development in the business segment. The business segment has a strong, positive development year-on-year, with a growth of 22% on net revenue and 15% in EBIT adjusted. The growth is driven 50/50 by the volume growth due to the acquisitions, mainly, and also product margins. The cost base in the business segment has reached a more normalized level with increasing sales activities due to the reopening of the society. The EBIT margin is 3 percentage points year-on-year down.
LTM EBIT adjusted margin is now 58%, which is above our long-time guidance of 52%-54%. Also, some very quick comments on the smaller segments. Nordic has EBIT adjusted of NOK 12 million, which is in line with our guidance. The new growth initiative segment has a significant improvement both in net revenue and in EBIT adjusted year on year, EBIT adjusted being up 68%, driven by increased discounts on COGS due to our volume in the mobile segment. Also some comments on the balance sheet and the cash flow statement, starting with the net working capital. It is decreasing to NOK 44 million at this quarter end, but we do have large inter-quarter fluctuations. That being said, Fjordkraft has a strong balance sheet and also flexible terms for the power purchase payment.
Thus, the increased price level does not represent a default risk for us. What you also can see from the graph is the capitalized commission expense, and it is increasing. That's due to our acquisitions last year. It's a reallocation from intangible assets to commission expense. We have a net debt of NOK 668 million at quarter end. It's a reduction of NOK 74 million from last quarter. The main driver is the positive development in the net working capital and our cash EBIT adjusted performance this quarter. The cash generation is still good with a cash EBIT adjusted of NOK 59 million, as you can see inside the frame on the slide. Also some comments this time on our hedging.
Last quarter, we announced that in order to adapt to customer demand for more predictability of the electricity costs and also to increase the predictability on our purchase price, we have started to hedge a larger portion of the variable contract portfolio. In our books, we utilize hedge accounting for these financial contracts, and the market price and the value of these contracts may change rapidly, and the price level at the quarter end does not reflect the price in the period of delivery of the electricity to the customers. Last, due to Fjordkraft volume and the limited liquidity in the financial market for electricity, Fjordkraft will not disclose further details on the hedging strategy. This is both sensitive information in terms of competition and would also limit our ability to do efficient hedging going forward.
My last page, very short, we made no changes to our outlook. We are ready to move on to a Q and A session facilitated by Morten. Thank you.
Okay. We are moving over to the Q and A session, and we've had some questions from our online viewers, so we can start with a couple of those. The first one is the following: How much of new delivery sales are coming from personal sales, and what is our response to the consumer account sales skepticism towards this channel? Maybe you want to comment a bit on that, Rolf.
I wonder, I believe it is from physical channels like Power then, because the door-to-door and the stand sale is not fully operating yet. I think that we cannot say exactly how much of the new sales that stems from the Power, but it is an important sales channels to us. We will continue this sales channel and we are quite familiar with the criticism from the consumer agency when it comes to this. Bundles are sold anywhere in any retail store, actually. We accept their skepticism, and we will continue our cooperation with Power, of course.
That being said, we have also great results from our internal sales force. It is important for us. We don't disclose how much or which portion it is, but it is important for us. Yeah.
Okay. Another question is, regarding M&A, and, it says the following: You stated earlier in the presentation today that M&A is the best possible way to grow under the current market condition. Can you give an updated status on the current M&A activity?
Yes, definitely. We stated earlier this year that we will concentrate on Sweden and Finland this year due to the fact that we have to implement and integrate the Innlandskraft in our organization this year. We are focused on that internally. Now we have done so. No doubt about that. The next year, we will look much closer into the opportunities in Norway for M&A. When it comes to Sweden and Finland, we have been working a lot. These two markets develop at a different speed. Elhub in Finland will be implemented or is set to be implemented next year in 2022.
That means that there are a lot of activities in Finland, and we have done a lot of work in Finland. In Sweden, it is a bit slower. They have not decided yet upon when or if Elhub is going to be implemented. There is also most of electricity retailers in Sweden are owned by municipalities. There is an election coming up in Sweden next year. Our feeling is that many of these vertically integrated electricity companies or energy companies owning electricity retailers, they want to wait until this election has taken place. The speed of these two markets are different actually.
We are working a lot, particularly in Finland, and now we will look much closer to the Norwegian market as well as we are now finished with our implementation of Innlandskraft here in Norway.
Okay. We have a couple of questions, which both target the current trading environment and if we can comment on that.
I think that is too early to do at this time. It's an extraordinary situation in the international market of electricity. I think it's way too early to say about that. It will depend both on the weather, but also what is happening in the international environment with the gas prices and so on. We don't want to comment on what we think about the electricity prices due to also our hedging positions. That's also a reason for saying it's too early.
Okay. A question on capital allocation. What are your thoughts on the current share price level, and why don't you proceed with share buybacks?
I can say something about that. This is a matter obviously discussed both in the administration and with our board. We have a very focused M&A agenda, so we want to allocate capital to future M&A activities. I think that has to be the answer on that question. We are monitoring this very closely.
Good. I think a last question here. If organic growth becomes less important, do you see room for improved profitability?
This is a balance. We have to balance. It is always like this. In a high price sentiment, churn will increase. We will have to spend more money to level out our churn numbers. Having an organic growth in such an environment is too costly, actually. We now see that we have a price sentiment that we never seen before. I don't agree upon the premise. I don't agree upon that this will affect our way of. We have to spend the money on M&A growth.
We have to, when we are buying a lot of customers, we also buy a churn, and then we have to level out the churn level of that acquisition, actually. It is a balance, and we have to look very close into that whenever we are deciding upon either organic growth or M&A growth.
Okay. That concludes today's session. Thank you all for participating, and have a nice day.