Good morning, everybody, and welcome to HAV Group ASA's third quarter 2025 financial results presentation. My name is Gunnar Larsen, and I am the CEO of HAV Group. I will be presenting alone, as Pål Aurvåg, our CFO, is out of office today. I will, as normally, present the highlights from Q3. I'll talk about HAV Group in brief, give you an update on the business segments. We run through the financials in a little bit more detail, and I end up summing up and giving an outlook on how we see the future. After the presentation, as normal, it will be a Q&A session where I will answer the questions that you have already sent in, and you can also send in additional questions during the presentation if you used the link that was given in our press release or stock announcement earlier.
Here are the Q3 2025 highlights. In the third quarter of 2025, HAV Group delivered significant improvements in both revenue and EBITDA compared to the same period last year. Revenue increased by 44% to NOK 193.7 million, and EBITDA reached NOK 1.5 million. This was a clear turnaround from minus NOK 24.8 million last year, and this also marks the fourth consecutive quarter with positive EBITDA. We continue to see strong performance in energy design and smart control systems, and the group maintains a solid balance sheet with cash positions of NOK 271 million at the end of the quarter. Order intake was NOK 171 million, including contracts for five container-based water purification systems for Greenland and three complete Raven integrated navigation systems for ferries under construction in Turkey.
We also secured a contract to act as system integrator and deliver power and automation system for a new ferry at Tersan Shipyard. Our order backlog remains robust, standing at NOK 1,266 million as of September 30th. After the quarter ended, we secured additional contracts as system integrator for a live fish carrier for North Salmon Services and for a complete water treatment system for Nordic Halibut. HAV Group has demonstrated stable and solid development in its order backlog over the past five quarters, now totaling NOK 1,266 million. Quarterly order intake has varied but remains at a high level, with NOK 171 million booked in Q3. Now I will give you some information about HAV Group in brief. We are 163 employees, and we are headquartered in Fosnavåg in Norway.
We also have departments in other places in Norway, in Ålesund, Bergen, Egersund, and also have an engineering department in Poland. Our value proposition is to improve vessel and cargo owners' competitiveness by providing advice and optimized solutions throughout the ship's life cycle. Our vision is a sustainable future at sea. We have four technology segments: ship design, energy design and smart control systems, hydrogen-based energy systems, and water treatment systems. We operate in these main industry segments: offshore wind, oil and gas, ferries and ropeworks, aquaculture, fishery, and short sea cargo. Now to information about each of the technology segments. In the third quarter, Richard Schofield was appointed Managing Director for our ship design business, and he will be joining no later than January 1, 2026. There is still unused capacity in this segment.
We are making solid progress on ongoing ship design projects, including the Lavik-Oppedal ferries and North Salmon Services valveboat. However, financial performance has been below expectations. This quarter, we once again delivered strong financial results in energy design and smart control systems, with considerable improvement compared to last year. Key contract wins in Q3 include complete Raven integrated navigation systems for ferries under construction at Tersan Shipyard in Turkey, and a EUR 7 million contract award to act as a system integrator and deliver power and automation systems for a new ferry at the same shipyard. The order backlog in this segment now stands at NOK 1.05 billion. After the quarter ended, we also secured a contract as a system integrator for a live fish carrier for North Salmon Services.
New regulations for land-based aquaculture and for reopening of license applications announced on July 1st have created new market opportunities for our water treatment business, especially with the introduction of disinfection requirements. In Q3, we secured a contract to deliver five container-based water purification systems to isolated communities in Greenland. After the contract ended, we signed an agreement with Nordic Halibut for a delivery of complete water treatment systems for a new facility in Torjulvågen, Tingvoll in Norway. This was also a breakthrough into a new segment in the land-based aquaculture. Activity levels in HAV Hydrogen have been reduced, as previously communicated. Responsibility for maintaining technology and expertise has been transferred to HAV Group's ship design business, and sales of ZEPOD and other technology are now licensed to the same unit. There are still some costs related to closeout activities, but these are expected to decrease further going forward.
When you look at the segment breakdown of the order backlog, we see that ship design has NOK 142 million, energy design and smart control systems has NOK 1,055 million, and water treatment systems has NOK 86 million. It has been a good development from last year for energy systems and energy design smart control systems and water treatment systems, while ship design system has decreased. The total external order backlog as per end of the quarter was NOK 1,266 million. I will go more into the details of the financials. We delivered a relatively high turnover on the back of good activity level in the third quarter. Revenue was at the same level as the previous quarter, but significantly higher than the corresponding quarter last year.
EBITDA in the third quarter ended at NOK 1.5 million, a major improvement on negative NOK 24.8 million in the same quarter last year. This is the fourth quarter in a row with positive EBITDA, which is pleasing, but as I've already presented, there is still room for improvements in some of our business segments. There was a high activity level in the quarter. The EBITDA and the net profit improved considerably compared to Q3 last year. The year-to-date EBITDA improved significantly versus the same time last year. Based on the orders currently in our backlog, we expect the operations income to increase in Q4 versus Q3. When we look at the details for the segments, ship design performance is still impacted by low capacity utilization.
The recent contract wins improved utilization for 2025, but the business needs to win more contracts in order to reach the profitability level that we expect. Winning new contracts will be the top priority for the new Managing Director at HAV Design. Energy design and smart control systems is the main contributor both to the turnover and margin. In addition to winning new contracts, the segment has good progress on projects and delivers significantly improved financial results. Water treatment systems segment is impacted by lower than expected sales in the marine segment and consequently delivers a negative EBITDA of NOK 0.4 million. The segment has, however, won numerous aquaculture contracts, and we expect fish farming to be an important revenue contributor going forward. With regards to HAV Hydrogen, you can see that the cost level is already reduced, and we expect this to be reduced further going onwards.
The main changes in the balance sheet are driven by operational activities. On the asset side, the current assets increased by approximately NOK 90 million year-to-date. This is caused by an increase in receivables by NOK 70 million and an increase in cash by NOK 20 million so far this year. On the liability side, the current liabilities increased by approximately NOK 90 million year-to-date. This is caused by an increase in advance payment for customers by NOK 80 million. As you can see, our cash balance has grown to a very healthy NOK 271 million, which is almost double the cash balance at the same time last year. Our strong cash position, coupled with only NOK 1 million in interest-bearing debt, shows that HAV Group has a healthy balance sheet. Onto the cash flow. The cash flow from second quarter was negative with NOK 16 million.
This is mainly driven by operating activities and specifically in reduction in advance payments from customers. The negative cash flow from investing activities is related to investments in R&D and equipment. The negative cash flow from investing activities, yes. The negative cash flow from financing activities is related to repayment of non-current debt. As mentioned on the previous slide, our long-term loan was NOK 1 million per 30th of September this year. We are closing into the end of the presentation, and I will make a summary and a market outlook. We have a continued strong performance by energy and smart control system segment, which is very, very positive. We also had the fourth quarter in a row with positive EBITDA results. This was a solid improvement compared to 2024, both Q3 and year-to-date.
We had new orders for NOK 171 million signed in Q3, and we have a solid order backlog of NOK 1,266 million as of the end of the quarter. On the negative side, the financial performance in ship design and water treatment business is still below expectations. Global megatrends such as green transition, stricter regulations, and increasing competition continue to shape the maritime industry. HAV Group is well positioned to address these challenges with technology that enhances vessel operations, profitability, and environmental performance. Regarding the market situation, geopolitical uncertainty and tariff issues present some headwinds, but the global shipping market is expected to remain stable in the coming years. HAV Group's main market presence in Europe and Norway reduces exposure to transcontinental trade conflicts. For the outlook, HAV Group expects that Q4 will be the strongest quarter in 2025.
We also expect that the positive development seen in 2025 will continue in 2026, driven by contract wins with corresponding margin improvements. That was the presentation. I hope it gave you a better insight in what the standing and the outlook of HAV Group is. We have had a very positive development from last year, and we have a solid order book, especially in the energy design and smart control systems, which gives us also a promising outlook on the next year. We go over to the questions. As I'm alone today, I will both ask and answer the questions. I go on to the questions that we have got in. The first question is, how is market activity looking now at the end of 2025 and further into 2026?
As you see, we have secured a very strong order book, especially in the energy design and smart control system segment, and the need for energy saving and emission reduction technologies using electrical integration, smart control is still high. We have a very good pipeline in that segment, and the outlook is also good for the market. For water treatment segment, it's especially the market within aquaculture, both land-based and sea-based, is looking very good, while we have a tougher competition in the marine market. Ship design also has a good market outlook. There, it's a matter of capitalizing all the actions that we are taking with new management, with a different focus with regards to sales and other measurements that we think will give results during 2026. Next question. How is Q4 performing so far in terms of turnover compared to Q3?
Are you capitalizing on your large order book? As I said in the outlook, we believe that Q4 will be the strongest quarter of the year, and that is the guidance that we are doing. Next question. I think one up, Robert. Okay. Next question. Energy design and smart control system business had a strong momentum. How do you view the sustainability of this growth? Is the capacity to take on more projects? As I said, we still think there is great potential in the market for the technology that this segment is delivering. We also always aim for a profitable growth, but we have grown very rapidly in this segment. The next year, 2026, will be a year where we will secure the margins that we already have in the contracts, and we will see also a growth in turnover based on the order book that we have.
Of course, we have plans for expanding and growing further on. Next question. How do you view the weak order book within ship design, and what measures are you taking to secure more contracts? Of course, we do not like the order book that we have and the activity level that we have. The potential in the competence, the knowledge, and the technology that we have in this segment is far beyond what we have achieved to capitalize on as far as today. We have done measures. We have hired a new managing director. We have had a whole process on how to approach the market. We have a broader market approach, both regards to customers and segments. We think and we believe that we will see the results of those actions during the next year. It is not a quick fix.
We have to work very smart and hard, and then we will see the results. Next question. How much debt does HAV Group have? As I said, we have only NOK 1 million in interest-bearing debt, so it's very, very low. Sorry. It's a similar question. How quickly will HAV Group pay off existing interest-bearing debt and become debt-free? I think that answers itself. We have a far lower interest-bearing debt than most Norwegian households have, only NOK 1 million. The interest-bearing debt is not a concern in our balance. Next question. have you considered measures to enhance liquidity in the share? Something beyond good reports and contracts? As of now, there are very low trading volumes in the share. I fully understand that investors would like both more liquidity and also positive development of the share price.
We still believe that fundamentally this will come from delivering good results. We have turned around now from a very negative 2024 to four quarters of positive EBITDA, and we are now also projecting that this will be better in Q4 and also onwards. The maritime business that we are in is a business with relatively long lead times from contract until you see this in our books with regards to income. Next year is looking very promising, and the pipeline that we have in some segments is promising. I'm quite sure that also both the interest for the company and the liquidity of the share will be much better when we start producing the results that we are expecting in next year. What is HAV Group's short-term and long-term growth strategy? It's a good question.
Coming from where we were with very negative or negative results in 2024, we have made a turnaround. We have secured a very good order book, and now looking at an order book with much better margins, our main focus is to capitalize this next year and also secure orders for the segments that have not order books that we are satisfied with. That is the strategy, and that will also result in growth next year. Further on, of course, we will be looking at growing each of the business segments organically, and we will be looking at business opportunities to grow also by mergers and acquisitions. That is also a little bit depending on the operating space that we can get from getting better financial results. Next questions. Are you a CEO worried about the development of HAV Group?
Of course, being a CEO, you're always worried, but we have to also remember what we have done. In the last 12 months- 14 months, we have doubled our order book and have an order book of more than NOK 1.2 billion. That is good. We have also made a significant turnaround from a negative 2024, now to have four quarters in a row with positive EBITDA. We are signaling that the fourth quarter will be the strongest and that you will see a positive development also in 2026. Of course, I'm worried. It's healthy to be a little bit worried. It's healthy to identify risk, so you can also take mitigating actions in order to reduce risk. We have a much better foundation now to deliver good results in 2026 than we had only one year ago. How do you work to get new customers?
First of all, we like to take very good care of our existing customers because getting resale or repurchase from an existing customer is the cheapest way of getting new business. We also really like our customers, and we want to take good care of them. In a lifetime, they're using our products. We also need to expand. What we have done is that we will utilize new modern sales tools like electronic marketing. We are also training our salespeople in more modern sales techniques, and we are expanding our market, doing market analysis to find out where we should approach new customers that can accept the value proposal that we have and need the products that we can deliver. The next question is, for how long can we expect that HAV Hydrogen will impact the financial results negatively?
As I said, they are now impacting very little, and that will also be almost close to zero in the coming years until we see that there is again activity in the hydrogen market. We will ramp up and utilize the capability and the technology that we have already developed in the market in this company. Until then, HAV Design Business will take care of the marketing. They will take care of the leads that come from the market and also the IPR that we have in HAV Hydrogen. Yes. What is HAV's view on why ship designers struggle to win new contracts and what initiatives are underway to restore competitiveness and order intake? I've addressed that question a little bit before, but the main reason has been that we have concentrated our sales and market historically very much on taking very good care of our customers.
That is also making us a little bit vulnerable when these customers are not ordering as many vessels. I would say the new turnaround is that we will still continue to take extremely good care of our customers, existing customers, but we are expanding our customer target because we see that our project products and our ship designs are very relevant for many more customers than we have had at least the last couple of years. If you look historically, also, HAV Design had more customers than they had the previous years, but also the market potential in the segments, like the offshore oil industry back in 2010- 2014, was much higher. That is also a normal result. We will expand, and we expect that that will give results. I think it's the final question.
Are there any strategic initiatives planned in the near future, such as acquisitions, mergers, or new partnerships to strengthen HAV Group's market position? I cannot go into detail on our strategy, of course, but as I said, the main focus in the foreseeable future, or at least in 2026, is to secure margins and positive results from the very strong order book that we have, especially in the energy design and smart control system. Along that, of course, we will explore possibilities. We will gradually be more active also towards not original growth. We will also evaluate any possibility that comes along the way. The focus now in the near future is to deliver results. We have also, as I said, in the order book, good margins, and we have enough in the order book to have a very good growth in 2026.
I think that was the last question. Thank you very much for watching the presentation. Thank you very much for sending in so many good questions. I hope I have answered them to your satisfaction. I am looking forward to seeing you again on the presentation of Q4 in March. If there is anything in the meantime, you as investors, you are contacting me. I am trying to give you the answers that I can by email or in other medias, and you continue to do that. Thank you very much for today, and looking forward to seeing you next time.