Good morning, everybody, and welcome to this third quarter presentation by StrongPoint. My name Jakob Tveraabak. i'm the CEO of StrongPoint, and with me today I have, as always, Hilde to present additional financial figures. Today's agenda is a threefold. I'll do a short introduction of StrongPoint. We'll go through the highlights of the third quarter, and then finally, Hilde will do some additional deep dives into the financials. We'll end this session also today with Q&A. First now, what is StrongPoint for anybody that is new to StrongPoint out there. StrongPoint, we are a retail technology company providing solutions, particularly to grocery retailers, but also to other retail. If you look at the...
What we have called the double opportunity for StrongPoint, we've had the growth of e-commerce and still have fundamentally the growth of e-commerce, but in addition, having now the inflationary pressure, the wage increases contributing to a margin pressure of the retail stores or the grocery retail stores. We believe that in order to withstand that margin pressure, you need to introduce solutions and technologies to withstand exactly that margin pressure and uphold the margins. Similarly for e-commerce, there's most large grocery retailers out there have a significant e-commerce presence. The need to make e-commerce profitable or more profitable is higher than ever, and again, StrongPoint provides some of the world's most efficient solutions to make exactly that happen. StrongPoint, we focus on grocery retail. Why do we focus so much on grocery retail?
Why are we so proud that approximately 85% of our revenue stems from grocery retail? Well, it's a resilient, solid, and mature market, and that's exactly what you would want in uncertain times and turmoil times like we have today. On this slide, you see a number of the customers that we are serving in total eight countries where we have offices and are present with sales, service, and support functions. To enlighten you a bit about what StrongPoint offers, we have introduced what we call the StrongPoint sandwich, and as you would all know, at least if you're Norwegian, you need the bread and butter. The bread and butter is the first component of a sandwich. In a StrongPoint setting, these are the in-store solutions, the mature in-store solutions that many of you are familiar with.
These are Vensafe solutions or tobacco automation. This could be CashGuard solutions, Self-Checkout solutions, Electronic Shelf Labels, Digi scales, and more. For this segment, we have a very healthy margin to provide us with. On top of the bread and butter, you of course need some toppings, and for StrongPoint, that topping is e-commerce. This is our in-store picking solution, our dark store picking solution, our automated picking solution with AutoStore. I'll talk more about that in a second. Also the last mile solutions, whether that's Click and Collect solutions, drive-through solutions or home delivery solutions. We're investing and have invested quite heavily into e-commerce. Finally, there are the solutions for the future.
We will always keep an eye on what is moving out there, whether that is frictionless stores, so fully frictionless stores like the kind of Amazon Go solutions, or whether these are robots to provide reshelving solutions, as an example. With this StrongPoint sandwich, as we call it, what can we expect to get out of this? Well, we've set out a financial ambition for 2025 of NOK 2.5 billion revenue and a 13%-15% EBITDA margin. Again, I'd like to reiterate that we stand by these financial ambitions also after this quarter. To some highlights in this quarter. As always, three points here, the financials, the progress on customers, and lastly, additionally, points on how we're progressing on the 2025 strategy.
What a quarter when you look at the top line. We've had a 76% top-line growth in our business. 20% of this growth is organic. This is organic growth, which is absolutely strong, stemming from, in particular, a very, very solid Pricer ESL sales in Sweden. From the Baltic organization that we have, where we have sold a tremendous amount of self-checkout solutions, and really across the board, delivering very strong in this generally turmoil market, but proving again that grocery retail is very resilient. Then you have 56 percentage point of the growth or NOK 110 million stemming from the ALS acquisition we did in the U.K. We're super proud to have ALS as part of StrongPoint.
We must confess this contribution from ALS this quarter has been very strong and exceeding our expectations. It should be said again also to this crowd that a company like ALS, which is now labeled ALS StrongPoint, by the way, has a peak typically in Q2 and Q3 season. Just managing a little bit the expectations there for the quarters, Q4 and Q1. Very strong NOK 110 million revenue contribution from ALS here. In terms of profitability, we've gone from a 4.1% EBITDA margin last year to 6% this year. It's a NOK 13 million EBITDA improvement. I'm very pleased about that improvement. That's 6%. Why isn't it higher with such revenue growth?
Well, it's not higher because we have been and also in this quarter been doing significant and deliberate e-commerce investments. Actually, the contribution or the negative EBITDA contribution from e-commerce is in and about NOK 15 million- . Clearly, that's not sustainable, and we are reducing the e-commerce investments going forward to reflect this softening in the market. We are very positive about the long-term viability and attractiveness of e-commerce. We are now shifting the resources and reducing the resources to reflect this softening in the e-commerce market. When you look at our revenue, well, mix, if you want, in this quarter, there are two things to note. One is e-commerce being down to a 4% out of total revenue contribution. That is actually the same in absolute figures as last year, same quarter last year.
Of course, lower with a higher top line. It also illustrates what we just said about e-commerce contribution. We have been investing, but the market hasn't followed on the top line. As such, you've been getting the negative contribution from e-commerce. The second point to note on this page is what we call shopfitting. That is the contribution from ALS. ALS contributing with a significant part of the revenue that we have now in the business. I will, in a second, also talk a bit more about what we believe ALS can do for StrongPoint going forward. On customers, lots of exciting things happening. Well, first of all, our dear friends in the U.K. announced in this quarter two major deals with leading grocery retailers in the U.K.
I'll get back to one of these solutions in a second. We've also done tremendous progress with other than grocery segments in the Baltics with do-it-yourself segments. Lastly, we've had a record high ESL sales of Pricer in the Swedish market. Proving that when we can and want to put the efforts into sales of any kind of solution, really, there is no limit to what we can achieve. On the 2025 ambitions and the progress, well, first of all, with these revenue figures shown, I believe we can say that the grocery retail market is a resilient market. It's a solid, mature, resilient market I'm very pleased to be in. We are starting now to integrate ALS more and more, and I'll talk a second about a bit more about that.
Again, for e-groceries, we believe that the long-term fundamentals are there. They're absolutely there. However, we also need to reflect the investments we're doing in e-commerce to reflect the temporary softening or dip in demand of e-commerce. Before giving the word to Hilde, I had two more pages I wanted to present you all. One being ALS. I just wanna underline the importance of ALS from a strategic point of view. We now have a platform in the U.K . And in Ireland to grow with our own solutions and hopefully in the future also with key partner solutions.
Number two, it is, as you've seen, also a significant financial contribution, and the transaction itself comes across as a very attractive and highly accretive one for investors. Thirdly, whenever you do an acquisition, I mean, we have beliefs about what we can do for this company being acquired. I'm very pleased to see that some of the solutions that ALS StrongPoint has are also valid for the other markets we serve. I want to highlight two of these opportunities. One, which we call the swivel checkout, which was part of one of the deals announced this quarter in the U.K., is a type of hybrid checkout solution. So combining a manned till, turning it around into a fully operated self-checkout solution. So combining the self-checkout solution with a manned till is what we call swivel checkout.
I believe that is a solution that is also very much applicable in other markets than the U.K. The second one is what we call Checkout Refurbishment. Why buy new checkout furniture when you can reuse the existing ones? That's a big thing in the U.K., a big thing because it saves the grocery retailers money, and not least it saves the environment, it saves the planet using or reusing the same assets again. I have strong faith in the other markets with other retailers where that makes absolute sense. Well done, ALS, for providing us with these two solutions that I'm thrilled to take out in the other markets. Finally, and yes, I know this is not part of Q3, but I have to tell you this anyway.
The announcement we did very recently about the world's first ever frozen facility with AutoStore. As you know, we made a distribution agreement with AutoStore becoming one of their partners earlier. We announced the first AutoStore's facility earlier this year. Now this is our second, but a lot more important. Now we're providing ambient, chilled, and also frozen capabilities in the AutoStore facility, and that is a game changer for any grocery retailer that is venturing into the e-commerce space. Can't wait to get more of these solutions out there, but right now I just wanted to highlight that also, although it's not part of Q3, strictly speaking. With that, Hilde, please why don't you take us through a couple of the other key financials?
Thank you so much, Jakob. I will absolutely try to do that. Good morning, everybody. I will also start off by talking about Air Link Group Limited or the acquisition that we have done. So far this year, ALS has contributed with NOK 141 million, and the earnings before tax per Q3 is then on a level of NOK 20 million. As Jakob said, ALS has a top season in Q3 and Q2, and we have also a gap that was created by the pandemic by the customers in U.K. and Ireland that the local management has done a fantastic job in closing during the quarter. If you look at Air Link Group isolated in Q3, the growth was actually 70% compared to their own figures last year.
It's a fantastic achievement by the management. We have closed the final purchase price. The estimated purchase price was based on the December 2021 balance sheet. During Q3, we have established all the figures into the Excel spreadsheet, and the adjustment amount to be paid is NOK 4 million. That will be paid in Q4. There is no earn-out in this transaction, so the final purchase price ended at NOK 116 million. This equals an enterprise value over EBITDA multiple of 2.5, which is a very attractive acquisition for StrongPoint. I must also add, there are several business opportunities that we have seen during the first four months, so we are very happy with this acquisition and this transaction.
Going forward, with the figures, rolling twelve, based on Q3, we are now at NOK 1.25 billion, and that, Jakob, is exactly 50% of our overall ambition for 2025. We have a growth in the period of 13% organic and 28% if we include ALS. That is combining the rolling twelve over last year's NOK 981 million in revenue. If you look at the right side, the EBITDA, we ended at NOK 62 million end of Q3, rolling twelve, still. That equals an EBITDA margin of 5%. That is a drop of 0.5 percentage point from the 2021 level, and I will try to explain a bit more about why there is a drop in the EBITDA margin. There are two reasons for this.
The first one is that our gross margin has declined in the quarter, and the second one is the continued investments in e-commerce. First, let me elaborate about the gross margin decline, which we want to assure is fully explainable, starting off by the first one, and that is ALS. ALS is explaining 2.5 percentage point of the decline. That is something we need to get used to. This is the business model of ALS. They have a lower gross margin, but their EBITDA contribution is very good. That will affect our gross profit also going forward. Secondly, and the largest effect is the product mix, and especially related to in-store operations. That accounts for four percentage points of the total decline. It is ESL, in-store and some other hardware products that we have sold during this quarter.
As Jacob has already explained, the lack of proprietary e-commerce sale has obviously not helped on the gross margin. Thirdly, it is foreign exchange currency, especially related to US dollar versus Swedish krona, that is accounting for one percentage point of the decline. Let this message come out as it is explainable, the reduced gross margin in Q3 compared to the same quarter last year. Secondly, we are continuing to invest in e-commerce with NOK 6 million in additional investments in Q3. We will, as Jacob said, reduce this level going forward, but in Q3 this has also contributed to the lower EBITDA margin.
Our earnings or net profit after tax came to NOK 8 million, up from zero last year, and our earnings per share in the quarter ended at 0.27, and our rolling 12 is 0.81. Looking at our cash flow, we started off the year with 174% in net cash in StrongPoint. This is a result of the two divestments that we have done in 2020 and 2021. Adding, of course, the EBITDA and an earnout received this year from the sale of Cash Security, we also now have paid a net amount of NOK 85 million of the acquisition of ALS this year. The dividend of NOK 35 million was paid in May, and we have a rather large change in working capital this year of NOK 57 million. There are two things explaining the change in working capital.
First one is that the most important part of this increase is actually receivables. With our customer base of more than 85% from the grocery sector, we can assure that the collection should go. The collection risk is not high on as we have seen previous year. Second is inventory increase this year that I have explained before. We have deliberately produced CashGuard to be able to mitigate the component situation that we have had this year. We also have some more lockers in our inventory in Sweden due to the lower sale of lockers in Q3. This ends up with a positive cash position of NOK 54 million at the end of the quarter.
If we are looking then at the net interest-bearing debt, we are still around break even if we do not include the IFRS figures. The IFRS figures have increased a bit in the period. That is a new long-term lease agreement for our Birmingham facilities and in ALS obviously. That leaves us with a net leverage of 0.108 compared to our EBITDA rolling 12. We distributed yesterday our new financial calendar for 2023. We start off the year on February thirteenth with a strategy update session, as we have done now for the past years. We will welcome you on to that.
We just want to also let you know that we will be starting a new time frame from 2023 with the launch of the documents, not at 7:00 A.M., but at 8:00 A.M., and the presentation will start at 8:30 A.M. We wish you welcome to join this webcast, but of course, please reach out to me directly if I can help out on some questions. Jakob, maybe we have some questions.
Well, let's see. Dominic, please, do we have any questions?
Yeah, we've got quite a number of them. First one, I think for Hilde. Very strong ALS sales. You say year-to-date is unprecedented in the company's history. How does the pipeline and backlog into 2023 look? Should we expect ALS to recover to 2021 levels?
I think that is first of all, the backlog of ALS is very short-term. It's a very short time between the order comes in and the actual delivery of that. Obviously we are not guiding for next year, but we are very pleased with this year, and I'm not sure, Jakob. Do you want to? You are more positive than I am with what to reveal, but we are very positive to the future for ALS, that we can say.
Next question, I think for Jakob. Which countries do you see upcoming acquisitions, and how many companies are you looking at now?
First of all, it's pretty clear I can't go in too much detail. I think first and foremost, we are now in eight countries: Norway, Sweden, the three Baltic countries, U.K., Ireland, and Spain. The potential in these eight countries is, you know, massive. You know, there's just so much white space in even these eight countries. The first and foremost focus for StrongPoint now is to ensure we get a proper operational leverage, that we get proper size in these markets, rather than necessarily jumping to a new geography. Focus for us is how do we become even bigger, stronger, get a better operational leverage in these eight countries with the margins that should entail.
Beyond that, I'm going to decline going into a discussion about how many or which companies we're looking at. I think history has shown that we are patient, and when we do acquisitions, we like to do them well.
Next question, I think for you, Jakob, as well. What is the reason for the relatively low e-commerce sales, and why have we not succeeded so far?
Yeah, well, I think. First of all, this is a market thing. It's not like there is numbers of RFPs or projects out there that we are losing out on. I think there is a general. I think it's natural that, you know, in a world of turmoil, even if you're a grocery retailer, you tend to be less sort of progressive or aggressive with projects that are more sort of uncertain of nature for them. We've seen that a number of e-commerce projects that were about to start have been put on pause or halt, and that goes for the entire market and that's just reflecting the uncertainty that we have.
What you see from these results is that we have, I think as we have explained, invested quite heavily into e-commerce also versus last year. However, the revenues haven't followed and we need to take the consequences of adapting the cost base to the revenues in that respect.
Final question. Sorry, following the recent AutoStore contract, do you see more to come?
I think the short answer is of course yes. We knew that when we got the AutoStore distribution rights, the partnership with Hörmann was very important to build our credibility, and we managed to do that with the first contract, ColliCare. Of course, as a company with focus on grocery retailers, it is particularly joyful to be able to do the first ever frozen facility. Following the announcement, we've received a number of interest inquiries from interesting parties because this is world news, and it would be stupid of me not to say that I believe in additional AutoStore sales. Sales cycles are long.
We're not going to deliver either one of the two wins we have until Q1 next year. I think the wait is very well worth the wait, so to speak.
There was one question regarding the inventory and receivables buildup, but I believe that Hilde actually answered that already.
Okay.
Otherwise, that's it.
Thank you so much.
Thank you.
Have a great day.