Welcome to Cavotec Q3 Report 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to CEO David Pagels and CFO Christoffer Robertsson. Please go ahead.
Good morning, and welcome to Cavotec's third quarter presentation. I am David Pagels, the CEO of Cavotec, and together with me today, I have our new CFO, Christoffer Robertsson. I would like to start with a short introduction of Cavotec for those of you who are not familiar with us yet. Cavotec was founded 50 years ago by three entrepreneurs in Sweden. Since the foundation, Cavotec has focused on delivering innovative engineering solutions that enhance safety, reliability, and performance in areas such as ports and other industries where our electrical cable reels or remote controls are needed. We have a competitive offering, and our products enable the decarbonization of ports, mines, and other industrial applications. Our underlying markets are continuously strong, driven by megatrends, electrification, automation, and regulations. Today, 50 years after our foundation, we are present across the globe with over 700 employees.
I would like to comment the highlights in the third quarter. Again, in the quarter, both order intake and revenue developed well. Order intake grew strongly at close to 29%, and revenue increased by close to 19%. We have successfully focused on working capital, which has led to an improved cash flow in the quarter. Our order backlog is set at record level with EUR 160 million, which reflects the strong demand for our products and services. The results showed a good improvement, and we had a positive EBIT of EUR 0.8 million compared to a slight loss last year. However, our profitability is not yet satisfactory, and the organization is fully focused on completing the implementation of our cost-saving measures.
So far this year, we have incurred restructuring costs of approximately EUR 1.4 million, and we will continue these activities during the final quarter, with a goal of reducing our cost base by approximately EUR 3 million, taking full effect by early 2027. The measures that we have taken include the closing of the Rotterdam office and moving the remaining headquarter functions from Lugano in Switzerland to Stockholm in Sweden. Now I want to turn to our recent market developments. During the quarter, we announced several significant orders. One order that I would particularly like to highlight is our first MoorMaster order for India, which also represents the country's first installation of automated mooring technology. We will supply our MoorMaster system to the JNPA port in Mumbai, one of India's largest container ports. The order is valued around EUR 5 million, with delivery scheduled on the fourth quarter of 2027.
This is an important order, the first automated mooring ever in India, and a significant reference project, which naturally we expect will pave the way for further orders in India. We have also signed an order valued at EUR 8 million, covering shore power systems for new-build container ships operating by a leading global shipping company. This segment represents a good growth area for us, and we have signed several large orders for shore power solutions in the last quarters. In addition, during the quarter, we also entered into an exclusive distribution agreement with a company called EVIAS to introduce their automated ground-based charging technology to ports worldwide. EVIAS technology enables electrical vehicles to charge while in motion or standing still, which increases the equipment utilization rates and saves space in busy ports. We will serve as an exclusive distributor and installer of EVIAS technology for the global port sector.
This collaboration is a response to growing customer demand for electrification of horizontal transport within the ports. By that, I now hand over to Christoffer for more details about the financial development.
Thank you, David. As David mentioned, order intake continues to increase. It is up 28.8% from last year to EUR 46.8 million. This is driven by good demand in the whole business, and especially for shore power systems and motorized cable reels for Ports & Maritime and the Industry. Following the good order intake in 2026, we now have a healthy record high order backlog of EUR 160 million. I would also like to remind you that Cavotec is a project-driven business, which means that both order intake and revenue fluctuates between quarters. The project-driven character of the business also means that we have long delivery times, often over a year for larger projects, such as installation of shore power systems. Revenue increased strongly with 18.9% to EUR 42.6 million. We saw a strong sales development in both Ports & Maritime and Industry, with sales growth of 26.9% and 9.5% respectively.
This development is, as with order intake, mainly driven by the good demand for shore power systems and motorized cable reels. Let us now move on to profitability. Our operating result has improved in the quarter. EBIT increased to EUR 0.8 million, with an increase in the EBIT margin to 2%. The higher revenue during the quarter had a positive impact on profitability in Ports & Maritime, while Industry, with its normally higher margin, reported somewhat lower profitability in the quarter. In the quarter, we have also taken EUR 0.2 million for the cost-saving measures, and the adjusted EBIT increased to EUR 1 million, with an adjusted EBIT margin of 2.4%. Items affecting comparability in the third quarter relates to optimization of the organizational structure and efficiency improvements. Items affecting comparability in the same quarter last year relate to relocation of the registered office from Switzerland to Sweden.
Profit for the period was negative and amounted to minus EUR 1.6 million. We are still not satisfied with the result, but we have improved following two tough quarters in the first half of the year. Income taxes amounted to EUR 1.6 million, compared to EUR 0.7 million last year. This is mainly due to higher taxable profit in the new Swedish parent entity. Earnings per share, basic and diluted, amounted to minus EUR 1.5 cents, compared to minus EUR 1.6 cents last year. Cost-saving measures have been initiated early 2026 and will be fully implemented during the year. The measures will reduce costs on an annual basis by approximately EUR 3 million, with some effect in the second half of 2026, and with full effect in early 2027. The measures include, among other things, optimization of the organizational structure and efficiency improvements in IT and administrative systems.
The total cost for the measures is estimated at approximately EUR 3 million, and this cost will be incurred on an ongoing basis during 2026. Year to date, the cost-saving program has contributed EUR 0.7 million positively to our EBIT. Let's move on to performance in the segments. We start with our largest segment, Ports & Maritime. Order intake increased 25.8% to EUR 27.5 million, reflecting good demand mainly for shore power solutions, with deliveries planned for 2027 through 2029. The order backlog increased 27.2% to EUR 131.1 million and grew 2.3% from EUR 128.2 million at the end of the second quarter 2026. Revenue increased 26.9% to EUR 24.5 million, mainly due to deliveries of shore power solutions contracted in 2024 and 2025. However, we have seen intensified competition regarding shore power products installed on the vessels, which is impacting margins negatively.
Adjusted EBITDA increased to EUR 1 million, with an adjusted EBITDA margin of 3.9%. Remember that Ports & Maritime has a project-driven nature with long lead times. We are happy to see that in the Industry segment, the order intake continued to increase up 33.2% to EUR 19.3 million, mainly driven by good demand for motorized cable reels. Following the strong order intake, the order backlog increased 27% to EUR 28.9 million, and increased 4.5% from EUR 27.7 million at the end of the previous quarter. Revenue increased 9.5% to EUR 18 million, driven by deliveries of motorized cable reels and good demand for services. Adjusted EBITDA amounted to EUR 1.6 million, with an adjusted EBITDA margin of 9%. We continue to see big market potential in the Industry segment.
As David mentioned, in addition to our focus on cost-saving measures, we're also working intensively on various initiatives within the organization to increase our internal efficiency. During the autumn, we have focused on working capital, which has gained positive results. The operating cash flow increased to EUR 7.8 million, compared to EUR 2.8 million in Q3 2025. This is an effect of improved working capital. Net debt decreased to minus EUR 3.2 million from EUR 8.8 million at 31st of December 2025, and down from EUR 10.9 million at end of Q2. The leverage ratio measured as debt to adjusted EBITDA for the last 12 months amounted at the end of the quarter to 0.52x, a decrease from 0.96x at end of 2025, and a decrease from 2.33x at the end of Q2.
The group's financing was shifted from Switzerland to Sweden during the second quarter of 2026 by entering into a new five-year financing agreement with SEB, securing more favorable terms. With that, I will hand back to David for the final remarks.
Thank you very much, Christoffer. Let me quickly summarize our presentation. We report strong revenue and order growth across Cavotec Group in the quarter, driven by healthy demand for our products and services. The operating cash flow was strong in the quarter, thanks to higher results and improved working capital. We have a record high order backlog of EUR 160 million to be delivered in the coming years, all-time high since I joined Cavotec. We have a competitive offering and operate within attractive customer segments that enables decarbonization of ports, mines, and other industrial applications. Our underlying markets are continuously strong, driven by megatrends, electrification, automation, and regulations. As I mentioned before, our profitability is not yet satisfactory, and the organization is fully focused on completing the implementation of our cost-saving measures in the group.
We will continue to build a stronger Cavotec, and I am confident that we are well-positioned to create long-term value for our shareholders. By this, we have ended into a third quarter presentation and are ready to take questions.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Lara Mohtadi from ABG Sundal Collier. Please go ahead.
Hi, Lara here, stepping in for Albin Barnevik. A couple of questions from our end. You continue to have a strong order momentum. Should we begin to extrapolate this in the development ahead? Perhaps, can you give some comments on current trading? How has the order intake developed in October compared with Q3?
We normally don't do extrapolations or sending signals about the forecast, but I agree with you there, Lara. It's a strong momentum. We see that now. We have a lot of activities and a lot of quotations. As mentioned by Christoffer before, we have a long horizon when it comes to the Ports & Maritime segment. At the same time, we have a little bit of a different pattern on the Industry segment. Industry segment are shorter order books or products. At the same time, it is also driven by we delivering one product, a prototype, and then when that prototype is successfully installed in our customers' machines, then all of a sudden it leads to them repeating flow business going to the years to come. So I must say I'm confident with the momentum that we have in the sales organization.
We're very active in the field, and I am confident that we have an interesting future ahead of us.
Very clear. Thank you. You had two announced orders that added up to EUR 13 million of Q3 order intake. It's roughly half of the P&M's EUR 28 million. Could you maybe comment on how the smaller orders developed in the quarter, the run rate business?
The small orders compared to the new order, the big orders, is that what you mean?
Yeah.
I think we have a mix of big orders. We talked about the one to this shore power systems. We talked also about the big ones with the JNPA, with the automated mooring for MoorMaster in India. It's always a mix between the bigger orders, and the bigger orders are mainly related to Ports & Maritime, and Industry is a bigger flow of smaller orders. At the same time, as I mentioned, they very often turn into flow business going forward. I think it's the nature of the business that we have this combination of, and I wouldn't say that I see more of one or the other. At the same time, I clearly see that we have a good, strong momentum in the Industry segment. That's how I can summarize it.
Okay. How much of, roughly, there was a 7 percentage point gross margin decline. How much of that is from the vessel side, the shore power pricing, maybe?
Yeah. I mean, I can maybe answer that one without going into too much detail. As mentioned, we have seen an intensified competition on the vessels, and that's clearly impacting part of that.
Okay. Great. Very clear. That's all from my end. Thank you very much.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions or closing comments.
Yeah. All right. Sorry, we're just scrolling up here. I have some questions online. So one question here from Johan Everlov at JPC, and I'll read it here. "Dear David and Christoffer, thank you for the presentation and for all the work done. Four questions below. One, how do you look at the cash flow trends in Q4 and into 2027?" I can begin answering that. So, I think coming out of a very strong Q3, I mean, our focus is still to work on working capital and sort of delivering on the backlog we have. We don't do generally guidance forward-looking, but we will obviously continue doing what we have been doing. Then on number two, "Could you provide some flavor on the level of planned deliveries of the order book in Q4 and into 2027?
Yeah, I can answer that one. We have, as mentioned, we have this mix between Ports & Maritime and Industry. We have a busy Q4, naturally. That's for you who follow us, knows that we have a little bit of a hockey stick every year, and the same thing is happening this year, that we have a lot of planned activities and planned deliveries for Q4. So it's very busy days, that's clear. But also we have a solid outlook when we look into 2027. As I mentioned, a record high order backlog needs to be delivered, and that will be delivered in the years to come. So I'm confident with that.
Yeah. On number three here, "Would it be correct to say that if you exclude leasing costs, Cavotec would already be in a net cash position?" This is something that we would not maybe comment on explicitly here. On the last one we have, "Finally, are you satisfied with the overall margin level and trends in the order book?
I can take that one. Yes, in general, we are satisfied with the overall margin in the order book. We have some trends. We see an increase in demand within the Industry segment. We see some margin pressure that we already highlighted in the presentation, especially from the Chinese competitors on the shore power ship side, which of course we are tackling with by innovative solutions and at the same time also trimming down the cost of our products. Of course, we are tackling that, but at the same time, we see a stronger growth, and also going forward for the products that we have better margins in. So I am confident that what we have in the order backlog is going to be interesting to deliver.
On the same note, we have a question from Marc Saint John Webb from Quaero Capital. "You seem to be well-positioned on growth markets with a strong order backlog. How will you convert this into profitability and value creation?
As we said, we have done some trimming of the organization. We are continuously working on bringing more efficiency into everything we do. Whatever we do today, we need to do it better, quicker, cheaper, more efficient tomorrow. That is the mindset that we have cascaded out in the organization. That is why we have taken those restructuring costs in this year, and therefore, I think we are better positioned for 2027. Again, we do not really forecast or speculate in what we are going to go in the forward-looking there. So, I just wait and see.
Yeah. Another question from Marc. "Tell us about the competitive environment changes in Ports & Maritime, on which products, Cavotec's competitive advantages and barriers to entry versus new entrants.
In that case, as I mentioned before, it is on the shore power ship side where we are doing both new equipment, delivering to new shipyards, building new vessels. Everyone now has to be delivered with shore power solutions on the ships. Of course, there we face competition from competitors that are strong and really eager to fight in that market. At the same time, we also have a growing segment when it comes to shore power ship side retrofits, where also the existing fleets of vessels and container vessels, which are huge, we are also doing retrofits on those for shore power. We do it either when they are in dry dock, or we do it also while our customers are sailing and using the ships, and we do the installations on board on the vessels during a trip from Shanghai to Rotterdam or whatever.
That is something which we are already skilled in. It is not easy. It is quite complex to do, but we have done it, and we have a solid part of that in our order book as well going forward.
Yep. Then another question, "What are the lead times on your orders in the Ports & Maritime and Industry?" I think we mentioned it before, but for Ports & Maritime, lead times are obviously longer. We are looking at from nine months up to two to three years even. Industry, it is shorter and around three to nine months roughly. One more. I think we are getting to the end here. "The cash flow was very impressive. What is the reasons behind that?" As mentioned, this is really a lot of work related to working capital, collections of overdues, but also collections of advances in new projects. So, that is driving the key sort of drivers behind improved cash. Then, "How are the cost-saving measures progressing?" Another question here. Yeah.
Yeah. You or me?
No, I mean, we are seeing the results from it already, as mentioned. But as also mentioned, we are continuing to implement these cost-saving measures throughout the rest of the year as well. I think that's it from the messages online.
Good. Okay. Thank you very. We have no further questions in that case. Thank you all for listening in, and we're looking forward to see you at the fourth quarter report, which is on February 19, 2027. Have a good continuing of the week and way forward. Thank you very much.
Thank you.