Good day, and welcome to the Elanders quarterly results conference call. At this time, I would like to turn the conference over to Magnus Nilsson, CEO of Elanders. Please go ahead, sir.
Welcome everyone to Elanders conference call. This is Magnus Nilsson, CEO of Elanders speaking, and together with me here is also Andréas Wikner, our CFO. I will start with some comments to go through the Q3 and for the persons who have the presentation ahead, I go to slide number two. We are, as we when we mentioned in the Q2, we could see a recovery in the end Q2, and this positive trend continued in the Q3. We have also, as we have mentioned before, we have had three customer projects in the business area, Supply Chain Solutions, where we have higher implementation and startup cost that was much higher than expected in Q3, Q4, and last year in Q1. We have now managed to get all three projects under control.
One of them we have actually closed down, and the other two projects, we have managed to do, negotiate new price levels with our customers and also made some changes with them, together with them in the processes. And this combined together also helped us to make a much stronger Q3 this year than last year. We can also see that the strong organic growth is continuing, and that was 9% in the Q3. And that is mainly driven by the business area Supply Chain Solutions, but also the subscription box business we have in printed packaging in the US. During the quarter, we also initiated a new customer project with a yearly sales value of SEK 100 million, and the implementation went really well, and we could see that this project was profitable from day one.
We could overall see a very strong demand from all our customer segments during the Q3. We could only see there was a slight down trend in Fashion and Lifestyle, which was mainly connected to the very warm summer in Europe, and but we could see in the end of the quarter that orders was picking up. Then in 15 October , we also announced that the Edelmann Group, a German packaging company, will acquire Elanders packaging operations in Beijing, China. We expect that the transaction should be finalized during the fourth quarter and will have a positive effect on the cash flow, but only a small negative effect on the result. Then I go to slide number three, and then we can look at the quarter, July to September. We look at the highlights.
So net sales increased by 20%, to SEK 2.8 billion, compared to SEK 2.3 billion the year before. And as mentioned before, well, 9% was organic. EBITDA increased to SEK 154 million compared to SEK 55 million the year before, which corresponds to an EBITDA margin of 5.5%, compared to 2.3% the year before. And the net result increased to SEK 75 million compared to SEK 14 million the year before. And the result includes one-off items of SEK 0 million this year, but last year we had SEK 28 million in one-off costs. And that was mainly, primarily costs related to redundancies last year. We also improved cash flow. The operating cash flow increased to +SEK 62 million compared to -SEK 60 million the year before.
And then if I go to slide number four, and we look at the accumulated numbers for January to September, then net sales increased by 16%, whereof 10% was organic growth. EBITDA is now ahead of last year, an increase in SEK 353 million compared to SEK 269 million, which corresponds to an EBITDA margin of 4.5% compared to 4% the year before. Net result increased SEK 150 million compared to SEK 120 million the year before. The net result was affected negatively by one-off deferred tax cost of SEK 11 million, when the deferred tax assets were re-evaluated using the new corporate tax rate in Sweden. And operating cash flow improved to +SEK 144 million compared to -SEK 119 million the years before.
If we then go to slide number four and look at Elanders, absolute biggest business area, Supply Chain Solutions, that now has a share of 75% of our sales. And this, this is the business area that is the main driver of organic growth, and in Q3, their growth was 9%. And as mentioned before, we could see a strong improvement in several of these projects, where we had lots of startup costs the last 12 months. We have also a couple of new customer agreements secured the last 12 months, which will have a positive effect on the sales the coming years. And the implementation of these new products are going according to plan. And as I mentioned before, one of them is already up and running and generating positive numbers.
If we then look at the Q3 for supply chain solutions, then sales was almost SEK 2.2 billion compared to SEK 1.8 billion the year before. And the EBITDA profit was only almost doubling. It was SEK 137 million compared to SEK 71 million the year before. And EBITA margin in the Q3 was 6.2% compared to 3.9%. So and all these improvements is, a big part of these improvements are connected to the, this project we have talked before, but also that other parts of the business was starting to run very well. So overall, a very strong quarter from supply chain solutions. And this means also that they are now ahead of last year with an EBITA of SEK 286 million compared to SEK 247 million.
If you then go to page six, and we look at Print & Packaging Solutions. So the market continues to be rather tough, with price pressure and overcapacity, but we still managed to make a rather strong quarter with improvements. And our operations in USA shows a really strong improvement, both in sales and profitability, and in both our traditional printing business area and the subscription box business. The latter has gone from almost zero in sales, 2016, to $18 million in 2017. And the first nine months this year, we have reached sales of $32 million for this subscription box business. And that is actually the driver for the sales growth you can see in the Print & Packaging Solutions area.
But last year, we also had one-off costs of some SEK 16 million, primarily connected to redundancies in Sweden. So if you look at the Q3 for Print and Packaging, sales was SEK 609 million, compared to SEK 520 million. EBITA was SEK 24 million, compared to SEK 4 million last year, and the EBITA margin went up to 4%, compared to 0.7%. So this means also that Print and Packaging accumulated numbers is also clearly ahead of last year, and with an EBITA result of SEK 89 million compared to SEK 67 million. And they also managed to improve their accumulated margin to 4.8% compared to 4.2%. So then go to slide number seven. We look at the E-commerce Solution, which is a very small area for Elanders. It's only 2% of the sales.
We're happy to see that, the result has continued to improve, and the cost-cutting measures we have done has been, has worked very well, combined with, efficient marketing. And, the fourth quarter is always by far the strongest quarter, and it's normally the quarter where all the earnings from the whole year are made. We continue to do the strategic overview of this area and to see where the future should be fit in the Elanders Group. So if you look at the numbers, we're also happy to see that sales, we are not going down in sales anymore. It's almost in line with last year. And in the Q3, the sales was SEK 39 million compared to SEK 36, and EBITA was a -4 compared to -10 the year before.
Accumulated EBITA result is now at -9, compared to -20 last year. So if you go to the last slide, I think now when we have got lots of the temporary problems we had under control, we are now feel we have a strong foundation going forward, and now we are continuously working with actions to improve our margins. We're also working hard to improve our cash flow and decrease the working capital. We aim for business with high added value. We look into developing more sophisticated contract logistics and omni-channel solutions. We're also developing our areas in the value recovery and after-sales service. We think that to strengthen this kind of service, we will, over time, be able to improve our margins and also improve our return on the capital employed.
We also, with our strong organic growth, also gives us the ability to be more selective when acquiring new business and prioritize margin instead. And that is a strong message from us to all our group companies, to really focus on the margins and to use this strong growth to be more selective and to prioritize business with high margins. Okay, that was the summary for the Q3, and we now open up for questions.
Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach the equipment. A voice prompt on your phone line will indicate when your line is open. Please state your name and company name before asking your question. Once again, that is star one. You have a question in the queue. Please go ahead.
Hi, this is [inaudible] from Tryg Forsikring. One question on decreasing working capital, working capital. What kind of measures are you taking on that area?
Yeah, I think we're looking to, this is Andreas speaking here, but I think we are looking at different scenarios. I mean, of course, we are looking into factoring, could be one type of financing that we could use if we can get good financial conditions on that. And we're, of course, we also need to sort of make an, let's say, incentive model, I think, to our management, you know, in our companies also to sort of work more actively to reduce the working capital. Right now, we have incentive model is another type of, let me say, measurement. So we need to include that also into the incentive model that will also drive it change with it.
I also think in the same time that with an organic growth of 10%, it's of course you build up your working capital, and so that's one effect as well, when you have a very strong growth.
Mm. Okay. Thank you.
We'll move to our next question.
Hi, this is Emmy Öström from ABG. Can you hear me?
Yes, we can hear you.
Yes.
Hello.
Okay, good. Good. Sorry. So, I mean, Daimler just warned again, and sort of we have a sort of bearish sentiment in terms of automotive. Have you seen any of these effects in this quarter, and how, how do you look on it going forward?
Yeah, I think regarding Daimler, I think what they announced was also a lower result because of lots of costs for these new regulations, and also about this, I think, the diesel scandal or what you call it. So I think lots of it, it's actually costs for them and not so much on the volume base. And for us, during Q3, we haven't seen any weaknesses in the demand of the service we are doing for Daimler. So it's not really easy for us to predict how the future looks like, because we do so many kinds of service for them, and we are also supplying their main factory in Germany, where they are doing lots of development works for the new platforms and things like that, that also generates lots of volumes for us.
So of course, it's yeah, very hard, but we haven't seen any signs and our automotive clients, all of them, the first nine months has increased in the sales value for us, so. But it's hard to say. For the moment, the business is very stable for us, all our automotive clients.
Got you. Thank you. And another question on the subscription business, because I think you mentioned in the previous report that it would reach $40 million, and now you're sort of saying that it's more than double. I'm just checking here. There's no change here, it's just a change in wording, right?
Sorry, you say in the last report, we said 40, or what did you say?
I think you said sort of that the subscription box business would reach SEK 40 million, and now you said, well, it's like, it's going to more than double. It's just a bit of difference in sort of wording.
Yeah.
But it's the same message.
It's just a difference in wording, yeah, I would say.
Okay.
Because it's, if you look at the run rate, we're already at $32 million.
Mm.
In nine months, so.
Yeah, and you don't.
And then.
Expect that to change?
No, no, nothing will change in that.
Okay. Okay, perfect. Thank you. I will get back in line.
Thank you.
You're welcome.
Thank you.
And as a reminder, if you would like to ask a question, please press star one. We'll pause just a moment. And gentlemen, at this time, we have no further questions. I'll turn the conference back over to you for any concluding remarks.
Okay. Thank you, everyone, for calling in and listening to Elanders conference call. Doesn't look like to be any more questions, so thank you very much from me and Andréas . Thank you.
That does conclude today's conference. Again, thank you for your participation.