Welcome to Lagercrantz Group Q3 Report 2025-2026. 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 Jörgen Wigh and CFO Peter Thysell. Please go ahead.
Thank you, and welcome everyone to the quarterly call from us. Great to have you with us all. Have you with us all? Yeah, as normal we try to have this as a 45-minute, roughly, ± 5 minutes or so, session where we go over sort of give a brief introduction to the group and then go over the numbers and then look a little bit ahead at the end and also look at the acquisitions, the most recent one we've done. So welcome everyone, and we'll get going. Together with me here is Peter as well, of course, so we're two of us here now.
So as a short introduction to the group, well, for those of you that are new to us, we are a tech group or a buy-and-build company that are buying and acquiring sort of Niche businesses, which we will highlight along the way more as we go along. We have organized ourselves into the five divisions you can see there, but we all run the companies very autonomously and independent companies running under their own brand name, addressing their own markets. Currently we are some 85 companies within the group. Our revenues are now exceeding SEK 10 billion on a moving 12 months for the first time. That was like a milestone with this quarter. And we are currently some 3,600 employees, growing with some around 15%-20% per year.
We run, as I said already, in a very decentralized fashion with 85 profit centers organized into the five divisions. You could see over to the right here where we have our companies, and most of it is in Northern Europe. You can also see that we have some footholds and smaller operations addressing especially export market activities in North America, but also in China, in India, and a couple of other places. You can see those footholds all the way to the right here on this slide. An M&A is, of course, a very central part of what we're doing, of our business model. We have been listed on the stock exchange since 2001 as a separate company. We were part of the Bergman & Beving Group before that.
So we're one of the companies coming out of that environment and have that type of philosophy and culture within our group. So that was a short introduction. Yeah, well, getting into the interim report then, we posted, we think, as a very solid and strong quarter, another one, adding to our fine trajectory here, as you could see. We are heading towards the SEK 2 billion as planned. And you can see that we're close to the SEK 1.5 billion here now in terms of profits. And we have then surpassed the SEK 10 billion in terms of sales. Quite satisfying to see. I just realized myself that I posted my 81st quarterly report now with this one. And it's great to see where we started. We started with some SEK 400 million in sales in the quarter we're comparing with now.
We had earnings of SEK 13 million in terms of EBITDA in that quarter. Currently we're at the SEK 513 million. So it's been quite a journey. Back then we had some 3.1% EBITDA margin, and now we surpassed the sort of 18% or are at 18% with the quarter that we just posted. So it's been a tremendous journey and quite satisfying to have another good quarter behind us here. We communicated in the report also the business conditions that we have on the next one then. We feel that the market situation has generally been stable and slightly along the way better, gradually better. Maybe not at the improvement pace that we had hoped for, but still on a good trajectory here in the last few months or in the quarter as opposed to earlier. It's been gradually improving.
Especially we feel that we have some differences between the segments we're working with. So the electrification and the infrastructure and the defense showed strong development, which we see in especially the electrified divisions, sort of the outcome there. But we also saw the Nordics slightly improving along the way, while the U.S. is, yeah, hampered and held back a little bit when you're exporting there. That is only some 5% of sales, but it's affected by the geopolitical situation and all the tariffs and the different things happening there. But also with the differences in the currency, the currency effects has also been against us in some companies, especially affected the Niche Products division, as we will see later on. But it's satisfying to see that the order intake increased organically with some 7% compared to the same quarter last year.
That was then after adjustment for the currency effects impacted negatively by 4%. A good market, slightly better than before, but not dramatic improvement, but slightly better than before. This is what we communicated here this morning. With that, I think we should go in and look at the numbers. Maybe Peter, you can go over the numbers here.
Yes, thank you, Jörgen. And as Jörgen said, we think that this is a very solid quarter with strong order intake first and also quite high net revenues growth that increased by some 16%. 18% came from acquisitions, but we also had 2% organic growth and then currency headwinds of 4%. The EBITDA grew by 20%, and the EBITDA margin improved to 18%. The cash flow was strong. It was up 12%, but it was strong also in the same quarter last year. So we are quite happy with that. And as you can see, the conversion ratio is quite high. Profit after financial items were up 19%. If we look into the accumulated numbers, we see similar numbers with net revenues up by 13%. Most came from acquisitions, but we also had 2% organic growth. And the currency headwind was 3% in the first nine months.
EBITDA grew 16%, and the EBITDA margin is also improving over the nine-month period to 17.8%. Similar cash flow and cash conversion is quite high also in the nine-month period. This was probably the area that we were not entirely happy with in the last quarter, but now it has been improved. The return on equity is 29%, and the equity ratio is 32%. The profit over working capital, one of our key ratios, is 80%. It's on the same level as last year. Earnings per share also increased to SEK 5.53 in the last 12 months. Jörgen will come back and present some of the acquisitions that we did in the last quarter, but so far we've completed 12 acquisitions in the last 12 months. This has added SEK 1.4 billion in business volume. This corresponds to an acquisition pace of some 15%.
So we are upholding a rather good pace of acquisitions. If we look very briefly into primarily the EBITDA margins per division, we are happy to see that Electrify division are now another quarter above 20%, so 21%. Jörgen will come back and tell you the reason for this. But we also see that the Control division and also the International division have good margin improvements. We see on the other side TecSec and to some extent also Niche Products with slightly lower EBITDA margin in this quarter compared to one year ago. But maybe Jörgen, I will hand back to you and.
Yeah, but before we leave that one, I think it's good to see that we have really five strong divisions. You could see that we are very happy with what was happening in like three of them at the moment, the Electrify, Control, and International division, while we're lagging behind a little bit in the TecSec and the Niche Products. But it's very satisfying to see now. We communicated the EBITDA goal of 20%. And you can see down there we actually have like two divisions that are basically already there. And then we need to work with the rest ones to get there as well. So it's satisfying to see the levels of performance in all divisions, but especially then within the Electrify and margin-wise in Niche Products as well. Some comments on the outcome by division. Electrify posted a really strong quarter. Revenues were up with 17%.
Acquisitions was 10% out of that and organically some 9%. So a very strong quarter from the Electrify division. They have had a very strong market, especially both within electrification and infrastructure. So they also posted a very strong EBITDA growth of 55% here during the quarter and an EBITDA margin of 21.2% as opposed to 16% last year. So it's a very, very strong and a very strong quarter posted by Electrify. We saw improvements in most businesses, but particularly in Nordic Road Safety, Elkapsling, and a few others, as you see mentioned here. But really strong broad-based improvement within the Electrify. And also very happy to see that Mastsystem that we acquired a little bit more than a year ago reported good earnings and also some continued strong order intake during the quarter.
That is a very good company that we acquired one here in Finland that we acquired about a year ago. They had a very strong quarter here, both in terms of earnings and deliveries, but also in more order intake along the way, which is very important for the division. The second division, a few comments there, is the Control division. It also posted a strong quarter with 8%. And acquisitions was then 16%. Here we have deliberately been working quite a lot with acquisitions because we would like to grow this. But organically, they're still struggling with the construction sector, especially in Norway and in Denmark, where we have highlighted before. But they also, along the way through the acquisitions or the more recent acquisitions, they have increased their exposure towards the defense sector.
Especially companies like the CP Cases in the U.K. and the U.S. and also Leteng in Norway had a strong quarter here due to that, good order intake and market development within the defense. Also highlighting is the Radonova with the radon measurement business. Had a very strong season this year. They have a peak season during the winter, and it's been especially strong this year. And also Precimeter and Stegborgs posted really strong outcome through the quarter. And the newly acquired companies, the He-Man in the U.K. and Orax in Sweden, contributed with good results also within the division. So we're very happy with also the outcome within the control division. Within the TecSec division, that is the one struggling the most. Their revenues increased by 10%.
And all of that came sort of most of that came from acquisitions, but also some organic growth, especially within the order intake. So it is within the TecSec with some good order intake along the way. But EBITDA then amounted to SEK 90 million as opposed to SEK 92 million last year. So we're slightly down. And also the EBITDA margin came down a little bit. And that is for the same reasons as before, that the market situation has not yet improved within the construction sector. And the companies with that exposure are suffering a bit here or not delivering to last year, really. They're doing quite okay, but not living up to what they have been doing in the last few years. Happy here also around the I Holland acquisition that we made here in the U.K. in November.
That is sort of a new area that we are taking TecSec into, more on med tech and other type of exposures where we see some stability and also some underlying structural growth in that area. That is a significant acquisition for the TecSec division with I Holland, adding some SEK 335 million on an annual basis. So that will be an important acquisition along the way. That is also yeah, it's affected the numbers only in November and December, but came in quite okay with the first couple of months here. We move on to a couple of comments on the Niche Products division. Their revenues grew with 17%. And acquisitions, there was some 23%. So organically, it was actually down 2%. And here we are. We have a number of very nice companies within the Niche Products division.
But some was also hampered by the development, especially related to the U.S. They have some volumes going into the U.S. with some exports going there. And due to tariffs and sort of effects and, yeah, currency effects, they are struggling a bit more than they used to be used to last year. So that is affecting those companies and affecting the whole division. On the other hand, Prido, which is a Swedish company, had a very strong quarter, continued to do very well. And also Van Leeuwen Test Group in the Netherlands showed also continued good development. And a couple of others with Waterproof Diving International, Sajas Group and a few others there as well showed clear profit improvements. And here we also made some acquisitions during the quarter. I'll come back to that with the Sit Right and Enskede Hydraul. Were acquired and will add along the way as well.
Very good to the Niche Products division. Last but not least is the International division. Here, revenues grew by 28%. They posted a strong quarter as well. And acquisitions were 30%, but organically, they grew by 5%, our sort of long-term target in terms of organic growth. But FX was against them a little bit with -7%. So top line, it grew 28%. EBITDA then grew by 30% to SEK 90 million. And the EBITDA margin picked up slightly to 17.3%. So good development and a strong quarter there as well. Here, we have acquired the Epoke and Friggeråkers here during the summer. And those had, yeah, they had a strong sort of season here and did very well here during the quarter. So that is affecting the numbers somewhat. But also other companies like the Libra-Plast and DP Seals and G9 in Denmark continued their strong development.
And also important to highlight was the Unitronic in Germany. It's a company we've had for many, many years and have been struggling a bit over the years, but it's now doing a lot better here as of, yeah, this quarter, but also in the last year or so. The Unitronic's performance has picked up significantly with some new volumes, some new sort of supply lines, and doing it very well for us at the moment. So yeah, that was good to see as well. So good development in many companies. So with that, I think we leave a little bit of the quarterly report. Let's talk a little bit of where we're heading and our new goals then. Well, I like to reiterate where we are.
I mean, we are still sort of very keen on building our group with these really strong Niche-oriented, primarily product companies where we have our own product rights. And we have that as a strategic aim as well to improve that share along the way. And we are strong believers in our business model. The business concept that we're running is really strong. It has been that for many years. And for many years, we've also had the target of growing the EBITDA with some 15% per year, i.e., doubling the group every 5 years. We have done that for many years, for many decades, really. And we continue to see that as a good opportunity going forward as well. There are some increased competition in the market along the way, but we still feel that we are able to deliver on our profit targets here.
We've also highlighted along the way that we would like to see at least 1/3 of that come organically and the rest through 8-12 acquisitions per year. The bar of 8-12 has been increased over the years. We would like it to be 10% of our sales, basically. That comes in through acquisitions. That profit growth of two-thirds should come through M&A and one-third organically is the way we think about it, even though the overall target of 15% is where we would like to be measured. In periods where we have a slower organic growth, we might sort of compensate that with more M&A, which has been the case now for a year or two. That you've seen also from the numbers that most of our growth in the couple of recent years have come through acquisitions.
We would like to do this in a very profitable way with our return on equity target has been 25%. We struggled to get there for some years. We started out, as I said, some 20 years ago. Then we were at 10% or so. And currently, we're running at 29% or so. That has picked up quite significantly over the years as well. And that translates then to the profitable working capital. So what we communicated here this morning as well, we have been discussing this internally for a while, is that we should clarify where we would like to be. So we are reiterating some profit growth target of the 15% and that we also would like then to continue on our journey towards the 2 billion in EBITDA within 5 years. That was communicated in October of 2023.
So we are basically two years down the road. We are well sort of underway to deliver on that target as well. We also see that along the way that our performance has picked up; we have been growing our EBITDA margin over the years with basically a little bit every year up to a percentage point or so. We feel that we have the opportunity to really push for the 20%. We will have now highlighted that that will be a target for our companies. That will be a target for the existing companies that we have, but it will also be a target for the companies that we acquired. Not everyone will be there to start with and not everyone will get there. On an average basis, we should be at 20% on the divisional and group level, at least.
We are now discussing how to get there with each individual business. We have also, with the years, really been pushing our profitable working capital target. For those of you that have been following these type of companies and us for many years, you know it's been 45% for many, many years. But we feel that we have sort of been well above that for many years. We felt that sometimes that was maybe sort of, yeah, to promise too much to have it very high for many years. But now we have really been delivering on that. We feel that we have basically the opportunity to have everyone at 60%. That is also now a target for all our existing and acquired businesses along the way.
So we set a new target and increasing the 45 to the 60 and then reiterating the return on equity target of 25%, which is the one we use externally. We would also like to highlight that we also would like to, yeah, position ourselves as someone that is really buying good companies and making them great. So we're buying and building Niche businesses. That's sort of the tagline and where we would like to be seen. The old word Teknikhandelskoncern was used some 20 years ago, and they're still used in some areas.
But maybe we feel that buying and building Niche businesses is sort of a stronger wording of where we actually would like to be, highlighting where we would like to be with the companies, highlighting to our organization, but also highlighting to you guys in the stock market where we would like to be and how we would like to be seen. So we also put it there alongside our logo going forward. So a little bit on the financial targets there. We will then continue to scale Lagercrantz. I think that we really feel when we're doing our modeling that we could, with the setup we have, sustainably deliver them more than 15% EBITDA growth annually over a long period of time.
We will be very occupied with, along the way, really driving our organization and culture to sort of bring everyone on board and make sure that everyone is working under our freedom and accountability and simplicity and different types of, yeah, words connecting to our culture and make sure that everyone is on board with that. That is a key area in order to be able to sustainably deliver the 15%. Of course, it's also about finding the M&A opportunities and also making sure that we free up enough cash flow from operations. We have always had the idea that we should finance the growth ourselves. We don't do capital raisings and stuff like that. We would like to finance our growth with our free cash flow from our operations. That is what we will be occupied with going forward.
So we will continue if you move to the next one, please. We will continue to build our five divisions. We feel that they have a very good positioning. We did this reorganization some five years ago. We are now adding more companies to each of the divisions, growing each division along the way. We have sort of made sure that we have the right resources on board and are working with growing these five divisions with the separate companies into the segments where we see some underlying structural growth. So we will continue building the divisions as they are. We move to the next one, please. We will also have a strategic ambition to grow the share of proprietary products.
We are now at, on the moving 12 months, we're at 79%, but we are aiming for the 85%, which goes hand in hand with delivering the 20%, but also hand in hand with delivering the SEK 2 billion in a couple of years' time. So it's a good gradual development also in this metric. I will round off with some acquisitions. Yeah, acquisitions are very important. We will continue doing them. As I said, we have raised the bar to 8-12 companies per year and posted some 90 acquisitions since 2006. And here you can see how it's developed. And compared to, yeah, many others, we have been quite acquisitive here in the last year, so posting some 12 acquisitions with the SEK 1,440 in an annual business volume, which corresponds then to 15%, roughly 15% of the volume we had when we entered this period.
So it's been a nice sort of add-on with acquisitions we made. We are happy with the acquisition we made as well. It's been a good quality, and they've added to the group, yeah, all of them or, yeah, yeah, all of them. No exceptions, really. Just to look at the ones we acquired here in the last quarter, from the same sellers, we acquired the Sit Right and Enskede Hydraul, a company that's located in Sweden or two companies, really, doing a little bit of different things. So Sit Right develops and manufactures proprietary products, including leveling systems under the Sit Right brand and also grapples under the Dala-Gripen brand. So you can see the products over to the right there, related to the forestry and construction machinery within the forestry.
So it's a quite nice business where we have some Niches within Northern Europe or in Scandinavia where we usually are very strong. These companies come in very nicely here. Then we have the Enskede Hydraul, which is more of a spare parts business for the forestry machinery aftermarket as well. You can see we also tried to post sort of some highlights in terms of numbers. You can see down to the right there, there's a very sort of good, nice, growing, and successful business with some EBIT margin of 19%. So a very good add-on to the Niche Products division.
But the bigger one in the quarter was the I Holland then that I touched upon already earlier, company founded in 1946 and making these types of punches and dies and other critical products for tablet producers, so within healthcare or pharmaceutical companies or their customers all over the world, really. So they are very global, based in Nottingham in England, serving customers in over 100 countries. And you can see this is more significant acquisition, both for Lagercrantz. So it's GBP 27 million in sales. And in EBITDA, we're roughly GBP 4 million. So an EBITDA margin of almost 15%. And this, of course, we would like to develop further in order to also be supporting the 20% goal eventually, part of the TecSec division from November 2025. So it's a fairly new one as well. It will come in nicely here in the coming quarter and years ahead of us.
So very nice in that sense.
I will round off with a financial overview. Yeah, we're very happy with the quarter. As said, our sales went above SEK 10 billion. Our EBITDA is at 17.8%, so a new all-time high or 18% for the quarter, as we said early on. And the EBITDA growth is 19%. And the earnings per share growth, which is maybe the most important metrics, is increased by 20%. And the return on equity of almost 30% but 29%, as you can see there. So a very strong quarter and happy to, yeah, be able to present that to you guys today. Very much good work being done by the organization. So thank you. Then we will open up for Q&A, I think.
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 Jakob Marken from Danske Bank. Please go ahead.
Hello, guys. First of all, congratulations on yet another strong quarter and to reach the SEK 10 billion top-line mark. A couple of questions from my side. Firstly, on the new margin target, I'm just wondering, how do you see the margin possibility in the current structure and how much do you think will need to come from acquiring higher-margin businesses? Sort of trying to get an understanding of where you think the group would be in two, three years without the acquisitions and how much you think would need to come from acquiring above-group-average companies.
Yeah. I think the ambition internally will be that for everyone to sort of grow their EBITDA margin with some 2% or so. I think that's the way we're going to work with it. Then I don't think it's fair to expect that of everyone to succeed in that ambition. So maybe one percentage point will come from sort of internally. And I think one percentage point would probably come from acquisition. So 50/50, I would say, in the improvement that you're discussing there.
Okay. Perfect.
I think that's a fair estimate. But I think the ambition will be there for all our companies to sort of improve with a couple of percentage points.
Okay. Yeah. I see. That's sounding reasonable. And then my second question was on cash flows. So quite a lot higher CapEx here in the quarter and also on nine months. I'm just wondering if that's just timing effects or is it a specific company doing a big investment here now? And how should we look at that in the coming couple of quarters?
Now, I think you should view that a little bit on sort of an annual basis. So you shouldn't sort of put too much attention on a certain quarter. I think what we have now is that we have some businesses that are a bit more seasonal. So for instance, we have the Nordic Road Safety business that is very seasonal towards the. They have their volumes coming in during spring. They deliver during summer, and then they're getting paid just before Christmas. So that seasonality affects. So the Q3 should be a very strong cash flow quarter for us and was this quarter as well as it was last year as well. But we have some seasonality when it comes to cash flows from the operations.
So, I think you should basically look more on it from an annual sort of, yeah, rolling 12-month perspective, I think, is more fair to do that.
Okay. And that goes also for the CapEx part?
Yeah.
Yeah. Okay. Perfect. Thank you. That was all from me. So I'll get back in line.
The next question comes from Zino Engdalen Ricciuti from Handelsbanken. Please go ahead.
Good day. Thanks for taking our questions. I'll also start with one related to the margin target. I'd like to hear your reason about how you view it when it comes to future acquisitions, how strict you will be that they should be able to reach this 20% or that, on average, acquired units should be able to reach that.
I don't think you should view it too strictly. I mean, when we look at our portfolio, we think that it's reasonable for us to have 20%. But I think the more important one is really the return on capital employed and profitable working capital. So I mean, we have a couple of businesses that have margins that are lower than 20% or lower than 15% even, but they're delivering very good sort of returns in terms of return on capital employed. And therefore, you can't be too strict on it.
But what we're saying is that we feel that the group and on a divisional level, we should be able with sort of the structure of these companies and how they're set up, most of them, we feel that we should aim for that in terms of how we look at it on a sort of portfolio and, yeah, with the areas and the segments and type of companies that we're acquiring, it's fully reasonable to get to the 20%. That's what we're saying. But it won't go for every company, right? Yeah.
Very good. And then over to Electrify. And as you said, another strong margin and demand quarter. And it sounds like conditions are still good. I'm just wondering if you have anything you think that should be highlighted as extraordinarily positive related to maybe product deliveries or anything like that. And if now we're looking on the upcoming quarter from a demand side, the comps are starting to get more difficult. If there are anything you want to send our way from related to that.
Not really that we would have highlighted. It's fair to say that Electrify consists of some, what is it, 17 businesses, 16, whatever. And some of them are very sort of stable and very delivering sort of, yeah, their components. And Elpress is one of those. It's like a freight train. It's consistently delivered. But we also have a couple of other companies that are more project-related. We have a seasonality and then our NRS business. And we have more of a project-related business in the Mastsystem and also in the Cue Dee company. It's also more sort of, yeah, project-related. I don't think that the quarter stands out very strongly. But we also highlighted that Mastsystem had some deliveries during the quarter that also affected the numbers. But they also had some good order intake that we will take with us in the coming quarters. I'm not promising before, but it might be along the way. We feel that Mastsystem is picking up and they have good growth and they will deliver. But the business is a bit project-related, yes.
Very good. And lastly from my side, if you were able to say anything related to the U.S. in Niche products related to, how do you say it, the renewed political turbulence at the beginning of this year, if you can comment on anything related to any eventual impact you might have seen?
Well, it's been ongoing, and it's been changing sort of every day for a while there. So it's very hard to tell, really, where we're heading. But I think we've seen some sort of slowdown in the market and also quite a lot of it's just currency effects, right? We have a couple of companies manufacturing and shipping from Europe into the U.S. And then we are suffering both from the strong or weak dollar or weaker dollar and the stronger krona, but also then, to some extent, from the tariffs. I think the currency effect is more severe.
Very clear. Thank you. I will get back in line.
Still, they're posting a good quarter, we think. So it's in line with last year. So it's no drama, really. But it's not dramatic. But it's still something there, yes, that we highlighted.
Indeed. Thank you.
Thank you.
The next question comes from Victor Forss from SB1 Markets. Please go ahead.
Hi. Good morning. Thank you for taking my questions. Starting off with Electrify, very strong margin here for two consecutive quarters. Just wondering if you could walk us through the sort of key drivers in terms of volume versus maybe mix and pricing in that margin.
It's not very much pricing. I think we follow the market with the pricing. So that way, we've been adjusting each company. But it's not like someone has really picked up their gross margin. I think it's mostly mix. And mix, in my world then, is sort of in between companies, right? So it used to be quite a lot around Elpress, and they're doing it very well. But to push it even further, we are also adding some volumes from Mastsystem, for instance, that is improving the margins along the way. So it's more of a mix. The NRS business is basically on the average, more on the average sort of level.
I think one addition is maybe that it's very broad-based within the Electrify division. And some are really performing on a high level. But we have a very broad base.
Yeah. Okay. Great. That's clear. Thank you. And then just on the demand side of Electrify sort of, are there any specific end markets to point out? I mean, are there any, in addition to the sort of general industrial and electrification trends, are there any sort of specific end markets that is driving the growth we are seeing right now?
Well, what we are in our companies are providing is sort of broad-based components that are used for the whole electrification. We're building electricity grids. That is one key thing. But most of what we're doing is going out through wholesale and delivering to installers and are using these type of materials. I think it's also fair to say it's not only electrification. It's also the infrastructure part that is picking up. So for instance, when we're building not only electricity grid but also fiber connectors, we have the subsea fiber connectors from Tykoflex, for instance, that is doing good at the moment. We're having also the NRS business with providing road safety that is also. And we're building roads and infrastructure more than we used to as well. And I don't think that's temporary. That is a continuing thing.
It's a growth in that market that will be sustainable for a while, at least.
And in addition to this, there are some defense-related end customer segments with the, of course, Mastsystem but also for Elkapsling and some other entities.
Yes. That's true.
Okay. Great. Thank you. And just a final one on acquisition pace. Jörgen, you mentioned it has been quite high for some period now and, yeah, in sort of a period of a bit slower organic growth maybe. Just wondering on your thoughts going forward. Should we expect the 15% as sort of a sustainable rate, or do you expect it to pull down a bit?
Yeah. I think 15% is on the high end. I think we should expect somewhere between 10% and 15%. That's where we would probably be. And it will be slightly higher when we are sort of generating more cash flow since we don't need it for organic growth because the market is slow. Then we might use a little bit more for M&A. But generally speaking, I'd like us to be measured on the 15% total growth. And then the components, they might vary a little bit along the way.
Okay. Perfect. Thank you.
The next question comes from Dan Heimer from SEB. Please go ahead.
Good morning,[audio distortion] . Dan from SEB on behalf of Max Bacco. We had one additional question, and it was related to the M&A contribution in the quarter. Looks a bit higher than what we had assumed. Is there any seasonal impact in acquired units we should be aware of, or is it just fair representation of profitability here? Thank you.
Yeah. I think there is some seasonality to the newly acquired sort of road equipment companies there, the salt spreaders that we have within Epoke and Friggeråkers . There we have a bit of seasonality that comes in with those companies that we acquired here this summer. So there is a small yes, there is such a component.
Okay. Thanks for the clarification. I think that was all from our side. Thank you.
Thank you.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad.
We have.
The next question comes from Gustav Berneblad from Nordea. Please go ahead.
Yes. Good morning. It's Gustav here from Nordea. Just to come back here on your margin ambition here. I mean, based on your assessment here to reach 20%, do you still expect it to be possible in this market environment, or do we need to see a pickup in the underlying market across your segments here?
I mean, we live in a turbulent world, right? We expect that to happen within reason. If we see a significant downturn or significant sort of slowdown in the market, then, of course, it will be hard. Then we will push out the ambition time-wise. But the ambition is still there, right? But generally speaking, I think we are looking at a market that is at this level or slightly better to get there. Basically.
Okay. Perfect. Yes, sir. Now, maybe just to come back on your comment here previously that you aim to raise the margin here by 200 basis points for or that's the ambition across the group. I mean, it's quite substantial, I guess, for certain companies already running at quite high margins. So can you just elaborate a bit more on this? What key factors are you seeing across here that will raise the margin so much across the group? Is it price, or is it lean work, or?
Yeah. The way we work is that we look at each individual company and try to set up sort of an ambition and support that with activities to get there and to get to that improvement. And those might incorporate all of those things. Price is, of course, important. It might also be that we are cutting out some low-margin businesses. We have a, I mean, even though we are doing well on the total, I think we have still a couple of low performers in the group. And by addressing those we did a couple of those here this summer, addressing a couple of those. But we have a couple more that we need to address. And so it's working on all fronts, really.
By finding the Niches, really building a strong market position in each Niche and doing a good job supporting and serving customers, it's generally something that we can aim for in most of our companies. Then, of course, it will be some companies that have a higher target than 200 basis points and some have lower. But yeah, that is sort of dealt with internally then. So generally speaking, it's 200 basis points for everyone as an ambition.
That's perfect. And then just yeah, yeah, yeah. Thanks. Thanks. And then just one final, last one here on Control. I mean, also, they're very impressive margin uplift year-over-year. Would you say that that's mainly driven by recent M&A, or is there something extraordinary that sticks out for Control besides the seasonality that is in the comp?
Not really. I don't think there is anything sort of extraordinary there. I think we have been acquiring a couple of high-margin businesses, the CP Cases being one of them, but also some of the older ones that are doing it really extraordinary well this year, which is the Radonova especially. But it's nothing that stands out to me. This should be a level they should be at. Then they still have a bit of seasonality. So they have this posting quarter in Q3 is strong, and also Q4 is usually strong for them. But then they have a little bit of a slower summer in that division due to the Radonova business being very seasonal.
Oh, that's very clear. Thank you for taking my questions.
Thank you.
There are no more phone questions at this time. I hand the conference back to the speakers for any written questions and closing comments.
Yeah. I can note a written question from Stefan at Redeye. First part, I think we have already discussed. But he is asking if in the TecSec and International division, we saw organic growth in this quarter. He's asking for specific drivers for this organic growth in those divisions, Jörgen.
Yeah. Well, in the TecSec division, I mean, we are also sort of delivering to penitentiaries and a couple of big projects that are coming there. So companies like ISG Nordic, for instance, had good organic growth in the quarter. And they have had that for a while also in terms of order intake. So TecSec is picking up due to those factors, I would say. Let's see what else. And a few others around that also had a pretty decent quarter. So that was the TecSec. The international division, what did we say there then? Yeah. I think it's also Germany is picking up, improving a little bit. We have some German exposure within the international division. So that's picked up a little bit. So a couple of specific not sort of specific markets and segments, but really no one-offs or anything. It's more of a slightly improved trend along the way, I would say. Good.
So with that, I think we'll round off, right? We are available here. So if you have any additional questions, please don't hesitate to call us. And hope to speak to you all soon. Thank you for listening in, and have a good day.