Welcome to our Q&A session on Momentum Group's Q3 report. I'm Ann-Charlotte, and I'm here to guide you through this session. We have received several questions about the report this morning, and as usual, Niklas and Ulf will go through the key points and try to answer your questions. Without further delay, here's the first question. Despite a challenging market, you are delivering organic sales growth of 3%, with some markets doing better or worse. If the market doesn't take off, will you be able to grow organically?
As we state in the report, it is a mixed bag as regards customer demands. Our focus on spare parts to a large extent means that we are somewhat protected and stable. Of course, in a situation with a long and deep recession, the growth will be hampered. That is not the scenario we anticipate, but rather that the improvement in the economy would probably materialize a bit later than the market had expected coming into this year.
Next question. You mentioned in the report that the expected economy improvement is pushed further away. Can you elaborate on that? Ulf?
As stated, many economies and business people foresaw that the general economy and the industrial sector would improve the second half of this year. Given the report so far, that improvement is now more pushed to next year, a view we also share given the challenges in markets such as Germany.
Here's another question. Demand in the Nordic region was variable, and the market situation is difficult to assess. How do you work with the companies to adapt to the prevailing market situation? Ulf?
Our companies are, for the most part, relatively small, and they target the market segment of limited size, a niche. This means that they have very close relationship with their customers and are well adapted to understanding the market changes. Based on this, we decide on our priorities when it comes to recruitment, which customer to focus on, et c. It starts and ends with understanding your customers and their demands. We work very closely with most of the segments in the Nordic area, like pulp and paper or steel and mining. We stay close to the customers and have the ears on the rail.
Okay. You delivered your highest EBITA margin for a quarter to date. What key factors contributed to this improvement, especially if you compare to previous quarters? Niklas?
Yes, thank you. The quarter was our best so far as regards EBITA margins. This was a consequence of improved margins in both of our business areas and especially the infrastructure area. Organically, we improved in the companies, and we had also a positive contribution to the margin from acquisitions. The focus on cost control and higher efficiency in acquired units played a critical role in enhancing the profitability.
Next question. Momentum Industrial will move its central warehouse in Q1. How much and when will this affect earnings? Is there a risk that sales will be negatively affected during the period of the move? Niklas?
Yes, thank you. Well, we have a budget for the move, of course, but we will comment on the costs in the coming reports as they materialize. We are prepared for the move for a long time, and do not foresee any significant impact on the sales performance in Momentum Industrial. Remember that an important part of their business model is to have local stock available in each branch.
You did not make any acquisitions during the third quarter. How come? What does the pipeline look like for the rest of the year? Ulf?
We do not rush into acquisition just to deliver on some kind of quantitative ambitions. We do the acquisition when we have done our homework and feel that the timing is correct. The pipeline is solid, but we have not committed to a certain timeframe. Bear in mind that acquisitions is one mean to reach our EBITA growth of 15% per year. We also focus on developing the business we have with organic growth.
The final question for today: What is the outlook for the group, considering the global economic conditions? Niklas?
Despite the challenges rising from a cautious market, relatively high interest rates still, and an uncertain global security situation, we remain optimistic. Our strategy focuses on active ownership, profitability, and employee development. We are confident in our ability to continue delivering growth and profitability, supported by a robust portfolio of businesses and a clear capital allocation focus.
Thank you for listening in. If you have any further questions, please contact us on ir@momentum.group.