Thank you very much, and welcome everyone on this call. With us also is Gunilla Öhman, our head of investor relationships. Starting with who we are as NCAB. NCAB, we are a supplier of printed circuit boards, and those are the products that you see on the left on this slide. They form the basis of any electronic product. Our customers, whether it is contract manufacturers or OEMs, they will mount the semiconductors and microprocessors and other electronic components on the boards to create the intelligent modules in their products. The key takeaway with our product is that products like PCBs, unlike the semiconductor industry, are bespoke products. The products, the PCBs, are uniquely designed for the product they are going into, and that means that it is an engineered product with a lot of continuous changes during the lifetime of the final product.
Here is where we, as NCAB, support our customers throughout that life cycle. We are a company focusing on the high-mix, low-volume end of the market. We are not involved in the really high-volume applications like consumer products, mobile phones, PCs, et cetera, but rather typically industrial applications or medical applications, where the product value in relationship to the PCB itself is significantly high. The PCB is maybe sometimes only 1%, 2% of the total bill of materials. Yet, the demands on these products are very high in terms of reliability and technology. Given that, say, the PCB is a small part of their total bill of materials, even larger companies have a relatively small spend on printed circuit board. This makes it both hard and challenging for them to maintain the competence and resources to work with PCBs professionally.
Even if they do, they are still challenging to have enough spend to really get access to the leading PCB manufacturers worldwide. This is where we again make a difference, both by being able to support them with engineering, but also by combining the spend of our global portfolio of more than 3,500 customers, we can have access to the best factories worldwide. We are in this high-mix, low-volume area. We are focusing with supplying the PCBs for demanding customers. We thrive in areas where there are challenges, whether they are technical or quality-wise, and we aim to supply with zero defects, produced sustainably at the lowest overall total cost for our customers. It is a very complex product, highly engineered, a lot of challenges technically, quality-wise, and as we see today, also from a supply perspective.
Our vision is to absorb that complexity, whether it is technical or commercial, and make it easy for our customers. Our model is based very much on being local, close to our customers. We have therefore built up a network of companies in local markets where we are covering some 19 markets today with local companies. Yet, even though we have fully outsourced manufacturing, we are still very much invested in the manufacturing part of the supply chain. So out of our close to a little more than 680 specialists around the group, we have around 120 of our colleagues working solely with securing the supply chain, both in current deliveries but also in future development. If we look at what is going on right now, the global PCB market has resumed very strong growth after a few years of slowdown after COVID.
This is driven both by general recovery in industry, but in the last two years, we've seen a rapid expansion also of the data center market. Data centers per se is not really the market where NCAB has its main business. This is typically more high-volume applications. We can participate sometimes in more of the infrastructure areas. This rapid growth that we're seeing in the global market right now, where the market has gone from around $85 billion in 2025 to now being projected to be around $115 billion , this rapid growth is creating a lot of supply challenges in the whole industry. This rapid injection of demand is occupying or sucking up available capacity. What started as being challenges in the PCB manufacturer's capacity already in 2025 and in early 2026 has now spread to the raw material supply.
What you use in the high-tech data boards require certain high or low loss materials, et cetera, and that is now skewing the supply chains of raw material, where more and more production capacity is being directed over to these kind of materials, which is also creating then further bottlenecks in regular industrial applications. As you can see, NCAB is also now showing a really strong growth in this market, and that is being reflected in our third quarter. If we move to the third quarter, we see a rapid growth in our order intake. Our order intake is up 166% versus prior year. This is very much a combination of underlying, good double-digit growth for us. Then we also see significant forward orders from customers and also significant price increases in the market, all driven by the shortage in general supply.
We have solid underlying growth in all of our markets, and we can see special strong growth in areas like industrial automation, defense areas, but also in the deliveries where we supply to infrastructure for data centers. We also see a very good development in the net sales area, where we're now seeing growth of 54%. All of our regions also here are performing well, and we start to see some of the pricing effects from Q1 to start having an effect on our top-line numbers also. We are very much, through our strong network and our factory management organization, becoming somewhat of a safe haven for customers. We have sometime what we call a double positive effect from both ourselves having, say, a strong position with leading factories, and those leading factories also maybe have better than average access to raw materials.
We think we can give our customers an unfair share of available supply in the market, and that is partly driving our growth in this time. We also see in the quarter a positive contribution from Board Shark that was acquired here in late June. With the growth in net sales, we also see a strong growth in the EBITA versus 2025. We get a good leverage on the growth, but even if we have some minor FX headwind, predominantly from revaluation effects in the quarter. Gross margin declining marginally as we are not getting fully transferred the price increases to our customers, but still quite stable. M&A, we are continuing the work and expanding, and we've also announced one further acquisition. Also important from the fact that we're now making a step into our east segment, and through the acquisition of the company, IMP Electronics Solutions in Australia.
This is a company based in Adelaide, and they are selling predominantly in Australia and New Zealand. A company also, like NCAB, focusing on quality and high-tech applications, predominant in industrial and defense sectors. Revenue in 2025 was around AUD 9 million, and the EBITDA margin is in line with NCAB overall. We will take over 12 employees, of which six are in Australia and six other colleagues are based in China. The transaction was signed here in mid-September, and we expect to see the closing happen later in quarter four. If we then look more specifically at the numbers, we can see in the quarter, order intake, as I mentioned, up 166% to now reach SEK 2,620 million compared to SEK 985 million in the prior year. Organic growth is 155% in US dollars, and that gives us also a very healthy book-to-bill of 1.79.
Net sales up 54% to SEK 1,463 million compared to SEK 949 million, and this represents an organic growth of 45% in US dollars. EBITDA grew with the increased revenue, and reached SEK 211 million compared to 110 in the prior year, and we had SEK 8 million of adverse FX effect. Gross margin, as I mentioned, declined slightly, 34.8% versus 35.2%. Our EBITA margin climbed up to 14.4% in the quarter compared to 11.6% in the prior year. We are also happy to have a strong operating cash flow of SEK 177 million compared to SEK 118 million last year. Our working capital is up versus last year, but somewhat stable versus prior quarters. Our net profit reached SEK 129.8 million compared to SEK 61 million last year and an EPS of 0.69 versus 0.33. Tim, over to you.
Thank you, Peter. Let us dig into the numbers. If you see here, over the last 12 months in quarter three, we had a gross margin of 35.1%. We have been quite happy to keep a relatively stable gross margin, even with everything that is going on in the market that you heard about from Peter. Slightly below 35% within the quarter, but 35.1% on the average. If we take a little bit more of a look into the order intake and the net sales, what you see in order intake is a total development of 166% up, backlog build of about SEK 1.2 billion , and comparable units in USD up 155%. When we dig a little bit into that 155%, you can see approximately 50 percentage points impact coming from higher prices and around 80% impact coming from forward orders.
When we then turn to net sales, we see that increasing around 54% or in comparable units in US dollars, around 45%. That again, as you heard from Peter, is a book-to-bill of nearly 1.8. We saw a good impact within the quarter of positive pricing from the orders in H1. We have also seen a continued positive trend in several different industries, some of which being EV charging, aerospace, and defense, as well as quite a few industrial customers. When we then turn and take a look at the EBITDA, we see around SEK 211 million as opposed to SEK 110 million in the prior year. A very strong increase coming from high operational leverage, a good pass-through from pricing. We also, as you heard from Peter, had a positive impact coming through from some of the recent M&A that we have been doing, including Board Shark.
And then, to offset all of that positivity, we did have a little bit higher costs on the SG&A side from higher variable compensation. Overall, we ended the quarter at an EBITA margin of 14.4% versus 11.6% in the prior year. As you heard, stable gross margins in the quarter. Then maybe over to you, Peter.
Thank you. If we look into the individual quarters a bit closer, we can see also here all quarters seeing their positive effects from pricing and forward orders. If we look specifically at Nordics, we can see the order intake is up 188% to SEK 599 million compared to SEK 208 million last year. Organically, this is a growth of 159% in SEK and 158% in US dollars. We see pricing forward orders, but we also see very good development in energy applications, defense, as well as industrial sectors. Net sales up 43% to SEK 290 million compared to SEK 203 million. This represents an organic growth of 29% in Swedish krona and 27% in US dollars. We see continued growth in the power and defense, and also supported by general industry.
With the growth, we see EBITA improve nicely to SEK 40.4 million compared to SEK 25.2 million, and the EBITA margin climbing up to 14% versus 12.4%, which is maybe more in line with our historical performance in the Nordics segment. Leverage, here again, we get from the net sales growth, which helps to drive the margin development. We also see a positive contribution from Multi-Teknik on the EBITA side. Looking at the European segment, also here, strong order intake growth, 143% to SEK 1,205 million compared to SEK 496 million. Strong pricing effects, forward ordering, and solid demand development from both industrial but also automotive customers. For automotive, this is then predominantly the truck and bus industry or heavy equipment, not so much passenger car. Net sales improved by 35%, to SEK 628 million compared to SEK 464 million.
We see basically now a good, strong development in most of our markets, but some that stick out are markets like Germany, Netherlands, and the U.K. But all markets are showing growth. EBITA improved to almost SEK 81 million compared to SEK 46 million in the prior year, and EBITA margin improved to 12.8% compared to 9.8% last year. Here again, it's a strong leverage from the net sales growth in the segment. Then we move to North America, where we have a very strong order intake which is up 194% to SEK 650 million , compared to SEK 221 million last year. We see this in US dollars, of course, it's the same number almost, with little FX effect. It's forward orders, and a large part of the delivery is extending well into 2027.
But there also here are positive development in defense and energy, and notably several larger orders for data centers, similarly what we had in quarter one, also in this quarter. Net sales are up 89% to SEK 424 million versus SEK 225 million last year. It is also 90% in US dollars. A large part of the growth is boosted by deliveries of larger projects won in H1, where we had both some scientific projects and data center infrastructure projects that we are now delivering out. We have also seen a continued strong development in our advanced prototyping business, which is also nice to see. EBITA increased to SEK 71 million compared to SEK 35 million last year, and it corresponds to a margin of 16.7% versus 15.4% in the prior year.
And here we see, of course, a very positive leverage from the added net sales growth, despite that actually some of these larger projects have a slightly lower gross margin. Looking then finally at the East segment. Order intake also here continued very strong as it did in quarter two, with order intake increasing 180% to SEK 166 million compared to SEK 60 million in the prior year. We are capitalizing on the growth in high-tech areas, and I think also here with the challenge in the supply base, NCAB's strong position with the factories as well as growth of sales that we have with global factories is helping us to show this extraordinary growth in the East segment. Net sales are up 109% to SEK 121 million compared to SEK 58 million in the prior year.
And we can see EBITA increase to SEK 25.5 million compared to SEK 9.5 million last year, which corresponds to a margin of 21.1%, which would be compared to 16.4% in the year before. And here, of course, the strong top-line growth helps to create leverage on the EBITA side. Tim?
Thank you, Peter. So to talk you through a few additional financial KPIs here, return on equity up to 21.7% from 14.1% in the prior year, so a significantly stronger earnings profile. Net debt down to 1.2 from 1.6, so a lot of dry powder for additional M&A in the future. Equity to assets ratio at 36.4% versus 41.5% in the prior year. Working capital, both in absolute terms and in relative terms, up a bit from prior year, especially as we support our customers through difficult times, which you heard from Peter. And available liquidity, a bit over SEK 1.2 billion ready to go. So maybe over to you, Peter, to talk a little bit about our pipeline.
Yeah. We consistently continue to develop our pipeline, and as we have said before, we have come from a historical situation with predominant focus in Europe and then into North America, extending further into looking at our East segments. With that, actually, I am very happy that we were able to close the deal here in Australia, even if it is not the biggest of our acquisitions. It is a very good fit for NCAB, and it is also an important first step to expand our position geographically in the East segment. A very healthy continued pipeline and ongoing discussions for the future.
As we go ahead, we continue with our integration process with the companies we acquire, where, of course, important starting point is to gain the confidence in the customers from the company we acquire, as well as the employees, which is really the two things that we are acquiring as a starting point. Then over time, we mature and look more into how we can together find the best way of taking the company forward. We are continuously looking to buy good companies. An important part in the early stage is always to understand how the companies operate and in which way they differ, so that we may also learn from the companies we acquire, and not only move them into an NCAB model. Overall, we integrate, and we are looking to find important synergies over time.
Of course, we want to see that the acquired companies, that we can support them to grow long-term by giving them access to our factory panel and our marketing activities, et cetera, as well as helping them drive quality and service through our factory management organization. We, of course, also give them access through our factory side and our purchasing power and our logistic solutions, which can help them also save cost. Then finally, it is very much, of course, cross-fertilization of know-how between these companies. Not only can we help these companies, but these companies also help to make NCAB better over time. That brings us then to our concluding slide regarding our overall strategy.
We are a company focused 100% on printed circuit boards, and we continue to stay focused in this area and believe very much in continuing with an asset-light model where we do not take ownership of factories, but rather build strong partnerships. It gives us the flexibility and agility to face both challenges and exploit opportunities in the market. We are, however, investing continuously in providing better and better technology and service for our customers so that we may grow our market shares in existing markets and deepen the relationships with our customers.
As we have taken the step now as an example with IMP, we are looking to expand the number of markets and our position in the markets. We typically look to do this through M&A as this is very much a relationship business. This through an M&A, it gives us a faster step into the market. We can then help to grow from that position. Finally, it is still a very fragmented market. NCAB is the undisputed global leader in supply of printed circuit boards, but yet we only have a few percentage points of the total addressable market. We are looking to find opportunities to consolidate also in the markets where we already have a position since many years. Thank you very much. With that, I think we open up for 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 Jacob Edler from Danske Bank. Please go ahead.
Hi, Peter, Tim, and Gunilla, and thanks for taking my questions and congrats on a really strong quarter. My first question is really on pricing. It was 50% in the order intake here in Q3, up from 20% in Q2. What are you seeing in terms of the pricing trend here as we are heading into October? Is it continuing up? What is your best on the price development here as we look ahead? Do you still think that we will see prices at a high level until the constraints ease at the end and we are into mid 2028? That is the first one.
It is a little bit similar to what we saw in quarter one and quarter two, that you say the 50% we see is an average. I think we saw quite a big movement very late in the second quarter and early in quarter three. We do not see the market improving. It is hard to predict whether prices will continue up further, but we do not really see the market easing up until maybe second half of 2027. I think that is the general view, just based on the continued ramp-up of AI investments, as well as what we can see in terms of new capacity, in terms of raw material production coming online. We do expect the supply markets to be quite challenging until at least second half of next year.
Very clear. As prices remain high or continuing up at least from Q3 to Q2, do you still see here, the last couple of months that the pre-buying activity is continuing? Obviously, we saw that in your numbers, but as of October here, is pre-buying activity continuing as well?
I think we saw extreme pre-buy or forward orders being placed here in the third quarter. I would expect that at some point, say when the supply situation somewhat at least maybe doesn't get better, but maybe at least it doesn't get further worse. At some point, you're going to have a situation where customers have already placed forward orders, and they will just continue to add months at the end. So it's not unforeseeable that the forward orders, it may continue for a few more months or maybe a few quarters. But at some point, I think we're going to see the forward ordering diminishing. With that, we're probably going to see our order intake total number come down as customers are, say, not placing just forward orders anymore.
Yeah. Tying those things together, as we just discussed. Now you had an order intake of 2.6, and if I would strip out the pre-buying element, I would be at, let's say, 1.7 or 6.9 annualized. That kind of underlying level, is that a level that you think you can sustain for a couple of quarters here as we look ahead, if I strip out the pre-buy element?
It is, of course, hard to judge.
Yeah.
I think we have solid positive development underlying in our business. To what extent potentially pricing could have a dampening effect on demand, it is also hard to say. Right now, we do not see that, but it is hard to make forward predictions what this will do.
Okay. Very clear. I just had a question on the gross margin. I think you are doing a great job here considering how fast prices are moving. It was at 34.8%, so just below the kind of 35%-36% range. Would you say that the main driver behind the strength is that you have kind of revamped the strategy of the five-day quotation window instead of 30 days as previously? Is that helping you in this environment?
Yeah, I think that has been an important part. Of course, it is very hard to get fixed pricing, and to some extent, we are also subject to what you can call dynamic pricing, where at some extent, because if our factories do not have material at home and they need to order material, they may need to pay a higher, different price when they get orders which are placed further out. That may mean that prices may even need to be adjusted upon delivery. But I think it is a very, say, unique situation, but it has been building up over some time, and I think we have had close dialogue with our customers and communicating around this. So I think we are working with our customers, and they understand the situation. This is something we will need to deal with.
I think the biggest problem, prices are, of course, a big challenge, and we are working hard to minimize the impact for our customers. Yet, the even more important right now is to be able to secure supply.
Yeah.
I think there we are so far performing extremely well. We have still extremely good both delivery quality and delivery performance data, which actually is very comforting and very helpful for the customers.
Very good. I just had a question on margins and OpEx growth, because the last component situation back in 2021, 2022, the margins on EBITA peaked at, let's say, around 14%, but this was in an environment where the gross margin was 2 to 3 points structurally lower. Now you are already at 14%. Book-to-bill is quite notable. FX is turning positive. IT costs will be on, heading into next year. So, in my view, margins should scale quite okay if we look ahead. Is there something missing here on the OpEx side of things? Because also there, the OpEx side is quite fixed, at least the majority of it, even though there are variable elements.
In principle, of course, leverage helps, but of course, we also need to ramp up to handle the extra activities. I think we can see tremendous growth in the number of quotes and activities we are doing. You can see it a little bit in our headcount development. I think we have maybe added in the order of a little bit more than around 10, 15 people since Q2. I think since Q1, we are up around 30 or maybe 25 if you take out Board Shark. So we are making some additions as well. Still, we do aim to, of course, to have a healthy growth and profitability with that growth.
Good. Sorry for taking up so much time, but in Q1, you took $20 million of larger orders that was connected to data centers and also the research center, right? Was most of that delivered now in Q3, or is there still some to be delivered in Q4?
I think the major parts, but maybe not fully all.
Yep. Very clear. Thank you so much for those answers.
Thank you.
The next question comes from Jonny Jin from SEB. Please go ahead.
Thank you, and good morning, Peter, Timothy, and Gunilla. I have a couple of questions as well. I want to start a little bit on the orders. Obviously, a very strong yearly quarter, which is good to see. On the forward orders here, do you see any signs of double ordering? That is that the same customer can place orders with you and other suppliers as well. Is there that type of dynamic on the market right now?
No, we don't see any signs of that. Typically, these are engineered and validated products, so that is not something we are seeing at all.
Okay. That's good. That's clear. I know that you are very good at securing supply and such, but there's no sort of risk that customers buy too much and cancel orders, or is there any type of dynamic that we need to be aware of?
No, since all of our products are bespoke designs, they are firm orders. None of our products can be used for another application. All the orders we have from our customers are firm and will be delivered. You could always argue, is there a risk that some customers are right now hedging themselves and building a little bit of inventory? That, of course, can be there, but that is hard for us to judge. I think we try to separate out what our forward orders where actually they are ordering ahead of time and placing them out, and that we can separate out as we have communicated. Of what we are delivering, if there is some part of that which is also where they are building a bit more inventory than what they had before, that is a bit hard for us to judge, but it is not impossible.
I think that is some possibility as well in these days.
Even if there was a situation where some particular customers had placed orders and needed to change the delivery pattern, for example, there is so much demand in the marketplace right now for material that we could often find a different customer for a certain type of material. It rarely happens from what we see, but we could.
Okay. That is good. Thank you. That is clear. Then on the data center order in North America, I think it was quite big in the quarter as well. Can you just shed some more comment about this, how concentrated are these individual customers, and is this sort of a recurring business or is this one of projects, or how is the pipeline looking for this type of business entering 2027?
You could argue that the products are not, you could say, specifically data center product, but it is more in the electrical infrastructure products. And of course, these are products that may reoccur going forward as well. So these, of course, have been larger projects, but we also foresee that these are business that could continue to also in 2027 for us.
They can just be a bit lumpy sometimes.
Yeah.
Yeah. Okay. Sounds promising. Just one from my side, and that is on the gross margin transfer. We talked about this a little bit, but do you expect to be fully compensated in Q4 sort of chasing, given the price dynamics on the market right now?
I think our aim, as we said, has been to kind of maintain our gross margins in that band, 35%- 36%. It is, with the rapid dynamics we have seen, somewhat challenging to maybe maintain that in this phase. It is our aim to sort of maintain stability in the gross margins. I think we are working well with our customers and trying to be open and transparent on what's going on, so that we are working jointly to secure supply, and we are able to transfer the cost increases, which are inevitable in this day and
Understood. Thank you for all the answers, and that was all for me, so have a great day.
Thank you.
Thanks, Jonny.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Johan Lönnqvist Sundén from DNB Carnegie. Please go ahead.
Good morning. Thank you for taking my questions.
Good morning.
My first question is about lead times and curious your take on how fast the kind of order that you have taken the last, say, two quarters will be kind of converted, or we are still talking about two, three quarters, then obviously you have some pre-buying that comes further into 2027. But just to have a little bit of your view on how much of a volume contribution we could expect in the coming, say, two, three quarters as there has been some, obviously, at the supply chain, and I guess you need to struggle a bit to deliver.
Yeah. I think the way you can think about it is that lead times, as we have been saying over the past couple of quarters, have stretched out to be about two quarters on average. It does not always work that way. We do have some quick turn orders as well, where we can deliver some things within the very next quarter after the order intake. It is not that much, but it is there. Typically, if you remember, quarter four is always one of those quarters where deliveries are a bit short in December and end up happening in January, so that moves a little bit more of that type of thing into quarter one. Then you could imagine then that you would see more of it in quarter two and on. Some of these forward orders can be almost full year orders in some cases.
But I would say the bulk of it is over the next couple of quarters.
Maybe you highlighted that in the report, but was the data center orders that you received singled out how big they were and when you expect to kind of deliver?
I think they are north of SEK 200 million, but we have not sort of broken out exactly when they will be delivered. They will be staged.
Yeah, largely over 27.
Okay. Just to get the sense of the estimate profile, is it like we start before Christmas, or is it after 2027?
No.
No.
These orders will be delivered in 27.
Yeah.
In general, delivery abilities, you have showcased during this quarter that you can deliver quite a lot of volume, any risk that you can't fulfill your kind of commitment, so to say?
No, I think we are actually in a quite good position. We are working very closely with our factory partners from both, of course, through our local factory management organization, but we are also from our group organization management, traveling on a consistent basis, meeting with our factories, and not only are we important customers of those factories from our spend profile, but these are also factories with whom we have been working in many cases more than 20 years. So we have very long-standing relationships with our partners, and that also plays in our favor in these challenging times. So I think we have very good positive support from our factories and are able to get what we call our unfair share of supply, so that we can really keep both existing and potential new customers happy.
Excellent. Those were my only two questions. I get back in now. Thanks a lot.
Thank you.
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.
There are no written questions. I just would like to remind you that we have a Capital Markets Day, which is due the 19th of November, and we are going to send the invitation out next week, so please look out for that. Maybe we have one more question from the telephone conference now. No, we have a written question here from our Shareholder, from Anicom, Alexandre Weinberg. He is wondering to what extent is the unfair share leading to acquiring new or larger clients?
This is very hard to quantify, but it is a very good question. We do see both with existing customers that we see that we get opportunities to take over certain projects, but we also see customers where we have been working with a long time where we are now getting opportunities to quote and start delivering other products. I think our business is extremely relationship based. It takes a long time to make changes, and in some cases, customers may be reluctant to change if it is somewhat working okay. I think this situation right now, it is opening the door, and I think that means that maybe it does not have a huge impact on the numbers we are reporting today, but it bodes well for our long-term development.
That sounds like an excellent end to this telephone conference, and thank you very much, Peter and Tim, and also for all of you who listened in. Welcome, as I said, to our Capital Markets Day, 19th of November. Thank you.
Thank you very much.
Thank you.