Magnus Welén and CFO Helena Burström will present report for the third quarter of 2025. After the presentation, there will be a Q&A, so if you have any questions, you can submit them to the form to the right. If you're calling in, you can raise your hand by pressing star nine and then use star six to unmute yourself when given the word. With that said, I hand over the word to you, Magnus.
Thank you very much. Hello everybody, and welcome to the presentation of the Q3 results of Prevas. My name is Magnus Welén, and I'm the CEO of Prevas. With me today, I have...
Helena Burström, CFO.
At this meeting, we have a brief agenda. We will start with a short introduction, review the financial performance of Prevas for the third quarter, review the market, and finalize this session with the Q&A session. Looking into the third quarter 2025, Prevas has performed a moderate growth for this quarter. We delivered net sales of SEK 355.2 million compared to last year of SEK 351.9 million. That equals a growth of around 1%. Out of this, acquisitions is 2% positive growth, and then we have a reduced organic growth with minus 1%. More or less, in total, we are on 1% growth for the third quarter. Looking into the profit, I'm very glad actually to see that we now are increasing profit and EPS compared to last year. We are delivering an EBITDA of SEK 30.0 million compared to last year of SEK 26.5 million.
That equals a growth of 13% of EBITDA. We're reaching an EBITDA margin of 8.4%, which is better than last year's 7.5%. The main reason that we see this kind of increase is it is a result of all the actions we have taken in order to adapt Prevas to the present market situation. All the efforts we had made in terms of focusing on sales. A lot of actions now are giving results also in the profit, which of course is very, very positive. The majority, the largest part of the increase, is actually due to improved margins and profits in Finland. I will come back more in detail to that on the slide later on in the presentation. The operating cash flow for the month was SEK 21.3 million compared to last year of minus SEK 6.7 million.
That is also, of course, a positive part for the Q3 results. Most important, of course, is the EPS. What we see is that the EPS, the earnings per share, increased SEK 1.34 compared to last year SEK 0.75. That is actually an increase of 79%. All in all, if we accumulate the year, Q1 to Q3, Prevas is performing 3.5% net sales growth with a 7.2% of EBITDA. I'm very pleased to see that we now see that the actions and the hard work we are doing actually also show in the figures. If we go more into the details, we can see that the EBIT for Q3 was SEK 26.1 million compared to last year of SEK 17.9 million. That is an improvement of 46%.
The reason that we see a big deviation in EBIT compared to EBITDA, a better improvement, is that last year we had quite high costs related to the acquisition of Enmac Group Oy. That is explaining the increase in EBITDA that was stronger than the EBITDA result. We can also move forward then to see if we zoom out a little bit, we can see that the net sales of Prevas over time are increasing. Prevas are growing. I looked into the figures and looking into 2020, the net sales for Prevas was SEK 771 million. And now rolling 12, we are more than double the size. So Prevas has grown more than we are double, more than double the size we were in 2020. We continue to grow. We have also grown in this quite challenging market climate that we have seen right now.
We can see that for a period of time. Looking into the EBITDA and EBITDA margins, you can see in the other graph that we have had a quite tough time. We've been working very hard in Prevas in order to take the necessary action to adapt to the market, to the quite challenging market that we have seen. You also see in Q2 that we also took some extraordinary costs related to restructuring in order to increase the efficiency of Prevas to the present situation. What we see in Q3 now, if you look into this graph, is that actually Q3 was better than Q3 of 2024 and more or less in line with Q3. I think this is a very positive signal. As you can see, the EBITDA margin is also increasing. With this, Helena, could you explain a little bit more about the financial position for Prevas?
Yes, absolutely, Magnus. As mentioned previously, we have had an increase in operating activities with SEK 28 million compared to last year. This is mainly driven by a stronger result. Working capital contributed positively, improving by approximately SEK 19 million, primarily due to decreased accounts receivable, lower personnel-related liabilities, and higher accounts payable compared to the same period last year. In the previous year, cash flow was negatively impacted as well by a calendar effect. Cash flow from investment activities decreased by SEK 170 million compared to the same quarter last year. This quarter's acquisition of OEM Sweden AB impacted cash flow by SEK 17 million, while last year's figures reflect the acquisition in Finland. Cash flow from financing activities decreased by SEK 121 million compared to last year, affecting cash flow negatively compared to the corresponding period last year.
Last year's loan related to the acquisition of Enmac Group Oy in Finland was recognized. The overdraft facility of SEK 100 million was unused at quarter end compared to last quarter last year, SEK 10 million. The cash at quarter end was SEK 7 million. Prevas remains well below the financial target, maximum 2 times EBITDA, and net debt in relation to EBITDA is 1.06 x. The equity ratio amounts to 50% in Q3 2025. In all, Prevas has a strong balance sheet and a solid financial situation. Back to you again, Magnus.
Okay, thank you, Helena, for updating about the financial position of Prevas. Now I would like to spend some time explaining more what has happened in Finland. What we see in Finland is extremely positive development. Why is that? The reason is that we have been working very hard. Our great Finnish team has been working. They have taken action. We have reorganized the organization in Finland. We have worked with temporary layoffs. We have worked with cost reductions. We have also reduced the staff in some areas. All of this is in order to increase the efficiency of the operation in Finland. We have also, and that is more important, focused a lot on sales. What we see now is the effect of all of this hard work that this team has been working with in Finland.
All the actions we have taken are now showing off also in the figures. This is actually the fourth quarter in a row where we see a positive development in terms of EBIT in the Finnish operation. For the third quarter of 2025, Finland delivers 8.9% of EBITDA and 34% of organic growth. That is impressive and a very good step forward. It is not according to our financial target of 12%, but it's a good step forward. For me, it proves that the great team we have in Finland, they have the capability and the ability to deliver. That is extremely important. More concrete, why can we see this kind of increase? We see now that we have a higher share of project business in Finland. Our team in Finland, they are very, very good in running larger projects where we work with engineering, where we work with design.
We work, we also buy the material, and we also do commissioning of different solutions in Finland. What we see now is actually the effect that when we ramp up projects like this in the Finnish operation. We right now are running projects, for example, for Cyclo in Finland, Cyclo Oy, where we have the responsibility. They are building a new plant, a new manufacturing line within the recycling business, and Prevas is responsible for designing the control system, installing the control system for this new manufacturing line. Very, very good. Another big project we run right now in Finland is for the defense industry. Of course, I can't tell you what it is, but it's a very, very interesting project for our engineers, also bringing a very high value to this defense customer we're working with in Finland.
What we have seen during a number of quarters as well is a positive development in terms of the order backlog. This is in a very competitive market, and the business climate in Prevas is not superb. It's still a tough market. Thanks to the efforts this team has been doing, we have slowly, slowly, gradually increasing the order backlog into a more normal situation for the Finnish operation. That is very positive. We also now recruit in some of the specific areas in Finland where we have orders, and we need to recruit more people in order to deliver that. Generally speaking, the market in Finland is still very tough. This increase, I would say, is not thanks to a huge increase in the business climate. It's more a result and a consequence of the actions taken by our great team in Finland.
A little bit of view on the market. What we see in the market today is a very strong demand in the defense area and in the energy area. Looking into defense, as you can see in the industry breakdown, defense now is 15% of the total turnover of Prevas. That is an improvement compared to last year of 13%. Actually, the growth in Q3 has been increasing, and we delivered a growth of 33% in net sales to the defense industry in the third quarter. It's a quite strong growth in that area where we see the demands. We are also growing in the energy area, and the portion of our sales today is 12% for Q1 to Q3 compared to last year, 10%. Also in energy, we are growing.
What we see is generally a flat market with quite high uncertainty, and we also have a significant variation in customer-specific demand. Some customers are growing. Some customers are very reluctant. They're pushing decisions forward. It's a very dynamic market in that sense. I wouldn't say that I see a strong upturn, and I don't see a big downturn. It's a quite stable market in that sense. What we see is a slowdown in Denmark, and that is related to one company, I would say, mainly. It's Novo Nordisk. Novo Nordisk is not a huge customer for Prevas, but we see that the effects in the industry in Denmark, as it's quite dependent on Novo Nordisk, now when they are reducing, they are saving money and reducing staff in Denmark. That sort of say what we see now in Denmark is a slowdown.
I would say that it's mainly driven by the reductions that are done by Novo Nordisk. In that area, it's a little bit more tough. We see some positive signals as well from the export industry, some of the export companies, not the automotive industry. As you know, Volvo Cars has been reducing quite substantially. In that area, we do not see positive signals, but from other companies working on the export markets from the Nordic, there we see some positive signals. We can look into—wait, I forgot one thing actually. What we also see positive signals from is actually within the life science area. We have some customers we've been working with for many, many years, and what we see now in at least two of our main customers in the life science is that they are increasing the spend in R&D.
That is a good signal, and that affects Prevas in a positive way. You can see in this slide that the five largest customers in Prevas, Saab, Ericsson, ABB, Hitachi, and Sandvik, are less than 25% of our total turnover. I know that you all that listen to this presentation are also listening to other companies' presentations. All of these have delivered quite good Q3 reports as well. There are some positive signals, although it's not a big upturn in the business, but we see some positive signals. Generally speaking, the demand for complex solutions where Prevas really comes to its best remains strong in the markets as such. We also still see quite high competition in some parts of the market, for example, within the software area and general IT. It's not a big part of Prevas, but we still see that there is high competition in those areas.
All in all, a flat market development, but there are areas that are growing rapidly, like in the defense area, and we work agile, and we are growing in the areas where we see the demands. Talking about growth, I would like to explain to you a little bit about EAM in Prevas. EAM is Enterprise Asset Management. Prevas has a strategy to grow in unique niches where we are creating unique value for our customers. EAM is one of those areas in Prevas where we have a unique niche. In this area, we are talking about value-creating asset management. We are a partner with Hexagon. Hexagon is developing and selling, I would say, the best software for EAM in the world. They are partnering up with us for the Nordic market, and we are actually a value-added reseller for Hexagon.
This means that we are not only delivering expert services for implementation, but we are also a reseller of licenses. In order to facilitate this area and to grow more rapidly, we have now shaped a Nordic organization. That means that we have people from different regions in Prevas that we have gathered together into a strong Nordic organization in order to enable faster growth in this very, very interesting area. Recently, we have received quite large orders in this niche area from Enscale. Enscale, for example, is a company building data centers for AI, growing rapidly on a global basis. It's a UK company. We have received orders from Green Cargo for working with EAM implementation and more efficient maintenance within the train industry. Trafikverket is another big order we received together with SAS. It's a partner of ours.
Sysav is another, it's a fourth company that we received orders from, and they are working within the recycling area in the south of Sweden. All in all, we see a good order intake in this niche area, and we look forward to continued growth. Why is this important then, you might wonder? This is an area with a higher margin than the regular part of the average of Prevas. That is one reason. Another reason is our unique niche competence and the strong strategic partnership we have with Hexagon. Also, a third reason is that when we have these orders, they are on a three-year basis or five-year basis because we are implementing changes and the software, and then we have the responsibility over quite a long time in order to partner up with the customer. It's long-term projects, and also a part is recurring revenue.
A very interesting initiative that we are focusing on right now, moving into 2026. I would like to talk a little bit about AI. Everybody's talking about AI. What we do in AI in Prevas, we have a quite broad adoption. We are working with AI in support and increasing the productivity in software coding and tests. We're working with agents, coding tools, etc., to increase the productivity. We also work with AI for our, we're using the large language models for documentation, for analysis, review of legal agreements, etc. Quite broad use in Prevas. That is one part. When it really, really gets interesting is when we use AI to bring customer value to our customers. I would like to explain to you a little bit about a case for a company called Sweet Tree Technologies. Sweet Tree, they have developed a method for somatic embryonesis.
It's a technique in which embryos are grown from tree cells in automated bioreactors. We have developed a solution based on a platform called Prevas Intelligent Vision Platform to quickly identify the most valuable embryos using AI and vision. In order to sort them, they are extremely small, I promise you that. We use image treatment in order to sort which ones. We have built an automation in order to actually do the physical picking. These plants are then cultivated into strong disease-resistant tree seedlings. It's fantastic. It's amazing. This case is so great because it combines everything that Prevas is about, using advanced technology for doing good. We are combining the fantastic expertise of Sweet Tree, working with somatic embryos, with AI, with advanced vision systems, with robotics and automation. It's magic. It's a very good case. We are working with a customer in power supply.
It's a customer that has developed systems in the past for power supply. It's critical systems, and they need to run with a very, very high upturn. In this case, the customer has a legacy code, 35,000 lines of code, actually, in this case. They needed to move into a modern platform with this code and also adding new functionality to the code. In this case, we have been working with code agents and code tools based on AI to do this work. What we see now is that the models have improved so much. We are using these coding tools to increase the productivity, also in cases where we have very extremely high demands. The reason that we can do that is that we have the domain knowledge in this area. In this case, we see productivity increases of 50%.
It's a massive increase in productivity using AI, and we work with it all over Prevas right now. We also have internal initiatives to spread the knowledge and experience within Prevas to be better, so to say. My view is that Prevas is very well positioned moving into the future, also utilizing the possibilities within AI. We have the domain knowledge. We have worked with these customers since 1985 in some areas. We are a trusted partner, and we have the senior expertise needed in order to utilize these kinds of tools for industrial purposes. We look forward to growing in the AI area as well, moving into the future. All right. A summary for the third quarter.
I'm very pleased to see that we are increasing the EBITDA 30% better than last year as a direct consequence of the actions that we have taken, of the sales focus that we have, and of course, thanks to all the fantastic customers that we are working with. I'm also very pleased to see the progress we make in Finland. Now the Finnish team has proven that they can and they will deliver. For the third quarter, they delivered 8.9% of EBITDA and grew with 34% organically. That is impressive. I'm also proud to say that we are agile in Prevas. In this quarter, we actually increased our net sales to the defense industry with 33% versus last year. It's a good step forward.
It also proves that we are an agile company, and we are adapting, and we are taking the actions needed in order to be strong also in a more difficult market climate. I'm glad to see that the integration of OEM Sweden AB now is up and running. We consolidated the company and the team into Prevas from July 1, and we have already made new business together. We're starting to learn each other and to find new possibilities together. The acquisition of OEM Sweden AB that we announced has now been consolidated and integrated into Prevas, and we're working together on new opportunities. As Helena was mentioning, Prevas has a solid financial position. We are ready to act on possibilities that pop up in a market situation like we have today. All in all, I believe we made good progress in Q3.
I'm not satisfied when we do not meet our financial targets, but we work hard, and we will continue to improve in Prevas for the future as well. I look forward to the fourth quarter and also, of course, to 2026, which is very close right now. With this, I would like to move into the Q&A session, and I hope that you have a lot of interesting questions for us. Thank you.
Thank you so much for the presentation there. As you mentioned, we will now carry on with the Q&A session. If anybody has any questions and is calling in, you can press star nine to raise your hand. If you want to ask a question, then star six to unmute yourself when given the word. With that said, we start off with some questions that have been sent to us. The first one is, can you comment on how you're adapting your workforce and operational focus across segments, especially in those showing the strongest growth, like defense and cybersecurity?
Yes, I can comment on that. What we are doing is actually that we are working across the regions we have in Prevas. When we work, for example, with the defense industry, we have offices that are quite close from a geographic point of view to some of these customers. In order to grow, we're utilizing the complete network of Prevas in order to be able to take in larger projects. That is one way that we work in order to be agile and to grow in the areas where we see where we actually see the demands.
Thank you. Finland delivers strong organic growth and a turnaround in margins. Could you explain on what drove this mixed shift toward more project deliveries, and whether you expect the trend to continue?
I would start with answering that we do not give forecasts, so I can't actually give a forecast of the progress and how it will look in the future in Finland. What I can say is that we have a very good trend in Finland and had that for four quarters. We have a fantastic team working very hard in order to adapt into the very tough market we see in Finland. In that sense, I'm very positive because we have a good team, and I'm very glad to see that for this quarter they have now also delivered financially.
Thank you. Have you noticed any shift in the market recently, for example, around demand, pricing, or customer willingness to initiate new projects?
I wish I could say yes. Now we have the turnaround. Now we have the high demands. Now it's happening. I wouldn't say that we see that. It's not a bad market, but it's quite stable. As I said in the presentation, it's quite dynamic. Some customers are doing very well. Some customers are very reluctant. My view is that I don't see any big trend shifts actually right now. Given the signals we see from the reports, you can see the stock market development, and also these Inch Up Shifts Index, these key indicators, they are showing actually a positive trend. We still need to see it in the actual demands in a stronger way before I can say that we see a big upturn.
Thank you. How has Prevas managed to increase its profitability despite relatively modest revenue growth during the third quarter of 2025?
That is a consequence of the work we have been doing before this quarter, I would say, because we have been working on optimizing our workforce to the actual demands. That is one part of it. We have a very strong cost control in Prevas, very strong actually right now in order to really, really focus operational efficiency in order to improve the margins. I would say that is the majority of the background that we see an increase this quarter.
Thank you. In Q2, you mentioned you were optimizing with personnel away from low demand sectors. Is it a lot more to do when it comes to the right amount of people in the right segments right now?
I would say put it like this. This is a normal part of our business to always be agile and always adapt. As I said, the market is quite dynamic. I can't promise that we don't do any more changes because I can promise you that we will do more changes. That is a normal way of how we do business, and we will continue to optimize our operations all the time. The answer is we will continue to work with improving our efficiency all the time.
Thank you. Moving on to the last question here. What is the strategic significance of the acquisition of OEM Sweden AB and the partnership with Cyclo for strengthening Prevas' future market position within the med tech, clean tech, and sustainable industry?
Oh, that was a long question.
Yeah, pretty long one.
We can start with OEM. OEM is a great team working with product development. It's a development house working for med tech customers from idea through all the different industrial design, the mechanical engineering, the embedded systems, and also compliance. They have ISO 13485, which means that they have the ability to develop med tech products. That is, from a strategic point of view, very important for Prevas to have this kind of capability. We have it in Prevas in the past, but we strengthen our position dramatically with the acquisition of this team, OEM. That was one part of the question. The other part, could you repeat that, please?
Yes, of course. The other part was, could you, what is this, I can't take it all at once from the top. What is the strategic significance of the acquisition of OEM Sweden AB and the partnership with Cyclo for strengthening Prevas' future market position within med tech, clean tech, and sustainable industry?
Yeah, I'll take Cyclo as an example. This is a company working within the recycling industry. In that sense, we are strengthening our position as we are building reference cases in the industry. That, of course, is positive for the future. In that sense, working with customers like this, also this company in the south of Sweden, Sysav, is also a recycling company that we will work with in the future. We have a position, but as it works, you need to deliver, you need to build references, and then you can continue to grow and strengthen your market position. That is how at least we work in Prevas. That's why I think it's so important with those cases like Cyclo.
Thank you, Magnus. That was the last question we had. Thank you so much, Magnus and Helena, for presenting here today. Thank you all for tuning in. We wish you a pleasant weekend when it starts.
Thank you very much. Bye-bye, everybody.