Lagercrantz Group AB (publ) (LAGRB) Earnings Call Transcript & Summary

Welcome to Lagercrantz Group Q3 Report 2025-26. [Operator Instructions] Now I will hand the conference over to CEO, Jorgen 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. And yes, as normal, we try to have this as a 45 minutes or roughly, plus/minus 5 minutes or so, session where we go over sort of -- give a brief introduction to the group and then 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 will get going. Together with me here is Peter as well, of course. So we're 2 of us here. 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 5 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. And currently, we are some 85 companies within the group. We -- 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% to 20% per year. We run, as I said already, in a very decentralized fashion with 85 profit centers organized into the 5 divisions. You could see over to the right here where we have our companies. And most of it is in Northern Europe, but 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. And M&A, is, of course, a very central part of what we're doing of our business model. And 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. Yes. Well, getting into the interim report then, we posted, we think, is 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 are close to 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 are comparing with now, and we had an earnings of SEK 13 million in terms of EBITA in that quarter. And currently, we're at the SEK 13 million. So it's been quite a journey. And back then, we had some 3.1% EBITA 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. And especially, we feel that we have some differences in 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, yes, hampered and held back a little bit when you're exporting there. That is only some 5% of sales, but it's affected by a geopolitical situation and all the tariffs and the different things happening there, but also with the differences in the currency, the currency effect 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. And that was then after adjustment for the currency effects impacted negatively by 4%. So a good market, slightly better than before, but no dramatic improvement, but slightly better than before 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, Jorgen. And as Jorgen 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 EBITA grew by 20% and the EBITA 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 9 months. EBITA grew 16% and the EBITA margin is also improving on the 9-month period to 17.8%. And similar cash flow is -- and cash conversion is quite high also in the 9-month period. This was probably the area that we were not entirely happy in the last quarter, but now it has been improved. The return on equity is on 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. And earnings per share also increased to SEK 5.53 on -- in the last 12 months. Jorgen 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, and this has added SEK 1.4 billion in business volume, and 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 the -- primarily the EBITA margins per division, we are happy to see that Electrify division are now another quarter above 20%, so 21%. Jorgen will come back and tell you the reason for this. But we also see that the Control division and also the International division are -- have good margin improvements. We see on the other side, TecSec and to some extent, also Niche Products with slightly lower EBITA margin in this quarter compared to 1 year ago. But maybe, Jorgen, I will hand back to you.

Yes. But before we leave that one, I think it's good to see that we have really 5 strong divisions. You could see that we are -- we're very happy with what's happening in like 3 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 EBITA goal of 20%. And you can see down there, we actually have like 2 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 17% and acquisitions was 10% out of that and organic is 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 EBITA growth of 55% here during the quarter and an EBITA margin of 21.2% as opposed to 16% last year. So it's 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 some year in Finland that we acquired about a year ago, and they had a very strong quarter here and 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 and a few comments there is the Control division, 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 that 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 and 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 -- due to good order intake and market development within the defense. Also highlighting is that 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 EBITA then amounted to SEK 90 million as opposed to SEK 92 million last year, so we're slightly down and also the EBITA 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. 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 of MedTech and other type of exposures where we see some stability and also some underlying structural growth in that area. And 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 -- yes, 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 were 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. So -- 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 FX and 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, [indiscernible], which is a Swedish company, had a very strong quarter, continued to do very well. And also the Van Leeuwen in the Netherlands showed also continued good development and a couple of others with Water Proof, Sajas 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% or sort of long-term target in terms of organic growth, but FX was against them a little bit with minus 7%. So top line, it grew 28%. EBITA then grew by 30% to SEK 90 million, and the EBITA margin picked up slightly to 17.3%. So good development and a strong quarter there as well. Here, we have acquired Epoke and Frigger�kers here during the summer, and those had -- yes, 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 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 this quarter, but also in the last year or so, Unitronic's performance has picked up significantly with some new volumes and some new sort of supply lines and doing it very well for us at the moment. So yes, 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'd 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, has been that for many years. And for many years, we've also had the target of growing the EBT 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 to 12 acquisitions per year. And the bar of 8 to 12 has been increased over the years. We would like it to be 10% of our sales basically that comes in through acquisitions. And that profit growth of 2/3 should come through M&A and 1/3 organically is the way we think about it, even though the overall target of 15% is where we would like to be measured. So 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 2. So that you've seen also from the numbers that most of our growth in the couple of recent years have come through acquisitions. And 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 SEK 2 billion in EBT within 5 years. That was communicated in October of 2023. So we are basically 2 years down the road, and we are well sort of underway to deliver on that target as well. But we also see that along the way that our performance have picked up. We have been growing our EBITA margin over the years with basically a little bit every year, up to percentage points or so. And we feel that we have the opportunity to really push for the 20%. So 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 acquire. Not everyone will be there to start with and not everyone will get there. But on an average base, we should be at 20% on the divisional and group level, at least. So we are now discussing how to get there with each individual business. We have also, over the years, really been pushing our profitable working capital target. And 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. Many -- we felt that sometimes that was maybe sort of -- yes, to promise too much to get it -- to have it like very high for many years. But now we have really been delivering on that. And we feel that we have basically the opportunity to have everyone at 60%. And 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 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 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 [indiscernible] was used some 20 years ago and are 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 of the financial targets there. And we will then continue to scale larger customers. I think that we really feel when we're doing our modeling that we could, with the setup we have sustainably deliver more than 15% EBT 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 words connecting to our culture and make sure that everyone is on board with that. And that is a key area in order to be able to sustainably deliver the 15%. Then of course, it's also about finding 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 our growth -- the growth ourselves. So we don't do capital raisings and stuff like that. We would like to finance our growth with our free cash flows from our operations. So 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 5 divisions. We feel that they have a very good positioning. We did this reorganization some 5 years ago, and 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 5 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. And 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. Yes, acquisitions are very important. We will continue doing them. As I said, we have raised the bar to 8 to 12 companies per year and posted some 90 acquisitions since 2006. And here, you can see how it's developed. And compared to many others, we have been quite acquisitive here in the last year. So posting some 12 acquisitions with the SEK 1,440 million 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 the 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, yes, all of them or yes, all of them, no exceptions really. And 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 2 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 in Northern Europe or in Scandinavia, where we usually are very strong. And these companies come in very nicely here. And then we have Enskede Hydraul, it's more of a spare parts business for the forestry machineries aftermarket as well. And you can see we also tried to post sort of some highlights in terms of numbers. And 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. And -- but the more -- the bigger one in the quarter was the I Holland then that I touched upon already earlier, a company founded in 1946 and making these type of punches and dies and other critical products for tablet producers. So within health care or pharmaceutical companies are the 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 a more significant acquisition, both for Lagercrantz. So it's GBP 27 million in sales and an EBITA of roughly GBP 4 million, so an EBITA margin of almost 15%. So -- and this, of course, we will 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, but we're coming nicely here in the coming quarter and years ahead of us. So very nice in that sense. I will round off with the financial overview. Yes, we are very happy with the quarter. As I said, we -- our sales went above SEK 10 billion. Our EBITA is at 17.8%, so a new all-time high or 18% for the quarter, as we said earlier on. And the EBT 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%, of 29%, as you can see there. So a very strong quarter and happy to 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.

[Operator Instructions] The next question comes from Jakob Marken from Danske Bank.

First of all, congratulations on yet another strong quarter and to reach the SEK 10 billion top line mark. So a couple of questions from my side. And 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? So sort of trying to get an understanding of where you think the group would be in 2, 3 years without acquisitions and how much you think would need to come from acquiring above group average companies?

Yes. I think the ambition internally will be that for everyone to sort of grow their EBITA 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 1 percentage point will come from sort of internally, and I think 1 percentage point would probably come from acquisitions. So half-half, I would say, in the improvement that you're discussing there. 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. Yes. I see. That's reasonable. And then the -- my second question was on cash flow. So quite a lot higher CapEx in the quarter and also on 9 months. I'm just wondering if that's just timing effects? Or is it a specific company doing a big investments here now? And how should we look at that in the coming couple of quarters?

No, I think you should view that a little bit on sort of an annual base. 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 -- they have their volumes coming in during spring. They deliver during summer and then they're getting paid just before Christmas. So that's seasonality effect. 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. But -- so I think you should basically look more on it from an annual sort of -- yes, rolling 12 months perspective, I think it's more fair to do that.

Okay. And that goes also for the CapEx part.

Yes.

The next question comes from Zino Engdalen Ricciuti from Handelsbanken.

I'll also start with one related to the margin target. And 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 think -- 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 if we -- 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 are 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 yes, 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...

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 extraordinary positive related to maybe project 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, yes, 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 in our NRS business, and we have a more of a project-related business in the Mastsystem and also in the QD company. It's also more sort of 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 [indiscernible] Q4, but it might be -- along the way, we are -- 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, 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 is 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 and -- or weaker dollar and the stronger krona, but also then to some extent, from the tariffs. I think the currency effect is more severe. 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.

The next question comes from [ Victor Forst ] from SB1 Markets.

Starting off with Electrify, very strong margin here for 2 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.

I don't -- it's not very much pricing. I think we have followed the market with the pricing so that we've been adjusting each -- 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.

Yes. Okay. Great. That's clear. And then just on the demand side of Electrify sort of is there -- or 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?

No. What we are in -- our companies are providing is sort of broad-based components that are used for the whole electrification. Building electricity grids, that is one key thing. But most of what we're doing is going out to wholesale and deliver it 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, where we build 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. So 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.

Okay. Great. And just a final one on acquisition pace. Jorgen, you mentioned it has been quite high for some period now. And yes, 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 fall down a bit?

Yes. 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 low, then we might use a little bit more for M&A. But generally speaking, I should -- I'd like us to be measured on the 15% total growth. And then they might vary a little bit along the way.

The next question comes from [ Dan Heimer ] from SEB.

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?

Yes. I think there is some seasonality to the newly acquired sort of road, yes, road equipment companies there, the salt spreaders that we have within Epoke and Frigger�kers. There we have a bit of seasonality that comes in with those companies that we acquired here this summer. So there is a small -- there is -- yes, there is such component.

[Operator Instructions] The next question comes from Gustav Berneblad from Nordea.

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.

And then 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 would you just -- 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...

Yes. 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 -- I mean, even though we are doing well on a total, I think we have still some couple of low performers in the group and by addressing those, we did a couple of those here in the summer, addressing a couple of those, but we have a couple of more that we need to address. And so it's working on all fronts really. And also -- but by finding the niches, really building a strong market position in each niche and doing a good job supporting and serving customers is 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 yes, that is sort of dealt with internally. So generally speaking, it's 200 basis points for everyone.

Perfect. And then just one final last one on Control. I mean, also the 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 really extraordinary well this year, which is the Radonova especially. But it's nothing that stands out to me. They should be -- 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 bit of a slower summer in that division due to the Radonova business being very seasonal.

There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Yes, I can note a written question from Stefan at Redeye. And 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, and he's asking for specific drivers for this organic growth in those divisions, Jorgen?

Yes. Within the TecSec division, I mean, we are also sort of delivering to penitentiaries and a couple of big projects that is coming there. So companies in IG Nordic, for instance, had good organic growth in the quarter and 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 do we say there. Yes. 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've 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.