Netel Holding AB (publ) (NETEL) Earnings Call Transcript & Summary

Welcome to Netel Q3 Report for 2025. [Operator Instructions] Now I will hand the conference over to CEO and President, Jeanette Reuterskiöld; and CFO, Fredrik Helenius. Please go ahead.

Good morning, and welcome to our presentation of our Q3 results. My name is Jeanette Reuterskiöld, and I'm President and CEO of Netel. With me, I have Fredrik Helenius, our CFO. During today's presentation, we will first go through how we see our market position and our strategic shift we have made with new customers and new geographies in the countries we operate with focus in Sweden and Norway. Then now I will go through why our profitability has fallen so much during this quarter. After that, of course, I will go through all the activities and measures we have started and intend to continue working on in 2026 to improve our margins. We give our indication for 2025 and 2026. And as usual, go into more detail in our financial figures together with Fredrik. We conclude by going through our financing situation and then a short summary. Okay. Then we move on to describe our market and our position. Our underlying markets are healthy and driven by the megatrends of electrification, digitalization and the modernization of critical infrastructure. We also have a strong offering, which is reflected in our constantly high order backlog of over SEK 3.8 billion. Our business is characterized by long-term customer relationships, and we have worked for many years with some of Scandinavia's largest telecom operators such as Tele2 and Telenor, and energy companies such as E.ON and Vattenfall. A year ago, we made a strategic decision to adjust our strategy and expand geographically in Sweden, Norway and Germany. At the same time, we stated that we will seek new customer segments, particularly industrial clients within the Power division. This has led, among other things, to our expansion into the southern parts of Norway with a new customer, Glitre Nett. And in Sweden, for example, we have won a major framework agreement with the Swedish Defence Materiel Administration. We are closely monitoring our customers' investment appetite, and we have noted a decrease in investment volume in the telecom market, which we can adapt to more easily with our flexible business model with a high proportion of subcontractors. In the 1st October, Netel announced that write-downs in 3 subsidiaries and decreased sales of around SEK 400 million are affecting Netel's result for '25. The assessments from that communication remains unchanged. Full year revenue is expected to amount approximately SEK 3 billion with an adjusted EBITA margin of 1.5% to 2%. The remaining operations, which account for more than 90% of Netel's revenue are still expected to deliver an adjusted EBITA margin of approximately 4% to 5% for the full year despite reduced volumes due to market changes. For '26, we expect to achieve growth and margin improvement for the full year '26, given our cost-saving measures during this year and next year and the market conditions we see today. Our order backlog for '26 per September were around SEK 2 billion. As I said earlier, Netel has continued to build up and increased our order backlog to SEK 3.8 billion during this quarter, but most of that volume will come next year and beyond. The reason for reduced profitability during the quarter is identification of overvalued projects by former management ahead of project completion in 3 of our subsidiaries acquired in '21 and '22, lower volumes of approximately SEK 400 million than expected due to a competitive market situation and our focus on profitability and procurement rather than growth. More projects than expected are still in the start-up phase. And also, the start has been postponed to '26 for a number of projects, especially within Telecom. We also did not achieve the savings from the business system and the new organization in Norway that we had anticipated earlier this year. We are now turning over every stone to restore profitability. Following the communication on October 1, we have received questions about how our business works and why results fluctuate between quarters. It is important to understand that our income statement is based on successive profit recognition where income and costs and there -- for the margin are distributed over the project period. Four times a year, we go through all the projects in detail and update forecast regarding the project margins. It is on these occasions and before the end of the project that adjustments can be made to our results. The forecast adjustments immediately affect the income statement through changes in profit recognition. And if write-down is made by, for example, 2% of margin, it will, at this point, affect the entire projects previously reported earnings, which can have these major consequences in an individual quarter even if the projects themselves have a profit margin that is in line with our financial targets. As we have a project-based business, our earnings and cash flow will continue to fluctuate between quarters, and it is important to see our development over longer periods of time to get the true picture. The nature of our business also means that project management, risk control and uniform working methods in tenders, follow-up and forecasting are of paramount importance to us. These are areas that have been and continue to be centered to me and my management team. We have, therefore, increased the transparency of the subsidiaries, consolidation invested in reporting and governance tools and introduced new procedures for central review and approval of tenders. This work will be further accelerated in connection with the consolidation of the subsidiaries within the group. Above here, you can see an example for how a write-down a margin with 2% in a project with, for example, a volume of SEK 200 million with the previous estimated margin of 10% gives a negative estimate effect at this time of SEK 4 million, even though the project delivered a margin of 8%. We have a clear time-bound measures to achieve our profitability target. We are now executing on cost saving program and needed measures under this next year. These measures differ slightly between the divisions, and I will go through that later on. And the programs were introduced internally with time specific milestones. We have a result on a saving program totaling SEK 40 million to SEK 50 million, SEK 25 million of that cost save will generate full effect under 2026. Of this amount, SEK 10 million pertains to already identified services and vacancies that have not been filled. Forthcoming measures involve the continued restructuring of management and central functions as well as SEK 50 million in the Norwegian telecom operations. The consolidation of subsidiaries will provide an additional SEK 15 million to SEK 25 million in savings with full effect in 2027. Among other measures, we are introducing new working methods, improving project management, consolidating companies, reducing the organization and streamline management layers. We need to optimize our organization and working methods to be competitive in the market and keep our margins levels. After the end of the quarter, we have conducted a strategic review of the business in the U.K. and the divestment of the operations in the U.K. are initiated. We have a signed letter of intent in place where our intention is for the deal to be completed before the end of the year. We have clear measures in all our 3 divisions, and we start with Infraservices. We have new management in place in one of our subsidiaries who during a review prior to project completion, discovered that the projects were overvalued by former management and had to be written down. Profitability was also impacted by the lower volumes in the quarter. The division is carrying out measures to improve project control, increase risk control and facilitate more uniform ways of working for tenders, follow-ups and forecasts. Cost save program is already in place. As an additional measure, I assume the role of acting head of the division during the quarter. In Power, profitability was impacted by one-off write-downs of completed projects or projects in end stages in the Swedish subsidiary and also impacted by continued high proportion of project starts and lower volumes in Sweden. Profitability is expected to improve next year in part through contributions from recently signed major framework agreements with, for example, E.ON and Vattenfall and Elvia in Norway. We are also reducing management levels to come closer to the projects and streamlining the structure of the divisions by merging several subsidiaries. We also accelerated focus and resources to manage projects efficiently with good governance, high risk control and high customer satisfaction. We see more collaboration between the subsidiaries to enlarge our projects and increase resources efficiency. In Telecom, profitability was impacted by the high proportion of projects that remained in start-up phases during the quarter as well as lower volumes in recently won projects. We also did not achieve the saving from the new business system and new organization in Norway that we had anticipated for this year. Approximately SEK 15 million of the SEK 25 million cost-saving program set to lower expenses in '26 involves the Norwegian telecom operations. These measures include vacancies that have not been filled, new organization in October this year, which is adapted to the new more efficient way of working. The new digital tools that are gradually being introduced in a Norwegian service organization are also expected to continue to contribute to increased efficiency and profitability. We have initiated, as I said, earlier, divestment of the U.K. operations. Netel acquired the U.K. business in 2022 to establish ourselves in an additional market. The U.K. business has had a negative performance trend and has negatively impacted both our earnings and cash flow. We have conducted a strategic review of the business and the divestment of operations in the U.K. are initiated, as I said. We have, as in the Infraservices division, also take -- I've also taken on the role of acting head of the division. To ensure transparency of our measures, we are reporting the sales and adjusted EBITA of the divisions and the group separately. Excluding the company in the Infraservices division in Sweden, the company within Power in Sweden, and the operations with Telecom in the U.K. This information can be found on Page 35 in the report. In this way, we should -- we show both how the divisions and the group are performing without these 3 subsidiaries and how our measures are impacting our core business and the 3 subsidiaries. Operations, excluding the 3 above-mentioned companies account for more than 90% of our expected sales this year and are expected despite lower volumes to deliver an adjusted EBITA margin of approximately 4% to 5% for the full year. So let's move on to our financial performance in more detail, Fredrik.

All right. Good morning, everyone. To start off, the financial performance in the third quarter is obviously impacted by the write-downs of the 3 subsidiaries and the write-down of margins, and that impact not only profit, but also on our top line. This is simply an effect by using the percentage of completion method as the relevant principle when completing our statements. The write-downs in Infraservices, in Power, and in Telecom instantly hit the profit through an amended accrued income as new margins are assumed for the aforementioned projects ahead of the completion. I believe that this, as Jeanette mentioned as well, as a very important characteristic to understand when evaluating the outcome and especially to understand why we end up in an isolated quarter with a downward adjusted top line and losses for the group whilst the guidance for the full year '25 implies that we will be profitable again in Q4. Nevertheless, the SEK 50-plus million effect in the quarter included, we did see lower sales in the quarter with a total of SEK 654 million or minus 17.8% growth. The outcome is partially affected by the project phase as we start up new projects and focus on less volume-driven activities in the project life cycle. And the start of the third quarter was a bit slower than expected coming back here from the summer months. Power in Sweden recognized lower sales as we continue to focus on new projects and tender processes and Infraservices noted a relatively bigger drop in volume from delayed project starts and from the frame agreements and in particular, a lower hit rate from new contracts with increased competition in our markets and our maintained focus to ensure profitability in our bids. Power in Norway, however, continues to deliver a very promising growth with almost 90% growth in the quarter or 40% growth year-to-date as we are continuing this strategy to enter new regions in Southern Norway and profit from our great team efforts in our customer relationships. Germany lost a bit of track here in the third quarter, but a lot of activities enabling the start of our new projects with, for instance, UGG and enviaTel. Though the team in Germany is still running with a 12% growth for the 9-month period, and with the new customer mix and new agreements, we do look forward to the continuing cooperation to continue to build the fixed networks in the German markets. The order backlog has benefited from added contracts, for instance, the new agreement with E.ON in Sweden and Elvia in Norway and amounted to SEK 3.8 billion end of September. We commented in July on the Q2 results that we included approximately SEK 1.5 billion of the backlog for the second half year of '25. And with the new guidance here of SEK 3 billion for the full year '25, that is still approximately the outcome that we estimate. The lower volume for the full year '25 does not imply that we write down the backlog, but rather that we lower expectations from the fewer wins that will be possible to generate volumes for the financial year of '25. Now with the backlog of SEK 3.8 billion here in the third quarter, we have a good position in relation to our guidance for '25 and almost SEK 2 billion expected for the '26 production. It is still an interesting market and good underlying demand across our operations, and we believe that we will enter '26 with a solid backlog once '25 is closed further on in December. Turning to the profitability in the quarter. The impact from the project or margin write-downs in the 3 subsidiaries in the quarter is evident and the effect from using percentage of completion is visualized by the extreme drop in the quarterly profit here in Q3. Adjusted EBITA was minus SEK 53 million in the third quarter. And in total, the margin write-downs accounted for SEK 59 million of the total results. As we communicated early October, we envisage an adjusted EBITA of 1.5% to 2% for the full year '25, and that is then including the negative effects here in this third quarter. The SEK 59 million in write-downs are not considered items affecting comparability or adjustments, given the underlying operational structure and with the effect stemming from margin updates, but the 3 subsidiaries account for less than 10% of the group's total sales and the profit impact from the margin update mainly referring to the completed projects or projects near completion, imply a challenge for us to report on the ongoing operations and new potentials. To provide a transparent view on these current operations, we had, as Jeanette mentioned, added the tables for the report on the group, excluding each of the subsidiaries. And again, as communicated in October, we believe that the 4% -- 4% to 5% in adjusted EBITA for that remaining 90% of our operations. Nevertheless, this is a quarter with relatively big isolated impact financially. And we, of course, note the need to educate on our process. The reasons are slightly different between the projects. But more importantly, we are considering the risk, we are taking actions on these issues, and we are working together with our core team to continue down the route to increase our margins going forward. We have tough decisions to create a more efficient organizational structure, identify the additional cost savings and focus on the underlying strategy with existing market opportunities and valuable colleagues aligned with the continuous work on risk management, and that will support our process going forward. In addition to the effects on our top line and volume and the profitability in the quarter, we obviously have a few key items to reflect on in terms of our cash flow, financing and the financial position of the company. The operating cash flow in the quarter of minus SEK 44 million is reflecting the aforementioned level of new projects and projects currently within a starting phase, in addition to the relatively lower volumes, which implies that we do not get that extra margin or the contribution to the cash flow in the Q3 isolated. As previously discussed during the earlier quarters, we tend to see the relatively greater need of working capital when we ramp up production with new projects. And that is 1 main factor for the outcome of the minus SEK 44 million in this quarter. Still, the end of the quarter showcased promising improvements with greater levels of our own invoicing. And we still believe that the fourth quarter and the last 1 of '25 will be a contribution with stronger cash flows and the seasonality effect as we finalize the ongoing projects. In addition, there is 1 important understanding to discuss regarding the cash flow and the margin write-downs, leading up to the communications early in October. We have already been through the effects from the percentage of completion, but that further implies that the cash flow effect will differ from the reported sales and profit levels. Surely, the margin write-down stems from both completed and ongoing near completion projects. And we do see some effects in the quarterly cash flow from these projects, but we do not expect to recognize ongoing negative cash flow. That money has already been paid during the project life cycle, partially in this quarter and earlier periods. And for the year-to-date period '25, these 3 subsidiaries have accounted for approximately SEK 60 million in negative operating cash flow. But again, we do expect to see limited future effects as most of this is already considered. And as we said, we do expect Q4 cash flows to include our seasonality characteristics with positive outcomes. And as the end of September, we had approximately SEK 150 million on our cash balance or SEK 360 million in total available funds. This outcome was a good base, continuing the work ahead of the year-end. And obviously, the relevant alternatives for the financing structures of Netel. The last 12 months EBITA is significantly impacted from the downward adjustments. And we know the leverage ratio that has increased to very high levels. We mentioned that we have a few key items that needs attention. And as we became aware of the need for the margin write-down in this third quarter, we immediately initiated the process to support our compliance under our financing agreements. As an effect from the high net leverage levels given the impact on the EBITA from the write-downs, we did not, as of the date, September 30, meet all our financial undertakings in the financing agreements. And that is why you will note that the financial debt is reclassified from long-term to short-term debt. And as a consequence, we highlight uncertainty -- uncertain assumptions regarding the going concern. This is strictly done in accordance with the IFRS standards and the relevant accounting standards and principles as we did not yet have assigned an agreed waiver from the lenders ready at that specific date, meaning the day that September ended. However, during October, that waiver has been achieved. We have received a confirmation from the lenders, and we are now working together with continuous discussions in terms of good faith and the mutual ambition to close an amendment ahead of the year-end to ensure a long-term financing in our statements again. We are working intensively on these matters with great care and with good prospects for the coming periods, but we want to stress the fact that achieving the waiver during October implies that we do not expect any direct effects or actions on our existing debt today, but rather focusing on the process ahead of the year-end. Our existing financing agreements are running with a termination date in December '26, and we are already finding our structure to be underway with working on the new long-term financing solutions for the group, enabling or rather support the long-term strategy of Netel. A few additional comments on our divisions and the performance in the quarter. We can start with the Infraservices. And for this division, Infraservices, we recorded sales of SEK 134 million, which is down 39% from last year and impacted just as the group from the margin write-down in 1 subsidiary in the quarter. The effect from this specific unit amounted to approximately SEK 19 million, and we note that we still struggle on the volumes and the profitability in the quarter. And the main reasons are explained by the delayed and moved project starts from the frame agreements, still a relatively higher part of projects in the starting phase and the decision to maintain our focus of ensuring profitability in our tendering processes. What we mean by that is basically the implication of, in the short term, relatively fewer project wins as the competition remains on a fairly high level within our local markets. And prices simply are, in some cases, too low in contrast to our expectation on relevant bid prices with prospects for profits. This is for the 1 main point explaining why we expect this SEK 3 billion top line for the full year '25, but it does not imply that we take a very cautious approach on the market opportunities. Rather the opposite, we note many interesting tenders to bid for, and we are working with new tenders across our local markets but also towards nearby regions and clients. In addition, of course, to increase our own focus on our structure and our own efficiency. The write-down of margins in 1 subsidiary within Infraservices implied a total EBITA for the division of minus SEK 23 million, of which SEK 19 million refer to that specific unit. We have a new management in place in that unit. We have reduced the heads from almost 40 full-time employees at year-end '24 to below 20 today. And during the detailed reviews of the project portfolio together with our new management, it became evident that several projects were running with wrong assumptions. Given the outcome here in Q3 year-to-date, Infraservices will struggle on the volumes for '25. But we continue to build up in order backlog to support [ the year improvements ] in the longer run. Within Power, we report sales of SEK 196 million or minus 5% growth, yet with a promising performance from our Norwegian business, where we saw a growth of as said previously, it was 90% in the quarter and 40% year-to-date. Norway continues to deliver positively from this strategic initiative to expand the addressable market, basically through both new geographies and through clients. Sweden, on the other hand, continues to focus on starting our new projects and to work with tenders with the right profitability characteristics as the market still generates interesting opportunities. The EBITA of minus SEK 20 million in the quarter includes minus SEK 21 million from write-downs in one of our Swedish subsidiaries. The projects in question are related to an agreement ending here in '25. And with the new management in place, new client agreements in place from '26 onwards, we envisage a stepwise improvement during '26, lowering the risk and increasing the performance with better EBITA contributions. In Telecom, we noted a relatively slow start after the summer months. And though September brought the speed back, the division reported minus 12% growth and SEK 324 million in sales. Evidently, there is an impact on both the top line and profitability from the performance and the write-down from our U.K. operations. But Germany continues to contribute and enable their year-on-year improvement as we now increase the speed towards and within our new projects with our new clients. Norway is currently underway with a significant reorganization to enable the next steps of their improvements. And together with the previously discussed margin enhancing measures and efficiency tools, with improved system support, we look forward to evaluating performance from our service contracts and ongoing projects entering the fourth quarter and over '26 . In total, Telecom reported an EBITA of minus SEK 19 million, mainly explained by the impact from the downward adjustment in the U.K. And with regards to the U.K., as mentioned a few times, we are pleased to highlight that we are working swiftly on actions and that we have a letter of intent signed. We are working closely with the counterparts to support a smooth process regarding U.K., enabling us to focus on the core markets of Sweden and Norway and in addition, the growth market with our team down in Germany. Coming back to the indications, we did announce in October that the write-down of margins in 3 subsidiaries and a lower expectations on sales for the full year '25 of around SEK 400 million are affecting Netel's results for '25. The assessment from October 1 remains unchanged. The full year '25 revenue is expected to amount to approximately SEK 3 billion with an adjusted EBITA margin of 1.5% to 2%. The remaining operations, meaning the 90% that did not -- that weren't affected by the write-downs are still expected despite reduced volumes due to the market changes and without considerations for the forthcoming cost savings to deliver an adjusted EBITA margin of approximately 4% to 5% for '25. For '26, we expect to achieve growth and margin improvements for the full year, given the cost saving measures during '25 and through '26 and the market conditions that we see today. We started with a few comments on the backlog. And with the backlog of SEK 3 billion here in the third quarter, we have a good position in relation to the guidance for '25. And again, almost SEK 2 billion that is expected for '26. And with that, I believe that we can move back to you, Jeanette, to summarize and add a bit of flavor on the process going forward.

Thank you, Fredrik, for this presentation. I will finalize today's presentation with some concluding remarks. It's been a difficult but necessary decisions that we have done. And we have to make more such decisions to adapt to the new sceneries that we have seen. We have a clear plan to improve profitability and are completing the measures we have communicated. We are maintaining a high pace during the remainder of this year to win new great contracts, implement the saving programs and complete our signed contracts to enter 2026 with better conditions. Through continued focus on consolidating our operations within the divisions and the group, increased internal efficiency, improved processes and strengthened financial position, we are preparing ourselves to face the future. And in conclusion, I would like to thank all of our employees for their commitment, hard work, every day and all your support. And now we are open and ready for any questions.

[Operator Instructions]

I'm not sure if you can hear me.

We can hear you.

Good, good. Lots of moving parts, obviously, today, but let's focus on a couple of them. Just looking at these 3 subsidiaries where the projects went wrong, so to say, or the assumptions were wrong, do you see it was a tendering problem that you -- the teams went into aggressive kind of assumptions on when they tender for these contracts? Or is it more related to how you ended up being able to execute on them that you needed to revise them?

I would say that in these cases, it's different between the 3 subsidiaries. In the 1 subsidiary in Power, for example, then we had an old contract since '21 with today's price levels, too low prices for us in that contract. So in that case, it was tough conditions in the contract for us due to the slightly less possibility for us to have index changes through the last years. But as Fredrik said, this contract is ended now in 2025, and we have a new framework agreement with that client for next year with a good contract in that case. In the other subsidiary for Infraservices, the tender levels was in the contract calculation was on site, but we could see afterwards that we had -- it was our own organization in these cases that had problem to deliver on those projects. And for the Telecom business, it's been a struggle for us from the beginning. When we went into U.K., we started to work with new customers that we hadn't worked with before, and it took time for the organization to know how to work with those clients. So different scenarios in each of these 3 subsidiaries. But for us, it's -- we feel confident that we are making now the right measures, and we have identified the different struggles that we have had. So in both the subsidiaries in Sweden for Power and Infraservices, we have new management on site with a stronger organization and better follow-up for us. And that's also one of the reasons for me to take head of the the divisions, Infra and Telecom, to come closer also to the organization and of course, the projects. And that is one of the reasons for us to do that right now.

Thank you for the color. And looking at all the work that you did initially when you joined as CEO on the basis of the finished problems you had and also contract problems when looking at the index clauses not being there in the contracts and similar kind of thing, is there any reason why, for example, the Power contract wasn't highlighted at the same time or come up to the surface now?

Well, as we said even at that time, it's not that every contract that was has index. It depends on how long term the contract is, et cetera. But this contract has been in our -- in this subsidiary since that time, but we -- the amount of project in that contract has exceeded to a level that we didn't see from the beginning. So we always have a mix of contracts in a unit or a subsidiary, and we can compensate with better contracts, but we -- this contracted the last -- during the last year has increase so much that we haven't been able to correct with other new contracts for the margin in the subsidiary.

Yes. And I can just sort of add to it. And I understand your question, Karl-Johan. To make that super clear, this is -- that contract of subsidiary in the Power business, this is not about index clauses not being in the contract. This is rather about the fact that we now have simply too many projects running at the same time towards the end of the contract. And the previous management struggled, structuring the start of those sub projects in that contract. And to give some flavor on that, that means that we have a few project leaders running more than 100 minor projects at the same time. And that is not a good solution for that business. So with the new management in place, we have now been through the business. We have understood that the changes were needed, and we now see the effects here in the third quarter of the margin update. And as Jeanette mentioned, we have taken the actions to further implement the improvements now from '26 onwards in new structures.

Excellent. And I understand it's a fluid material here. But when we look at the backlog of SEK 3.8 billion, do you still see that supporting your margin ambition when we are looking at so we have some sort of feeling where you see things ending up in 2026?

Yes. The -- as we have said before, we -- and as clarified today regarding the estimated lower volume for '25, we are working with our financial targets in the sense to evaluate the profitability of our tenders. So again, we can confirm that in the backlog, we do see that, that one is supportive for the financial targets in the longer term. Obviously, we are now having this third quarter. We have provided guidance for '25 and also the guidance for '26 saying that we will improve from the '25 levels. But on the order backlog, we are chasing and looking for projects that support our financial targets.

Excellent. And obviously, not being in compliance with financial covenants and this kind of creates an extra uncertainty and good to see the waiver and the way you describe the liquidity base of the company. But when -- is there -- I guess, before we see any more firm idea about the financing of the company, it's going to be a big period of uncertainty. Do you have any idea when you can come back and give us more clarity on that?

As we commented, we have -- we did work together with our lenders and our counterparts for the way we're here during October. And today, our strong focus, together with our counterpart, we are entering into the discussions to achieve long-term financing again ahead of December 31, i.e., on this side of the year-end. And our focus is strongly on that process as commented, and again, we want to stress that. We are now working together with the lenders to support the achievement of the amendment ahead of December 31.

And the impact during Q4 on receiving the waivers that we should expect, say, substantially higher interest rate cost for servicing the debt you have until you get into new agreements?

No, we have no such details. I think that, again, our strong focus now is, first of all, highlighting the effects of the statements here in the third quarter and focusing on the discussions in terms of good faith together with our lenders to achieve the amendments ahead of year-end.

Well, thank you very much, and I appreciate the extra color and all the best out there and good luck in difficult situations.

Thank you.

Thank you. I'm not sure if we don't have any additional questions on the line, but we do have a few written ones. We have a question on the quality of the backlog. I think that we commented on that one that we do go after projects that can support our financial targets. We have another question referring to the risk on the short-term liquidity if we see a need for fresh capital. As said, we have SEK 150 million in cash end of September, SEK 360 million in available funds. We do not see a short-term liquidity issue. Again, our focus is now when we did achieve the waiver in October to ensure the smooth process and the ongoing discussions together with our lenders ahead of year-end. I don't think that we have a sort of related question, what can we expect in terms of a new share issue. Again, we do have our underlying financial agreements running to December '26. In the short term, our focus is on achieving the amendment and the long-term financing ahead of year-end. But then in the longer term, of course, we will look at the overall refinancing of the company, given that the underlying agreements are running with the termination date in December '26. We have another question for the public sector and the Swedish Defence, how we see our forecast and our contracts and projects when it comes to the Defence customers and the revenue or profitability in that kind of clients, I assume, and type of contracts.

Yes. And as I said earlier, this is the segment for the public sector and Swedish Defence in Sweden is one of our strategic new customer segments that we are approaching and will see more volume within. And of course, that is a very interesting segment for us further on and important. We think we had 1more question there.

Yes. We have a question saying that we indicate 4% to 5% EBITA margin for the full year. And to make that super clear, that 4% to 5% refers to the business, excluding the 3 subsidiaries with the margin write-downs here in Q3. Those included, we did guide on 1.5% to 2%. The question then refers to that, that would imply a very strong Q4. And I think that's simply the need for that clarification. Our guidance of 1.5% to 2% includes the write-downs. The 4% to 5% refer to the 90% of the business that did not have these write-downs in the third quarter.

And you can see this specific on Page 35 in the report.

Yes. Lastly, there's a question again on the share issue given the severe debt situation and the weak cash flow. But as stated, we do have a cash balance of SEK 150 million here in end of September and SEK 360 million as available funds. We do say that we expect to have a stronger cash flow in the fourth quarter and our focus will be on ensuring the long-term financing again here in '25 and ultimately, before the year-end. And with that, I don't think that we have any other questions. So I thank you for listening in.

Yes. And we see you next time for quarter 4, the 6th of February 2026.

Thank you.

Thank you.