CTEK (Stockholm:CTEK) Q3 2026 Earnings Call

0:00 Welcome to CTEC Q3 Report 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers, CEO Henrik Fagrenius and CFO Thom Mathisen. Please go ahead.

0:26 Thank you very much, operator, and good morning to all of you, and welcome to the revenue call for quarter three for CTEK. Today's presenter is myself, Henrik Fagrenius, and I also have our CFO, Thom Mathisen, here together with me. As usually, we start with a brief recap of CTEK before we dig into the numbers. CTEK was founded 30 years ago by Bengt Wahlquist, who invented the first smart charger. That's the invention that has founded our company. We have two technologies, one with low voltage where we have chargers for consumer, client brand and professional and also power solution.

1:17 And the other technology is EVSE as chargers for electric driven cars. We have a global reach with our products and we are divided into two divisions. Consumer divisions are focused to retail chains and retail chains and have, as I mentioned, a global reach. Our professional divisions are selling our products. Client Brand and our chargers for electric driven cars to B2B. So the customers there are OEMs and parking operators and others. We are proud suppliers to the very best of car manufacturers.

2:06 We have more than 50 of the world's biggest and most prestigious vehicle manufacturers, among them Ferrari, Lamborghini, Porsche, BMW, etc. I think that speaks a lot of the quality and innovation that we represent and the trust that these prominent customers are giving us year after year. We are in the premium segments. We have products for many different applications. We have during the last half year introduced many new products in the booster segment and we are on our way also in the power solution segments.

2:51 And we have accelerated our efforts in the development to renew our product portfolio and also go into adjacent segments. So with that, we move over to Q3. Quarter 3 was a very solid quarter with profitable growth for us. The revenues were coming into 217 million, an organic growth of 2%. The gross margin was very strong, an improvement with 5.4%. Thank you very much. The cash flow was slightly negative, but compared an improvement compared to the comparison quarter. And it's also seasonally quarter three is seasonally where we build up some some stock for our high season.

4:03 We have a very solid and strong financial position. Our leverage is 0.8 and we have a solid position and the freedom to act and look for M&A's going forward. Let's look a little bit deeper into the numbers. We have, as I mentioned, an organic growth of 2% with increased profitability. If we look into the two different divisions and start with the consumer divisions, our new products was, of course, helping the gross margin and also the growth.

4:48 The underlying growth in the consumer segment was more than we can see here. It was a very strong development in many of the regions, particularly Scandinavia, North America, UK and Dash. We had a lower sell-in to Amazon of almost 15 million SEK, but the sell-out from Amazon was significant. Thank you. Thank you. Professional, we recovered a bit from the partly low first quarter. So we were increasing good in the professional low voltage segment.

5:35 The EVSE is still a bit challenging marketing conditions, but a positive trend in the quarter and also improving margins with our new CC-free charger. Cash flow, I mentioned earlier. Seasonal but better than comparable quarter and a very strong financial position. We announced earlier this year that we are doing a strategic overview of or review of our EVSC operation and we are aiming to have that concluded within this financial year. So with that, I hand over to Thom for some more details.

6:22 Yes, thanks Henrik. So I continue with primarily some more information from the divisions and also on capex and cash flow position. So starting with the consumer division, as Henrik mentioned, it looks like flat, but in reality, an underlying growth. So the change buying pattern from Amazon from quarter three last year meant that we had very high revenues quarter three last year. And if we put 50 million above that, To this year, you should see a growth, to put it like that. Strong profitability as always, and it's helped by the new product launches and still continued good cost control.

7:17 Coming over to the professional division, here we had an organic, strong increase of organic growth, about 11%, driven by the low voltage that has coming back now after the first two quarters, with a little bit lower volumes than normal. And as Henrik also mentioned, the EVSE market is still a bit challenging, but we have had a very good trend upward during the quarter. I'm happy to say that we have had a good development on the profitability in the division, driven both by volumes, but also supported by improved margins in the EVSE business. So now we are on 6 million SEC positive, corresponding to 10% EBITDA margin in the professional division.

8:08 Coming over to some words around cash flow and capex. As mentioned, we are building up some networking capital during quarter three. It's our high season end of quarter three and quarter four. So just the normal seasonality. We have done investments, and that investment for us is primarily in product development. A little bit lower than last year number-wise, but that doesn't mean that we don't invest in development. It's in the same... remain in the same line as last year, but we have had a bigger share of early stage research that we don't put on the balance sheet, but we expand it directly into OPEX.

8:53 So still very important for us to keep our focus on product development, and we are still doing that. Cash flow after investing activities, around 14 million negative, far better than last year. And we have continued to strengthen our net cash position. So we now have cash on hand on 170 billion, almost. It's around 90 million better than last year. And our net debt is now below 130 million. And with the EBITDA ratio, we are now at 0.8. That is significantly better than last quarter three.

9:38 We have also prolonged our financing credit facility. So we now have it valid until end of September 2029. So again, strong position for doing M&A investments going forward if we find the right things. So with that, I hand it back to you, Henrik.

10:06 Thank you, Tom. So to summarize the quarter, it is a very solid quarter. We are back to profitable growth in both our different divisions. We can see that the improvement that we have done now in the organization is starting to pay off. We are having a lot of new products and that will continue in the next coming week. Introduce more products in our booster category. And the very strong financial position that we are in makes it possible for us to continue to invest in growth, both organically and with selected acquisitions.

10:56 So with that, I hand over for some question and answer session. If you wish to ask a question, please dial 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial 6 on your telephone keypad. There are no phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments. Sorry to interrupt. There is one phone question. I will... Yep. Yeah. Just activate it.

11:42 The next question comes from Mattias Ehrenborg from Red Eye. Please go ahead.

11:48 Yes, hello and good morning. Just a few questions from my side here. Obviously a very strong quarter in fitability and the gross margin was once again very strong as we saw in Q2. I was just curious if we look ahead going into the coming quarters, how much of this improvement do you expect to be sustainable going forward in terms of the gross margin?

12:16 Thank you, Mattias. I think that we can see that our new products are contributing to this stronger gross margin. There is, of course, also a mixed effect when it comes to products and regions that are in favourable for us right now. We have taken quite a step change in the EBSC production products with a much better gross margin with the CC3. So those are, of course, Okay, that's very clear, thank you.

13:12 Looking in a professional segment, and especially client brand volumes, you mentioned in the Q2 report, I believe, that some orders have been pushed in time between quarters. Would you say that these orders or volumes were delivered as expected in Q3, or is there some other volume still pending? And how should we view the underlying demand for these products, would you say?

13:40 In the professional segment?

13:42 Yes, exactly, the Kleinbrand product.

13:45 Yeah. No, we had a pretty weak first half year in the client brand and we see some recovery in Q3 to more. So we had a growth of almost 11%, I think, in the client brand because last year was a strong first half and a weaker second half. And this year we foresee the different developments. So weak first half year, but stronger second half year.

14:14 Hmm. Okay, and also going into Q4 now which is typically a very strong quarter for you. You mentioned also in the report a planned inventory build up ahead of Q4 which can be seen in the numbers. Combined with these new product launches, how do you think investors and analysts should think about the sales development in Q4?

14:41 Yeah, we are not guiding for coming quarters, but we have new products coming in. We see a positive development on that. It's no secret that we are aiming for growth, but we are not guiding more than that.

15:01 Okay. Just moving a bit to the geographical development, I noticed that Americas was quite strong in the quarter. I think the strongest quarter since Q4 2024 and also performed strongly here in Q3. What would you say were the main drivers behind these growth numbers in these markets?

15:24 I would say it's very much due to our new products. They have been very well received in Nordics. In Nordics we have a wide distribution network and a lot of good retail chains, so we get out our products quick to the market and they have been Well received by the end consumers. We also see that North America, the growth is driven also by new products, but also an underlying growth in all our products. And we have opened up our e-commerce in North America. It's not big numbers, but big percentage growth.

16:11 I understand. Would you say that this quarter in particular could provide some guidance on what to expect for the coming quarters? Or do you think that the volumes were somewhat elevated due to timing effects? I mean, I think it was 20 million in this quarter in America. Is it reasonable to expect the same numbers going forward or slightly higher even?

16:37 As I mentioned, we are not guiding for future quarters, but I think that we have been, the US or American market has been underserved by CTEK and we are aiming to gain market share in North America. So that's, we are focusing on North America and we are aiming to gain market shares in North America.

17:03 I understand. Just moving on to M&A a bit. You mentioned in the report that you're actively evaluating opportunities. Would you say that your appetite for M&A has changed since our last discussion in Q2 or when the Q2 report was released?

17:23 Now, I would say it is still very high. Of course, we need to find the right object that is supporting our strategy going forward. So that's important that we have a strategical fit. But the appetite is high. It was high in Q2, and it's very high in Q3 as well and going forward.

17:46 Sounds interesting going forward. And lastly, from my side, the EVST strategic review. You mentioned the report aimed to conclude this review before year end. And I assume that this timeline is still on track, of course. But would you say that it mainly depends on CTEC's own decisions or ongoing negotiations with potential counterparties that That's affecting the timeline.

18:20 The only thing I would say there is that the process is going according to our time schedule and it is ongoing and our aim is to conclude it within this financial year.

18:34 Excellent. That was all from my side and thank you for taking my questions.

18:40 Thank you, Mattias. 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.

18:54 Yeah, we have the first question, written question is about OPEX, which has increased almost 10 million year on year. What is driving this increase? Yeah, I would say it's mostly if you take it year to date, it's more or less, it's less of increase. It's some periodization impacts of some provisions we are making here and there, but the underlying OPEX is stable. We have the same number of employees as the last year. So nothing more dramatic than some periodization impacts.

19:32 Okay. Good. The next written question is, can you talk a bit on your view of the revenue targets? Is it time to review these targets? In our financial target, we have a 2 billion revenue target, and we are a bit from that. And I would say that depending on the outcome on the strategic overview of our EVSE operation, we might have reasons to come back. to that target. But as of now, that is our financial target that we have. Next question. Low voltage has a small rebound in Q3, but is still down 30% year to date. What is your view on this? How have you lost many clients?

20:25 I would say there is mainly two reasons for this. The first one is in the client brand section where we had a weak first half year and that our We are rebouncing a bit and we calculate that that will continue. throughout the second half of the year and the other one is a slightly different change in ordering from our big customer Amazon which has changed their ordering and that the sell out from Amazon as such is still very very positive so it's more of a periodization But we see that we will take back part of that losses.

21:21 Okay, thanks. So you still feel confident on your low voltage guidance on revenue if you exclude EVSE? We definitely still feel confident on that. Of course, it has to do with the consumer appetite as well. We cannot steer that, but we do not see that we are losing any clients. On the opposite, we are gaining clients, both small and big retail chains. With our new products and adjacent segments, we are also growing. It will take some time, of course, to get into new segments, but we see a very positive take on our new products.

22:12 I think for the moment, that was all written questions. So with that, if there is no further questions, I thank you very much for your attendance today and wish you a nice day going forward. Thank you very much.

22:42 Thank you.