Earnings call transcript: Terranor Q3 2025 sees revenue growth, stock drops

Terranor Group AB reported its third-quarter earnings, highlighting a 10% quarter-over-quarter revenue growth, driven by its Swedish operations. Despite these positive results, the company's stock fell by 9.6% following the announcement. The decline comes amid broader market pressures and restructuring efforts within the company.

Key Takeaways

• Terranor's Q3 revenue reached SEK 794 million, marking a 10% increase from the previous quarter.
• The Swedish segment showed significant growth, contributing to 17% of the quarter-over-quarter increase.
• Stock fell by 9.6% after the earnings call, reflecting market concerns over restructuring costs and strategic shifts.
• The company is targeting a 5% EBITDA margin long-term, with expectations for stronger results in Q4.

Company Performance

Terranor's performance in Q3 2025 showcased robust growth in its core Swedish market, which remains a critical driver of the company's revenue. The quarter's results were bolstered by the successful implementation of new contracts and a strategic focus on road operations and maintenance. However, the company faces challenges as it restructures its Norvia and Infra subsidiaries, which may have contributed to investor apprehension.

Financial Highlights

• Revenue: SEK 794 million, a 10% increase quarter-over-quarter.
• Year-to-date revenue: SEK 2.4 billion, reflecting an 8% year-over-year growth.
• Adjusted EBITDA: SEK 21 million, with a margin of 3%.
• Operating cash flow was negatively impacted by IPO costs of SEK 27.2 million.

Outlook & Guidance

Terranor remains optimistic about its future prospects, targeting a 5% EBITDA margin over the long term. The company anticipates its strongest revenue and profitability in the upcoming fourth quarter, driven by ongoing tender opportunities in Sweden. The market for road maintenance is expected to grow, particularly in Sweden and Denmark, providing a favorable backdrop for Terranor's operations.

Executive Commentary

CEO Michael Berglin emphasized the company's strategic direction, stating, "Without us doing what we do, society will stop." He highlighted the strength of the Swedish segment, noting, "Sweden segment is 4%. Take away Infra and Norvia, close to 5% only in the road operations and maintenance." Berglin expressed confidence in the company's trajectory, saying, "We are trending in the right way. We are confident that being specialized and being in all these markets."

Risks and Challenges

• The restructuring of Norvia and Infra could lead to short-term operational disruptions.
• Market volatility and broader economic conditions may impact future stock performance.
• The company faces competitive pressures in state and municipal contract tenders.
• Seasonal variations in business could affect quarterly performance.
• Challenges in the Finnish market may pose additional hurdles.

The earnings call provided insights into Terranor's strategic focus and market positioning, yet the immediate stock market reaction underscores the challenges and uncertainties the company faces as it implements its restructuring and growth strategies.

Full transcript - Terranor Group AB (TERNOR) Q3 2025:

Markus Zalmrud, Analyst, DNB Carnegie: Hi, welcome to DNB Carnegie in the earnings presentation with Terranor. My name is Markus Zalmrud. I'm an analyst here at the bank. I've got with me Michael Berglin and Inka Kontturi, who is CEO and CFO at Terranor. I will leave the word to you. You will present the quarter, and then I'll come back with Q&A. Over to you.

Michael Berglin, Group CEO, Terranor: Thank you, Markus.

Inka Kontturi, Group CFO, Terranor: Thank you.

Michael Berglin, Group CEO, Terranor: Thank you all for visiting this webcast for our Quarter 3 Interim Report. Let's see if I can get this. Yes, here's me and Inka, like Markus said, Group CEO and Group CFO of the company. Starting by summing up the quarter, in a nutshell, I would say that this is a very strong quarter. We prove our ability to grow. We prove that the core business has the ability to improve profitability. We will shed some more light on the profitability situation. Overall, the core business of Terranor, the road operations and maintenance, is progressing in the right way. We are trending towards the long-term targets. Of course, we've always talked about Sweden being the growth engine, but Sweden is also important to note the profitability engine. Looking at quarter to quarter could sometimes be misleading.

Looking at quarter three in 2024, we had a one-off effect, profit in one of the subsidiaries that affected in a double-digit million level. Of course, we tend to look at it over a one-year cycle. In that perspective, Terranor is definitely trending in the right way. Coming back to the market that we operate in, as you know, we have operations in Denmark, Sweden, and Finland. Sweden, that stands for close to 60% of the operations, of course, has a very strong outlook. In all three countries, we expect the full market to hold some 80 billion. Considering the higher traffic volumes and also the higher security demands, not to mention NATO and defense, of course, we are moving into a market that will be growing over time.

Good thing working with state and municipalities is the visibility, the transparency of what funding will come into the sector. Looking at both Denmark and Sweden, the visibility is very high and indicating that numbers will increase. In Sweden, the numbers are at the 50%, close to at least increase annually, predominantly to handle the maintenance deficit that we have built up in Sweden. Of course, we see that in the numbers for the Swedish road operations and maintenance business. Like I said, looking solely at the Swedish road operations and maintenance business, making up close to 60%, it has never been in better shape. I really need to underline that both growth-wise and profitability-wise, we are all-time high in the Swedish road operations and maintenance.

Quarter to quarter, we are affected by a one-time effect in 2024, but we are also affected negatively in this quarter by subsidiaries that we have taken a restructuring stance towards. We have taken action. Part of it is in the adjusted numbers. Inka will tell you more about the adjustments. I'm not a big fan of adjustments, but tell me, I will tell you very straight up, over 90% of the adjustments is the IPO. Aside from that, we will not work with adjustments. What you see is what you get. Inka, seasonality on the back of me talking about it's hard to see one quarter compared to one quarter over an annual cycle. Please inform us.

Inka Kontturi, Group CFO, Terranor: Yes, yes. Our operations follow the seasonal cycle. Our maintenance year starts with the winter season in fourth quarter. During the winter season, we have more fixed revenues with limited margin expansions. Going into the summer season, second and the third quarter, we have more variable works and then also more on extra works, which increases the profitability. Going into the fourth quarter again, closing up to the maintenance year, we usually have the highest of the volumes. The seasonality is really important to keep in mind when evaluating our quarterly performance. Terranor Group is growing. You're saying something? Okay. Terranor Group is growing. Our revenue amounted to SEK 794 million with 10% of the growth quarter to quarter. Revenue for year to date was SEK 2.4 billion, and this is the growth of 8% compared to the prior year.

This keeps us firmly on a track to meet our medium-term targets at least of 8% of the growth. Biggest growth driver is the segment Sweden, which has been growing 17% quarter to quarter and 10% year to year. Growth comes from the base business, road operations and maintenance, where we have now started five new contracts successfully. Our growth journey will get support from Denmark, where we have signed the new municipality contract starting in April 2026. Here we can see adjusted EBITDA numbers. Adjusted EBITDA for the quarter was SEK 21 million. This is 3% of adjusted EBITDA margin. This is a drop of one percentage point from third quarter in 2024. Looking into the quarters, this year the growth, the EBITDA has been more stable, and this is increasing. We have increased our EBITDA by 14% compared to last year.

This result reflects seasonal effects, ongoing restructuring in certain subsidiaries, but also successful ramp-up of the new contracts. Excluding the subsidiaries, Sweden demonstrates the strong profitability and performance, well in line and above the plan. Mikkel, would you like to give some color to this?

Michael Berglin, Group CEO, Terranor: I can. Thank you, Inka. Talking about the subsidiaries, let's start there. You know that in Sweden we have subsidiaries called Signa Infra and Norvia. We have told you guys before that we are embedding those subsidiaries now into the business. Partly it is due to efficiency, but it makes much more sense because road operations and maintenance is what we are focusing. If we were to look solely at Norvia, which is the trucking company, and Infra, we have had losses this year. Of course, this is part of why we are taking actions and we are taking firm actions. Coming into 2026, those businesses will be in a totally different shape. It has to be said that looking at the road operations, they are trending very close to the long target margin of 5%.

Also, Sweden, the road operations and maintenance is, I would say, the driver. Close to 90% of revenue growth is from Sweden. What makes Sweden especially strong looking forward is the new contracts that we started, not only 2024, but the contracts we started now this year in September 2025. All of them have been mobilized, been ramped up, been executed on or above target. That gives confidence that Sweden is trending in the right way. Inka is talking about the profitability trend, and I will strongly support that. We have had effects from the subsidiaries. We have handled it. Looking beneath it, looking at what really will be the driver for years to come, that part of the business is certainly going in the right direction.

Inka Kontturi, Group CFO, Terranor: Back one.

Michael Berglin, Group CEO, Terranor: Sorry.

Inka Kontturi, Group CFO, Terranor: The items affecting comparability, 27.2 million. This is mainly related to the IPO process. This includes the IPO cost of SEK 18 million and the bonus cost for the IPO process, also SEK 7 million. We have quite lean top organization, and we needed to bring in extra support in able to complete the IPO process in compressed timeframe. We are not expecting the IPO-related cost in fourth quarter.

Michael Berglin, Group CEO, Terranor: Now.

Inka Kontturi, Group CFO, Terranor: Now.

Michael Berglin, Group CEO, Terranor: Thank you.

Inka Kontturi, Group CFO, Terranor: Fourth quarter, the cash is negative. We still have IPO-related one-offs, but we are not expecting those to come in anymore in the fourth quarter. Compared to year-to-date figures 2024, we have increased our operating cash flow plus 17 million. And without IPO one-offs, this would be even more. Like we discussed earlier, Sweden remains the core growth engine with the five new contracts and solid profitability. Finland is on a restructuring phase. Focus has been on decreasing the fixed cost and increasing the profitability in the state contracts. In Finland, there was a risk reservation done in third quarter. The effect was EUR 2 million. Denmark is focusing on closing of the five state contracts. We can see a small effect on decreasing on extra work volume in state contracts in Denmark.

Going into 2026 with four new state contracts and starting to turn the municipality contract in second quarter, we are expecting Denmark to contribute positively to our midterm margin targets.

Michael Berglin, Group CEO, Terranor: Thank you, Inka. Looking at the long-term targets, I want to perhaps start where you left off, Inka. Looking at Denmark, we have talked about the effect of leaving all of the state contracts this year end. I think it needs to be underlined that, of course, when we leave almost 60% of the revenues, that is the state contracts, we have run those contracts for four years now on what we have said to be challenging margins. Leaving them, starting them up, basically doing the same work, but on very different terms. Of course, Denmark is going into much better territory. Also looking at the Tender municipality contract that we won, it is the effect of also us focusing more on the municipalities. I would say I have really strong hope.

I am confident that Denmark will be producing also close to the 5% in the short future. Sweden and Denmark really looking strong. Finland, we talked about, it will take longer time. Finland has a lot of contracts back from 2022 and 2023. In Finland, contracts are always five years, meaning they expire in 2027 and 2028. We will work with Finland. Looking at Sweden and Denmark, Terranor Group is definitely in good shape. I would say better than ever. I have strong hopes that we will reach the targets. I mean, the growth target, we're above it. Profitability, trending in the right direction. Dividends, yeah, that is the plan. We will pay back to our owners. Leverage-wise, we are in good shape. To sum it up, Markus, I think that looking at the targets, we are on the right path.

Yeah, this is what we always come back to, the reasons to invest in Terranor. I want to start with what we always talk a lot about in the company. Why are we here? What do we do? First of all, we produce service that is good for society. Without us doing what we do, society will stop. The market that we are in is growing for a good reason. We will not see less traffic on the roads. We will not see less demands on secure roads. Quite the opposite. We see a high degree of increase in funding coming into our sector. For a company like us, obviously now trending in the right path, I see a good future. I see very strong outlooks. Like I said, we come from high growth rates.

We continue to grow, maybe not as fast, but looking at the tender season that is coming in Sweden now, we feel for good reasons confident that we will continue growing. By that, Markus, the presentation is over. Open up for questions. Yeah, a couple of questions. Maybe I'll start out with a few. Maybe we just start with, we talked about sales and the driver of sales. There were new contracts starting in Sweden in September. Maybe talking a little bit about how the ramp-up of those are going. Because also, of course, with new contracts starting up, with what you talk about high profitability, and we come back to profitability, let's start with sales. You have also the old contracts coming out. Is this the main reason for the 10% growth driver?

Yes. That is also a good question to the point. It is also the driving force of increased profitability. Because like you said, we are phasing out contracts that were taken in 2021, 2022 when the company was more, how should I put it, eager to gain market percentage. Of course, also the operations were in a different shape than it is now. Coming back to your question about the contracts that we ramped up in 2025 and also in 2024, there is a big difference between how we ramped up mobilized contracts back in 2021, 2022, and now looking at 2024 and 2025. The evidence is, I think everybody can understand that since this is a price competition, you go low, you get the contracts. The evidence is if you can ramp up on your tender and the tender margin.

For the contracts in 2024 that we started, four new ones, in 2025, we started five new ones in Sweden, they've all met the target and/or above. Since what we do for four years is, I'm not trying to make it easy because this is hard, but what you do the first year, you will continue doing year two, year three, and four. You will probably, most likely, increase your efficiency in doing it. Coming out the first year is very, very important.

Maybe we can come back to sales and orders, but maybe we dive straight into profitability and the margin. Because the margin was down 140 basis points. In my book, that was mostly because of Denmark. Maybe one question on Sweden before we come into Denmark. How big of an impact did you mention Infra Norvia. I mean, you had restructuring, but take that away. That was one of the reasons. How much is that impacting?

Year to date, I would say that Norvia, not as much as the loss last year. So we have done progress, but of course, we're not happy losing money. Year to date, I would say, Inka would help me, but I would say SEK 10 million, close. In the quarter, less of course, but still negative. Looking at Infra, maybe finishing off Norvia, to me, it has been much more of an operational issue. The operation has been sized wrong, and now we are downsizing, especially the business in the Stockholm area. To us, that will do all of the change from negative to plus. Looking at Infra, it has been a top-line situation. Company was very successful in 2024, doing a lot of contracts, obviously profitable. Coming into 2025, it has been a problem gaining new orders.

Partly criticizing myself, we are a road operations and maintenance business company. That is what we are good at. Finding light infrastructure projects outside that scope, we have not been good at that. Now we are embedding it into the base industry. That to us will solve the problem. Yes, it has had effect in the quarter. Again, coming over to the road operations and maintenance. Like Inka said, Sweden segment is 4%. Take away Infra and Norvia, close to 5% only in the road operations and maintenance. Looking forward, when we do not have the effect of Norvia and Infra, but we do have the effect of additional funding coming in, and we are already now trending towards 5% in the base industry, that gives me confidence that we will in total be able to reach the long-term target.

Would you say that you're taking care of the problems in Norvia and Infra?

Yeah.

When will you be done? So will we see the impact or the effects? Yeah, when?

In quarter four, we will see. Definitely starting 2026, we will be out of the losses. We will have a profitable Norvia, and Infra will be part of the road operations and maintenance. I will also give you an idea of why Infra is natural in the road operations and maintenance. Because of the additional funding, all the demands that our biggest client, Trafikverket in Sweden, our strategy is to be the one-stop shop provider for what they need in road operations and maintenance, not doing tunnels, bridges, but in our industry. Within that comes light infrastructure. We will do that as well, but we will not do it aside from the base industry. That is the big difference.

Okay, okay. Moving to Denmark maybe. We did not see the normal seasonal pattern in Denmark. We saw a pickup in profitability last year in Q3 and Q4, and now we saw a drop in Q3. What was behind that?

I would say the ending of the contracts. We anticipated higher volumes, looking at historical data that supported that always Q3 and Q4 amounts for the highest revenues. This year, I would say, is somewhat affected that we are leaving five out of five contracts. Don't get me wrong, it's not that like we're shutting down business, because next day, December 31, December, we leave that one contract. Next day, we start up the other one. Our clients' behavior in ordering extra work, swellings, it has been lower in Denmark this quarter than it was last quarter. For us, it has to do with us closing down all of the contracts, then starting it up. If, Markus, it only means a periodicity question that volumes are shifted from quarter three, quarter four into the new contracts, then I'm all fine.

Like I said, I am very confident that Denmark is moving into better territory.

We will come back because you pick up on, I think, an important point. If we look a little bit just very, very short term, should we expect the same kind of impact in Q4? I guess that Q3 and Q4 and the extra orders kind of go together.

They do. Q4, my guiding, so I need to choose my words, but historically, and we actually do not see that big of a trend difference. Q4 will be our strongest quarter, revenue-wise, but also profitable-wise. Looking at Denmark, since to your question, Q3 this year towards last year, we cannot totally rule out that quarter to quarter, the fourth quarter will be better this year than last year. Looking at Sweden, again, yes, we will be stronger. The growth engine is Sweden. Out of a group perspective, we will trend stronger in Q4 than in Q3, and we will end the year at all-time high revenues. That for I'm writing checks here now. I understand that, but yes, I feel that confident about it. Yeah.

Again, looking at extra, if it is extra work and swellings, which is behind the kind of drop, which is your interpretation here, then as you say, I mean, you do not do extra work and swellings because it is fun rates, because they are needed. Even though they are not ordered now, they are still there to be ordered is the way that you see it.

Very true point, Markus. Of course. I have talked about visibility and transparency going forward and working with state entities. We tend to talk a lot about Sweden because it is obvious, the deficit. The same goes for Denmark. We have visibility. We know there will be additional funding for bicycle paths, for road safety, for rest areas, all of the things that we are working in, all of the areas that we currently hold four out of five state contracts in. Of course, the additional funding will increase revenues also in Denmark. On top of that, municipalities that we have proven that we are strong in the competition.

Yeah. I've got a couple of questions. I'll take a couple of questions from the call. You've been quite vocal, not just reading out now. You've been quite vocal about the new contracts being entered in much higher profitability levels. During this quarter, even if adjusted for one-offs, the EBITDA margin seems quite far from the 5% target. When do you expect profitability to improve at an aggregated level?

You will see it in the fourth quarter.

In the fourth quarter.

Yeah, you will see it in the fourth quarter. The long-term target of 5%, I cannot be clearer than Sweden close. Denmark with the new terms next year will be close. If it happens in 2026, that I will not check, I will not write, but we are very close. We have had struggles with subsidiaries. We have handled them. We have had struggles with historical contracts facing out. We have the evidence of our mobilization, the ramp-up, and the tender knowledge. We see that 5% definitely. I will stop there. I will not give a date for when 5%.

Another question, which is a bit more shorter term, but you're closing down the contracts in Denmark. How does it usually work at these kind of times? Is it projects running and that there's a risk of write-outs of projects or anything like that that we should look out for?

Of course, to some extent, you will have that risk. But then again, you've been running the contracts for so long. You know these contracts. The level of uncertainties, unforeseens that you might see in other industries, suddenly something happens that is not our industry. You will not, we will not see a big drop in any kind. That is not what I'm seeing.

Maybe staying a little bit with Denmark before we move over to Sweden and also a little bit on Finland. You got municipal order on Denmark during the quarter. We had the four state contracts, which you won last quarter, which is starting in January 1. You've been talking a little bit about municipal orders being you're targeting those. Talk a little bit about your strategy in Denmark and regarding this and what the focus is.

Yeah, sure. The strategy is similar in Sweden and Finland. We target primarily the state contracts. The state contracts are the base. That's where you have the volume. After that, municipalities that are adjacent or within the state contracts, simply because it adds efficiency, utilization, it adds robustness and resilience because we are not only dependent on one state contract. I think looking at the Swedish industry, we have very good examples from Gothenburg or the West area. We see it also in the Norrköping area where we've been very fortunate with the municipality contracts. The same goes for Denmark. Where we have the state basis, we are now targeting the municipalities and we are strong in that industry. I'm looking forward and seeing a mix of state and municipality being the backbone of the business. That is the strategy.

Maybe look a little bit about Sweden. You have the new contract starting now and then you'll have the full impact in Q4. You are also going into new tendering season. Maybe talk a little bit about the tendering season, what you expect, what is upcoming, how you're preparing.

Yeah, very highly exciting. This is starting now actually, or in October, we get the documents that we are tendering on. We start earlier. We start in April, May looking at because we know what contracts are coming out. We actually know what contracts are coming out 2026, 2027, 2028. So long time to prepare. We have a lot of data looking at historically, what was the tenders last time? Do we have equivalent contracts that we can benchmark towards? All of that is done prior. Then the documents come out in October and we really dig down. We have the central department, we have the local department combining forces. First tenders go in in early January. I think it is 22 or 23 contracts that are coming out this year, kind of depending if sometimes Trafikverket splits one big contract into two.

Somewhere in 2022, 2023, I think on an annual basis, these contracts last time were tendered up to close to SEK 1 billion annually, times four. That was four years ago. A lot of volume coming out. Of course, we will continue to tender on everything. That is what we do. We want to grow, but not giving away trade secrets. Like I said, we like to build strongholds and we like to see a bigger picture of where is interesting municipality areas, where can we find adjacent businesses. All of that goes into our tender process.

How does it work practically when they come out? Is it like they come out one by one or will it be chunks or will we get to know at the end of March how this was the outcome or how will it work?

Yeah, that's also exciting because they come out in buckets. You are handling four, five, six perhaps in January, two weeks later, another four, five, six, and it continues until end of February. You will also know the answer sometimes before you are handling the next bucket. You tender and you know the answer, then you tender the next ones. Of course, a lot of strategy also goes into do you change your tender pattern? Do you change within this timeframe? Yeah, I say this is very exciting, but also we are in the most intense time. We are moving into the wintertime. It needs to be said most of our focus is on the roads, providing security and safe roads. Aside from that, tender season, definitely.

Maybe a question from the audience on the contract that you have or that you're starting, how sensitive are you to fixed prices here? That is, what kind of risk are you having from prices being fixed and then you have inflation on that?

I was going to.

You can.

Okay. We have index protection, so that is one layer. Of course, if we tender completely wrong on, let's say, subcontractor prices or our own prices, like in any tender process, that is your risk. Again, coming back to how we have been able to mobilize in 2024 and 2025, meeting all our subcontractor prices, to me and to our entire organization, it gives a lot of confidence that we have the ability to calculate and tender on the right levels. So yeah.

Another question on Norvia and Infra. Are there any extra cost of project costs or anything like that? Or is it, do you have the restructuring cost, but if you do not talk about that, do you have any project write-downs or anything like that? Or is it just.

No.

It's just pure profits?

Yeah, it is. Like I said, in Infra's case, it has been a disalignment between overhead cost or, yeah, CapEx and top line. We have not been able to get enough revenue to cover the cost. Now we are, yeah, downsizing, putting it into road operations and maintenance and making it supporting the base industry. Looking at Norvia, utilization, definitely. The operations around Stockholm area have been too big. We have not been able to utilize the trucks or the drivers. Now we are downsizing it. The adjustment posts that we have in this quarter are due to the downsizing. It is a one-time effect. It will not continue. Unfortunately, we had to lay off people and we are selling trucks. It is part of the strategy of downsizing to come back to a shape where we are profitable and grow from there. Simple.

It's not simple, but in its logic, perhaps.

It is a question of pricing of the new contracts in Denmark. How much of the price is increased in these contracts? Is the volume similar to previous years or will there be higher volumes as well as prices to expect?

Both. I would say starting with the revenues, of course, we already know contract by contract that looking four years ago and now prices are up. So revenues in those four contracts will be very, very close to what we had in five contracts. That gives you one idea. Secondly, quality standards from our client is increasing. So our biggest client, Vejdirektoratet in Denmark, they have increased quality demands. They actually can on a level one to three, they can choose and they have to tell us before every year. We know that they are choosing the highest standard. That also together with the increased funding that we already know, yes, I see increased revenues driven by that in Denmark. Prices, of course, you have price inflation in Denmark. To me, the most interesting is the relation. What are we getting paid?

What do we have to pay the subcontractors? Of course, the delta. To me, we are increasing that delta, meaning better profitability in Denmark as well.

There is a question also on Finland. You mentioned the war in Ukraine, which has not been mentioned before. Is it the same thing with the contract that you do have, which you said you signed in 2021, 2022, that is before the war is kind of part of this? What is it that you bring this up now? That you mention it now? Has it been a further deterioration of the profitability in the contract in Finland?

No, I would say why we're bringing it up is it has been there. We've talked about it before. We have contracts that are challenging. We have talked about we have contracts that are affected by the sanctions. We have mitigating actions that have been in place. Of course, we are working, we're struggling with them. We are bringing it up because one needs to understand that out of 13 state contracts in Finland, nine come from 2022 and 2023, meaning a majority. The effect that the sanctions had on these prices or the cost that we carry, it had increased. We are in discussions with the client. We think that it's a sound, it's a good discussion. We have the mitigating actions. I am stepping in and will now be the Country Manager, acting Country Manager of Finland.

That is part of, I need to be there and support the local management because we have a situation that will continue until 2027 and 2028. We have time to work with the situation. Finland, looking at Sweden and Denmark, Finland has more challenges with the historical projects or contracts simply because they carry a higher weight in the order in the backlog, nine out of 13. Compared to Sweden, compared to Denmark, Denmark is changing five historical contracts all into new ones. That is a complete game changer for Denmark. Looking at Sweden, we know that the historical challenging contracts, we are phasing them out now and we have been replacing them. Denmark and Sweden, completely different. I think it is fair to be transparent and to guide that we have a different situation in Finland than we have in Denmark and Sweden.

Finland making up for 15% of the revenues, not meaning that again, I am stepping in now because yeah, I need to be there and support Denmark and Sweden trending in a better way.

Is it the same? Do you have the same strategy in Finland as you have in Sweden and Denmark? That is, for the contracts that come out in 2027 and 2028, you will tender for them all?

No, that is historically, yes. For Finland, that is part of the analysis that we need to do for Finland. Contracts are a bit different in Finland, competition a bit different. Of course, if one size does not fit all, then we adapt. That is what we always do. Part of my interest in Finland now is also taking the course for how do we turn Finland into 5% profitability. A bit too soon, but we will come back with more answers on Finland for sure.

Cash flow, you have the IPO cost and restructuring cost, and that is taking cash flow down in the quarter. If you adjust for those, that's the first part of the question. If you adjust for those, is it as it should be or is there anything else in the cash flow that is happening between the numbers or below the numbers?

Inka Kontturi, Group CFO, Terranor: Yeah, the operating cash for the quarter was on the negative side, but we had the SEK 27 million of the IPO cost included in that. Without that one, we would be higher than last year. Compared to quarter to quarter, we were SEK 17 million higher. Going into the future, into the fourth quarter, the best is still yet to come. The fourth quarter historically has been the best quarter when it comes to the cash, and we see that one coming also in this year.

Michael Berglin, Group CEO, Terranor: As you said, the IPO cost and also the restructuring cost for Norvia and Infra are behind you as well. We should not expect, as you can see now, any more of this coming. That is planned anyway.

True.

Finally, maybe we're entering 2026. It's a very exciting time with the tenders that you go into in Sweden in particular. What is going to be the focus for you guys when we enter the new year and then going also beyond the kind of March when the tendering season is over? What is your focus?

Sticking to the strategy. We are trending in the right way. We are confident that being specialized and being in all these markets, looking at the extra funding that is coming in, we are very confident that we are on the right strategy path here. Continue doing what we are doing, continue supporting the operations. This is everyday hard work. It is work that is, of course, good for society, but nevertheless, it does not do itself. Security, efficiency in what we are doing, supporting the colleagues out on the road, but sticking to the game plan, sticking to the strategy. So far, it has proven, looking at Sweden, again, 60% of the revenues with the best projection going forward, we are on the right track. Stick to the plan, do more of what we already are doing, but continue focusing on the road and what is happening there.

Mikael, Inka, thank you very much for coming here to talk to us. Thank you everyone for watching.

Thank you.

Inka Kontturi, Group CFO, Terranor: Thank you.

Michael Berglin, Group CEO, Terranor: Thank you, Markus.

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