DTCGF (DTCGF) Q3 2026 Earnings Report, Transcript and Summary

Welcome to Dometic Q3 Report 2026. Today, I am pleased to present CEO, Juan Vargues; CFO, Per Carlsson; and Head of Investor Relations, Tobias Norrby. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Good morning, everybody, and welcome to this quarterly report, the third quarter for this year. Let's move on to the presentation. We are very happy to report organic growth. It has been a while ago since we could show positive numbers. And what is even more positive is obviously that the underlying markets are still weak. We have still today low consumer confidence. But looking internally, we started by showing organic growth a couple of quarters ago in one of the segments, then we got 2 segments, and now we have 3 segments showing a positive development. Even positive is that we continue to see a good order intake in Q3 and a stronger backlog when we move into Q4 in comparison to what we had last year and what we had as well at the beginning of Q3. Obviously, we would like to see higher profitability. As you all know, we are working very hard with our restructuring programs, adapting capacity all the time. At the same time, we have still today the headwinds coming from raw materials just now. And obviously, volumes are still very much down in comparison to what we had a few years ago. We keep working hard on implementing our strategy. And that means these days on one side, finding the pockets of growth wherever they are in the tough market conditions, but also continuing to adapt capacity to the new need by reducing complexity and using our assets in a better way in a more efficient way. That means as well that considering the situation of the American market, considering the fact that the industry is down 14% this year that we might have new interest rate hikes moving forward. The expectation is we should be careful with our expectations on the remainder of the year and next year. And therefore, we also launched a new restructuring program addressing primarily Land Vehicles Americas. There are a couple of other pockets, but the vast majority of the program will address Land Vehicles Americas, having as a target to have SEK 215 additional million in savings by the end of 2028. Looking at the numbers, organic growth, 3% up. EBITA reaching 9.7% versus 10.4% last year. A negative free cash flow for the quarter of SEK 90 million, affected by a few one-offs that Per is going to comment later on. And then all of that leading to a leverage slightly higher than 1 year ago of 3.4x versus 3.2x. Looking at the underlying OEM markets, we see U.S. RV production is very much down, both quarter-to-date, but the same numbers in reality for the year-to-date number, minus 14%, so still very, very weak. We have also registrations in Europe. As you may know, we don't get numbers. There is no association publishing numbers every month as we have in the U.S. on manufacturing, but we have registrations instead, which is a pretty good indicator of the state of the market. Registrations, we had a strong Q1 across Europe. We got a weaker Q2, and Q3, as you can see, is pretty negative, reaching 16%. And we're meeting dealers, when meeting OEMs across Europe, just now, the expectation is obviously that this weakness will continue for the remainder of the year and most probably also next year. Looking at the U.S. Marine business, a little bit of the same. We still have the majority of dealers feeling that their inventories are high, that they are suffering from, obviously, low consumer confidence and price pressure. So at this point, we cannot see any signals of any major change on market conditions from an OEM perspective. What we can do is obviously to focus on the rest of the areas where we are present, which means the Service & Aftermarket business or the Distribution business. And considering all these factors, again, we are happy to see the evolution in sales and bringing us to the feeling that we are taking market share just now on a broad base. We expect as well our investments in Service & Aftermarket, in Mobile Cooling and Marine to continue to show that the diversification process that we started a few years ago is paying off. Looking at the facts, again, SEK 5.1 billion in sales revenue in the quarter with 3% organic growth. EBITA SEK 495 million or 2% down with an EBITA margin reaching 9.7%. Adjusted EPS of SEK 0.03 in comparison to SEK 0.64 1 year ago. I already commented the negative free cash flow of SEK 90 million, and we'll be back to that and the leverage ending up at 3.4x. Looking at the year-to-date numbers, happy to report finally 1% organic growth year-to-date, not just in the quarter, but we are turning to positive even for the year. EBITA, almost SEK 1.8 billion in comparison to 1 year ago or 10% down with an EBITA margin of 11%, adjusted EPS of SEK 2.16, a free cash flow of a little bit more than SEK 0.5 billion, a leverage of 3x. Looking at sales, the graph is self-explanatory. Ground Vehicles growing 2%. As you can see, Americas is still in decline 8%, but pretty far away from what we see in the decline of the market. Again, manufacturing in the U.S. is down 14%. We are down 8%. So that's good news. EMEA, 9% up, very positive. APAC also turning to positive 1%. Marine, 4%. Mobile Cooling, strong 9%, which feels very, very good. And then Global Ventures still suffering as well, 6%, primarily driven by the connection to the RV industry in the U.S. Looking at the evolution of the different channels, we clearly see also how we have been targeting growth outside the high-ticket discretionary spend, moving more and more into distribution channel, moving as well into Service & Aftermarket. And that has brought quite a lot of resilience when looking at how the different end user markets develop over time, especially driven by the OEM situation and consumer confidence. Looking at organic growth by channel. I also believe that the slide is self-explanatory. We see the stability. We are coming from a negative situation for a number of quarters with American market falling first. Then once the American market stabilized, then we got the European market coming down. And then the market in APAC coming down. But the good news is that we have just now the opposite situation. We got into some kind of stability, and now we see as well that we are starting to grow. Especially happy to see, obviously, Service & Aftermarket, where we have been investing from a product development perspective. We have been developing from -- even from a branding perspective, introducing a new brand to address a different channel that we were used to. We see as well OEM being positive 4% despite the weakness on the -- in the RV industry. We are growing primarily driven by commercial vehicles at this time. And then distribution, pretty flattish, has been flattish for a couple of quarters. And we still expect, obviously, to see that channel moving into positive in the quarters to come. EBITDA showing good resilience despite the fact that we have raw material prices just now playing against us. As you are all aware, on plastics due to the oil prices coming up and being a pretty high level, 10% to 20% higher than 1 year ago. We have aluminum close to 40% higher than 1 year ago. We have steel 10% to 15%. So this is playing against us, but we still managed to mitigate some of the negative effects. Gross margins staying at 29.3% versus 29.5% last year. Here, we need to consider as well that we have a negative product mix with Mobile Cooling growing 9% in comparison to the rest, where we have lower margins in comparison to the average. And then SG&A, we have also been working hard. We continue to invest in product development. We continue to invest in sales activities. And at the same time, we reduced in other areas of the company, especially administration. All of this leading to a slightly lower EBITA margin for the quarter. Going a little bit deeper into the different segments, Land Vehicles, 2% up with growth in Service & Aftermarket overall and growth as well in the OEM channel, especially driven by commercial vehicles, while RV declining, but a pretty slight decline. So we see also that, that's moving. Now we need to understand what is going to happen in the European market in the coming months, but we have seen a pretty positive development in Europe from an RV perspective during the first quarter of this year. EBITA ending at 6.3% or a little bit more than SEK 140 million with improved gross margins despite raw material costs, and that's obviously a consequence of all the savings that we are getting through the restructuring program that we have been running in the last couple of years. We also see higher SG&A as a consequence of investments in both product development and sales and marketing in a similar way as in a couple of other segments as well. Marine, positive 4% organic with growth, very nice growth in Service & Aftermarket and flattish on OEM. We still -- we are all aware of the situation on the boating market in the U.S. We see that market is still negative, while we see positive in Europe, very much driven by the yacht market, the superyachts and the megayachts going still very, very well. Good resilience of margins as well, 20.4% with stable gross margins, again, protecting. We have tariffs in Canada kicking in at the same time as we have been pricing, we have the raw material prices. But again, we increased our prices and managed to mitigate the negative effects and a slightly negative FX effect as well in the Marine business. Mobile Cooling, very nice growth, 9%, very much driven by North America and seeing very, very good sell-through, I have to say, higher than I would expect. But obviously, here, I like to talk about the weather, but I do believe that weather has had a positive impact in this season in comparison to last year. Margins, lower than we expected, ending up at 5.4%, but very much driven again by raw material prices, have increasing prices, but we have still -- we are still suffering from a time lag between cost increases where we get new cost increases on a monthly basis and price increases where we normally -- when we are talking about the major accounts, we have anything from 3 months to 9 months implementation. And then working as well on SG&A to adapt the capacity to the new levels. Global Ventures, negative organic growth of 6% with mid-digit negative growth both on other global verticals and Mobile Power Solutions. EBITA margin, 7.7%. And here, we are clearly suffering from factory under absorption. In this case, in this segment, we have small units and it's a little bit more complicated to adapt capacity to the demand on the market, even if we are still working to reduce our capacity even there. Looking on sustainability, we're also happy to report that we continue to make quite nice progress with injuries coming down and below target with share of female managers above target, which is also positive. Renewable energy also developing in a nice direction and above our target for this year as well. And the same is valid in terms of assessments of direct material suppliers also there above target for the year. As I commented earlier, the American market is not developing as we all would like to see. That means that we continue our efforts. Looking at the restructuring programs that have been implemented until now, we would expect annual savings of SEK 900 million, so SEK 750 million from the program announced in December 2024, another SEK 150 million from the program that we announced in Q2 this year. At this point, we are running a savings of SEK 600 million, adding another SEK 110 million in savings in Q3. As we speak, we are just now working on shutting down 3 manufacturing units that will obviously bring additional savings in the quarters to come. You will look at what we have done so far, 1 manufacturing unit has been shut down, another 6 distribution centers have also been reduced. Now moving forward, we still suffer from overcapacity, especially in Land Vehicles Americas, considering the situation of the market and that we don't see the market turning back anytime soon. So we need to continue. We are adapting capacity. We are reducing costs, and we are also working on the product portfolio. Additionally, I would say it is a job that we started in December 2024. We want to improve asset utilization. We want to reduce capacity and look at additional footprint adaptation. We keep working hard on simplifying the product portfolio. We will be selective on customers and products and channels, so the 3 dimensions. And as commented earlier, is very much focusing on Land Vehicle Americas and getting back to a profitable situation. The program as such, we are booking a restructuring cost of SEK 425 million. We generate SEK 215 million in additional savings, bringing the total savings once we are done with the 3 programs to SEK 1,115 million in savings. And the estimated cash impact is going to be SEK 140 million. So we try as much as we can to drive a split vision, which means that work very, very hard on savings, work very hard in adapting capacity to the needs -- the market needs at the same time as we continue to invest in the long-term growth generation, which means that we continue to invest in product development and keep our levels at 3% of sales. We keep investing in innovation. We are just now at 23% in our innovation index. As some of you may remember, innovation indexes for us is the share of products that we are selling that are less than 36 months. Just now, we are running at 23%, having as a target of 25%. And we continue to invest in sales and marketing, not the least driven by the number of product launches that we have in the pipeline. We have been launching a lot of new products, and we continue to launch new products. A few examples of product launches during the quarter. We have new AC equipment in the air distribution box for the RV industry and the commercial vehicles. We have a new kitchen equipment on air fryer, even there for the RV and commercial vehicles industry. We have a new premium series of roof racks and the Front Runner brand. So that's the new domestic frontrunner series that we believe very much on. And we have also launched a new generation of solar panels, and this will continue going forward. So a lot of things going on in the innovation pipeline in other works. And with that, Per, I would like to hand over to you.

All right. Thank you, Juan. So good morning, everyone. I'll walk you through the P&L and the cash flow in the coming slides. So on a very solid and good top line, I would say, with the growth of 3%, and especially encouraging, obviously, is that we have growth in 3 of the largest segments. So it is good support. That gives us a gross margin of 29.3%, which I would consider as a good margin management as we still have a quite heavy headwind from the higher material prices, both in resin and in metals, plastics and metals, impacting not the least the Mobile Cooling business. We also have a little bit of a negative impact on the currency as we have seen a strengthening of the RMB in the year and in the quarter. And as you know, we have quite a lot of production in China, both internally and externally sourced. Against that, we have the price increases that has been implemented throughout the year, and we see an effect of that, and that gives us basically a flat margin year-over-year. On the operating expenses, underlying SG&A is up in line with sales, which is in a way good because it's a lower pace of increase than what we have seen earlier in the year. The other part here in the operating expenses is the other operating expenses and income where we had a couple of good ones in '25. But underlying SG&A up in line with sales. So that gives us the EBITA of SEK 495 million, 9.7%, which is then slightly down compared to last year, but still quite a good number for us. Below that, we have a couple of big items impacting the P&L. We have the items affecting comparability, which is a net number of SEK 72 million. The restructuring provision for the program that we have launched that Juan talked about of SEK 405 million, which is then offset by the reversal of the provision related to the ACON earn-out case that we had a victory in say that we also communicated during the quarter. So that's SEK 354 million favorable that gives us the unfavorable of SEK 72 million in the quarter. Below that, we have the noncash adjustment of the intangibles related to acquisitions. So that's an impairment of close to SEK 4.2 billion, a significant number, obviously. That's in for Land Vehicles, which is, I mean, you can say, connected to the restructuring program that we have launched and also in the Global Ventures also related to the American market. And then we also have an adjustment of the intangibles on the Mobile Cooling side. And I would say that this should be seen more as a retroactive adjustments on the balance sheet, I mean, due to the development we have seen in the market in the recent years rather than a changed view on the future. And why now in -- at this time, well, we always do an impairment test in Q3 every year. So that's the reason for the timing. On the financial side, financial expenses are slightly down, primarily supported by lower interest expenses as our debt is coming down. And then we have taxes of SEK 245 million. Taxes this quarter is a little bit distorted, obviously, by the high number of nonrecurring adjustments of the IAC and the impairment. I would say you can still assume an underlying tax rate of some 34% when doing your estimates. Taxes here is also impacted that we have taken a very conservative approach on the reversal or release of the ACON earn-out, and we believe that will come back in Q4. Moving over to the capital side. So working capital still at 25% on an LTM basis, in line with what we have seen here during the last year, still running with high inventories, which is then offset by a favorable development on the payables, partly related to the inventories, but also better terms and then also favorable development on the receivables. We do believe that we have potential to come down, especially on the inventory side. And we still have a target of 20% working capital for the group. As we have talked about also 100 days on the inventory, might sound a little bit aggressive at this point in time, but we believe there is potential there for further cash release from working capital. One should be mindful, though, that now going into the fourth quarter, we are going into the prebuild season for the Mobile Cooling business to be ready for the early or the springtime sales, especially in the U.S. in 2027. Moving over to next slide. Relatively flat. The small peak you see on the CapEx side in Q3 is related to the manufacturing moves we are doing in the U.S., where we are building up capacity in the receiving plants. As Juan mentioned, we have 3 restructuring cases ongoing in the U.S. now, which should be finished towards the end of the year. It will also give us some more savings related to the '24 restructuring program. R&D remains on about 3% of sales, which is a level we believe is good for us to be able to launch all these new products that we have. And that takes us to the cash flow itself statement. There we filed an operating cash flow of SEK 563 million for the quarter, which is impacted then by the timing of the accounts receivable program, where we have a lower amount now in the program due to the seasonality of sales. So that's an unfavorable impact -- timing impact compared to last year of SEK 350 million as we got paid in the second quarter instead of the third quarter. The inventory impact is lower than what we have seen in the first half that will start to flatten out the curve. Below operating cash flow, we have a significant interest payment in the quarter related to the annual payments of the bonds, 2 of the Eurobonds -- so that's a EUR 20 million payment in the quarter, which on the quarterly, let's say, extraordinary impact is about EUR 15 million out of that. And we also have the payment of a tax settlement of a tax dispute that has been ongoing for a couple of years in Germany actually. And that takes us then to a negative free cash flow for the quarter. Furthermore, we have also paid back SEK 750 million of debt in the quarter, which was done in August. And this then shows you the seasonality for a number of years of the cash flow. And obviously, a negative free cash flow in the quarter is not something we would like to see. I think we have some good reasons for that, which is below the operating cash flow side, which is favorable and what we are aiming to deliver. And this has an impact, obviously, on the leverage side, which is somewhat up compared to Q2, driven by the lower EBITDA, LTM as well as the cash flow and FX. So all 3 are going in the wrong direction for us. Typically, otherwise, we have a relatively good hedging on our leverage. Compared to last year, the 3.2 going to 3.4 is all related to the EBITDA as our net debt is down compared to last year, which we continue to work on to get our debt down. It's a key measurement for us, obviously. And just a status on the maturity profile on the debt side that we have them in a couple of years from now, but we are continuously obviously working together with our bank group to have a solid and good profile on our debt. We're comfortable with that. Okay. I think that concludes my part. Back to you, Juan.

So what about moving forward? Well, we have a number of priorities. One is to continue to look for the growth opportunities even if the market environment is still pretty tough, but there are always opportunities to find something more, especially, obviously, from a Service & Aftermarket perspective and from a low ticket discretionary spend perspective. We want to improve the earnings quality of the company, while we will continue to protect our investments in future growth. We will continue to emphasize driving our restructuring program to a positive conclusion and by that, improving profitability. We will continue to focus on cash generation and taking down leverage towards our long-term target to 2.5 and we will also continue to adapt to a volatile change in market conditions and pursue any opportunities, any strategic opportunities wherever they arise. And that will conclude our presentation. And with that, we open for the Q&A session. Please go ahead.

[Operator Instructions] The next question comes from Agnieszka Vilela from Nordea.

Can you hear me now?

Yes, we can.

Yes. Okay. Perfect. I have a few questions. Maybe starting with Land Vehicles. I think that the growth in the quarter was a bit surprising and obviously positive and mostly surprising in EMEA. So if you could tell us what has been driving the growth there? And also, do you expect the momentum to continue?

You have different business. I mean there is 1 reason for calling for Land Vehicles and not RV. And the reason is obviously that we have other businesses apart from the RV. We are doing well in RV in the quarter, I have to say. So it's still positive even in Europe, but it's very much positive on the commercial vehicle side. And then we have also a very strong Service & Aftermarket quarter. We have seen EMEA doing pretty well. Starting already in Q1, Q2 was stronger and Q3 has been very, very good. We don't only have the EMEA. We see as well a recovery in APAC, I have to say. So despite the interest rate hikes that we have seen 4 times this year, we have in the quarter a positive growth of 1%, even there driven by Service & Aftermarket, but also RV doing decently, I would say. And then, of course, you have, as you are very much aware of Land Vehicles Americas, where we are still dropping, but we are dropping less than the market, which is also good to see.

Yes. And just looking at these regions like -- and maybe looking into 2027, I mean, it's a lot of uncertainty, but would you describe some regions as doing a bit better than others and having better outlook?

We have seen Europe doing much better, right? I mean the question is just now is what we see on registrations, what we see on, again, whether interest rate increases are going to happen or what will be the impact on the consumer. I mean, underlying, it is clear that the European consumer is in a slightly better shape than the American consumer just now. That's crystal clear. But again, looking at registrations, of course, that we need to be alert of what is going to happen in the coming months. So that's why I mean -- you have the OEM side, I don't think that we are going to see any major improvements as far as interest rates are so high as they are. Our bet has to be on Service & Aftermarket, making sure that we are performing much better than anybody else, launching new products, looking at new channels. And as you may remember, we also introduced a new brand to address a part of the market that was growing, and that's why we see that we are taking quite a bit of share as well.

And that's my follow-up actually because, Juan, you mentioned that you're taking market shares. Could you justify any regions or products that you are succeeding with? And also what is driving that? Is it your innovation investments and R&D that you put into that business quarters ago? Or what's really driving that?

I think it is just now it is on broad fronts. I think that -- again, if you look at our growth I mean, you know how the market has been perceiving Dometic now for a long while. But the reality is that if you have an American market, and as you know, American market is above 52% of our sales. If you have an American RV market, which is down 14% since the beginning of the year, at the same time as we are running Q1 ended up at 0 growth, Q2, minus 1%, and now we are minus 3%. That's telling you that this is not just that we are taking share this quarter. We have been taking share now for a couple of quarters. But the good news is that it seems as it is accelerating. We have been communicating better order intake. We have been communicating stronger order stock. So I simply believe that we are taking share just now everywhere. If you look at the registration numbers in Europe, minus 16% in Q3, and we are showing plus 9%, something we must be doing differently. And If we are developing products, the same. We have been launching a new series of products for AC, both on the RV side and on the truck business. We have been launching new products on a continuous basis on Mobile Cooling, where we see very nice growth. Marine, we have the gyro, still not flying at the pace that we would like. But still, we are not helping at the market. We are still positive. So I think it's very much in a growth front.

Perfect. And then the last question from me on the cost inflation and especially on the raw material side and your price increases, what was the net impact in the quarter? Was it still negative? And what mitigation actions are you taking? And when do you expect to be in balance?

I mean it's 2 things. I mean, when you have raw material prices moving in that direction, on 1 side, you need to push back from a sourcing perspective. On the other side, you need to pass prices to the market. And sometimes it takes a little bit longer. Sometimes it goes a little bit faster depending on the segment, depending on the region and the customer. We have a negative impact. But our personal feeling is that we are mitigating quite well, while at the same time showing growth, which is not easy in a market which is tough and where customers are looking for lower-priced products, so to say. And we will continue. I mean this is also 1 of the reasons, obviously, for driving very, very hard our restructuring programs to compensate. We are still in a catch-up situation.

And when do you believe to be in balance if the prices remain as they are?

I mean, normally, if the prices stay at these levels, we should be maximum in another 60 days, I would say.

The next question comes from Fredrik Ivarsson from ABG Sundal Collier.

Sorry, I've been a bit late, so excuse me if I missed something here. But to follow up on, obviously, a question on the raw mat, but did you actually comment on the gross impact from the raw mat headwind here? Or if not, can you do so?

I mean it's a mixed bag, obviously, when we are talking about so many products and so many different types. I mean we see that we have a net negative, which is causing, I would say, somewhere between 50 basis points and 100 basis points.

And was that the gross number?

Yes.

Okay. Good. And then still the gross margin was pretty stable, which is obviously due to a combination of price mix. And then which 1 of those 2 factors, price or mix, would you say had the impact in 3Q?

Price. Mix plays a role, but it's less obviously than price.

Good. And then on the order intake, you talked about the positive trend. Is that driven by both RV and is the outlook more positive in any of those 2?

Its Service & Aftermarket and Mobile Cooling, Service & Aftermarket a little bit everywhere. And then Mobile Cooling is also very positive and Marine is very positive as well. So I would say that the 1 which is lagging is still the RV industry.

[Operator Instructions] The next question comes from Igor from Tubic (sic) [ DNB ].

Just a couple of questions from my side as well. I just wanted to start off with the CapEx level going forward, given that you are closing down some manufacturing sites, should we assume or expect similar levels going forward? Or should this come down in any way, so to say?

I mean, over time, we have been shutting down a large number of factories in the last 8 years. What we have done is that we have really changed the profile of the CapEx. In the old days, we were spending CapEx in machinery, manufacturing capacity. While today, we are spending much less on that in that area, but we are spending more on IT, modernizing our IT profile at the same time as we are spending more as well in product development. I mean if you think about the innovation index and how we are growing and the number of product launches is clearly behind product launches, you have new tooling, you have investments in a number of areas. So I don't think that you will expect that we are going to come down to 1.5. I do believe that being between 2.5 and 3 is a good level for the kind of company we represent.

Okay. Very clear. And in terms of the new restructuring where you have announced additional cost savings of SEK 215 million -- SEK 50 million, the net cash impact of SEK 140 million, when will that come, so to say?

It will come stepwise.

Yes, all the way throughout '27, partly even into early '28.

Perfect. And a final 1 from me. You mentioned the partnership trend or consolidation that you see in the U.S. Are you in any talks around that? Or how should we think about it? Or are you looking to divest that part of the business? I just want to try to understand what your strategic way is there, so to say.

Talks -- these are relatively small markets. So we will always have talks to the left and to the right. What we mean with that is obviously that we see the situation just now with Patrick and Lippert that might have consequence for other smaller players. And that might mean as well, obviously, that customers don't like, obviously, monopolistic situations. So customers might be looking for other options, right? As you know, our position on the RV OEM market in the U.S. has been pretty tough in recent years, right? And this might also open for customers looking for other options like us. So it's a broad perspective. And I'm not just thinking about the RV industry. I mean we see, obviously, that the outdoor sector has been in a tough position during the last 4, 5 years. We see that companies are acquired by PE players, companies are acquired by industrial players. So there is a lot of movement as we speak. And of course, you cannot just stay outside. You need to have your eyes open and evaluate any opportunity.

Yes, clear. And a follow-up there, are you considering any divestment of any other part of the business or...

I mean we communicated in 2024 -- in December 2024 that we were looking for a number of divestments. Unfortunately, we still see with the market being depressed as it is, we still see a gap between sellers' expectations. In this case, we are the sellers and buyer expectations. So we want to divest to create value for the remaining business. We don't want to give away businesses that would be destroying the value instead. So we have not abandoned by any means our plans. We simply -- we have been to the market. We are on the market, but we are not getting the kind of price levels or valuations that we are expecting. No changes from a plan perspective.

The next question comes from Andreas Lundberg from SEB.

Can I go back to the working capital discussion you had? How do you see that in the coming quarters or in 2027? I recall you talked about somewhat high inventories during '26.

Yes. I see for '27 for the fourth quarter, as I mentioned, that we will continue to see buildup of inventory in Mobile Cooling to the preseason buildup. We're working on reducing that inventory in the other segments. It's a little bit hard for you to see whether we are able to offset the Mobile Cooling side the growth. Going into 2027, you should see a year-over-year increase on the inventory development.

Sorry, you expect inventories to increase next year.

No. I said we expect to see probably a flat development during the remainder of the year as we have a buildup in Mobile Cooling, which is offsetting the decline we are looking at for the other segments, while coming into the '27 and when we are through the buildup for Mobile Cooling, we should see a decline year-over-year. But keep in mind that we have quite a substantial seasonality in the business. So Q4, Q1 and also then partly into Q2, we have a buildup of inventory due to seasonality. Every year, as every year.

Except for working capital and potentially obviously operational earnings or operational cash flow, what are the biggest levers that will affect your cash flow most in the coming year?

We hope that we should be able to get down the inventories, which should help us to release some cash. Obviously, on the accounts receivable side, we have the program running. But of course, if we get into a growth mode as we see indications now in the quarter, that will also take some investment into receivables. So -- but we have a focus on cash flow and on working capital as that is the biggest lever in addition to the generation from EBITDA.

Right. And on this program on receivables, where are you now? And then how do you think about that on an isolated situation, i.e.

Yes, we have about SEK 600 million sitting in the program as of end of September compared to SEK 950 million end of June. And that was the -- as I tried to explain the movement on the operating cash flow. That's the -- 1 of the reasons why we see a drop compared to last year on the operating cash flow. It will come down further into Q4 as we -- as the season comes down.

Okay. But do you have any chances to sort of increase that program or decrease? Or where are you in that...

Exactly. We are looking into integrating more customers into the program, which is a good program for us due to the high seasonality in the business, actually. Should be able to seasonality-wise finance the inventory buildup by getting earlier from the customers.

The next question comes from Daniel Schmidt from Danske Bank.

A couple of questions from me. And you clearly talked about a positive trend in order intake, and we have heard that before and hasn't been really real in improving top line the quarters after, but now it seems to be happening. And I think you mentioned you called out Service & Aftermarket, Mobile Cooling and Marine being very positive, but RV still down in the order intake. But given that sort of scenario heading into Q4 and hopefully, a stabilization of raw materials seem to be coming down a little bit as of late and you increasing prices, is there sort of reasonable to believe that Q4 could turn out a positive in terms of change of EBITA margin's year-over-year?

I mean we will do obviously anything we can to see that happening. But again, you have a lot of moving parts. But what I can comment, Daniel, is our intention, obviously, to see margin improvements on a continuous basis. Unfortunately, we have seen whenever we have improvement, we have a headwind in terms of the market and in terms of the mix. But absolutely, that's our intention.

All right. And just maybe also a detailed question on RV in EMEA, which is sort of clearly sort of seen quite good growth in the quarter. I think you mentioned 9%, if I'm not mistaken. And registrations are, of course, clearly down, but it's not a 1:1 correlation between registrations and production. Did you still feel that production in EMEA among OEMs was up in the quarter?

No. My firm belief is that production in the quarter was down.

Okay. And do you have any sort of view on production for Q4 in the European market, given the weakness in registrations you could have that's going to accelerate that now, or what you do?

It's going to be down. I met all the major OEMs in Dusseldorf in August. So the big, big show in the European market for the RV industry is in Dusseldorf in August, at the end of August every year. I met all the major OEMs. I met all the major dealers. Dealers are still concerned on the inventories. They are concerned about prices. All the OEMs were more pessimistic about Q2 -- sorry, second half and 2027 than the first half. Again, it's consumer confidence. So I believe that we got a decent 2 quarters right after the drop in EMEA during the second half of 2024, the whole 2025, and we saw improvements in the first 2 quarters of 2026. But now the industry is expecting -- looking at registrations is expecting that production is going to come down. It came down in Q3, it will continue in Q4.

Do you see the same drop in Q4 as we saw in Q3 on a year-over-year basis in production?

If I think about EMEA, I do believe that the drop in Q4 is going to be about the same, perhaps a little bit higher than in Q3. Just a comment, Daniel. When you said 9%, I was not just talking about RV. I was talking about LVE as such. So RV OEM was lower than 9%, while we have the commercial vehicles was pretty strong, and then we have a very strong Service & Aftermarket as well.

The next question comes from Johan Eliason from SB1 Markets.

I just have a small follow-up here on the cash flow impact going forward from existing and the new restructuring program. You obviously said most of the SEK 140 million will be in '27 and then early 2028. But can you just remind me how much is sort of remaining of the ongoing programs in terms of negative cash outlays in the final quarter and then 2027?

The majority on the cash, I mean, obviously has been spent. I don't remember the number off the top of my head actually.

But is it sort of...

I mean most of the related to the -- related to the one in '24, I mean, most of that has obviously been executed. Then we have the one we launched in -- the extension we launched in June, July. There we still have -- so I would estimate somewhere SEK 50 million to SEK 70 million left on the...

SEK 140 million, SEK 210 million altogether.

Now we have a question from the web.

Yes. We have one question from the webcast audience, and that is if we can elaborate on how much of the goodwill impairment that was impacted by higher discount rates versus a weaker earnings development in the acquired businesses.

No, we have -- yes, the discount rate had quite an impact on the impairment test. Yes.

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

So concluding the conference for the third quarterly report, happy to report solid growth, nice order intake. We are entering the quarter with a positive backlog in comparison to 1 year ago. We keep working very hard on improving our margins, improving our cash flow, and we'll keep looking for the new opportunities to mitigate the pretty rough market conditions still today. So thank you very much for your attention, and we'll see you soon. Goodbye.