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Securitize founder and CEO Carlos Domingo joins Market Catalysts host Julie Hyman to explain tokenization and why companies are choosing to tokenize their stocks. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here: https://finance.yahoo.com/videos/series/market-catalysts/ #youtube #stocks #investing #news #crypto About Yahoo Finance: Yahoo Finance provides free stock ticker data, up-to-date news, portfolio management resources, comprehensive market data, advanced tools, and more information to help you manage your financial life.
The 'Fast Money' traders talk stocks wrapping up a strong October.
The 'Fast Money' traders talk stocks wrapping up a strong October.
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Boxing legend Mike Tyson and ChaChing founder and CEO Max Sugrue open up about their website Price Fighter to help Americans on 'The Claman Countdown.' #fox #media #breakingnews #us #usa #new #news #breaking #foxbusiness #theclamancountdown #miketyson #tyson #maxsugrue #pricefighter #business #entrepreneurship #startup #innovation #technology #finance #economy #boxing #leadership #inspiration #americans #money #success #website #founder #ceo
Bank of America promoted Denis Manelski and Soofian Zuberi to become presidents and co-heads of global markets and made several other leadership changes in its trading arm, according to an internal memo seen by Reuters on Friday.
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Comprehensive cross-platform coverage of the U.S. market close on Bloomberg Television, Bloomberg Radio, and YouTube with Katie Greifeld, David Gura, Carol Massar and Tim Stenovec. -------- More on Bloomberg Television and Markets Like this video?
Comprehensive cross-platform coverage of the U.S. market close on Bloomberg Television, Bloomberg Radio, and YouTube with Katie Greifeld, David Gura, Carol Massar and Tim Stenovec. -------- More on Bloomberg Television and Markets Like this video?
Fundstrat's Tom Lee joins 'Closing Bell' to talk November trading, the outlook for small caps and much more.
Fundstrat's Tom Lee joins 'Closing Bell' to talk November trading, the outlook for small caps and much more.
Federal Reserve liquidity facilities caught fire on Friday as month-end pressures pushed a key lending tool to a record level of usage.
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Stocks posted a sixth straight month of gains in October, led by mega-cap tech, with the S&P 500 up 3% and QQQ up over 5%. Small and mid-cap domestic stocks lagged, while international equities and bonds delivered modest gains amid volatile gold and declining oil prices.
Claus Jensen: Good morning, everyone. Welcome to the conference call for Danske Bank's financial results for the first 9 months of 2025. My name is Claus Ingar Jensen, and I'm Head of Danske Bank's Investor Relations. With me today, I have our CEO, Carsten Egeriis; and our CFO, Cecile Hillary. We aim to keep this presentation to around 20 minutes. After the presentation, we will open up for a Q&A session as usual. Afterwards, feel free to contact the Investor Relations department if you have any more questions. I will now hand over to Carsten. Slide 1, please. Carsten Egeriis: Thanks, Claus. And I would also like to welcome you to our conference call where I'm pleased to share the highlights of Danske Bank's financial results for the first 9 months of 2025. This period saw a solid financial performance rooted in our strategic priorities as outlined in our 428 strategy. Net profit for the first 9 months came in at DKK 16.7 billion, equivalent to a return on equity of 12.9% for the first 9 months and 12.6% for the third quarter. On the macroeconomic front, the Nordic region shows promising growth, aligning closely with structural rates. And despite some downward revisions of GDP growth for Denmark, the economy remains strong. The supportive low interest rates set by central banks in Europe are contributing positively to the business environment we are operating in. And our achievements can be attributed to a good performance across core income lines, prudent cost management and while maintaining strong credit quality. We are pleased with the increased commercial momentum that we saw during the first 9 months. This is in particular evident from an uplift in lending and deposit volumes of 4% and 3%, respectively. The positive traction for lending is mainly due to higher customer activity in the corporate segment, whereas the increase in deposits is driven by the retail segment where our customers favor savings over spending. Our asset management business continues to grow, reaching an all-time high of more than DKK 950 billion in assets under management, bolstered by strong net sales in both the private banking and institutional segments. Credit quality continued to be strong and was supported by favorable macroeconomic conditions. For the first 9 months, the loan loss ratio amounted to 2 basis points, unchanged from the preceding quarter, and the PMA buffer is kept largely unchanged. And then just a few comments when comparing to the preceding quarter. Core income came in slightly better. NII was unchanged as a combination of lending growth and the contribution from our structural hedge had a positive effect that offset the impact of lower market rates. Fee income was higher due to a positive development in asset prices and continually strong momentum for net sales across all channels within asset management, which resulted in a solid increase of 6% in assets under management. We, therefore, maintain our guidance range from net profit of between DKK 21 billion and DKK 23 billion. However, we now expect net profit to be at the upper end of that range. The expectation is driven by better NII and an improved outlook for loan impairment charges, which we now expect to be no more than DKK 0.6 billion. And then Slide 2, please. At Personal Customers, we saw a stable financial performance supported by deposit growth and healthy customer activity while managing the impact of policy rate cuts on deposit margins in the first 9 months of the year. In Q3, total income was supported by an 8% increase in fee income that reflected a positive uplift across all fee categories. Net interest income also benefited from an updated hedge -- our updated hedge allocation framework, and Cecile is going to talk about that a little bit later. We continue to see strong credit quality and prudent cost management, which support our 2026 financial objectives and the trajectory on cost income and return on allocated capital is in line with our 2026 targets. In terms of lending, the development in home loans generally remained stable, reflecting a somewhat subdued housing market when looking across the Nordic countries as a result of cautious consumer sentiment. In Denmark, housing market activity has gradually risen and total home loans in PC Denmark grew modestly as the lending volume of our bank home loan product, Danske Bolig Fri, increased by another 11% in Q3 and is now up more than 35% year-on-year. This is also a reflection of changed customer preferences with customers substituting the more conventional Realkredit Danmark mortgage product by bank home loans, which highlights our ability to offer flexible loan products through a rate cycle. And then simultaneously, we've adapted our pricing and our holistic advice to serve our customer needs and enhance Realkredit Danmark's competitiveness. And then finally, while deposit volumes are typically affected by increased summer spending, we continue to see elevated cash savings and an overall 2% deposit growth year-on-year. And then additionally, our commercial traction within Private Banking was underpinned by another quarter of higher net sales and inflow to investment products. And this, in turn, drove assets under management to record high levels and again shows our ability to expand offerings and support customers' financial planning regardless of the market environment. Slide 3, please. At Business Customers, we see the momentum building and our financial performance reflected continued progress on our commercial priorities. Core banking income was up 3% in the third quarter relative to the same quarter last year, supported by solid fee income driven by higher everyday banking fees, including FX activity as well as finance-related fee income growth. Total income quarter-on-quarter was supported by stable fee income despite typical seasonality and NII benefited from the updated treasury allocation framework. Our growth agenda was supported by improved credit demand and our efforts to expand our customer base, resulting in increased market shares across all 4 Nordic countries. And this was underpinned by the growth in lending volumes of 1% quarter-on-quarter and then 4% year-on-year, which again was largely broad-based across industries. With a sustained focus on diligent cost management, the cost-income ratio continues to be in line with our 2026 target and the robust credit quality and benign level of impairments further supported profitability with profit before tax increasing 3% quarter-on-quarter and in line with our 2026 targets. Our strategy execution has been encouraging and clearly highlights the business potential, and we continue to focus on improvements to our digital offerings, coupled with targeted advisory services to support customers efficiently across the region, where complex solutions are in demand from our customers across the Nordics. And then Slide 4, please. In our Corporate and Institutional franchise, we saw a strong financial result for the first 9 months of the year. Total income was up 8% year-on-year as we continue to leverage our strong balance sheet to the benefit of our corporate and institutional customers and saw strong customer demand for our investment solutions. In addition, we focus on executing our strategy to be the leading Nordic wholesale bank. Importantly, our leading solutions in product areas such as loan capital markets, debt capital markets and cash management see solid customer demand and help us continue to attract new corporate customers outside Denmark, in turn, delivering on our strategy. Total income was up 1% relative to the second quarter, driven by solid customer activity in our markets area alongside continually strong credit quality. And this helped us generate a return on allocated capital of 25%, well ahead of our 2026 target. And then we continue to grow our corporate lending book. We saw lending growth of 12% year-on-year and 4% quarter-on-quarter. We were also very proud that as the only Nordic bank, Danske Bank was mandated as joint global coordinator in the largest ever capital raising transaction in the Nordic countries. Operating expenses, they grew 2% relative to the second quarter as we continue to invest in the business and selectively add competencies as needed to drive our advisory offering and execute the strategy. And then assets under management grew 6% in the third quarter relative to the preceding quarter to a record high level of DKK 954 billion, primarily driven by strong net sales across channels and also a robust investment performance. And then with that, let me hand over to Cecile for a walk-through of our financial results for the group, and that's on Page 5, please. Cecile Hillary: Thank you, Carsten. As Carsten just mentioned, our financial performance was solid in the first 9 months of the year. Net profit for the group came in at DKK 16.7 billion and was down 5% year-on-year, firstly, due to the loan impairments line and secondly, from lower insurance income. NII remained stable as the impact of rate cuts was mitigated by the growth we saw in volumes and the contribution of our structural hedge. Fee income benefited from higher customer activity and the growth of assets under management. The result for the third quarter came in at DKK 5.5 billion, up 1% from the level in the second quarter, mainly due to lower loan impairment charges. Total income was slightly down as income from both trading and insurance activities decreased from strong levels in the second quarter. This decline was partly mitigated by stronger fee income, thanks to the rebound in customer activity in the third quarter. Trading income saw a decline in Q3, mainly due to valuation adjustments in group treasury and a one-off in Q2. Trading income from customer activity at LC&I was on par with the level in Q2. Income from insurance activities came in lower in the first 9 months of 2025 compared to the year before, partly due to an increase in provisions in the first quarter. In the third quarter, the result was lower due to return on investments and the results of the health and accident business. We continue to focus on repricing, preventive care and reactivation initiatives to improve the financial outcome of insurance contracts and respond to current market trends related to long-term illnesses. Operating expenses were almost unchanged relative to the same period last year as well as the preceding quarter. And finally, as Carsten mentioned, credit quality remained strong with a net reversal in the third quarter. Slide 6, please. Let us take a closer look at the key income lines, starting with net interest income. Overall, NII remained stable both year-on-year and quarter-on-quarter despite the impact of lower rates on deposit margins. When comparing net interest income, not only with the same period last year, but also with the preceding quarter, NII has benefited from a continually positive development in lending volumes, particularly evident on the corporate side. The growth in deposit volumes contributed to NII year-on-year with a stable quarter-on-quarter level. In addition, our deposit hedge has helped to mitigate the impact of rate cuts on deposit margins and the lower return on shareholders' equity. In this context, please be aware that as part of our ongoing focus on asset and liability management, we have increased our bond portfolio hedge slightly to approximately DKK 170 billion. With respect to deposit margins, the increase that can be observed relates to changes to our fund transfer pricing framework implemented in the second quarter with the objective of allocating NII from the structural hedge to the business units according to their contribution. It is important to note that these are not driven by changes to customer pricing and do not impact group NII. Our NII sensitivity, which was updated in the second quarter, remains unchanged. With respect to expectations for the full year, I would like to highlight that they are based on the current rent environment with forward rates as of the end of September and subject to balance sheet developments. We consider the current market view and consensus on NII to be a good indication for the full year of 2025. Now let us turn to fee income. Slide 7, please. Our fee income grew by 2% relative to last year. Adjusted for a nonrecurring item from last year and the divestment of PC Norway, fee income was up 3%. The increase mainly came from everyday banking transactions due to higher activity among existing as well as new customers. Relative to the second quarter, fee income was up 3% in the third quarter, driven by higher investment activity among our customers and the recovery from the sentiment we saw in the second quarter. Investment fees benefited from increasing asset prices and continued growth in assets under management with positive net sales for all types of clients. Income from financing had a positive effect in the third quarter, driven by higher corporate activity, whereas fee income from everyday banking and capital markets transactions declined slightly from the second quarter due to summer seasonality. However, the somewhat muted transaction activity in ECM and M&A was offset by continually good primary activity in DCM and LCM. Next, let us look at net trading income, Slide 8, please. Net trading income increased 12% from the level in the same period last year. The increase was mainly due to positive market value adjustments in group treasury, partly offset by xVA adjustments. Trading income at LC&I improved from the level in the same period last year due to higher customer activity. In Q3, customer activity at LC&I held up well despite the third quarter being a seasonally slower quarter. Net trading income was down 27%, mainly due to the positive one-off item booked in the second quarter as well as valuation adjustments made in group treasury. This concludes my comments on the income lines. Let's turn to expenses. Slide 9, please. Looking at the cost development for the first 9 months, our focus on cost management and improved efficiency continues to yield the expected results. Operating expenses are in line with our full year guidance of up to DKK 26 billion. And at 45.6%, the cost-to-income ratio is progressing towards our 2026 targets. Relative to the level last year, costs were in line as structural cost takeouts and the planned reduction in costs for the financial crime plan mitigated the impact of wage inflation and performance-based compensation. The relatively modest increase in digital investments should be seen in the light of the significant ramp-up we made last year. Relative to the preceding quarter, costs were down by 1%, mainly due to lower costs related to financial crime prevention, which continued the trajectory towards a lower run rate by year-end according to plan. While the cost discipline and trajectory during the year have been encouraging, we continue to expect full year expenses to end close to the guided level given higher quarterly costs in Q4 due to seasonality. Slide 10, please. Let us take a look at our credit portfolio and the trend in impairments. Credit quality continued to be strong, underpinned by a well-diversified and low-risk credit portfolio. The macroeconomic environment remained benign with increasing employment and steadily improving household finances. Consequently, impairments continue to be below the normalized level. In the third quarter, credit deterioration related to a few single name exposures was offset by workout cases. In combination with the update of our macroeconomic models, we saw a small net reversal for the quarter. The update of the macroeconomic models included a small revision to the weighting of our scenarios towards a slightly more balanced approach with the upside scenario now weighted at 25%, the base case scenario at 50% and the downside and severe downside scenarios combined at 25%. In addition, we have kept our PMA buffer unchanged at DKK 5.7 billion. The decreases in PMAs for CRE and agriculture have been reallocated to global tension. We continuously keep our macroeconomic scenarios under review in conjunction with the PMA buffer. Given the strong asset quality we saw in the first 9 months, we have lowered our full year guidance for loan impairment charges from around DKK 1 billion to no more than DKK 0.6 billion. Slide 11, please. Our capital position remained strong in the third quarter and was further supported by another quarter of solid capital generation post dividend accrual and lower REA as a result of lower market risk. At the end of Q3, the reported CET1 capital ratio was unchanged compared to the preceding quarter at 18.7% despite a temporary impact from Danica of around 0.4 percentage points due to the call of a Tier 2 instruments. We continue to operate with a healthy CET1 buffer versus the regulatory requirements now at 390 basis points, and we intend to progress steadily in the coming years towards our stated capital target of a CET1 capital ratio above 16%. The ongoing share buyback program we announced in February is being executed and will continue to provide support throughout the year. Now let us turn to the final slide and our financial outlook for 2025. Slide 12, please. As previously mentioned by Carsten, we reiterate our outlook for net profit to be in the range of DKK 21 billion to DKK 23 billion. However, we now expect net profit to be in the upper end of that range. For total income, we continue to expect slightly lower income this year than in 2024. Income will be driven by lower albeit resilient net interest income and will be supported by our focus on fee income. We will continue to drive the commercial momentum and growth in line with our financial targets for 2026. Income from trading and insurance activities remain subject to financial market conditions. We continue to expect operating expenses of up to DKK 26 billion, reflecting our focus on cost management and cost-to-income targets for 2026. We have revised our full year guidance for loan impairment charges of around DKK 1 billion due to continually strong credit quality. We now expect loan impairment charges of no more than DKK 0.6 billion. And finally, our financial targets for 2026 also remain unchanged, subject to our current economic and market expectations. Slide 13, please, and back to Claus. Claus Jensen: Thank you, Cecile. Those were our initial comments and messages. We are now ready for your questions. Please limit yourself to 2 questions. If you are listening to the conference call from our website, you are welcome to ask questions by e-mail. A transcript of this conference call will be added to our website within the next few days. Operator, we are ready for the Q&A session. Operator: [Operator Instructions] And our first question today comes from the line of Shrey Srivastava from Citi. Shrey Srivastava: Two for me, please, one bigger picture and one sort of more technical. I want to ask about recent M&A activity that you've seen in the Danish market and how it affects your view on the competitive landscape across your various business areas and how you're changing your strategy in response to that, if at all? That's the first. And the second one is you -- it's going back to your comment on the deposit hedge. You've been increasingly using derivatives to manage the interest rate risk in the banking book. And it says in your report that you begin to -- you expect to begin use of derivatives in a hedge accounting format in the first half of next year. Can we get some more color around this decision and what sort of impacts we can expect to see, if at all, and the rationale? Carsten Egeriis: Thanks for that. I'll take the first one, and then I'll hand the second one over to Cecile. M&A landscape in Denmark, we've obviously seen the news this week of the Sydbank and Arbejdernes Landsbank merger. I think this is very much in line with -- not speaking to the specific merger, but the consolidation and acceleration of consolidation is very much in line with what we have been expecting. And I've said before that particularly the changes around the competition landscape on Realkredit related to the Totalkredit decision some time ago would make it more interesting, beneficial to consolidate. And so this is very much in line with that. We don't see any change to our strategy. We're focused on continuing to deliver our strategy, growing with our customers, taking market share. We're investing in technology. We're investing in advisory services, and we believe that we have a very good focus strategy and position in the Danish market. And yes, so no changes in strategy. Cecile, do you want to take the deposit hedge question? Cecile Hillary: Yes, absolutely. So in terms of the deposit hedge, Shrey, currently, it includes the bond hedge, the loan hedge, but we don't use yet derivatives. That's in plan indeed for next year. So let me unpack these different components. The deposit hedge or structural hedge, obviously, as we call it, includes a bond hedge, which, as I've just mentioned, has increased this quarter from DKK 160 billion to DKK 170 billion, really reflecting the continued stability and strength of our deposit base. That bond hedge is -- has got an average life of about 3, 3.5 year average life and obviously provides the NII support that we're aiming for. In addition, there is a loan hedge, which is about DKK 200 billion. That loan hedge is not a perfect hedge from the point of view of deposit hedge in the sense that there are several durations. There is also a little bit of optionality with respect to certain loans, but we still see that as obviously a good hedge when it comes to providing NII support. Going forward, our intention is indeed, and we're very progressed in our capabilities now to use derivatives in order to affect our structural hedge. And those derivatives would be, as we would expect, hedge accounted, meaning that effectively, they will not create sort of mark-to-market volatility precisely because they will be effectively hedging our deposit book. Having -- so what will it do? It provides additional liquidity and additional ease effectively of reinvesting the deposit hedge. However, what it doesn't do is it does -- it's not necessarily in itself going to increase the hedge. Effectively, the way it would be managed is that derivatives would slowly replace part of the bond portfolio that we currently have in place. So that's to give you a little bit more detail on this hedge. Operator: Your next question today comes from the line of Namita Samtani from Barclays. Namita Samtani: My first one, do you expect net interest income to grow into 2026 now? And could you explain me how you think about the structural hedge going into 2026? Do you still expect it to be accretive? And my second question, in Danica, there was a health and accident provision in Q4 of last year. Will the same happen again in the fourth quarter? Carsten Egeriis: Thanks, Namita. In terms of NII, we'll come with an updated guidance as part of year-end. So I think I'll keep my focus today on the quarterly results. But as you've seen, NII has stayed pretty stable and rates have now stabilized. And at the same time, we continue, of course, to have a strategy where we're focused on growing our balance sheet, including our lending. And I think, again, you could probably think about the hedge accretion as being close to neutralizing as rates now are stabilizing at 2%. But again, we'll update on '26 NII outlook as part of year-end. And then on Danica, we do do model updates every year on the health and accident, and we continue to do that. And there is no question, as you've seen that the health and accident continues to be under some level of pressure, but it's too early to say what the quarterly updates will show, but we continue to be focused on one, improving the operational management, which includes particularly being much more proactive towards our customers in terms of how we can help them. And then at the same time, of course, it is also correlated with health trends and that includes mental health illness trends, which still are quite high in Denmark. Namita Samtani: Could I just have a follow-up? The fourth quarter '25 NII, do you still expect that to be flattish versus the third quarter? Carsten Egeriis: I would say at this stage, of course, again, we don't want to give an outlook on Q4. But again, there is still some remnants of impact of the reducing interest rates that we've seen earlier and that offset by the volume growth that we're seeing. So we continue to feel good about the level of NII that we're seeing in Q3 into Q4. That's probably the way I would formulate it. Cecile Hillary: I would guide you to for -- if you want to think about the NII for the full year, actually, we find that consensus and market expectations are actually pretty accurate. Operator: Your next question comes from the line of Sofie Peterzens from Goldman Sachs. Sofie Caroline Peterzens: Yes. It's Sofie from Goldman Sachs. So the first question would be the risk-weighted asset decline that we saw. Should we expect any further risk-weighted asset declines to come? And how should we think about any further kind of capital headwinds or tailwinds in the coming quarters? And related to that, kind of given that you have the U.S. corporate probation coming to an end this year, is there anything that you think would restrict Danske from distributing over 100% of profits in 2026? What is the FSA's general thoughts around over 100% distribution? So if you could kind of comment around that. Carsten Egeriis: On the first one, REA decline, there's a particular sort of larger movement, if you will, on market risk. This tends to move a little bit up and down depending on market. So I wouldn't say that we should see any particular movements on REA and more think about REA as a function of growth. So no particular sort of movements expected either way. And then on U.S. probation, I think I've earlier said that we have before distributed over 100% of capital also in line with the sale of, for example, the Norwegian retail business. So that is not a constraint in itself. But we will update on the capital strategy and distribution strategy as part of our Q1 results where we're also planning to give an update on, obviously, both '26, but also financial metrics targets for '28. Sofie Caroline Peterzens: Okay. That's clear. And just going back to the risk-weighted asset growth. In the fourth quarter, should we expect any increases from the operational risk? Carsten Egeriis: Not major. I mean, you're right, we do update it every year. And as you know, we're on standardized and it's a little bit of a function of income. And as you know, income has been pretty stable year-on-year. So I wouldn't see it as anything material. There will always be some movements, but nothing material. Operator: Your next question comes from the line of Tarik El Mejjad from Bank of America. Tarik El Mejjad: Two questions, please. First, on the corporate growth. Can you maybe shed some light on what sectors or what area is growing because you're posting quite a healthy growth here and came a bit of a positive surprise. And the second one is on the cost of risk. I mean you had releases without PMA releases. And I want to understand if there is a particular specific area where you had some releases on some files? Or is it just a structurally lower cost of risk? Carsten Egeriis: Yes. Tarik, thanks for that. On corporate growth, it's broad-based. We've been looking at exactly that question. And there are no particular sectors driving that. One would have thought, okay, maybe the defense side, the energy side. In fact, I think that those growth opportunities are yet to come at larger scale. And in fact, the growth we're seeing at this stage is, yes, pretty broad-based. And again, broad-based, but also driven by the fact that we see that we're taking market share in corporate lending across the Nordics in line with our strategy. Cost of risk, nothing particular. Look, we've kept the PMA stable, as you've seen. And PMAs, I would say, are still at the higher end of what you would sort of expect through the cycle. A large part of it, as you can see in the breakdown also sort of linked with general macro uncertainty. If you look at sort of the actual flows in -- through stage 1, 2, 3, I think nothing particular that we would call out. We continue to see strong asset quality and sort of stable flows. Cecile Hillary: And if I can maybe add to that. The release and the impairment line that you see, indeed, obviously without any changes to the PMAs other than some redistribution from the CRE and agriculture line into global pensions is really linked to 2 different things as well. So one, actually, if you look at the various divisions, we actually saw net reversals both in LC&I and BC. So obviously, some strong workout cases there and some recoveries. Net-net, positive in PC, but frankly, very minimal. So all in all, clearly, a very strong asset quality all around. And then some moderate impact from the IFRS 9 models, where we have made a few changes just to obviously reflect economic assumptions, number one. And also the weighting of the scenarios has slightly changed to be more balanced with a sort of 50% base case instead of 55%, 25% upper case and 25% combined severe downside and downside cases. Tarik El Mejjad: Okay. Can I squeeze in a very quick follow-up on the other and treasury line, this is more for our models, to be fair. I want to understand what's the big negative there just for the future period? Cecile Hillary: Is that on the trading income line that you mentioned? Tarik El Mejjad: Yes. Cecile Hillary: Yes, yes. So on the trading income line, there are 2 reasons why this came down quarter-on-quarter. And again, just to be clear, this is not linked to LC&I. So the first one is the one-off in Q2, which was the sale of the export finance shares, which I think we mentioned in Q2. The second thing is, as you mentioned, indeed, is treasury effectively market valuation adjustments. What it is there is as part of our hedging. So obviously, these are not open positions, but purely hedging of both interest rates and currency and FX risk. We obviously use derivatives. These derivatives are held at fair value in the center. So in this case, obviously, in treasury. And clearly, they will fluctuate according to rates and FX considerations in the market. And sometimes they go up, sometimes they go down, and this is effectively what it comes to. So I will reiterate, this is not due to any economic loss, and there is always some fluctuations up and down throughout quarters. Operator: Your next question today comes from the line of Mathias Nielsen from Nordea. Mathias Nielsen: Congrats on the strong underlying results this quarter. So the first question goes like if we take a step back and look a bit into the next year, like if you were to highlight the top 3 priorities like both strategically and financially into '26, which 3 things would you then highlight as the most important? And secondly, maybe related to this, when I look at the lending growth in LC&I, it clearly looks like you're getting to a strong business momentum there. It also looks like the business customer segment is starting to look stronger and stronger and pretty strong as well. And then lastly, like when do we see the personal customers? I know it's always easier to get business momentum with the big clients because you're closer to them than the small clients. But when should we expect the personal client segment to get even more on fire compared to where we see today? Carsten Egeriis: Thanks, Mathias. Look, as we look into '26, it's really about continuing on our Forward '28 strategy. we said that we wanted to be the leading wholesale bank in the Nordics, a leading bank for SMEs across the Nordics with sort of more complex needs and then a leading private bank and personal bank in Denmark and Finland. And we continue to invest in both advisory capabilities and in technology and to ensure that we can really deliver a leading bank across those priority segments and focused customer groups. So that's what '26 and out to '28 is all about. There's no question that since the presentation of our strategy in June '23, technology has moved quite significantly in terms of what we're seeing in artificial intelligence more broadly. So no question that is a huge focus is how can we accelerate and augment our existing strategy by investing further in artificial intelligence and using technology to position us even stronger. To be more specific, we're also investing in capital markets and advisory capabilities in Norway and Sweden across our Private Banking segments. And as you've seen here in Denmark, Mathias very heavily in our technology digital solutions where we're investing heavily in both our district platform for corporates and in our mobile bank for Personal Customers. Your question on Personal Customers and when do we see as much clear green shoots and clear blue water in terms of acceleration and business growth. Look, I would say on the one hand side, on Personal Customers, where I would call out strong traction is private banking and investments. You see us taking market share on the investment side in Denmark. That's closely linked with also good traction in Private Banking, where, in fact, we're also increasing customer inflow. We're investing in our family office in that area as well and see good traction. And then it does take longer to move the needle on the broader retail segment. Our focus is really on the customers that require more advisory-heavy solutions. And we do see customer inflows in those segments. And we continue to, again, invest in, for example, the housing, the mortgage area, where we believe that we need to do more. So hopefully, that's helpful and gives you a few examples of what we're doing. Cecile Hillary: If I may, let me add, you asked for obviously financial objectives. And obviously, Carsten gave you the sort of strategic and financial combined. I would add that one of certainly my key objectives and the group's key objectives is also to ensure that the group is efficient, right? So our focus on cost will remain and our focus on cost-to-income ratio. And that focus on ensuring that we balance obviously the need to be efficient and the need to continue to invest, both of which obviously can enhance each other. So that's on the priorities. On the PC side, the other thing I would add to what Carsten mentioned is that I am pleased to see that on the housing front, on the financing on the housing front, we have stabilized volumes. That's particularly the case in Denmark. And we have done that whilst protecting profitability, right, and returns. And given the competitive situation that we operate in, the fact that we managed as we obviously endeavor to do to continue to balance, obviously, the competitive pressure we're seeing on the RD side with our progress that has been extremely significant on the bank lending side and protect, as I mentioned, profitability has been pleasing to see. Mathias Nielsen: So just to wrap all your things you set up, like the way I understand it is like there's still some way to go to -- to get to the peak performance of how much you can actually deliver after what -- in turnaround after all this AML cases. Is that fairly understood that you're not at a fully up running state yet? Carsten Egeriis: We absolutely see plenty of unrealized potential, not least in the PC segment, but certainly also in the corporate segments where we're still punching below our weight across the Nordic countries. We still have a challenger position in many areas in those countries and have much more opportunity to again grow market share. Operator: [Operator Instructions] We will now take the next question -- and the next question comes from the line of Martin Gregers Birk from SEB. Martin Birk: Just continuing along the lines of Personal Customers, I guess your Q3 numbers is perhaps implicitly also another testament to your successful Danske Bolig Fri. Do you guys see a limit to that story? And when does that dilute RD too much? That would be my first question. Then the second question goes back to the M&A story that is unfolding in the Danish space. You have a [ Sydbank ] that is increasingly talking to large customers being attractive, you have a Nykredit which has beefed up their own bank balance sheet after acquiring Spar Nord. [ Sydbank ] now that is also getting a balance sheet that allows them to tap into this segment. Do you feel increased competition from this? And when is -- when sort of does your role as a big brother in the Danish banking market? Or let me rephrase this, when are sort of the little brothers in the Danish banking market becoming too big and that forces you to act? Carsten Egeriis: Thanks, Martin. I think on DBF, Danske Bolig Fri, so the bank lending side and then the Realkredit side. Look, I see this very much as being able to offer our customers a broad range of products based on both market situation. So where rates have been, it's been interesting to take out a bank loan given the increased flexibility around that. So I think we're very much focused on being able to offer the broad palette of products and services and then letting customers decide. So I see that we can both continue to grow in Danske Bolig Fri, but certainly also have a lot of focus on growing the Realkredit side of things. And as you all know from Denmark, we're investing really heavily again in improving our Realkredit offering, both digitally with the housing universe with giving customers faster turnaround on decisions with giving them more clarity on how much they can borrow as well as making targeted price adjustments where we think it's interesting. So again, much more opportunity there. M&A story, competition, is there competition? Yes. Is that -- is it a very competitive market environment out there? For sure. I think we've been able to show that we can grow and take market share in that. I'm not concerned about the consolidation in the Danish market. I welcome that consolidation. We have a strong strategy, which we think is very competitive, very compelling. And with the pace of change that we're moving and the investments we're moving with, we think that we can continue to grow in the market. Claus Jensen: Can we have the last question, please? Operator: Your last question today comes from the line of Jacob Kruse from Autonomous. Jacob Kruse: So just 2. So firstly, you talked about being a challenger in some of the other markets. How do you view your sort of nonorganic growth opportunities there? I think there's been clearly a lot of activity going on. And with respect to, I guess, it's the 13th of December where you come off the probation period. Does that immediately change something? Or what's the time line there? And then secondly, just on the -- you mentioned on the structural hedge, this replacement going into derivatives and an increase in liquidity. Will that have any effect on your NII or P&L? Carsten Egeriis: Thanks, Jacob. I think, as I've also mentioned before, that the Nordic markets, particularly Sweden, would be an interesting market to look at nonorganic and we'll continue to do so. There is nothing sort of relevant at this stage. We continue to be focused on our organic strategy, but we certainly are continuing to scan the market and looking at opportunities on the nonorganic side as well. But again, very important to underline within the focus segments that I also mentioned before in terms of where our strategy focus is. No, I don't think that the post probation changes -- I mean, it changes that we will update our capital situation and distributions situation because we've always said that we would be carefully looking at legacy excess capital during this period. And so we'll have that discussion. And again, our preference is that we grow and use our capital to grow at interesting return levels, but we'll also look at other opportunities. And then, Cecile, do you want to just talk about the hedge piece? Cecile Hillary: Yes, I'll take the hedge piece, and thank you for your question, Jacob. Just to confirm, the inclusion of derivatives is effectively going to help us manage more effectively the reinvestment of the hedge. In itself, it doesn't add additional NII or it could, but I would say, marginally just because of the additional liquidity, the additional ease of effectively targeting a certain point, I guess, in the curve. So I would say any additional uplift due to derivatives specifically is more marginal. But just to take a step back, right, with the deposit hedge, the bond hedge and the loan hedge combined, we expect to continue to get a very good lift in the coming years, particularly next year before, as Carsten mentioned, in horizon, a few more years tailing off, right? But I mean, the lift will continue to be there to NII. Carsten Egeriis: Okay. Thank you very much, everybody, for your interest in Danske Bank. Very much appreciate the questions. And as always, please do reach out to Investor Relations and Claus, if you have any questions.
Nuno Vieira: Good morning, and welcome to CTT's 9 Months '25 Results Conference Call. This event is hosted by Mr. João Bento, CEO of CTT; by Mr. Guy Pacheco, CFO of CTT; and by Mr. João Sousa, CCO of CTT. Please note that this conference call is being recorded. [Operator Instructions] I'll now turn the call over to Mr. João Bento, CEO. João Bento: Good morning, everyone. Welcome to our third quarter results presentation. I would invite you to follow us through the presentation that has been distributed yesterday evening. So if we move to the first slide, Slide #4. We have a plot of the -- a bridge of the revenue and EBIT in the quarter, with our, we'd call resilient organic growth; revenues growing 6%; recurring EBIT doubling that, 12%, with positive contributions from all the business lines in terms of revenues. This 6.1% are, in fact, 17.2%, taking into account the contribution of Cacesa. And on EBIT, the pro forma growth of 12.3% is in fact -- corresponds in fact, to 38.1%, which illustrates how competitive the addition of Cacesa represented to our e-commerce solutions portfolio. Moving to Slide #2 and with additional -- with additional detail on the growth of parcels volumes. We see a comparison between second quarter and third quarter, with a slight sequential improvement in e-commerce volumes. But we have to take into account that there were a couple of events, very significant in the end of September, that somehow impacted volumes in the quarter. Indeed, we have this typhoon Ragasa in South Asia that kept significant amount of volumes, e-commerce volumes sourced in China in the ground, so they could not fly. Some of them were sent by land, but there were also impacts in the border between Poland and Belarus, and some of the volumes that came through roads were also halted there. There was also, well, I would say, meaningful delay in main volumes that we can discuss later on. The good news is that all these volumes were merely delayed and they showed up already in October. But on the right-hand side of the slide, we can see that we have, well, double-digit growth in July, in August and then in September, a flattish improvement basically for the reasons that we have mentioned. So because of that, we are -- we keep quite confident also because October is looking extremely positive, and we anticipate a strong growth outlook for volumes, around 15% year-on-year for the fourth quarter of this year. Moving to Slide #6 and moving from volumes to revenues and margin. What we see is an improvement of 36% in revenues, that without Cacesa would even still represent a double digit, around 11% growth, which is significantly amplified when we move to the EBIT margin in the sense that with the pro forma of Cacesa, the growth would be very slight, 4.5%, but indeed a 50% growth on EBIT. The good news that we'd like to highlight here is that although -- well, despite of these volumes delayed given the typhoon and the closing of the Polish border, we still see an improvement in margin from 8.7% to 9.5% that, as you know, is, well, the best EBIT margin for any parcel business in the market. So given the contribution of Cacesa, that differentiates our E&P offering. We -- with this integrated model, we continue to drive profitability in parcels. And in that sense, we think that we should signal that. Moving to Mail. I will pass the floor to my colleague, João Sousa. Joao Carlos Sousa: Thank you, João. Good morning, everyone. On Mail & Other services, as you can see, in the third quarter of 2025, we are already seeing a recovery in address mail, with volumes down only 4.3% compared to a decline of 8.5% over the first 9 months of the year. In fact, this improvement reflects a gradual stabilization of the activity after several quarters of more pronounced declines in traditional mail volumes. This recovery is mainly explained by the normalization of volumes and clearance of backlog from major clients, which had a negative impact in the previous quarters. And we are seeing also these positive trends already -- or continued in October that reinforce this recover momentum. I would like also to highlight the business solutions that is driving good performance. Business solutions continue to play a key role in supporting both revenues and margin in the Mail & Others business area, with recording growth of 10.9% year-on-year. As with this mix of revenues and services, as a result of this, we have total revenues reaching EUR 341.9 million, representing a limited decrease of 1.9% comparing with the previous year. On EBIT for the Mail & Other segments took on EUR 2.28 million for the first 9 months, maintaining a flat margin of 8.9%. This stable performance demonstrates that our operational discipline on cost control and continuous on to managing these ongoing structural change in the mail market. On Slide 8, now we are going to financial services and retail. We continue to see a sustainable performance across public debt and insurance offering. Financial sales continue to show a solid and consistent growth, supported by stronger results in public debt products and insurance. Public debt placements, up to 167% in Q3 compares with versus period in last year. Savings certificates maintain like a preference savings vehicle for the Portuguese citizens. And I would like also to highlight that the digital sale channels for these products continue to be performing strongly, and September was the record month for these channels. This has also allowed us to bring new citizens to this product. Also, we are -- with a robust growth in insurance and health plans, we are in this strategic to build recurring revenue streams continue to deliver. Health plans -- the stock of health plans, growth, 69% versus the end of last year and almost 33 -- sorry, 12.8% on quarter-on-quarter. Insurance products also, with a very good outlook, performing pretty well. And I would like also to highlight that in -- already in October, we launched a new health insurance that also allow us to have a new product in this area. And the first numbers give us also a very good highlight -- a very good outlook for the coming months. Seeing this on this business area, the revenue is up to 57%, reaching EUR 9.8 million, and EBIT up to 44.8% to EUR 5.2 million. This reflects the success of our diversification strategy for this business area. And now pass to Guy. Guy Patrick Guimarães de Pacheco: Thank you, João, and good morning to all. On Slide 9, we can see Banco CTT's numbers, where we witnessed a strong growth in business volumes, growing 11.4% year-on-year in the third quarter, with a strong performance on the loan book that grew 16.4%. And on the off-balance savings, that grew 25.7%, where we see Generali partnership already at cruise speed and gaining -- continuing to gaining traction on the market. That translated to banking revenues growing 3.7% in the period, although with some compression in net interest margins as interest rates seem to reach a bottom, which gives us positive trends going forward. We see net interest income going up EUR 0.9 million, and commissions led by insurance and card commissions growing EUR 0.6 million in the period. We -- in terms of profitability, a flattish performance as we continue to invest in our future growth, deploying additional commercial capabilities, be it digital or physical, and we invest in technology to support that growth. Our return on tangible equity stood at 13%, a slight increase vis-a-vis the 12.4% of last year. Moving on to the financial review. In Slide 11, we have our key financial indicators where we see resilient growth throughout most of the metrics. On revenues, 17.2% growth. And if we consider Cacesa last year with the 6.1% growth in the third quarter, recurring EBIT growing 38.1% or if we account for Cacesa, 12.3%. Specific items reached EUR 7.6 million as we concluded the restructuring project that we have ongoing on the Mail division for this year. We invested EUR 4.2 million in exits of people. M&A expenses and strategic projects account for the rest of the value. Net profit in the quarter reaching EUR 10.7 million, growing 35%, or reaching, in the 9 months, EUR 32.8 million, growing 18.4%. Our free cash flow stood at negative EUR 6.4 million, and this is due to strong working capital investment that I will detail towards the end. On Slide 12, we see our revenue reach, where we continue to see Express & Parcels as our main contributor to growth. Revenue is growing 6.1%, accounting with Cacesa, with Express & Parcels growing EUR 15.7 million or 10%, with softer parcel volumes due to a weak September, putting some pressure on growth. And this was caused by the extraordinary effects that João shared, the typhoon and the military movements on the Polish border. Cacesa continues to perform very well. In Mail, we witnessed a EUR 2.4 million decline or 2.3%. This is -- this shows 2 different performance, Mail declining EUR 3 million in the quarter or 3.4%, that were partially offset by the good performance of Business Solutions as we continue to diversify along the value chain of our customers in order to further increase the resilience of the revenues of these business units. In the bank, EUR 1.3 million increase or 3.7%, fully driven by net interest income and commissions growth as we continue to grow our business volumes. In Financial Services, an increase of EUR 3.5 million in the quarter, and fully due to the strong performance in public debt placements, that grew more than EUR 1.1 billion as debt certificates continue to be a very attractive product in the market vis-a-vis other low-risk alternatives and already with some positive contribution of the recurring revenues that we continue to bet on in order to find additional diversification on these business units. All in all, other key metric is the Express & Parcels in the quarter already are above 50% of our revenue, reaching 52% of our total revenues this quarter. On Slide 13, we see our costs. Our OpEx grew 5.6% in the quarter, driven by parcel, in line with activity, but softer volumes putting pressure on our unit costs. As you know, we start to scale for the peak season, where we keep prioritizing quality as we see that as paramount to further growth in the future. Mail & Others with a decline of EUR 3.3 million on OpEx or 3%. We continue to optimize our routes with a strong reduction on the number of routes and account reduction that mainly account for that OpEx savings. In Financial Services, we see a EUR 1.9 million increase, fully in line with higher activity. And in the Bank at 5.8% increase or EUR 1.5 million, and this is fully to the commercial and technology investments that I already shared. Cost of risk this quarter with a good performance, reaching 0.7% of cost of risk. So good dynamics there as well. In Slide 14, we see our recurring EBIT, where we posted a 12.3% growth with bank, flat and all the other business units with a positive contribution. In Express & Parcels, we see very resilient margins despite these lower-than-expected volumes in the quarter, with 9.5% margin and increasing EUR 0.7 million. In Mail, positive contribution of business solutions and cost reductions, leading to a EUR 0.9 million increase in the quarter. Financial Services, with good -- very good performance in placements, also contributing positively with EUR 1.6 million. And the Bank, with this flattish performance, with the investments in capabilities offsetting the growth in banking products. Going forward, we expect a very strong peak season that will underpin the EBIT growth in Express & Parcels. Mail seasonality will lead to a sequential margin improvement as fourth quarter continues to be, seasonality-wise, the strongest quarter of the year. Financial service will continue to grow, although with a tougher comparable in the fourth quarter. And the Bank will post a flat to single-digit growth due to the continuous investments in commercial activity. Slide 15, we see our consolidated cash flow. Operating cash flow reached EUR 42.9 million in the 9 months, with a strong growth year-on-year. Free cash flow also stood in 20 -- 12 -- sorry, 18.8%, also with a EUR 10 million growth. And our net debt now stands at EUR 61 million at consolidated level. In Slide 16, we see pretty much the same figures, but excluding the bank or having the bank under equity accounting, where we see, in the 9 months as the operating cash flow reached EUR 20 million and due to this high investment in working capital. In the third quarter, our working capital increase EUR 13 million. And this is due to seasonality or third quarter is normally very strong in working capital investments, and that is due EUR 5 million to the travel subsidy to the Portuguese Island, a service that we provide to the Portuguese government, and because of summer normally has this high growth and payment terms with Portuguese that are always pressured. And we have EUR 8 million increase in accounts receivables, both by increase in activity and some delays in payments of some key customers that we expect to fully offset in the fourth quarter as normally we do. Our net debt now stands at EUR 2.4 million due to this working capital investment, but we expect to -- that to be deleveraging towards the 2x in the end of the year. And with all that, I'll hand you over to João Bento for his final remarks. João Bento: Thank you. So moving to Slide #18. We have a plot of the evolution of EBIT and the corresponding contribution of E&P that we see that, well, after the drop between '19 and '20 associated with the COVID crisis, it's been very, very steady. And looking at the trailing last 12 months up to the third quarter of this year, we see that we are already at EUR 105 million of EBIT, which means that we would require fourth quarter, that would be roughly EUR 10 million or more above that number. The right-hand side chart, it illustrates the gap between where we are and what we need actually to do. So we see the fourth quarter EBIT of last year at EUR 30.5 million. If we would consider the contribution of Cacesa, that would take us to EUR 37.2 million, meaning that because we need EUR 41 million to achieve the guidance, we are at a 10.3% increase or 34.4% versus the actual number of last year. This 10.3% of growth quarter-on-quarter -- fourth quarter-on-fourth quarter is, I would say, significantly less than what we have exhibited throughout the year. So at the top hand side of the slide, you can see that in the first quarter, we grew 19.5%, 28% on the second, 12% on this quarter, with all the delays associated with the typhoons. And so I'm not saying it's easy, but it's quite feasible, and that's why we are strongly committed to keep our ambition of recurring EBIT equal or higher than EUR 115 million. And by completing a quarter along those lines, this will, in fact, represent the conclusion of, I would say, notable transformation cycle that we have been taking this company. I would still ask you to follow me on the last slide, just to remind you that we have our Capital Markets Day taking place next Monday and Tuesday. We have quite promising news for you. We're going to do the similar exercise that we did 3 years ago, discussing and illustrating the strategy for our business areas and committing with financial targets for 2028. So we are looking forward to meet you all there. And I believe that you'll be very pleased with the news that we have to bring. With that, we remain available for your questions. Nuno Vieira: [Operator Instructions] Our first question will come from João Safara. Joao Safara Silva: I'll start just with 2 questions. The first on -- to try to understand a little bit what is implicit in the fourth quarter margin for Express & Parcels. Obviously, and you've mentioned that you've been focusing a lot on quality ahead of the season. Nuno Vieira: João, sorry, we are having significant difficulties in listening to you. If you can speak louder, please. Joao Safara Silva: Yes. Is it better now? Nuno Vieira: It's better now. Joao Safara Silva: Okay. Sorry. Okay. Yes. So what I -- yes, so going back to my question, what I was wondering and trying to look implicitly to the fourth quarter. To meet your guidance, you obviously have to have some kind of improvement in Express & Parcel margins. So I think basically, I just wanted to have a confirmation there since we've been having in the last quarters, in first quarter, margins were flat, obviously, trying to exclude the impact of Cacesa, which I know it's difficult. And then in the second quarter, you've recovered. And now in the third quarter, it seems that margins, again, they've more or less been flat versus year-on-year. And for the fourth quarter, according to my numbers, it would still imply an improvement in margins. So if you could -- well, just give me some color there on what are you seeing for the fourth quarter in terms of margins? And then the other question is just on the extraordinary costs you had this quarter for the employment contract suspension. The question here is, I mean, basically, if this is something related to the plan you're going to present on Tuesday? Or is this something that was already contemplated and part of your ongoing cost savings? Guy Patrick Guimarães de Pacheco: Thank you, João. So on your first question, so we are expecting a strong peak season in Express & Parcels, that will once again be the main driver of our growth in the fourth quarter. Obviously, as you know, scale here plays a role and because we have this unforeseen lack of volumes on the third quarter, especially in September, that put some pressure on unit costs. And as such, our margin was stable-ish. And I would like to underline that, nevertheless, we were able to post a 9.5% EBIT margin that shows a lot of resilience of that business unit. But nevertheless, as you said, we expect both a volume increase and a slight margin increase during the fourth quarter. That was again Express & Parcel as a main driver. We also expect growth coming from Mail -- sorry, positive impacts for Mail and the growth coming from Financial Services as we continue to see resilience on the placements, although the comparable will be tougher as last quarter was already very strong in placements last year. On the specific items. So 2 main things. First, it's the restructuring project that we ended, and that we continue to explore opportunities to optimize Mail & Others as we continue to see that paramount to sustain margin going forward. And that project comes to an end in the third quarter. And now we also had some strategic projects that are, as you mentioned, linked with the next strategic cycle that we'll announce next week and some M&A expenses as we continue to have projects ongoing and what's ongoing, be it with the transactions already announced and other internal projects. Joao Safara Silva: Just a follow-up, would there be, on the fourth quarter, additional nonrecurring cost? Guy Patrick Guimarães de Pacheco: On people, no. We should expect some costs around M&A, but nothing as meaningful as this quarter. Nuno Vieira: Our next question comes from Filipe Leite. Filipe Leite: Yes. I have 3 questions, if I may. The first one is on Cacesa and the integration of Cacesa. Basically from the EUR 5 million synergy that you announced at the time of the acquisition. If you have an idea of how much do you have already achieved in terms of synergies, and when should you expect or should we expect the full achievement of this EUR 5 million synergies with the incorporation of Cacesa? Second question on Mail and CPI used this as reference for the upcoming year. Mail price increase, I believe, is up to June or July. And the question is if you have already an idea of the potential magnitude of the price increase for mail next year? And last one is a clarification on specific [indiscernible] because looking at the breakdown, you mentioned in 9 months, EUR 1.4 million positive impact from regulatory compensation. But in second quarter alone, this positive impact was EUR 3.5 million. If you can clarify what are those regulatory compensations and why the reversal in third quarter? João Bento: I'm afraid we didn't get exactly what you mean in the third question, but I will start with the previous 2 ones. So on Cacesa, things are going pretty well. What we can say is that we are more or less around midterm achieving the full synergies that have been announced, and they will be fully embedded across next year because there are several -- the nature of the synergies is diversified, but so we are probably halfway to be there. On CPI, actually, the formula is public. We know the volume decline, we know the inflation. The issue here is that the proposal has been put, but it's not been approved. In any case, you should expect something around 6.5% plus or -- more or less around that, just not to give you the exact figure because it's not been approved. But it's very easy to compute the numbers and it should be something around -- well, between 6.5%, 7%, some like that. Guy Patrick Guimarães de Pacheco: On the third question, because we didn't fully get it, I suggest that Nuno Vieira will follow up with you in the end of the call. Nuno Vieira: [Operator Instructions] As there are no further questions at this point, I would like to hand the call back over to Mr. João Bento, CEO, for any additional or closing remarks. João Bento: Thank you, Nuno. Well, as we've seen, it's been a mild quarter, fortunately, positioning us strongly in line to achieve the guidance this year. And I believe that the most promising news are to be shared with you on the forthcoming Capital Markets Day next week. So thank you again for coming. We remain available to your questions through the IRO team, and hope to meet you all next week. Thank you. Nuno Vieira: Thank you very much for your participation. This earnings call is now concluded.
Operator: Ladies and gentlemen, welcome to the Third Quarter 2025 Conference Call. I am George, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Aritz Larrea, President and CEO. Aritz Uribiarte: Thank you very much. Good morning, everyone, and welcome to the third quarter presentation for Loomis. My name is Aritz Larrea, and I'm the CEO of Loomis. And with me here today, I have our CFO, Johan Wilsby; and Jenny Boström, our Head of Sustainability and Investor Relations. I'll start by providing a quick summary of our third quarter performance before taking questions. Let's start the presentation by turning to Slide #2. We delivered a solid and positive performance in the third quarter with revenues reaching SEK 7.6 billion and currency-adjusted growth of 7.1%. Despite the expected decline in our ATM business, the group achieved a strong organic growth of 3.9%. This was also the first quarter to include the full results of Burroughs, which made a meaningful contribution to our overall growth and further strengthened our position in the U.S. market. Our efficiency initiatives continue to deliver strong results with the operating margin rising to 13.2%, up from 12.9% last year. We've successfully grown the business without increasing our headcount, further driving margin improvement and demonstrating the impact of our ongoing operational discipline. We delivered another quarter of strong operating cash flow with a rolling 12-month cash conversion of 95%. This robust cash generation enables us to continue investing in the business while also delivering attractive return to our shareholders. Our commitment to optimize capital allocation to drive returns is also reflected in the increased return on capital employed, which was above 16% in the quarter. While we have been active in M&A, invested in our business and continued our share repurchase program, our net debt-to-EBITDA ratio has improved compared to the second quarter. During the third quarter, we completed 4 acquisitions and signed an agreement for a fifth one. I will address each later on in the presentation. As announced yesterday, the Board has also approved a new share repurchase program of SEK 200 million for the fourth quarter. Let's now turn to our reporting segments, starting with Europe and Latin America. Our European and Latin America segment delivered a solid performance in the quarter with revenues reaching close to SEK 3.7 billion, and the organic growth was 2.3%. We have seen a different mix of performance across our business lines during the quarter. While we continue to experience strong demand for our cross-border valuables transportation and storage solutions within the international business line and the Automated Solutions business delivered solid results, the ATM business declined due to previously announced losses in Sweden and France. In addition, there was a negative impact due to the ATM consolidation market in the U.K. While these developments have led to short-term volume headwinds, we expect the long-term industry trends to continue to favor specialized providers. In addition, revenue in Europe was also affected by the ongoing restructuring activities in Germany, where we continue to discontinue unprofitable contracts as part of our efforts to strengthen profitability. These developments have temporarily affected growth in the region, but our initiatives are consistent with our strategy to focus on efficiency, scalability and long-term profitability. We can also see that the restructuring initiatives implemented in recent quarters are having a positive effect on profitability, while with the operating margin increasing to 12.9% versus 12.4% in prior year. In September, we completed the acquisition of Kipfer-Logistik announced in July. Kipfer-Logistik is a leading pharmaceutical logistics provider based in Switzerland, and this acquisition significantly accelerates the growth of Loomis Pharma. By integrating a well-established company specialized in high-security, temperature-controlled road freight, we are further strengthening our international business line, where Loomis already provides cross-border, high-security logistics for banknotes, precious metals and jewels, including customs clearance. With our long-standing expertise in Secure Logistics, we continue to explore opportunities to expand and enhance our services in this area. Let's turn to the next page and talk about the performance in the U.S. The U.S. segment delivered another strong quarter. If we adjust for currency impacts, which was negative 9%, the U.S. achieved record high revenues and operating profit. Organic growth was 5.4% and the acquisition of Burroughs contributed to the overall growth. The International and Automated Solutions lines of business had notably strong performance in the quarter. Our implemented staffing planning measures have enabled a more efficient way of working, allowing us to grow the business without adding employees. At the same time, we have secured a high service quality and maintained customer satisfaction. The volume growth, combined with improved efficiency contributed to the improvement of operating margin. The operating margin increased to 16.3%, up from 16.1% in prior year. This is the first full quarter with Burroughs, and we continue working on integrating their business into our U.S. operations and our Loomis culture. We are still early in the integration process, but while the business is adjacent to our existing operations, it represents a new line of work for us, one that is highly technology-driven and involves technical service teams we previously did not manage. We are seeing great progress and are already observing how it complements our current business. Burroughs is a strong strategic fit as it allows us to provide a fully integrated ATM and automated solutions service offering to our customers. In August, we acquired Keys Armored Express, a CIT service provider operating in the Florida Keys area. We've also signed an agreement to acquire Precious Metals Vault and storage facility in Toronto. This acquisition will strengthen our local presence in Canada and increase our depository service and storage capacity within the international business line. Let's turn to the next page and talk about SME Pay. Revenues in the SME Pay segment increased to SEK 65 million in the quarter. Nearly 40% of this revenue now comes from new small- and medium-sized customers, demonstrating that our strategic focus on SMEs is delivering both growth and margin. We're also making strong progress on the digital side. Loomis Pay continues to scale, broadening our payments offering and strengthening customer loyalty. Transaction volumes through our payment gateway surpassed SEK 2.5 billion in the quarter, representing a 23% increase compared to last year. In addition, in July, we took an important step in Spain with the acquisition of 2 POS companies in Catalonia. This significantly strengthens Loomis Pay presence in the region, enhances our POS capabilities and expands our customer base among SMEs. Let's now move to the next slide, where I'll share a few updates on our sustainability progress. This quarter, we adopted 2 new sustainability policies, an environmental policy and a human rights policy, further reinforcing our commitment in these critical areas. Our environmental policy includes our emissions reductions targets to 2030 with the actions being taken to reach these. The key focus here remains on reducing emissions from our vehicle fleet. For the first 9 months, we have reduced our Scope 1 and 2 emissions by approximately 2% compared to prior year. I want to highlight that the increase you can see in emissions in the graph here compared to the second quarter is largely related to the acquisition of Burroughs. Initiatives are ongoing to align Burroughs to our carbon emissions reduction plan. Continuing to decrease emissions while growing the business is, of course, challenging, especially due to difficulties with charging infrastructure for an electrified fleet, but something that we are fully committed to. As a global employer with an important role in society, it is crucial to uphold fundamental human rights across our operations and value chain. Our new human rights policy reinforces our dedication to safeguarding the rights of our workers and how we intend to uphold our efforts in addressing actual and potential human rights. Now let's turn to the income statement slide, where I'll begin by noting that despite a significant negative impact from exchange rate fluctuations, we achieved a strong currency adjusted growth. This quarter includes costs classified as items affecting comparability, primarily related to the ongoing restructuring efforts in Europe and Latin America. Our financial net has declined compared to previous years, following lower financial expenses, driven by declining interest rates. I would also like to highlight that the effective tax rate has gone up to 30% for year-to-date 2025 due to changes in our assumptions for deferred tax assets. This year-to-date adjustment impacts the effective rate in the quarter. Additionally, the tax rate in 2024 was also lower due to the U.S. green tax credits, which have now been removed. For the full year, we expect an effective tax rate of about 30%. Despite the considerable currency headwinds and higher effective taxes, earnings per share rose to SEK 7.83 per share. I would also like to highlight that also our net debt-to-EBITDA ratio is about the same level as prior year, and we also see an improvement compared to the second quarter, even after several M&A and continued share repurchases. Now let's move on to the next slide, where I'll provide a longer-term view of our performance. As we can see, we have a stable and resilient business model that continues to deliver. We delivered a strong third quarter, and I'm confident in our journey ahead. Our restructuring initiatives in Europe and Latin America are showing results, and we've seen clear margin improvements over recent quarters. On a rolling 12-month basis, we generated over SEK 30 billion in revenue and reached an operating margin of 12.6%. Currency adjusted growth was 6.1%, fully in line with our financial targets for the strategic period. The major focus in this strategy is accelerating growth within the SME customer segment. This is already contributing to our performance. We have seen healthy revenue momentum and solid margin contribution from SMEs across all our key markets. As we look ahead, it's important to recognize that we are up against a very strong fourth quarter last year, which benefited from favorable movements with U.S. tariff uncertainties. We're also managing the impact from ATM business losses in Sweden and the consolidation of ATM networks in France, both impacting our European operations. In addition, there's a negative impact due to ATM market consolidation in the U.K. compared to Q4 last year. That said, we still see solid opportunities for organic growth, both with our actual customers as well as with SMEs. And as we outlined at our Capital Markets Day, value-creating M&A will continue to be a key lever in our strategy going forward. This concludes my summary of the quarter. Operator, we are now ready for questions. Operator: [Operator Instructions] Our first question comes from Simon Jönsson with ABG. Simon Jönsson: I want to start off with the M&A track. I think it's nice to see that you are more active again as you have been talking about, of course. And I wonder specifically about Burroughs, you mentioned it a bit, and you have had some time now to digest it. So my question is what you're seeing in terms of the turnaround on margins in Burroughs, if that is something that you have already started to see a positive impact on? I mean, the margins in the U.S. were quite good despite the full integration of Burroughs. So I guess I wonder if you have seen any margin impact already in Burroughs. Aritz Uribiarte: Thanks for the question, Simon. I would say that it's still early stages with Burroughs, but our immediate focus is just on resolving some existing quality issues to ensure service excellence. Once this is achieved, we will shift our efforts to improving operational efficiency and margins, with the objective of making the business margin accretive over time as we promised when we announced the acquisition. Simon Jönsson: All right. So I'm guessing that it's fair to assume that it remains quite margin dilutive here as of right now, at least. Aritz Uribiarte: You're right, yes. Simon Jönsson: Then I wonder about the SME Pay segment, just specifically on the organic growth acceleration we saw here in Q3. If there are like any specifics you could point to here, like bigger customers or something that drove the organic growth acceleration Q3? Aritz Uribiarte: So as we explained at the Capital Market Day, we've been always focused on big retailers and big banks. SME was never our focus. And we shifted that, and that has been a shift that our sales teams have made. And we've seen an important progress there. And consider that Q3 also has the seasonality, the normal seasonality that we have in Europe, but it was a great quarter from that perspective, and we expect the following quarters to continue the same way. Simon Jönsson: All right. Great. Then lastly, maybe a bit more general reflections, but on Latin America and maybe specifically on Argentina, I mean, it continues to look like the business environment is improving, more politically stable and so forth. So do you have any general reflections right now, what's going on? And if that's positive or negative for you? Aritz Uribiarte: I think, I mean, when you look at Argentina, it's really small when you look at our group. But I think that progress has been made there from the country side. We keep investing there, and we're looking into growing in that market as well inorganically. So it keeps being an interest market for us. Operator: Our next question comes from Dan Johansson from SEB. Dan Johansson: A couple from my side. Maybe firstly, I was curious to hear how we should think about the revenue mix right now. I noticed you continue to have very good momentum in both Automated Solutions and also international, which is, of course, good for margins and CIT is down like 5% or so versus last year. And I mean, long term, your mix shift will, of course, continue, but it would be interesting to hear how you think about business mix more near term for coming quarters. Do you see sort of a near-term recovery in CIT? Or should we expect these trends to continue and revenue mix to continue to be supportive ahead here? Aritz Uribiarte: Yes. Thanks for the question. And my first comment there would be, I was surprised on your comment around CIT because we should look at the business lines currency adjusted, and I don't see that decrease happening in CIT. Looking forward, as I said in the call, I mean, we're facing -- we're up against a very strong fourth quarter that we had last year. We had the favorability of the U.S. tariffs uncertainty there. And we are having a negative impact on the ATM business due to the losses in Sweden, France and the U.K., and that will impact our European operations. But we keep working on finding alternatives. And as you've seen, for example, our international business, despite the slowdown due to tariff uncertainty, the business has also keep growing. So we keep looking at other revenue streams as well. Dan Johansson: Yes. Fair point on the currency effect there. But also interesting on international. I mean, as you say, is the performance and the momentum in international sort of even throughout the quarter? Was there any notable difference in growth rate July versus September and beginning of October? I mean, before it was tariffs, but now it seems to be other factors driving the performance. So a little bit of momentum throughout the quarter. And also, is there anything in particular driving the very strong performance you have in international still now? Aritz Uribiarte: I mean the front of thing we have with international, Dan, is that it's not a recurring business. So we can't see it as we see our domestic business there. We do expect the international business line to slow down a little bit versus what we've had in Q3. But again, as I told you, we're looking into how can we keep growing this business and keep expanding as we did with pharma, keep expanding to other verticals and other areas of interest as well. Dan Johansson: Yes. Makes sense. Interesting to follow. And maybe a final one, just a small comment there on the ATM market consolidation in the U.K., just so I get it right there. Did you experience an impact already this quarter? Is that more gradually ahead as we move into Q4 and further on here? Aritz Uribiarte: Sorry, I didn't catch that question. Can you repeat again, please, Dan? Dan Johansson: No, it was just -- did you see the ATM slowdown in U.K. already this quarter? Did it impact the numbers in Q3? Or is that more for Q4 and going forward here? Aritz Uribiarte: Yes. You should expect more or less the same trend, rather trend in Q4 and first half of next year. Operator: The next question comes from Viktor Lindeberg with DNB. Viktor Lindeberg: Maybe following up on Dan's question on U.K. as a start. And can you quantify the amount of the contract or contracts that you've lost so we can pin down the magnitude of this? Aritz Uribiarte: We don't disclose those numbers, Viktor. Viktor Lindeberg: Okay. But it's fair to say that it was already in the full quarter of Q3? Aritz Uribiarte: It has been -- yes, it's been in the whole Q3 quarter. That's correct. Viktor Lindeberg: Okay. You mentioned the tax rate, and it's come up to about 30%, and you guide for that for the full year as well. Is that a good ballpark proxy going into next year as well? Aritz Uribiarte: Yes, I would say so for now. Viktor Lindeberg: And on the tax rate from a cash tax perspective, the cash tax has come up quite a lot this year. Are there any one-off items, if you will, in that amount? Or should we pencil in similar, call it, cash tax rates going into next year as well, do you think? Aritz Uribiarte: No, that's going to come down because we had a delay of U.S. tax payments from '24 that came into '25. So they are artificially large this year. And that piece will wash out when you get into '26. Viktor Lindeberg: Super. That's very helpful. Two final points. One very small on your Loomis Pay and SME. I noted you have about SEK 9 million of revenue now in automated solutions in this segment, and that's quite an astonishing number for the small size of that segment. But curious to understand, is this Automated Solutions revenue a product sale similar to CIMA? Or is it actually more installed base type of revenue, more recurring in that sense? Aritz Uribiarte: No, it's exactly the same. The only thing is that when you look at CIMA, you have a huge portfolio of solutions, and we're talking about a smaller range of solutions. Viktor Lindeberg: Yes, that was my question. So if it is more the actual product installed generating SEK 9 million in the quarter and then in that sense that we maybe can expect SEK 9 million also in the coming quarters or if it's more product sales? Aritz Uribiarte: Additional product sales and recurring revenues. Viktor Lindeberg: Okay. Super. Final question on the U.S. and automated solutions growth accelerated quite dramatically. And my numbers tell me 31% in organic terms. But that begs the question, if you have added revenues from Burroughs or something else into that segment? Aritz Uribiarte: Yes, you have revenue coming from Burroughs as well. Viktor Lindeberg: All right. So can you give us an indication on the underlying SafePoint or Automated Solutions organic trend? Is it similar to what we have seen in the mid-teens or so? Or has it started to deviate? Aritz Uribiarte: I think you're right that it's more or less same. Operator: [Operator Instructions] There are no more questions at this time. I would now like to turn the conference back over to Mr. Larrea for any closing remarks. Aritz Uribiarte: Thank you very much all for listening in. Please reach out if you have any follow-up questions. Thank you. Bye-bye. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect.