Good Wednesday! LapWall published its third quarter earnings report today, and as usual, we have the company's CEO here for an interview. In addition to this, the company changed its CFO during the quarter, so we also invited the CFO here to give a brief introduction. So let's start with that. Tiina Määttä, could you tell us briefly about yourself and what is your relevant work background?

Well, thank you indeed. Tiina Määttä, and I have now started in LapWall's team in this role of CFO and General Counsel. And if we think about relevant work experience for LapWall, it is certainly the good 10 years that I spent working for a company engaged in industrial insulation contracting and project management. And of course, then others. I have spent another good decade then here. In financial and legal advisory services, where there have been a variety of client companies and I've had the opportunity to get to know a wide range of companies. But that is perhaps. If I say from a personal side that this work is important, then indeed. Then perhaps the most important things are found at home, that there are three wonderful children and a quite nice life partner to be found there.

Sounds good. What made you choose LapWall in particular? And is it specifically this legal expertise that you bring to LapWall as something new or additional expertise?

Well, the idea is indeed that all the expertise and experience that has accumulated over the years, I want to get to utilize it as versatilely as possible, and personally I am strongly motivated by being able to feel that I am genuinely useful to my own employer and work community. And therefore not just legal expertise, but rather it is working at the interface of business and these support functions across as broad a sector as possible. What does that all involve? And this is indeed a really interesting matter, that we are in a so-to-speak traditional industry, but things are being done here in a completely new way, and in this you get to. You really get to use your brain cells to move this thing forward. All the basics are already in great shape here, but there is certainly still work to be found, and a fantastic team that I've been able to join, so what could be better.

Thanks for the comments, Tiina. Before we jump into third-quarter matters with Jarmo, Jarmo, you'll still get the floor regarding the recruitment of the CFO.

Yes, welcome indeed to our team, Tiina! And we clearly looked for this kind of a combo where finance and legal matters meet. Naturally, there aren't an overwhelming number of such individuals available. And Tiina also has experience in project business and then also the international side. And then I believe that she will be able to help us achieve the targets set for us, that the management team plays a significant role.

Even though there are tools, technology, digitalization, AI, and everything in use, people are always needed. And time will tell, of course. But based on the few weeks Tiina has been on board now, it looks good. And Tiina is not quite an unknown acquaintance in that sense, as she served as LapWall's outsourced financial manager through Talenom between 2013 and 2015. We bought that service from there, and then let's say she went. She then went on to grow and develop further in project business and elsewhere, and then our paths crossed again.

All right, sounds good. Let's move on then. Or let's delve deeper into the third quarter report that you published this morning. Revenue. Actually at the highest quarterly level in its stock exchange history, and EBITDA is also right at the highest levels. So. Could you walk us through what kind of deliveries occurred during that quarter and what drove this high level of profitability now in the third quarter?

Well, as we have stated, this is a volume business. And of course when we get sufficient volume into the factories, it shows there. Then we have certain costs in place, and when we get the right kind of product, the right kind of volume in there, it then also shows in the profitability figures, that at a certain stage this machine operates in such a way that almost revenue minus raw material costs filters down to the bottom line, and this is visible here. Of course we still have plenty of potential in reserve, and volume above all from there, and the right kind of volume, that shows in the figures.

Yes, let's delve a bit deeper into that. You have yourself described the accumulation of profitability with the formula that there is the market price, the cost price, and then there is volume. So the profitability improvement was so large, how much help was then obtained from these other two factors besides volume now in the third quarter?

When you look at this business, of course we report separately, they are. If you look at the first 9 months, they have been pretty much the same size during the first 9 months of this early year. And if we consider that at the beginning of the year we had to scale down this warm roof element business at the Pälkäne factory to a single shift, which is the first time in the company's entire history. That's right. And then we started there, when at the end of Q1, at the beginning of Q2, demand started to grow strongly from there. And this kind of. Let's say that a partially pent-up demand on the roof side for hall-like buildings started to grow, and both the Pälkäne and Veteli factories were then able to be shifted to two shifts. And it can also be said that it demonstrates quite some capability from our organization that you can scale up this volume in a controlled manner this quickly from there. That's the other side.

And of course then when we look further at this Pyhäntä unit and compare it to the comparison period as well, the volume has grown by over 20 percent there too. And um. Or isn't it over 46%, 46%, from there. Naturally one could already say this, that if we didn't have this new investment made, we wouldn't have survived these deliveries. Although if you think about it roughly now and give a rough picture, we are able with our current five factories to make around one million square meters per year. And now we have been running those five at 60,000 square meters a month, so we don't have that volume. Or let's say that the capacity to make a considerably larger volume still exists there.

And then what is also a positive individual highlight there, is that this warm roof element business has been running already now in the autumn at the volume targeted for 2030. So that demonstrates in a way that once we just get goods in there, we are able to scale this operation and then deliver the goods from there. Naturally, a factory is always one part of that whole. It is strongly influenced by what kind of. What kind of product solution portfolio you have there and how those other processes operate within it. And they are quite efficient with us, so that's how the whole is formed. And of course then when we get volume, it usually also happens that efficiency improves. That is, when we are in this kind of low-volume production. It means that you have to take in items to the factories that are not suited in the best possible way.

Meaning either smaller-scale projects and then also ones where you have to do more of this customization and similar, so all these things strongly influence that whole. And of course also whenever you have volume, you have visibility a bit further out, which then means that you are better able to plan your own operations, production, and the whole. That of course we aim for as well, and we constantly optimize so that our own process can operate with an even smaller and even shorter cycle in a way. So that improves our own efficiency and our own operations from there. Of course, it is also often a question of when you get such a deal, how you get all the necessary baseline information and other inputs for it so that the product can then be manufactured. But there too we have in the background, when we talk about this product company mindset that has been mentioned, a central element of it is that our product forces the project into our concept, even if that might sound bad. But the flip side of this is that when our product has been tested, all approvals are found there and we stand by that product, the customer gets a better product cheaper. That is, if the customer goes customer-driven, wanting their own order-specific design, customization, they have to pay more for it and you get a poorer product. That's just how theory and practice work there.

Indeed, perhaps a further question regarding that. A further question on Pälkäne and Veteli. This change in demand was quite steep in a short time, and in project business it is very important to be able to ramp production up and down flexibly. So, what were the key factors in succeeding with this ramp-up? And is personnel recruitment or what the most important bottleneck there?

For us, the white-collar team is pretty much fixed, and it certainly starts from having our processes in order and having capable, committed staff there. So it certainly means that people have to stretch and put in the effort. But the fact is that the process works and you then have capable staff there. And we haven't recruited in any massive amounts. That also means that when you ramp volume down, you retain that capability. That is, you hold on to those people, because if you start letting go of those key individuals at that point. Then you let them go, then it works. Meaning that you hold on to your team even when volume is quieter.

And then through that the capability comes from the fact that in our roofing business as a whole we have a white-collar team of about 20 people, including sales engineering and this factory operating organization and management in it, and then all our production staff has been through temporary work agencies from the start. That doesn't mean they wouldn't wear a LapWall hat. They would. And we still determine their pay. It is nevertheless an efficient, good recruitment channel as well. Through which we get staff, and we have very long-term employment relationships on the temporary worker side as well.

Well, you kept your guidance unchanged, but commented that you now expect to end up at the upper end of the ranges you provided for both revenue and EBITA. When this is calculated out, you still expect the fourth quarter to be somewhat weaker than this. This wild third quarter that you reported now, can you open up the drivers at this point as to why expectations are of this nature?

Well, there is the Christmas break alone. Which means that traditionally Q4 has been quieter and there are fewer production days and such, so that is also strongly visible there, that the whole is formed directly from there, really. And of course at this point we are living past mid-October. So there is visibility into the rest of the year, and we know what we are doing there. That the only variable there. Which could be then, is that if for one reason or another work sites cannot progress as planned or vice versa, we can still take more goods into the machine on a fast schedule if needed. So that means that you don't necessarily have to start those. Making orders to be delivered later. So we have the capability in a way to then play this game according to need from there. And turns can be quite fast, just like on the DC side, that it's quite an interesting world. Overall indeed.

We will move on to new sales then. And you delivered so much goods in Q3 that the order book turned downward, so with what mindset do you view new sales and market pull at present? And perhaps as a follow-up question, you also mentioned that you secured the third data center project in LapWall's history into the order book, so how? What do discussions with these operators tell you at the moment?

We are involved there, after all. We concretely have several projects offered from there, and then discussions are still underway with quite a few. But what is actually good to bring up is that we have earned our place in that market as well, meaning our product solution portfolio and the fact that we are able to significantly shorten the lead time of the construction site with our solutions, that is actually the key driver for our customers out in the field, that our product works. There was actually nothing to complain about from that side, and through that, we are able to bring significant added value to the customer. And then the fact that we have the possibility to get the entire building envelope closed with our products. That is, the walls and the roof, and also what perhaps has not come up in discussions, those partition wall solutions there, if you have 20,000. If you have that roof, there runs about the same amount of partition wall. And already based on the discussions we have had, it has turned out that our product for those partition wall solutions is excellent. And also for the external ones, so there is potential there.

Naturally, what the challenge is in that market is that we are still a fairly unknown company to these international players, and there it has often been the case that it has been decided to use some other solution than ours. But the awareness that we can bring significant added value to the customer, and that the execution will not fail because of us at least, that certainly carries weight. And the interest there is really high then. But now, having followed this discussion related to the DC market myself, it changes almost daily or weekly one way or another, that the need for these does exist. And I myself would see that Finnish decision-makers should now have the wisdom that during such high unemployment, all sensible investments in Finland are indeed needed. And then the discussion related to electric energy costs, it has taken on quite proportions and certainly very wrong ones, as to how it then correlates with the price of electric energy. But investments are needed in Finland. LapWall is strongly involved in this, and we certainly know how to take our share of the market, and to the customer, it has shown that it improves their competitiveness. And then that cannot really be emphasized too much, how immense the significance is that the construction lead time is shortened. You have seen various figures regarding daily costs and the like, so it is an insanely large cost, and when you get LapWall as a partner, the customer can rest assured in that regard that the job will not fail because of us.

Yes, perhaps a specific question regarding this third data center project, does it get included in the order backlog ended in the third quarter or has it come after the period?

It is included.

All right, and then also what I started my question with, what is it like? What does the market look like through your eyes? Data center. Outside of data center construction. Is there any kind of activity visible there?

If you look at a larger perspective. In the year 2025, we made one project, this year. Now we have a second project. The fact that the installation will be completed during this November, and a third project will then start and it will be completed at the beginning of the year. In January, according to current estimates. And then if we look at next year, we certainly still. Such an investment view at the moment that our DC side will grow significantly next year, because there is that much tender project pipeline. Naturally, they are not signed and sealed yet, but the current strong investment view is that we will be involved there even more.

Sorry, I repeat, my question was perhaps a bit unclear. I meant what construction or the market situation looks like outside of this data center construction at the moment.

Meaning outside.

In construction.

Well yes, that is a good question, and you know. Residential construction, large-scale residential construction, has not taken off and it is not visible that it would strongly take off next year either from there. But this kind of low-end construction again then. There are certain customer accounts that have then significantly improved their pace. Then again, as was discussed about these wide-span hall-like buildings, demand there has been at quite a good level. Project pipeline has been there. Naturally, situations can change quickly, and then this public construction and defense construction, there are also projects underway quite nicely, so otherwise, the overall investment view is quite positive. Excluding large-scale residential construction then. That as you probably know, there is no visibility then as to when it would actually start. In what way residential construction would get going?

When this investment was made, we ourselves thought that this residential construction would start more strongly, in which case we would be able to serve these customer accounts even better with our wall element assembly line. Since this has not been the case, then we must gain access to this even more strongly. To this wall-like buildings' wall element market as well, and we are working hard towards that.

That leads us via a nice bridge to the last question. And you formulated it like this in the report as well, that growth will not be limited by capacity, but permanent demand must be able to be created for LapWall's products. If you think about this current market activity in hall-like buildings, you already alluded to market share growth, but do you see that in the current or near-future market environment, this permanent demand can be created?

We certainly have proof of that in that we have. If you think about the fact that when we bought. If you look, I will take a slightly longer answer. In 2017, we started. We started in the warm roof element market. It will soon be 10 years since that. From that, our volume has increased tenfold. And we have been able to take market share, to show that our product works. Another good proof is this new roof element product, meaning it has also grown and is growing with a good volume. Then the demand for that product.

Then the third such step we are now taking, so that on the wall element side we get to actually join large-scale construction, our proof is that we have been able to do that. It is. It is hard work, we must do product development, open up the markets, get to the right tables to discuss. And I do believe that we are able to create it from there as well. The fact what the overall market demand for next year will be, we have the same drivers in use as everyone else, so it is expected that next year total construction would grow somewhat, and we must be able to bring concrete added value to our customer. That means that when our customers use our products, their earnings must be able to improve. Otherwise from this. The company has no future. And we certainly have the investment view that we are able to do that.

And we can continue to work towards getting our cost price decreased, and from here the whole thing is then built, and we look to the future with quite good spirits then. I did not say earlier, I do not remember now if I said it. If I repeat, you can cut it out even, it feels extremely good that this factory investment of ours has succeeded. Even though we are somewhat behind schedule, the fact that the factory has shown that it works and will work. Just as we planned during the investment, that definitely warms the heart. And our staff has indeed done an insanely great job in all businesses, in all areas, and big thanks for that once again to our entire staff who happen to be watching this. Broadcast then from there.

Although I promised that it was the last question, I cannot help asking. You mentioned in the report that now regarding the sub-assembly line, targeted times are being aimed to be achieved during H1 2027, so what is the situation with the progress of the sub-assembly line's commissioning at present?

In reality, let us return to that as well, the sub-assembly line, how they are going to operate, it manufactures the parts for all these three factories, meaning for seven assembly lines. At present, parts are manufactured there in the new factory. For this roof element line and its element line. Meaning. Meaning there is still a way to go before achieving the demonstrated or targeted capacity. Naturally, what has taken more time from our perspective is the programming of the whole, meaning so-called engineering work and its commissioning. But nothing has come up to indicate that it could not make the parts it is supposed to be able to make. But the programming and commissioning. So that has indeed taken a long time. But the whole time we are moving forward and we believe, and there is a strong belief that it will achieve the targets set for it.

Good to hear. Nothing else than Jarmo, thank you for the interview and very best of luck for the rest of the year!

Thank you.