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Sophie Arnius: Hello, everyone. Welcome to this call focusing on our performance in Q3 2025. Also this quarter, we improved our margin in a challenging market, and that was thanks to commercial execution and cost control. And this was definitely evident for our Industrial business area. My name is Sophie Arnius, I'm heading up Investor Relations, and I will also be joined by our CEO and President, Rickard Gustafson; and our CFO, Susanne Larsson. And there will be, of course, opportunities to ask questions before or after their presentations. And there are 2 ways to do that. [Operator Instructions] With that, let's get started. It's a great pleasure to hand over to you, Rickard.
Rickard Gustafson: Thank you so much, Sophie, and good morning, everyone, to this earnings call. And as you heard from Sophie, yet again, we are able to present a resilient and somewhat improved adjusted operating margin despite a rather challenging market conditions. And also, as you can see on this chart, after 8 consecutive quarters of negative organic growth, we are actually back to organic growth in the quarter. Actually, it's primarily driven by our Industrial business, where we have seen growth across our geographies, while Automotive is still more volatile and a more negative demand environment. This performance was actually slightly better than we anticipated walking into this quarter. However, though, the underlying market conditions has not significantly changed in this quarter versus the second quarter. And to some extent, we are also helped by favorable comparison figures compared to Q3 last year. When it comes to our strategic initiatives, we are making good progress. Our Automotive separation is progressing at a very high pace, and I will share some more lights on that today, but I will refer also to our upcoming Capital Markets Day in a few weeks' time on November 11 in Stockholm, where we will be able to share more lights on this. When it comes to our Industrial rightsizing initiative that we announced last quarter, it's also progressing according to plan at high pace. As we said when we announced it, we do not anticipate significant savings in this quarter, in the fourth quarter this year. The majority will come in 2026 and into '27. And then we continue on our strategic journey to invest in our capabilities and effectiveness. And this quarter, I would like to put the spotlight on an initiative that we have developed in Italy, where we inaugurated a new global Super-precision bearing center that we are pretty excited about, and I will share some more details around that shortly. But if we move on and start taking a look at the high-level numbers. Net sales ended at SEK 22.4 billion, representing an organic growth of 2%, as I mentioned before. The adjusted operating margin improved slightly to 12.3% in the quarter despite significant headwinds from FX and rather challenging market conditions. I refer them primarily to the tariff situation. The main reasons why we have been able to further enhance and make -- retain the resilience in our earnings is our ability to drive commercial capabilities and execution on commercial activities. It's our good cost control and also that we benefit from previous investments that we've done in regionalization and in world-class manufacturing. Turning to cash flow. Coming in short of the same quarter last year, primarily driven by higher items affecting comparability, where Automotive is the main -- or the Automotive separation is the main driver behind that. And you will hear more of this by Susanne very shortly. But if we then turn to our different regions. And as I mentioned in my opening remarks, I'm very pleased to say that we have growth -- organic growth in our Industrial business across the regions where we have some more variation on the Automotive side. But let's pick them one by one. Starting with EMEA, our largest region, where we have an organic growth of 1%. It's driven by our Industrial business, where some industrial verticals stand out and had very significant growth. I refer to Aerospace and Magnetics. While in general, demand in Europe is still at a fairly low level, industrial demand is fairly low level, but has clearly stabilized in the quarter, but it's not yet taking off. When it comes to Automotive, we're still in a negative growth territory. However, though, less so if you compare to the same quarter last year, and that is primarily due to a stronger rebounds in our commercial vehicles section. Turning to Americas. Also a low single-digit organic growth, again, driven by Industrial. And of course, in this region, the price/mix activities to manage tariffs is part of the organic growth journey. But also some industrial verticals are also standing out. And here, I'd like to mention marine and aerospace. Turning to Automotive, a weak underlying demand that we have seen and especially true for commercial vehicles in this region. China and Northeast Asia, mid-single-digit organic growth. And here, we see growth both in Industrial and Automotive. On the Industrial side, it's primarily our industrial distribution that is growing and also our renewable energy business. Here, I need to make the same comment as I did in Q2 last year. Some of the renewable energy growth is somewhat inflated for prebuys or policy-driven prebuys in China. On Automotive, the growth there is pretty stable. And again, we report and see very positive development when it comes to EVs in this region. India and Southeast Asia, also a region where we have growth both in Industrial and Automotive, where we see very good activity levels in India and Vietnam, as examples. And from an industrial point of view, agriculture and material handling stand out in a positive way in the quarter, while Automotive has a good development, both when it comes to vehicle aftermarket and commercial vehicles in this region. If we then focus in on our segments and start with Industrial that this quarter represents roughly 70% of our net sales and 90% of our adjusted operating profit. As I mentioned, we're back to growth here and we have an organic growth just shy of 4%. But in absolute terms, as you can see from the chart, we are actually declining some 3% this quarter versus same quarter last year, and this is driven by FX. However, though, the adjusted operating margin continues to improve and now reaches 15.5% despite significant headwinds from currency and also we've been able to manage a volatile environment and the tariff situation. And the main drivers here are the same as I repeat for the group. But again, our commercial capabilities have played a significant role here. We have very good cost control. We benefit from investments in regionalization and world-class manufacturing, as I mentioned. And then we have a small but not very sizable also contribution from the rightsizing program. But as I mentioned, most of the value from that program or benefit from that program will come later as we move into 2026. Turning to Automotive. This quarter, roughly 30% of sales and 10% of adjusted operating profit. As I mentioned, still in the negative growth territory, but somewhat different across the regions. The negative growth, as you heard me say, is driven by Americas and Europe or EMEA primarily. We have talked about the tariffs a number of times. And we said at the group level, we do believe that we will be able to largely compensate for the tariff impact, and that has been the case also in this quarter. We also said that the majority of the net negative impact from tariffs will be found in Automotive, and that is also the case. So with that in mind and also the fact that FX had a really significant impact on the earnings in this quarter, I do believe that the adjusted operating margin performance, not just shy of the same level as last year is a rather good delivery. The main thing, the positive thing I'd like to put your focus on here is the fact that we continue to see a lower material cost that enables us to offset some of those headwinds and maintain the margin. And this is not a onetime event. It continues to be driven by very solid procurement activities and also a better material mix in our production that is helping to reduce material cost. So that is something really positive. If we then turn our focus to our ongoing separation initiative. So it's progressing well and at a very high pace. It's still a large program and a lot of work to do. But in this quarter, we have some significant milestones that we have achieved. We have actually concluded a number of very important IT cutovers during the quarter, and they actually turned out fully in line with our plan and no negative surprises came out of those. Another key thing is what's happening in India, where you may know that we have -- our business there is listed also on the Indian Stock Exchange. And there, we have been able to complete the separation, and we are ready to list the new entity in India before year-end, another significant milestone. But to give you some flavor on why we talk about that this is a very tight schedule, and there are -- I mentioned a couple of times that there are always risks with this massive project like this or a program like this and a number of activities are on the critical path, and that has not changed. I don't have any red flags to report today. But to give you some color on this, we're talking about some more than 1,000 IT applications that we need to cut over. We're talking about more than 9,000 intellectual property rights that needs to be split. We're talking about more than 60 manufacturing lines that need to be transferred around in our footprint. So it is a sizable project. But as we said before, we believe we still stand for that we should be operational ready to list Automotive by mid-2026. Then turning to another item. And as I mentioned in my opening remarks, that we are investing in a product line that is named Super-precision bearings that we are pretty excited about. Today, it represents some 2% of our Industrial net sales, but this is a product line that goes into a number of important industrial verticals like robotics, advanced machine tools and compressors, all of them that also benefit significantly from some key megatrends such as electrification and automation. And why are these products? What value do they bring in these type of applications? Well, clearly, it's about accuracy and speed with minimal friction and exceptional running accuracy. And they also provide better stiffness and power density for these type of applications, enabling increased energy efficiency. Just to mention a few of the value creation that we have from these products. So what we have done and what we inaugurated in earlier in the quarter that we have now built a new global cross-functional Super-precision bearing center. It's based in Italy, in Airasca, close to our normal operation there, where we have been able to co-locate our R&D, our engineering capabilities and our production teams in under one roof. We have invested in a highly automated and digitized manufacturing capacity there that can be able to very, very short turnaround times and also increase throughput significantly. And the benefits that we get from this by getting this under one roof is clear that can drive cross-functional synergies. But more importantly, we can then co-create with our customers and help solve their needs in very critical applications. And I have the joy myself to be part of the inauguration ceremony. And I must say that was very rewarding to see the excitement among many of our customers when they saw our new capabilities in this field and what that could do for their business. So we do believe that this is an exciting opportunity where we will benefit from good growth and profitable growth also driven by electrification and automation, as I mentioned. So with that, I end my part of this presentation and hand over to Susanne to take you through the numbers in detail.
Susanne Larsson: Thank you, Rickard. Good morning, everyone. So now we will really talk about the financial implications and some of them you have also heard Rickard commenting upon. But let me first start with the financial summary and an overview of the quarter itself then. So starting off with the net sales, it was down 5.1 percentage points. It was explained first by an organic growth of 2%, more than offset by a significant FX headwind. Our gross margin was down 0.5 percentage point. However, if we put the one-off cost, the IACs aside, we saw an improvement of 0.4 percentage points. Our adjusted operating margin strengthened compared to last year from 11.9% to 12.3%. This in spite of FX headwind of minus 1 percentage point. Quarter 3 one-off cost IACs amounted to SEK 755 million, with the main areas being the automotive separation costs representing SEK 362 million. We had SEK 230 million related to impairment charges of fixed assets and finally, SEK 141 million on ongoing restructuring activities. So net-net, we had an operating profit of SEK 2 billion compared to SEK 2.5 billion last year, where the main difference is explained by the increased one-off charges. So if we look at the bridge here, analyzing the operating margin from 11.9% to 12.3%, I start with the organic dimension. So as I said, sales growth amounted to plus 2% with Industrial contributing to the growth. Negative production volumes were more than well compensated by price mix. And talking about price mix, the key initiatives is pricing, portfolio management, but also managing the tariffs mainly through price adjustments. The organic impact on the adjusted operating margin was 1.5 percentage points. Cost management was good with the development almost flat in the quarter, and this in spite of negative impacts of inflation, volume-related inefficiencies and tariff costs. In the quarter, as Rickard said, we managed to largely compensate for tariffs and expect to do so also continuing into quarter 4. Currency remained significant with a headwind, taking down sales by 6.9 percentage points and had an impact on the adjusted operating margin, as I said, minus 1 percentage points. The main currencies remain the same. It's U.S. dollar, it's Chinese yen and it's Turkish lira with the main effects vis-a-vis the Swedish krona. And finally, the structure is a small one. It's a net effect of the divestment we did in Aerospace in Hanover and the last year's acquisition of John Sample Group. So let me try to explain the cash flow performance in the quarter. Cash flow from operating activities ended at SEK 1.8 billion, and there are some reasons for that relative weak cash flow, and it comes from what I will address now then. So first of all, we had one-off IAC costs with a relatively immediate cash flow impact, and that is particularly related to the Automotive separation costs that is converting to cash flow relatively immediately together with ongoing restructuring programs. And this explains SEK 500 million in the quarter. In the bar other, we have SEK 300 million negative explained by realized FX effects. Taxes paid in the quarter amounted to SEK 700 million, which is higher than last year, SEK 200 million. However, last year was low, so this is on a normalized level. And then finally, the net working capital, we had the change there of minus SEK 400 million. And this was partly explained by accounts receivable and the timing within the quarter and accounts payable being low due to seasonality, typically in our quarter 3. Inventories, we are pleased to see decreasing in the quarter, where we saw reductions in both Automotive and Industrial. And before leaving this, I just want us to remember that last year, we had the change in the net working capital where we changed the reporting of consignment stock. So we had both increase in inventory and accounts payable of SEK 1.5 billion each. So let's take a look at the balance sheet and the return on capital employed. SKF has a strong capital structure. And at the end of September, we had a net debt of SEK 14.5 billion. And if we put the pensions aside, it ended at SEK 7.5 billion. Cash and cash equivalents ended at SEK 7.6 billion and were reduced as a consequence of a bond repayment of SEK 3.3 billion in the end of September. The SKF liquidity remains strong. Net debt, excluding pensions in relation to equity ended at 13.3% while net debt excluding pensions in relation to adjusted EBITDA ended at 0.6x. Finally, adjusted ROCE remained on a similar level as previous quarter, and that is 14%. So coming to my last slide with the outlook then. The global economic development remains uncertain. So the outlook expected is that the market demand remains similar as the one we just left in quarter 3. By that, we mean that we expect an organic sales to be relatively unchanged quarter 4 year-over-year. The currency impact on the operating profit remains high, and we estimate that to be minus SEK 650 million, applying the rates as per the end of September. The full year tax rate guidance is adjusted to 28%, which is 2 percentage points higher than the previous guidance, fully driven by FX. And finally, then, the CapEx guidance for the full year, we have taken down somewhat from SEK 4.5 billion to SEK 4 billion. And by that, Rickard, I hand back to you.
Rickard Gustafson: Thank you so much, Susanne. And if we wrap this up then, as you heard us say, the market conditions continues to be challenging with a lot of volatility and geopolitical uncertainty, which puts a negative push or downward push on demand. But with that said, though, we are very pleased that we, after 8 consecutive quarters of negative organic growth now are back into organic growth. And as you heard us talk about, primarily driven by our Industrial business. Also pleased that we continue our margin resilience story, where we see that we are managing in this rather volatile environment and managing headwinds in a decent way and holding up our operating margin. And this is due to that we actually execute on what we said that we're going to do. We are driving commercial capabilities. We are standing firm on cost management, and we are continuing to invest in our business in terms of automation and in terms of regionalization. I'm also pleased to report that we're making strong progress, as I mentioned, in our Automotive separation. It's a lot of work still to be done. It's too early to claim full victory. But so far, we are driving this fully according to plan. And as I mentioned, we have achieved some significant milestones in the quarter. And I'd like to again put some spotlight on the upcoming event in Stockholm in a couple of weeks in November 11, where we look forward to see you all and share more details on how we see our future Industrial business, some key highlights on our future Automotive business and provide some more transparency on the cost also related to the separation. So with this, I'm going to hand over to Sophie that will then initiate the Q&A session.
Sophie Arnius: Thank you, Rickard. And yes, we hope that many of you can join us in Stockholm for the Capital Markets Day, but there is also an option to join us online. Nevertheless, you need to register and the registration closes on Friday, and you find the link to register on our website. So let's now open up for Q&A. [Operator Instructions] We will start with a question from the telephone line and from Rory Smith at Oxcap.
Rory Smith: It's Rory from Oxcap. I'll stick to one as instructed, Sophie. And that is just if you could unpack that North America and particularly the U.S. performance and even put a number to the volume versus price impact in the quarter. I'm just trying to separate out those tariff price increases from any underlying improvement or otherwise there, that would be great.
Sophie Arnius: Rickard is happy to respond to that question.
Rickard Gustafson: Yes. We will not disclose how much is volume and how much is price mix as such. But when it comes to Americas, it is price mix that drives the growth, and we are actually still in negative volume territory in Americas. So that's as far as I can go.
Sophie Arnius: And let's continue with a question from the line of Alex Jones at Bank of America.
Alexander Jones: Just on the guidance that you've given for Q4, are you pointing for a sequential deceleration in organic growth given you're talking about relatively unchanged? Or I think you talked about unchanged into this quarter and then delivered plus 2%. So is that still in the range of possibilities? And if it's more the former and you are talking about deceleration, can you just explain the moving parts for us, given I'd imagine that the pricing gets sequentially higher as you continue to recoup the tariffs?
Sophie Arnius: Let's hear from Ms. Susanne on this topic.
Susanne Larsson: So what we are really saying is that we do not see a significant change in the market environment quarter 4 over quarter 3. So since quarter 2, I think we are seeing signs of bottoming out. So from the sequential question you asked, we have to remind ourselves that quarter 4 last year, we came in strong, and that we have in mind when we compare quarter-over-quarter, and that is the reason for us to guide flat.
Sophie Arnius: And let's continue with a question from Erik Golrang at SEB.
Erik Pettersson-Golrang: A question on Automotive just for some perspective. I mean, currency, as you say, continues to be a heavy headwind for you from a profitability perspective and the relative impact on Automotive is quite significant. So I mean, it's a sub-5% margin business on an adjusted basis. Are you -- is this sufficient for the company to be stand-alone? Or is currency dramatically changing the outlook for Automotive?
Sophie Arnius: Rickard, do you want to take this one?
Rickard Gustafson: Of course. Erik, as we have said also when we announced our ambition to do this separation, we have higher ambitions for automotive than the current performance. And yes, we have entered up in a more volatile environment maybe than we anticipated before, but we are managing through this. And in our internal plans, when we look forward, we're still very confident that we will create a solid and profitable Automotive business as we move forward. But more details to come in a couple of weeks' time in Stockholm.
Sophie Arnius: And we will continue with a question from Daniela Costa at Goldman Sachs.
Daniela Costa: My question relates to tariff impacts in Section 232. But first, I guess, a clarification sort of on the bridge on the cost, you have SEK 23 million headwind, which I guess sounds quite small. Is it because you've been selling out of inventory? And then is that repeatable in Q4? How do you size the direct and the indirect inflation coming from Section 232 going forward?
Sophie Arnius: This is a CFO type of question. So Susanne, please.
Susanne Larsson: Daniela, I think we are very pleased to see that we have a cost development, which is only SEK 23 million negative, really flat. And I think what you see is a lot of effort coming in from managing the cost variability, looking into what we have done with automating our manufacturing operation and really driving a lot of cost initiatives, which is necessary from a long time in a negative decline. So I think that is something that we see will continue to be a leverage that we can utilize going forward. Talking about 232, I think what we are guiding now is to say that we anticipate that the majority of the tariffs and also including 232 will be compensated and not ending up in our P&L.
Daniela Costa: Including suppliers indirect impact from...
Susanne Larsson: Including that, yes.
Sophie Arnius: And we will continue with a question from Andreas Koski at BNP Paribas.
Andreas Koski: Just a short one on the prebuy effect in China. What was the impact? How many percentage points did it support the organic growth in this region?
Sophie Arnius: Rickard, please.
Rickard Gustafson: Yes. As you know, we normally don't disclose that many details around these things for a number of good reasons, and I'm going to stick to that also today. So I'm not going to give you a percentage as such, but it is -- we do see that some of the organic growth that we report on the Industrial side in the China region is somewhat inflated in the quarter due to this prebuy impact that we don't expect to see in the fourth quarter.
Sophie Arnius: And let's continue with a question from Rizk Maidi at Jefferies.
Rizk Maidi: I just wanted -- for you, Rickard, maybe just to draw a picture on the demand. I think even if I look at China, it does seem that industrial distribution has had maybe perhaps a little bit better performance. And then moving on to Europe, I think earlier this year, you talked about some green shoots. Just maybe if you could just give us an update, it looks like from today's commentary that things are stabilizing, not picking up. And maybe if you could have a comment as well on Americas, just to draw sort of an overall picture.
Rickard Gustafson: All right. I will try to do that then. Starting with EMEA then, if we go down that path. As I mentioned, we do see some growth on the Industrial side, especially in a few verticals as such in aerospace and marine. While I do sense that in general terms, we haven't seen a significant uptick in demand in EMEA yet. We're still waiting for that to come. We do feel more confident though that it has truly bottomed out, but activity levels are not yet picking up from that level. Turning to Americas. Again, as I mentioned on the previous question, the growth there is primarily tariff related, less so on volumes. Aerospace and marine are some green shoots in that particular region. And also industrial distribution is holding up okay. It's not growing, but it's holding up okay, which is also important from a profitability point of view and a mix point of view. So that's positive. Turning to China, where we do have a mid-single-digit organic growth for the group. Where the Industrial business, as I mentioned, industrial distribution is contributing to that. But I need to remind you that it's also a reclassification that would happen. So that's why the numbers may look more stronger than they actually are. But even if I compare like-for-like, it's a solid and somewhat growing performance also in distribution. So we see that in China. And I already commented on the renewable energy area. And for Automotive, if I just touch on that briefly, we are very pleased to see that we continue at a very solid growth rate when it comes to EVs in that particular region. And India and Southeast Asia, primarily driven by very good activity levels in economies such as India itself, which is the majority and also like Vietnam, which is a smaller contributor to us where India is it's the most important market for us in that particular region. And in general, good demand levels across Industrial. And I mentioned 2 that stands out a little bit more than others, that is agriculture and materials handling. Again, I do believe that the tariff situation, the uncertainty is having a negative impact on global demand. We do see where some signs of bottoming out, as I mentioned, but we still wait for the uptick to come back. And as you also heard Susanne, when we guided for Q4, we sense that the underlying kind of dynamics of the business in Q3 was roughly the same as in Q2. And we -- our best estimate is that, that will be also the case for Q4.
Sophie Arnius: Let's continue with a question from John Kim at Deutsche Bank.
John-B Kim: I'm wondering if you could give us a little bit more color on the planned listing of your Indian asset. Any color there would be helpful.
Sophie Arnius: Rickard, do you want to bring some color on that?
Rickard Gustafson: I'd be happy to. It's a massive achievement in such, but it's not so much to say, it's a kind of odd comment. I hear that myself. But it is a complicated effort to split that business in India, both from a legal point of view and also to get all the authority permits and tax permits. So that has been a rather sizable effort. And now we have concluded that. Everything is set and done. So now we have a new entity that we are ready then to also put forward to the Indian Stock Exchange, and that's going to happen sometime between now and year-end. So I think that as much as I can say.
Sophie Arnius: We will continue with a question from Tim Lee at Barclays.
Timothy Lee: So maybe a bit follow-up on the Section 232. Do you have any estimate on the cost impact from Section 232 alone, both directly and indirectly? And have you already made any price hike because of Section 232? And is there any pushback from customers in terms of further price increase? I just want to see whether there will be any comments on the further effectiveness on pricing activities going forward?
Sophie Arnius: Let's have Susanne answering this question.
Susanne Larsson: Talking about the tariff environment, I think that is really one of the uncertainties that makes the demand still not really picking up. So I think the biggest impact of the tariff is the lack of recovery that we see. But generally speaking then, we have been successful in managing the tariff cost. We have worked through the 232 implications for SKF, and we anticipate to be able to take that through with the majority also to our customers. We, of course, have a close relationship with our customers in this, and we are normally applying surcharges while this situation remains.
Rickard Gustafson: And if I may add a few more comments. Of course, we are having intense discussions with our customers on these items. And we're not just using price as the only mechanism to compensate for this. We're also pushing forward activities to drive more of our assortment to become USMCA compliance as an example, that's another key component in this. And when it comes to general price increases, the market is not -- cannot absorb more general price increases, but we will continue to do selective price increases. That has nothing to do with tariffs, but more where we see that we can drive price and especially when we come with new innovation and then we work together and co-create with our customers, we make sure that we also take our fair share of the value that's being created, and that will continue.
Sophie Arnius: We will continue with a question from James Moore at Rothschild & Redburn.
James Moore: Could I ask a question on the new Specialized Industrial Solutions business, which you basically renamed Independent and Emerging and brought in Hans Landin. Just -- it's going to be like not a third, but coming towards that the future industrial company. And I wondered if you could say 2 things, really, what are you changing to improve the profitability of Specialized? And as Specialized is mostly field lubrication and aerospace, could you say where your confidence is the greatest amongst those 3 for profitability uplift and potentially what you're doing to drive that?
Sophie Arnius: I will ask Rickard to address this one.
Rickard Gustafson: And I will give you a cliffhanger. You're right. We are excited about the -- what we then call the new name of this entity. And there are very important and exciting business units that makes up -- makes this up and with very solid growth. And some of them are further down the road and have already done some to reestablish the profitability levels are now in full gear growth and others are still doing some kind of work to further enhance profitability before ramping up their growth. This is a key component in our future industrial story and growth journey that we foresee. And it's going to be a part and something that we will share in more detail when we're going to put more color to our future Industrial business in November 11. So that's the cliffhanger. So you will see more there. But clearly, we drive them now much more as fully owned subsidiaries of this company than what they were before and without no overhead anymore.
Sophie Arnius: And we should also just clarify what is included in Specialized Industrial Solutions for those of you that have not seen the press release that we had out a few weeks ago. So it's aerospace, it's seals, lubrication and our magnetic business. But as Rickard said, we will come back more on that topic, the interesting topic of Specialized Industrial Solutions at the Capital Markets Day. We will now continue with a question from Anders Idborg at ABG Sundal Collier.
Anders Idborg: So you're guiding CapEx to come down, but you're guiding extraordinary items or items affecting comparability to come up. So I was just wondering, could you give us an early look how we should think about those 2 items trending in 2026?
Sophie Arnius: Susanne, can you please respond to this question?
Susanne Larsson: I almost repeat what Rickard had said around cliffhanger. But you're right, the CapEx, we took down that outlook for the full year from SEK 4.5 billion to around SEK 4 billion. And we also say that we sequentially increased the one-off cost into quarter 4. So when we meet at the Capital Markets Day, we will provide some further clarity on how we look upon CapEx moving forward, but also how we look upon the one-off costs and the rightsizing that we are doing, including the spin of Automotive.
Sophie Arnius: We are marketing our Capital Markets Day, as you can hear. So we hope that you all can be there or tune in. We will continue with a question from Andre Kukhnin at UBS.
Andre Kukhnin: Can I just start with a quick clarification first on the change of accounting for consignment stock, could you just explain to us what that is and whether that took place in this quarter? Or is that the quarter a year ago and the impact of it?
Sophie Arnius: Susanne, can you add some light here?
Susanne Larsson: Sorry, I was obviously not clear previously. When you compare the cash flow this quarter 3 compared to last quarter 3 line by line, I just wanted to remind everyone that last year, we did a classification, which is not impacting the change of net working capital as such, but line by line. So we changed the reporting of consignment stock last year and by that, increased our inventories with SEK 1.5 billion, and we also increased our accounts payable with SEK 1.5 billion. So the net-net was 0, but line by line makes it more difficult to compare this year's line by line in the net working capital. Thank you for the question.
Sophie Arnius: And Andre, you have another question as well?
Andre Kukhnin: Yes. Sorry to try to squeeze in. But really, I wanted to actually understand the cadence of profitability into Q4 versus Q3 a bit better. Just thinking about obviously normal seasonality, I think you see sort of 70, 80 bps decline normally in Q4 versus Q3. But then we've got, I guess, savings stepping up from the program that you launched last quarter. But then I also note FX of SEK 650 million, I think, guidance versus less than SEK 500 million in Q3. And then the tariff pass-through, is that margin neutral? Or are you passing through the actual cost increase and hence, there is a bit of a margin headwind. I just wanted to understand whether Q4 will be a normal seasonality or whether the combination of these factors will be it one way or the other.
Sophie Arnius: Rickard, do you want to address this one?
Rickard Gustafson: I will try to. I think the answer is yes. We do foresee that it's going to be normal seasonality in Q4. So you should bear that into your estimates. The negatives that we foresee in the quarter -- coming quarter is clearly FX. As we mentioned, probably going to have if we remain at current levels, a negative SEK 600 million impact in Q4. Tariffs, we do say that we largely compensate. We believe that we're going to do that also in Q4, but that means largely means that there is some net negative impact in the numbers, but largely compensate. On the positives, we do see that we will we do see that we will continue with our cost control. We will continue to drive our portfolio management and price mix activities as we have done in the past. And we do foresee that we will continue to yield benefits from rightsizing -- sorry, from rationalization and from world-class manufacturing. And probably some but not significant also contribution from the rightsizing initiative. Most of that will happen later though. So all in all, but it will be -- we do expect normal seasonality.
Sophie Arnius: And let's continue with a question from Klas Bergelind at Citi.
Klas Bergelind: I was late on the call, lots going on, so you might have covered some of this. But first on North America, I was expecting higher growth driven by the pricing there to compensate for the tariffs. So it seems at least versus what I thought that underlying volumes are weaker. So can you please talk through Rickard, what end markets sort of weakened quarter-on-quarter? I mean, commercial vehicles, heavy machinery. Have you seen any improvement as we went through the quarter and into October? Just curious about the underlying volume development in North America, please.
Rickard Gustafson: Right. And yes, Klas, we did touch on this a bit earlier, but I'll try to give you some color to this. When it comes to the numbers I report for Americas, it's both Industrial and Automotive. And we do see growth in our Industrial business, and I have answered another question today where I do acknowledge that the growth in Industrial is driven by price mix. We're still in negative volume territory also on the Industrial side in Americas. Some areas that is growing nicely in Americas in this quarter is primarily aerospace and marine that have very strong performance. And as you mentioned, in Automotive, we have seen a weak demand when it comes to commercial vehicles in the quarter. And Automotive is also reporting negative organic growth in the region.
Klas Bergelind: Okay. When it comes to -- just one follow-up, and I'm sure you talked about it, Section 232, a lot of questions on this. But have you given any sort of clarity around the share of steel and aluminum out of your COGS at the moment, please, i.e., the share that is subject to the 50% tariff, so we can do -- I mean, we're stumbling a little bit in the dark, right, where we were trying to do our own models. But if you have said anything on that, Rickard?
Sophie Arnius: Susanne, can you please respond to this question?
Susanne Larsson: Yes. So we are not disclosing the share as you're asking for. And at this point, we are mainly saying that we will continue to compensate the majority of this out into the market.
Rickard Gustafson: So when we say largely compensate also for Q4, that includes what we know right now related also 232.
Susanne Larsson: In the current scope it has. Yes.
Rickard Gustafson: Yes.
Klas Bergelind: Okay. Absolute final one, promise to be quick, is on the spin-out costs. I think when I spoke with Sophie this morning that you're guiding for higher one-offs quarter-over-quarter. I'm trying to understand the composition relative to world-class manufacturing spin-out cost. And also you had that sort of noncash write-down, I think, Susanne, in the third quarter. I'm just -- are we going to see any more? I'm just trying to understand the level of one-offs into the fourth quarter, please?
Sophie Arnius: Yes. Susanne, do you want to?
Susanne Larsson: Yes, I can take that. So you're right, we said that sequentially, we will increase it in quarter 4 over quarter 3. And I also want to just pay -- make you pay attention to our announcement that we are closing a factory in Argentina. So that is something that will also come into the quarter 4 as a one-off charge down. So that, together with a continued high level of effort into the Automotive separation activities are the main reasons for that.
Sophie Arnius: Very good. We will continue with a question from John Kim, Deutsche Bank.
John-B Kim: I'm wondering if you could just give a bit of color on your rightsizing, whether your headcount reduction or optimization has gone to plan versus the initial guide? Yes, I'll leave it that.
Rickard Gustafson: Right. I'll take this one. The answer is yes. We are progressing well in line with our internal plan and a lot of the necessary negotiations in the different jurisdictions or countries have been completed and the vast majority of people impacted have been informed. And we're now going to start to see that the staff reduction to happen. As I said a couple of times, we do not anticipate a significant impact on our cost base or positive contribution to the cost in the fourth quarter. There will be some, but it will be not be significant. But the vast majority will come as we enter into 2026.
Sophie Arnius: And then we have the final question from the line of Seb Kuenne at RBC.
Sebastian Kuenne: You raised the tax guidance to 28% from 26% and this is not because of any impairments, not being tax deductible, but more because of your regional profitability structure. Do we now have to assume that the tax rate will also be higher in the coming seasons or coming years? And could you split that between Industrial and Automotive? Is it more Industrial profits being in high tax countries or more the Automotive side?
Sophie Arnius: Susanne, that's a CFO type of question.
Susanne Larsson: It is indeed. So thank you for the question. Yes, we raised the outlook for the full year tax rate from 26% to 28%. And I say that all of that is actually explained by FX. And we have some of our entities with the functional reporting in another currency than they're local, and this is something that is then impacting the tax as well then. So that is the reason fully for us then having that. And that also means that this is not necessarily something that you can assume is a going concern as we move along, but then having this impact where we have big FX implications as such then. Talking about the 2 stand-alone companies and their relative tax rates, we have not disclosed that yet. So I'll leave that for now.
Sebastian Kuenne: Sorry, the acoustics was a bit bad. So it's more of a one-off FX issue rather than underlying structural regional split of profits?
Susanne Larsson: Correct.
Sophie Arnius: Very good. That was the final question. So Rickard, please go ahead with your concluding remarks.
Rickard Gustafson: Yes. Thank you very much, and thank you all for joining us for this call and for your energizing and engaging questions. As you heard us talk about, we are continuing to maneuver in a rather challenging and volatile environment. With that said, though, we are sticking to our strategy and we're trying to deliver on what we said that we're going to do. And that recipe is working. We continue to report a resilient and somewhat improved earnings that we are pleased about. We are also happy that we now, after 8 consecutive quarters of negative organic growth, entering into a more growth territory and especially that is driven at this time by our Industrial business. Again, we don't yet say that we've seen the shift and the uptick in the market and the activity levels are rather unchanged, but we are happy also with the progress that we'll make in the strategic transformation of the company. So with this, I thank you for your attention, and I hope to see you -- many of you either in person or if you join through digital means in a few weeks' time in Stockholm. I wish you a good day, and thank you so much.