4C Group AB

Good morning and welcome to 4C Strategies year end report for 2025. My name is Jonas Johnson. I'm the CEO of 4C and with me today, I have Veronica Wallin, who's our CFO.

Hi everyone.

We're going to guide you through this presentation today with a bit of deep dive into what's been going on during the fourth quarter. And also looking into the details around numbers and KPIs about our performance at the back end of last year. And also at the end, we'll give you a bit of an outlook in terms of where we're going with 2026. So as an introduction in terms of what was the fourth quarter for 4C and how did the year sort of end, it was a busy quarter. The fourth quarter is always a busy quarter for us and a lot of good progress. As we announced in the previous earnings call back in the Q3 report, we focused a lot during the fourth quarter in terms of our refocus and reset of our resilience business. where we did quite substantial reorganizations and optimizations efforts. We did this whilst at the same time obviously then focusing those efforts towards our defense space and making sure that we could really enhance our business in that area and work together with both existing customers and potential new customers to really push forward our offering in the defense space. When it comes to the resilience, and I'll come back to this in a little bit more detail, but it was a significant change for the company and we did quite a lot of reductions and really tighten the team in to focus on ensuring that we could deliver to our existing customers and look at the pipeline, but do that with a substantially less and smaller footprint than what we had invested previously. During the quarter, there was also quite a lot of challenges in the US with the government being shut down for a substantial period of time. That led to a lot of delays. But whilst this was, it did affect us, at the same time, we managed to close out quite a lot of deals and I'll come back to more details in this area. But we also managed to grow our presence, I would say, through a lot of targeted customer engagements. We were present at the major trade shows within the defense space. And we've we've increased and built our pipeline for the future, which is super important. And I should also say that both in the expert services space and in the resilience space, we managed to close out the quarter on a really strong, strong performance. And we'll come back to that as well. So all in all, when we look at Q4 and we look at the 2025 as a whole, it didn't necessarily get quite as far as we were hoping we had. challenges through the year, which we've been addressing continuously and are continuing to address as we move forward. But I think in terms of how we ended it, I'm still proud of the team and that we managed to pull together in the final months of the year to deliver a profitable result at the back end of the year. So when we look at the numbers, how did we perform? So interestingly enough, we managed a top line result, which is pretty much exactly the same as the comparative quarter previous year. So 113 million SEC in net sales. We had a 74% software component in that, which is above our targets and obviously very positive. And when you look at the EBITDA and EBIT, you can see that it was also quite a profitable quarter. And Q4 is traditionally a strong quarter for 4C. So we'll go into more details around the numbers, but I'll just also mention that we continue to see a strong increase in our ARR up to 215 million. And looking at the whole of the year, then we closed out for 2025 on 352.4 million top line, which is an increase compared to 2024. Not necessarily as much of a growth as we were forecasting and hoping for at the start of the year. But I think we did a strong recovery during the fourth quarter compared to some challenges earlier in the year. Going into a bit more detail around the world in the segments then, when we look at defense, as I mentioned, the fourth quarter, especially in Europe, is a strong quarter in terms of those, a lot of organizations having the same calendar year as their financial year as well, which means that there are opportunities at the back end of the year. We had an order intake in defense of approximately 110 million SEC in new sales. And they came from a number of different strategically important contracts. It's also a big quarter when it comes to pipeline growth and customer engagement. So we worked a lot with our customers around the world to identify new opportunities, to make sure that all of our customers are aware of our products and the opportunities that sits with those products as they now continue to ramp up. in their growth phase when it comes to defense rearmament and defense spending so i think we had a we had a good good quarter in terms of outreach we've had a lot of new deals coming in uh both as close deals uh but also as opportunities for 2026. we are continuing to build that pipeline as we now focus uh most of our energy towards the defense segment within 4c and i would mention some q4 highlights we did sign despite of the extended shutdown in the us government we did sign new customers in the us at the back end of the year with a with a new organization within the department of war that we haven't worked with in the past We've expanded even more our presence in Norway and in the UK. And we've signed a couple of key deals in the APAC region at the back end of the year, which we were forecasting throughout the year and continued to grow and cement our presence with NATO, which is obviously a key critical customer for us as we move forward. All in all, a good quarter within defense. We had some of our opportunities and deals that slipped into 2026, which we're now actively working to convert. And some of them have already been closed out, as you would have seen in the press releases. And we're continuing to see a stable growth in terms of demand within the defense space. So lots of exciting opportunities that we're working on around the world. Shifting focus then into our resilience space, as I mentioned, we did a strategic shift in our sort of our presence within the resilience space during the fourth quarter. We reduced our footprint to free up resources. We are looking at a reduction, total cost reduction of approximately 40 million, and those will be fully implemented by the end of Q1 2026. So in a few months time. with that done and that executed we will be focusing on on a selective growth path for this segment as i mentioned before where we were obviously looking at taking care of our current customers some of which are key names around the world and some of which also sit on very long-term contracts so we're we're happy with those and and we are aiming for a positive cash flow within the resilience space during 2026 and it to be a positive EBIT contribution, potentially as early as 2026, but definitely in 2027. Interestingly enough, when you look at Q4 highlights, back end of the year, we actually signed more contracts in the resilience space than we did during the previous quarters in 2025. So we signed, and I'll mention two of them because I think they're important as part of our strategy, and that is to deliver our resilience space in close proximity and linked to our defense so that we continue to position ourselves as a company that works in defense and total defense also within our resilience space. So one, we sold a BCM solution, business continuity management software solution to NATO as an organization, helping them streamline their operations and become more robust in what they do. And also we sold an incident reporting tool for a European defense organization, which is a really exciting opportunity with a long-term commitment from them that we're looking to grow. well as we move forward so showing that our resilience basis or resilience products are also relevant within defense space and selling those directly to defense customers not necessarily then being applied as defense tools so to speak finally then looking at our expert services offering which is strongly centered around our nordic business here in stockholm and also in our out of our london office in the uk When you look at expert services, they did a really strong recovery during H2 of 2025. And as a whole on the year, they grew by about 10%. And they delivered that with above 20%, as you can see on the screen, with above 20% of EBITDA. And which I think is really, really good for our expert services, which is a consultancy offering, right? We had a positive increase when it came to the hiring situation during Q4, which was a bit of a challenge to us earlier in the year. where we saw more of an outflux than an influx of delivery consultants, which is a challenge, obviously, in an expert services business. But that changed during Q4 and we're now in a very positive place when it comes to talent actually seeking themselves to us. wanting to be part of this journey. So we're entering 2026 with a really strong order book. We have above 46 million SAC in signed contracts to be delivered during 2026. And that's a comparison to a total revenue in 2025 of 65 million. So we are in a good position. And as a highlight, just to mention, and we press release this as well, but we did win and became the prime delivery partner on a two year framework together with the Swedish Post and Telecom Authority, which is in the first assessment valued up until approximately 48 million SEC, but has call off options additionally up to a total of 100 million. Great opportunity and a great contract to use our expert services to deliver a more robust society here in Sweden, which is obviously a core part of what we aim to do as a company. So a really good strong end to the year in expert services, building the foundation for the future. And all in all, I would say around our three business areas, we managed to close out the year in a positive way. We'll go into more of the details now in a second. So I will hand over to Veronica to give you a little bit more uptake on the financials and the KPIs.