Addtech AB (publ.)

Good morning and most welcome to the EdTech quarter and year end result presentation. Starting with the highlights for the fourth quarter, which can be summarized as a solid end to another strong year for EdTech. The business situation remained stable at good levels in most of our key segments with the solid order intake, even if it continues to be variations. And we kept our backlog volume on par with last year. I'm also proud to conclude that we passed a milestone of 20 billion SEC in yearly turnover and also with record high margins. So once again, a very good work from my team and our companies. More on that when we summarize the full year, but first to the quarter. The fourth quarter was A challenging quarter in terms of sales growth, down 3% in total and 7% organic. We had extremely tough comps and also fewer working days due to Easter in March. And this has, of course, some negative effect on the outcome. But still, the total sales was on the weaker note due to specific challenges in some places. I will come back to this when commenting on the business areas. But that said, the underlying demand remained stable on the high level, as I said in the beginning, despite the somewhat softening markets sentiment. And of course, very satisfying to see that the general momentum in the customer activity in general remains. We entered the new fiscal year now with a well-filled order book and with good quality. And also this new year has started on a positive note. If you look on EBITDA development, overall, the positive margin trend continued in the quarter and was at the record high 15% margin. And this is a mix of active work in our companies to add value and improve the product mix. Of course, keeping strict cost control and combined with good contributions from acquisitions. As stated in the report, And I will come back to this later on as well. We had a customer claim within the business area energy, which resulted in a settlement this quarter, affecting the result negatively with a one-off of 39 million SEK. Despite that, our EBITDA was in line with last year, and as I said, with a record high margin of 15%. And this is primarily thanks to Strong contributions within the industrial solution and process technology. I would also like to highlight our important financial measurement R2RK reached a new record high level of 68%. Cash flow is down year on year, but still on very satisfactory level. Malin will come back with details within short. So moving on some very brief comments on the market development within each of the business areas. Automation delivered a solid end to the fiscal year. Good sales trend for companies applying to process and defense industry. A bit flattening trend with the mechanical industry and medical technology. Here we have seen customer destocking effects quite clear. But I believe that we are now back to a more normalized level going into the new year. Electrification, as you've seen in the numbers, had a challenging quarter. Several factors affecting the outcome. First of all, tough comps, mainly in the battery systems. Among other things, last year we had large telecom orders in the battery systems. Also, destocking effects still here in the quarter, normalized supply chains and negative effects from a weaker construction market has also affected the battery systems. But there have also been some specific challenges in some of the other companies in the business area. So in general, the demand within the key segments for electrification were stable and also defense continues to have a strong development. Moving on to energy, when looking at the figures here, of course, you have to take out the one-off effects from the customer claim settlement, which also had quite a lot of effect on top line, not only in the quarter, but also actually earlier in this year. But adjusting for this, the organic sales growth in the quarter would have been positive and also the profits. And overall, the business situation within energy continues to be favorable. Demand for infrastructure products within electrical transmission and distribution continues to be strong on most of the geographical markets we are present here. Market situation for companies supplying to mechanical industry here was stable, but we saw some Positive signs from customer demand within wind power. So more on the demand side still. Building installation weakened during the quarter, as we write in the report, also somewhat affecting infrastructure and non-residential that are our core markets here. Industrial solution, a bit lower sales volume this quarter, primarily due to the special vehicle segment. It varies here between different end markets where primarily the construction market was weaker due to lower demand earlier this year. Sales towards forest sawmill industry remained at high levels with a solid number of product deliveries with high profitability. The market for new projects are still a bit on hold due to the high interest rate and the weak construction market primarily. Strong contributions from acquisitions is also important to mention. That also explains the strong margin in the quarter. Last but not least, process technology delivers a solid fourth quarter. Of course variations between the segments. says to energy and processing industry is keeping up well, especially towards oil and gas. Here, we also note a bit weaker demand towards forestry and also the special vehicle market. Medical and marine flattened out on a high level. So that was a brief summary of each business area. Now, Malin, over to you for some more comments on the results.

Thank you, Niklas. Exactly as you said, our profit margins continue to improve during the quarter. In general, thanks to increased value add in our value proposition, strategically improving our product mix and not least, of course, good leverage from acquired companies. On top of that, we continue to keep a firm grip on the costs. Very pleasing to see that the cost efficiency continues to improve quarter by quarter. The solid increase in Q4 to a record high 15% is fueled by industrial solutions, as Niklas said, and the positive effects from good margin project deliveries. On the other hand, we had negative effects from one-off effects. However, the underlying trend is positive with sequential improvements over the year.

We expect rolling 12 levels to persist with gradual improvements.