Alligo AB (publ)

Welcome everybody to Aligo year end report 2025. And thank you for dialing in on a Friday the 13th. Sometimes I reflect on how time flies, especially when we have the quarterly reports, because it feels like we are having more than one every quarter. But this time I was just reminded that this is my 50th quarterly report. So that is really time to reflect on how time flies. Today's presenter, as always, is besides myself, CEO, it is also Irem Isenborn Belander, our CFO, but also now Deputy CEO. Congratulations, Irem.

Thank you.

And that's also the sign of the brilliant job you're doing, but it's also a little sign that we will stick to the path even after my departure. So that's a good signal. The agenda, as it always is, just some highlights. We're not going to go through the report in its entirety, just some highlights. We normally bring at least one theme, but today it's not only one theme, it's not two themes, it's actually three themes. One slide each on the renewed efforts in Tools Finland, own brands, that is 1832, and one slide on smart services. I hope you will enjoy that. And we normally fly in with a little A couple of slides on a legal group, a little shy of 10 billion second turnovers, Sweden dependent volume wise, even more on the profit wise, as you know. Two and a half thousand employees, some around 240 stores. We acquire companies, get stores, and we merge some stores, so then we reduce stores. But as it is today, some 240 stores. And we focus on brand, as you know, 18% of our sales as it is now. and we focus very much on small and medium-sized customers. This slide is a bit busy and it's not very easy to overlook but we are a little bit proud of it because it illustrates to the far right how we manage to run non-integrated businesses at the side of the integrated business. So we've built up a number of groups of businesses where we see growth potential within competence areas and product areas where we have in the integrated businesses. So it's not totally new businesses. It's areas that we do have in integrated business, but we'd like to focus on them a little bit more and keep the specialist competence that exists in those. And one is the product media grouping. They are now 17 companies overall, a little plus 600 million second turnover. And the welding businesses, six companies, with around 400 million in turnover. Then we have Battery with BatteryLaget, last year's acquisition, 280 million. And then we have others, and it's a bit of a pity to have that headline over a number of very nice companies. The fields are likely to be various, but HDP is one of them working with the defense sector in Finland, developing very nicely. But then to the left, you have the integrated businesses, as you know, Sweden, it's called Svedalen, Norway and Finland, it's called Tools. And that business is super integrated, logistically, IT, ERP, support functions. So that is really, really a true, true Nordic organization, integrated business. But 20% of the group today is the other separate businesses that are not integrated. So acquisitions, four acquisitions last year, a little less than the year before. But more stores, BatteryLogged had some 26, 27 stores, so that added a lot of stores. And the segments were to battery and product media. And we acquired some annual revenue of around 378 million and 115 employees, I think, BatteryLogged had some 90 people. So they are the biggest chunk of the acquired businesses. This is something nice. You saw that earlier, perhaps this week in a press release, we were awarded Ecovaries Platinum. So we are now number top 1% of 50,000 companies around the world. And especially in our industry, we are in a real, real top position. And it's very important to build a profitable and professional organization going forward for defense contract and for also the public sector and larger customers, it's very, very important that you take sustainability seriously. And this is a signal and a sign that we have been doing that in a very good way. So we are so incredibly proud to be awarded a platinum level for Ecovadis. That's very important for many aspects. Highlight Q4. Blue skies, but some clouds, I don't know what it should really signal. But it's a challenging market still. It has not changed dramatically. We've seen that, said that many times that we hear signals and we see signals and we see some early signals of improving market conditions, but it's not rising up to the sky yet. Recovery in Sweden. Norway ended the year with a little bit of surprisingly weaker oil and gas sector. We haven't really gotten their arms around it. Why? But in the Finnish market, the recovery continues. So the market sentiments are stable. The same behavior as before during the year. The customers are cautious, but we see good signs going forward. But we as management have been focusing on more or less the same things as we always are focusing. very much on driving sales. That is what is needed to be added to this case when we now build this platform. So driving sales, we continuously work with cost reductions, try to add acquisitions. I think we've done it quite responsibly, even in a slower market, we have dared to invest in growth and we have grown even in tough conditions, even if it hasn't been organic growth, it's been acquired growth. We are working with reducing inventory levels. We have much more to do, but as you know, we merged two reasonably different companies into one and trying to agree on one assortment to our customers. And we have more to do on the inventory levels. Price adjustment, the latest price adjustments went out beginning of February. I think we've got a pretty good process of doing that in a professional way. Good delivery capacity and microeconomic factors. It's still uncertainty, but for once, actually, we are a little bit benefiting from it. The trade tariffs made the capacity, freed up capacity in Far East, which is beneficial for us. We can get the minimum water quantities down. And also the strengthening of the SEC or the, yeah, that the dollars become cheaper is also actually good for us. So for once, there are some macroeconomic factors that are in our favor. So in brief, revenue growth 2.7% and that we normally do. The top line we grow, but for the first time in nine, 10 quarters, we actually kind of show organic growth. It's not gigantic, but we are so happy that we can at least say that we are back on organic growth track. Cashflow good, a hundred million up compared to last year. And adjusted EBITDA margin of 9.0. So we are reasonably happy with that. And the gross margin continues up. So starting from a very healthy level of 41.1, we now this quarter at 41.8. But as you know, this is not the margin maximizing case. I'd rather trade some tenth of the gross margin to get growth. we still believe that we do a decent job in knowing which contract which customers to to work with and keep the gross margins up but we need some top line to this and it will be brilliant this slide i showed of a internal meeting we have 600 sales persons in in all of the swedish sales organization and i wanted a picture that illustrated the sunrise but this picture was the one i got it's a dark total pitch black, but it's our business that shines up the sky. So sales high focus in all countries has been for a long time. It is still. And the achievements we have and the organic growth we have is the result of extremely hard work of our dedicated sales organization. We run these growth initiatives like it was a private equity case. Increased shareholder brands we're focusing a lot on. But we have a little bit to do on sales efficiency, we think, still. How to put together the customer portfolios and so forth, how to run that more professionally. We have some things to do that, we think. Acquisitions, we are happy that we could make the first acquisition in product media in Norway with Respond. We've got a good footprint in Norway now, 81 million second turnover. So now we can acquire businesses to that platform. So that journey will continue in Norway. And operations wise, except for a lot of good financial development in the quarter, we also did a refinancing. So three plus one plus one is in place, increased headroom. So it gives us good financial stability and also headroom to do acquisitions and so forth. Margin improvement, as I said, Continuous development of sales and assortment processes. And tools in Finland we'll come back to. And always super cost conscious in whatever we do. So the three themes I promised you. If we take the first one. Tools Finland. We started that during 2025. And it's the same activities as we identified them. It's no new activities. It's the same activities. But we really, really need to ensure that they are being carried out. So to be clear, it's the same evaluation of which shops are profitable or not, which customers are profitable or not, and how do we run the business. So we have a new country manager in place, a person I've known for 17 years. I brought him with me from my previous job to Sweden, and his name is Håkan, and he will succeed. I have no doubt about that. He knows how to run a safe organization. So Finland, it's a tricky market. There are very few companies who are really profitable. We are in a decent place already as it is, but we are not happy with our profitability level and the structure of the business. So we will drive even harder towards smaller medium sized customers getting the private label share up and look over our structure. So that project is already well So Finland, we will continue to report on the progress, but we are doing what we said the whole time. So two more areas, starting from the far right and ending at the far left. So if we take own brands, just a quick on 1832. It's now being launched, it's being sold, and it has its part in our product portfolio. But a number of other things that we perhaps could have predicted and perhaps not is that if you have a customer complaining, saying the price level has come up on the Gesto, and now when we can offer 1832, the customer many times choose to stick with Gesto because they had the option to take 1832. So 1832 plays different roles in our product portfolio. It is a lower price, high quality product. But it's also an offer for the customers that, at the end, choose to actually stick with the guests of Janklöden Univan, which are our higher position brands. So 1832, we are very happy that we launched that so quickly. It plays an important role today, and it will play an even more important role going forward. And then smart service, you've heard about that before. And we think we have the best solution in the business. And we are reasonably successful in implementing that. We have 1,300 of these solutions out in different customers in the Nordics. Some of them are Sandvik, Hitachi, Widerö. Hitachi I will visit in a couple of weeks. We have others. I don't know if we're allowed to talk about them. One is producing the world's fastest car. I'm going to visit them in a couple of weeks. where we are well integrated into the production facility with our smart service. So we have identified, invested in, and are now launching areas where we take away the product price out of the equation. So we build ourselves much tighter to the customer. So these are really, really clever solution, which brings great benefits for the customers. Financially, our deputy CEO,

Thank you. As Clay mentioned, the Q4 results exceeded last year's and cash flow improved, leading to reduced leverage. Additionally, stabilized demand in Sweden contributed to organic growth. As you can see in the income statement, revenue increased by 2.7% in the quarter, driven by a 4.2% growth from acquisitions and organic growth of 0.5%. But this was contracted by adverse effects. We had organic growth in both Sweden and Finland, while the demand was weaker across all customer segments in Norway. Organic growth in Sweden was driven by project orders for the defense industry, while recovery continued among larger industrial customers in Finland. EBITDA reached 249 million, representing an improvement of 25 million, or 12%. The increase was due to improved results in Sweden and Norway, driven by stronger gross margins, cost reductions, and contributions from acquired businesses. The improved gross margin is due to positive customer mix effects, better sales and assortment management, and to some extent reduced purchase costs in US dollars. The impact from stronger margins, cost reductions and contributions from acquired businesses is illustrated in the EBITDA bridge. And as you can see, the cost reductions have offset the annual increases and the effect of inflation on other expenses. This is a business slide, but as you can see, Sweden has the highest share of SMEs and their own brands, followed by Norway, while Finland has the lowest. And this directly correlates with profitability in each market. The higher the shares, the greater their profitability. The lower gray boxes show the share of own brands in the integrated business. And as you can see, this share has increased in Sweden and Norway, which is one reason for the improved gross margin in those countries. Moving on to some highlights of each market's development in Q4. And as Clayne said, the Swedish market remained weak. However, project orders for the defense industry increased contributing to an organic growth of 1.8%. Additionally, there was acquisition-driven growth of 6.3%, and the improvement in EBITDA is due to higher volumes, higher gross margin, cost savings, and contributions from acquired businesses. The market in Norway was weak across all customer segments, and especially in the oil and gas segment, which was slowed down in the second half of 2025. Despite lower volumes, APT improved due to recent cost reduction, higher gross margin, and contributions from recent acquisition. There was a continued safe recovery in Finland among larger industrial customers. Despite this, the result was weaker due to somewhat lower gross margins, investments in increased production capacity for Patria, and a review of the store network. As Claim mentioned, the new Finnish management places even greater emphasis on ensuring the execution of ongoing activities while also reviewing the organizational structure. Let me turn to cash flow. The fourth quarter is seasonally the strongest quarter from a cash flow perspective. Operating cash flow improved from last year, driven by higher EBITDA and lower inventory levels for external brands, while investments in our own brands partially offset this progress. Even if the capital efficiency project contributed to positive effects in Q4, there is still more work to do. We aim to reduce net worth in capital as percentage of sales from the current 28 to 24%, which was the level in 2022. Investing activities in the quarter primarily relate to the acquisition of the project media in Norway. The organic investment was slightly higher than last year in the quarter, but still lower for the full year, and the capex to depreciation ratio was 0.8. The ratio of net up to EBITDA decreased as expected from Q3, ending at 2.5. The ratio is slightly higher than last year due to higher net debt following the acquisition of Batterilagret in 2025, our largest acquisition to date. Our covenants relate to interest coverage and equity asset ratios. These are fulfilled at the end of the period and there is good headroom before reaching the thresholds. Furthermore, we have refinanced the business after year end and increase the sustainability linked facility by 500 million to 3.1 billion SEK. And the maturity is three years with an option to extend it by another one plus one year. So in summary, we maintain a solid financial position and will continue to invest in organic growth and take advantage of M&A opportunities. Due to weak market, organic growth and everyday margins didn't reach target levels. However, a strong focus on maintaining the gross margin, adjusting the cost structure, and consistently acquiring well-run businesses has partially compensated for weaker volumes. And as a result, we ended the year with an everyday margin of 6.4%, the same as in 2024. with profitability improving in the second half of 2025. The high acquisition pace has increased leverage, but we still have a solid financial position and leverage remains within the financial target range. And when it comes to dividend, the board of directors is proposing a dividend of 2.20 per share, representing 41% of the net result up from 36% last year. And throughout the year, we have also made progress in our sustainability efforts and improved on each target compared to last year. And for instance, 83% now meet our supplier standards up from 77% last year. Handing it over to you, Clay, for summary and outlook.

Thank you, Eliane. So in hyperspeed into summary and outlook. So Q4 and full year, we are happy that we in the Q3 could change the trend and start improving the results. And in Q4, start actually to show organic growth. There was two quarters in a row with a trend shift. We have high sales activities in all markets, that I can promise you. And it's also a bit frustrating. We have done more than ever, worked harder than ever, but in the market conditions, which has been getting so little in return, it's extremely frustrating. But it's no alternative than to keep on pushing and have this activity level so high. We have done whatever we can to adjust to the market conditions and that you know we've been quite early off doing that with cost adjustments. Maintaining the gross money and was even strengthened and focus on acquisitions, even if the market has not been super strong. And as I said, increased dividend from two sec per share to 2.2. I think that's also a sign that we feel confident about the future. So Outlook 2026. Yeah, we, as we've said quite a while, we are in a very, very good place. It feels stable. All the structural grips are taken. We have some fine tuning to do, especially on the warehouse levels, inventory levels. We can fine tune a bit. We can keep on pushing for sales, but there's no any structural grips needed to take as of today. And a very strong financial position, as I said, even the refinancing in place sounds and feels very, very good. So the focus area for 2026 is to continue push for sales, improve marketing, do responsible acquisitions, and now show you guys that we can really turn around the tools business in Finland because that is now personal. We are going to do that. Rest assured. So that was all from us now. So, Raz, handing it back to you.

Thank you, Sal. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Once again, it's star 1-1 for any question and wait for your name to be announced. To withdraw your question, please press star 111 again. You can also submit your questions on the webcast page using the Ask a Question button. Thank you.

We are now going to proceed with our first question. And the questions come from the line of Henrik Hidse from ABG Sandal Collier.

Please ask your question.

Hi, Klein and Ariane. This is Henrik at ABG. Hi, Henrik. I was just wondering if you could, first of all, maybe in any way quantify the gross margin tailwind you expect in the coming quarters, given the current USD exchange rate?

It's one of the more difficult questions to answer, depending on what we will sell. If it's a high degree of workwear, of course, it's more beneficial because then you get the rotation on the inventory quicker. and we can start buying more. I just checked when we started the call, it was 8.93. So of course, if the dollar is on that level going forward, that is of course highly beneficial for us. And we saw effects during last quarter, yeah, during 2025, and they will increase throughout the year. But to give you a specific number, it's difficult. And I'd also like to use some, better position from that perspective to perhaps drive sales more we are on a very decent level contribution margin wise gross margin wise but the dollar helps us a lot to bring down this the the inventory levels and will also give us a competitive advantage also to use that in sales efforts in a more in a more tougher way, but it's difficult to give you. I don't know, Irene, if you can give... We try to calculate it back and forth and we have difficulties giving you a... Everything is moving.

But of course, the yearly purchases is rather high. It's about 80 million US dollars. So of course, it will have a positive impact. A lot of factors that affect the ghost margin. So it's difficult to say

We used to say I mean 10 million, 10 percent better dollar would give 80, 90 million better result everything else the same. So it should have a positive effect to the result but it also depends a little bit how the product mixes and the customer mix of course.

Okay very good and maybe one more from me. You mentioned in Finland two larger customer relationships which are ending. Could you give us any sense of how large these customers are for you as a group and how quickly you will be able to adjust cost to this?

Those two accounts together are around 10 million euros. The bigger one is not yet terminated even if we now is heading in that direction. But as of Before Christmas, we already started the cost reduction activity. So it is well underway. Finland is quite quick when it comes to adjusting cost base in relation to people employment. So that process is already well on its way and will be mitigated quickly. And we will keep relationships with both those customers, but more on the workwear side where we see better profitability industrial component side. But around 10 million euros, we think.

Okay, very good. That's all from me for now. Thank you.

Thank you.

We are now going to proceed with our next question. And the questions come from the line of Emanuel Jansson from Danske Bank.

Please answer your question.

Hi, Klein and Iri. I hope you can hear me. Very well. A couple of questions from my side then. It's obviously great to see organic growth turning upward again. I think it was around 10 quarters ago we saw organic growth on the top line. I think perhaps it's possible to maybe give some colors on which customer groups are growing the most right now and looking ahead. Where do you see the biggest potential for 2026 in terms of customer group?

The customer group we are really focusing on are the small and medium-sized customers. And by saying that, we're not losing, of course, the large customers. It's all about the mix. And we have had, since the merger, too much tilt towards, in certain parts of our organization, we have tilted far too much towards large customers. And they are also very important in our business. in our group, but we need to increase the share of small and medium-sized customers. So that is absolutely the focus going forward. Keep the large ones happy and develop our business with them, but increase the share of small and medium-sized customers. And looking back, as Irene said, it's also the Q4, We got more normal orders from the defense sector, but also we got rid of from the Q1 through Q3 last year, we had unusually high orders being the last part of the year for the defense sector. So the comparables were terrible, but that you know very well. And the comparables were more reasonable. So now we're on a level for the defense sector, but we see very good growth potential for the defense sector. going forward in all three countries. And I think we proved time by time by time that we have a very competitive offer and have a long, long history of working with the defense sector. But besides that, we have our focus sectors as well. We want the industrial sector where the smart service is very important. The recare, the wash and laundry service is very important. And they have the construction sector where we have a segment manager who is running that very much. It's two large sectors, industry and construction, and a little spiced up with increased activities towards the defense sector should bring us in a better position going forward.

Should we view it as the defense sector is the most stable or positive one sector now, and we should expect maybe the construction sector to improve further in 2026 or segments?

The construction sector, I think all other reporting companies have said the same thing, that it's not much visible yet, but we all predict at least to pick up. But nobody believes it will be in a very near future beyond the levels of 2022 and 2023. That perhaps was unusually high and we will not see for a while. But as long as it picks up the slightest, it will be beneficial for us. And we also have a good opportunity if we run marketing and we run sales the way we have planned to do to actually take market shares. And we know we have from time to time taken market shares in different sectors to say that overall it's too bold and dangerous but its defense sector is a great potential and construction should pick up going forward.

Sounds promising and just regarding the store channel sales which is connected to the small medium enterprises. You mentioned that there is stabilizing but it still seems a bit slow. How is the footfall in the stores or is it simply that people are still only buying what they absolutely need at the moment?

Unfortunately the latter. We see that it is a behavior which is very well known when the business is slower and it's still there that they buy whatever they need and we talked to a lot of customers and they confirmed Of course, if you used to come into a Sudol shop wanting a pair of new shoes and you also bought a diesel heating fan, you just buy the shoes these days. So it's a bit of add-on purchases while you are in our shops. They are on a much, much lower level. So as you say, they still buy what they need. That behavior is still there.

Obviously, that holds a great potential for 2026 then in terms of both growth and margins. Exactly. And just looking into 2026, at least from my point of view, which I also think is also backed up by some, at least, weather data here in Sweden, it's been quite cold so far in the start of Q1. I suppose that's not negative for you guys, or can you give us some glimpse of the future?

Exactly. And I can connect that to your previous question. So if this weather would have appeared in the market condition as they were 2022 and 2023, it would have been much better because then you need to go to a federal shop to buy a snow shovel or a heater or start batteries. And they do. We sell a lot more of the winter related products, of course, thanks to the weather. But we don't get the leverage on that. sell if they come in and buy a stock battery because they need it that they buy a stock battery they don't buy new gloves and a new pair of boots at the same time but as you say of course the weather we cannot complain about that.

Sounds fair and just jumping back to Jumping to Finland then, it's been tough this quarter in terms of profitability. What's the main reasons behind that drop in profitability?

Some of the decline in profitability could be explained by somewhat weaker margins and some could be explained by the fact that we have invested in a new production facility for for Patriot where we produce a lot of components for military vehicles. And we have also had some effects when it comes to reducing the square meters within the store network. So that has also had a negative impact on the profitability in the quarter.

As you said, the HCP business is a beautiful little diamond in our Finnish business, and it's profitable and has been growing nicely. But since our biggest customer, Patria, has ordered more and more and more, we have moved to new production facilities, which was done in Q4. And now going forward, their order book is full and they are chasing us. Will you be able to deliver as quickly as we are going to order? So it's been a transition phase that spills over into Q1 before we can ramp up because it's not actually, which is quite nice to go and visit them. They're actually producing components quite technically wise, quite challenging parts and being implemented into the vehicle. So it's not only selling hydraulic hoses or batteries, they're actually doing assembly So they're very well into the Patria production process. So HCP if they don't perform on the level they did last year, of course that hits the result in Finland. But it will come back because our customers order books is full.

Interesting. So if I understand it correctly, the underlying margin is probably a bit higher than we are seeing in this quarter. Yes. And also you mentioned that you've hired a new country manager into that region. Can you maybe give some more colors on what the specific actions are in that?

It's more execution and a lot of good things have happened in Finland but we felt we needed to up our game a bit in the actual getting things done. We are planning and planning and planning. We need to now to implement things and Håkan, I think you've met him. We've worked together for 17 years and he is extremely knowledgeable in running and improving sales business. He's been country manager in Finland some three, four years ago. He's been country manager in Sweden, he's been assortment and procurement manager. I think he's had most positions in the group soon. So he's the type of guy you send in when you want to make a long lasting transition. And he is super motivated and flies over every Sunday night and take up the fight. And it's a good spirit in the Finnish team. The new name of the project is SISU, actually. So they want to show that we will dramatically change our development. And with Håkan at the helm, that will happen. I'm very sure of that.

Sounds really promising. And maybe the last question from my side, and it's regarding, we saw very strong cash flow and you see that the balance sheet is down to two and a half times net at EBTA. And since you're still with us here, Klein, in Aligo, and I guess also that perhaps you're staying through Q1 as well. We don't know that yet, of course, but can we expect any new acquisitions before the new CEO is hired, do you think?

My departure and another one coming in does not change anything. And we have the pipeline. I talked to our M&A team yesterday and said, let's push a little bit more. But it has to be that the seller is also, because we can be quick, but the seller needs to bring up the data we need to do a proper due diligence process. So we are ready. We have the balance sheet for it. We have the cases for it. And one should come in the near future, but it's not only up to us. So we go full speed ahead on whatever we can identify. Being a very fluffy answer to your question.

I understood, but with this net at EBITDA two and a half time, you think you will ramp up M&A even further this year versus 2025?

I would say like this, we don't see our balance sheet as any limiting factor. I mean, the cash generation we have in the group always, and the headroom we have now, it's not a limiting factor. So we are ramped up and have been ramped up even when it was 3.1. So we try to acquire the ones we find. selective in what we want. And looking at the welding companies we acquired and the product media companies we have bought, we have acted so quickly and picked the best ones. So it's fun to see when our competitors now buy the ones we didn't want to go forward with. So if you're quick, then you get to the decent price level and you get the ones you want, especially in the welding sector. That has been also in the product media sector, of course. So it's it's fun to see if you act quickly how well it can be done.

Sounds like a good strategy. Well, I think that was all my questions for now. So congratulations on this trend shift on the organic growth. Thank you. Thank you.

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We are now going to proceed with our next question. And the questions come from the line of Carl-Johan Bonnevier from IDNB Carnegie.

Please ask your question.

Yes, good morning, Klein and Ari, and congratulations for being back to organic growth again. Good to see you. And also cash flow, I guess, and gross margin. So a lot of nice things and a lot of good color already for a lot of the questions I had. So I think a couple of detailed ones. Looking at depreciation and IFRS 60, what happened in the quarter?

Yeah, actually, it was a little bit on the low level, but actually it has been somewhat... On a higher level, the quarters before, so it was a little bit of an adjustment for the facing to the previous quarter. So you need to look at it on the full year basis to get the right picture on the level.

Excellent. So full year is, if you divide that by four, that's a good quarterly assumption for next year. Excellent. And when you discussed the gross margin improvement of the 70 bits, you talked about the mix effect, and it sounded more like you talked about being a customer effect than an assortment effect, just to give you a little more color on that. Is that the SMEs at the end of the day coming back slightly more now, or maybe breathing slightly more optimists than the larger ones?

Generally, we are very cautious. Perhaps We discuss in the management team quite often if we are too cautious, but we said, let's not go for growth and risk anything of the contribution margin or gross margin. And we made jokes yesterday in the board meeting that we, for so long, have been talking about negative mixed effects. The larger customers is growing more than the smaller customers and we've sold more of the assortments that has been the lower gross points. But actually now we do have a positive mixed effect, which is nice to see. But it's difficult to give you a very clear answer, but we look at customer category by customer category and product area and by product area and closely follow the the gross margin development. And what we're also doing, which is a bit risky and potentially could have costed us, but it hasn't, is that we're actually reducing gross prices to increase our competitiveness. And by that, also reducing the discounts to the customer. So that is, of course, a risky thing to do. But we're doing it very baby steps, step by step by step, and ensuring that if you take an assortment, like start batteries actually this year, bring down the gross prices and the perceived price level is now improved, but you also bring down the discount level. So the price of the customer is actually the same. So we managed to decrease prices on a lot of assortments and gross prices and kept the margins. That's something we are very proud of because it's a risky maneuver to do.

It's a big game to be played, no doubt on that. Looking at the acquisitions and the impact I've had on this year, obviously very good profitability coming out of that segment. Do you feel that there is any normalization that are down towards your corporate target? Or do you see that the potential that you continue to find these kind of targets and the targets you already have continue to deliver towards that higher level?

Are you touching on something very important? If I interpret you the way I think, that is also why we don't integrate certain businesses, because if they are well-run, high profitability level, exactly what you're describing could potentially happen. You integrate them and they start moving in the direction of the integrated business, i.e. lower profitability levels. So that is one element. why we'd like to keep them separate. And in some cases, don't touch them much. They develop nicely. Cheer them on and try to find some synergies, but don't do any radical grips. Don't change what's not broken.

That's good. Looking at Sweden, just to help me bridge the growth you saw, that you report 12% growth. You said 6% was coming from acquisition, a little less than 2% from organic.

and what was the last four percent uh yes it's actually due to the increase of internal sales because when we look in look at it on a country level we include internal sales and actually that has increase during the quarter because we had some disturbances in Westby. So we actually sourced from Sweden. So that is driving some of the growth in the Swedish business in the quarter. A little bit strange, but that was the way it was in this quarter.

And if you look at that item on the growth level, then that basically just adjusted away.

Yes, exactly.

Perfect. And one final question for me, looking at getting the working capital to sales down to 24% from the current 28. Is that mainly an inventory thing or is there a potential in receivables tables as well as you see it?

Mainly inventories. The payables, some potential, and we have moved in the right direction. Receivables is in tough competition with our competitors, so that is a tougher thing to change. But payables, yes, to a certain extent, and inventory levels, yes, to a much higher extent.

Excellent. When you look at inventory, it's more of a question that you have the inventory to be able to drive growth, or is that a lot of you still have a lot of shelf-warmers that you need to sort out?

We work closely, sales and procurement work closely together. They try to estimate the market some nine months to a year ahead, because that's what it takes when you buy things from China or the Far East. And two years in a row, we have perhaps been a bit too hopeful that the market will pick up. We did not want to end up in a situation, which we did in Sudol in 2015, where we pushed for own brands and it sold out directly. Then it took us two years to regain the confidence from the sales organization because they said, oh, no, we're not going to sell our own brands. It's out of stock anyway. So we said early on, it's not going to be any big stockouts. We need to have products at home. But then the market did not develop as we predicted. And then it's difficult. You get stuck with the product. They don't get old. It's not like milk. We have to scrap it, but it gets stuck in the stock longer than we had hoped. So now we're going to sell it out and we reduce and revise sales forecasts going forward. So that is the main thing. I mean, external brands is easier. You can send it back in certain cases. You can You can quicker stop the deliveries. What you order today, you get delivered on Monday. But own brands, it's a much longer process and difficult to adjust to changing markets.

Excellent. And now looking at the cold winter weather we have faced in the Nordics here, at least in the first quarter, so to say, we didn't get much of it in Q4. Have you had a lot of sellouts of your own products or have you had the stock level so you have been able to meet the demand that hopefully has been there?

I keep close contact with many shops, as we say, clothing departments, and none has said anything about that. They don't have products. There was one winter boot that sold out, but then we have four other winter boots with more or less the same functionality. So we have had products at home. Absolutely. And it's a good opportunity, exactly as you say. Normally, we try to sell out winter gears in late March. But I've been pushing for start doing that now, because you also have a tendency, a customer, you buy one winter jacket, you don't buy two just because it's cold a longer period. So we sold now the winter gears most customers need if they don't tear it up or burn it up or whatever they do. But I also said that let's bring this slow movers closer to the cashier. So when you're on your way out, you don't buy a new winter jacket for 3000 SEK, but perhaps you buy a new winter jacket for 800 SEK that we want to get rid of. So that is what's starting now. And for the coming 10 days, it's still going to be cold. we're going to push for getting the slow movers down. But they're not getting, we don't need to scrap them. They're not getting old, but we need to bring down the levels.

Just to get the feel for it, I remember when you discussed the weak Q4 2024, that was a negative snow shovel effect, as you talked to me, meeting up a very strong, say, Q4 2023. I think you talked about snow shovels being down 60-70% at the time. What kind of snow shuffle effect have you seen in Q1?

Up a lot. But as I said earlier, if it would have been this weather in 2022 or 2023, the ones coming in and buying those snow shovels, they would have bought many other things back in the days, but today they buy the snow shovels. I can share one lead. I mean, if you take dark batteries, for one example, that particular Don't interpret me that it is across the line, but the start batteries when it was cold, it's up 40-50%. But only the batteries. The ones buying the batteries that don't buy new boots or gloves or heaters. So the winter-related products, yes, they sell a lot more thanks to the weather. Otherwise, it would have been strange. But we don't get this nice effect. We're getting a good effect, I shouldn't say anything else. But we don't get this

really nice effect as we normally should have done in a weather condition like this sounds very nice though still somebody's getting some some extra out of this cold weather all the best and thank you for all the extra color thank you take care thank you we have no further questions on the phone line so i'll hand back to you mr olenvik for the webcast question

Thank you. Most of them have been touched upon. I've tried to read at the same time as I talk. Could you give some color on the average ticket price for the store channels during the year and during Q4? Do you notice a positive trend? Do you notice an increase in the number of customers? Okay. That's a very good question. We measure in all our shops how many visitors we have per day. And that is stable, as I've said in many questions on the same theme. So the customers are there to the same extent, but what they buy is less. They buy exactly what they need. So the average ticket size came down. It has stabilized, but the average ticket size has come down. So in a market condition as we have been through, and we are hopefully at the end of, there's a lot of inefficiencies that happens in an organization like ours. If you take tendering process, In a good financial climate, customers don't ask for tenders. But in tough conditions, they ask for tenders for down to 10,000 SEK. And they ask us, and they ask two different competitors, we need to tender. Even customers we have contracts with, and we think we are the sole supplier, and still the customers ask for tenders to test the price levels. And also in the shops, there's a lot of haggling about prices and they buy exactly what they need. So in the market conditions, as we've been through, trying to reduce costs and get rid of people, that happens at the same time as inefficiencies increase. So the same number of people in the shops, but lower ticket sizes. Let's see, there was another one at the number of visitors. 24 to 23. I got the question if the number of visits is 2024 compared to 2023, but I would have guessed it was a little bit lower in 2024 than 2023 because the market conditions was worse in 2024 than 2023. Without being 100% sure, I would imagine that the visits in the shops were lower in 2023 than 2024. Very good, very good questions from everybody. Usual. No other from the line?

No, we have no further questions on the phone lines, so I'll hand back to you for closing remarks.

Thank you. Then I'd like to say thank you very much for dialing in. We are reasonably happy for a decent ending of 2024, increased gross margin, the SALT up even a little bit organic growth cash flow okay increased dividend from 2 to 2.2 debt leverage from 3.1 to 2.5 refinancing Iran well negotiated with the banks very good conditions and a three plus one plus one ecobal this platinum level so I think we can look back and say we are reasonably happy with the last quarter and a few weeks into 2026 but the market is more or less the same but it feels like we are getting a little bit in return for the struggles we do so even if the market continues on this level we think we can develop okay and if we get a little bit help from the market we can develop better than okay and the focus areas are the same focus on sales, getting the inventory levels down, structural grips are taken. So the journey continues as always and stay safe this Friday the 13th and thank you for listening in.