Coor Service Management Holding AB

Welcome to CORE's Q4 presentation for 2025. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to President and CEO Ola Klingenborg and CFO and IR Director Daniel Warnholtz. Please go ahead.

Welcome, and thank you for listening to the Q4 report from CORE. I will start by giving you an update on the fourth quarter highlights and talk about the market conditions. I will then hand over to Daniel to present some more details around the financials before we summarize the key takeaways from the quarter and have a Q&A. Starting off with the market conditions, we continue to see a very high level of market activity in the fourth quarter. We see some varying outcomes between our different geographies. In Sweden, we signed a new contract with Huddinge Municipality, and we extended some important contracts with Hitachi Energy and Telia. The Telia contract also included Norway. where we also extended a contract with . We also extended a contract with the psychiatric department of University Hospital in Denmark. During 2025, we've taken several measures to restore the level of working capital, and I'm pleased to see that this has resulted in significant improvement in cash conversion. to 99% compared to 57% for the full year of 2024, so a good improvement there. We also continue to see a high employee motivation index at 78, which is an improvement over last year, which is encouraging. We also make progress on the environmental targets. The scope one and scope two emissions reduced by 54% versus 2018, which is above the target of 50%. We also have reduced emissions from purchased goods and services, and this is an important milestone for us, and sustainability has been an important focus area for us over the last couple of years. As separately communicated, we announced that Patrik Sjölund will assume the role as CFO at CORE in the second quarter of 2026. The board of directors proposed a dividend of 2.5 SEK per share for 2025, of which one will be an extraordinary dividend. It's proposed that the dividends be distributed in two payments of 1.5 respective one tick per share. In addition, the Board of Directors intend to propose a share buyback program at the 2026 Annual General Meeting. So, and finally, we are really looking forward to the Capital Markets Day on March 19th, where a formal invite will go out later today. So with that, I hand over to Daniel to go through some of the numbers for the quarter.

Thank you, Ola. And let's start with an overview of the key business KPIs. In the fourth quarter, organic growth was 3.2%, and that comes as in previous quarters, primarily from high variable volumes in Norway, but encouragingly also in Sweden and Finland. The EBITDA margin for Q4 is 5.0%, an improvement compared with last year that ended at 3.3% in Q4 2024. Q4 2024 was characterized by weak operating profits, primarily in Sweden and Denmark. Cash conversion, that is a full year number now, ended at 99%. a strong number that is above our long-term target of staying above 90%, and a very clear improvement, versus a weak 57% in the corresponding quarter in 2024. Leverage also, and that last 12-month number is at 2.6, and continues to decrease as we de-level. And finally, as previously reported in the Q3 report, customer satisfaction stays at a high level of 72, an improvement versus 70 last year. Then moving over to the P&L. As I mentioned, we had good organic growth in the quarter. Net sales ended at 3.2 billion. That is just above last year. So while organic growth was a positive 3.2%, we had negative FX headwinds of 2.2%, and hence a net reported 1% growth. Adjusted EBITDA amounted to $160 million in the quarter, which gives us an adjusted EBITDA margin in the quarter of 5.0%. Both EBITDA in absolute and margin is an improvement compared to last year. At the end of the second quarter of 2025, we announced that we are completing the changes in staff organization that we announced earlier in the year, and that the effect of these changes are now gradually becoming visible in the P&L. both in central cost but also in the segments primarily Sweden and Denmark. Items affecting comparability during the quarter amounted to 29 million and mainly comes from restructuring costs as well as some integration costs for newly started contracts in Sweden and Norway. Net income is 60 million and adjust the net income when we add back amortization amounts to 72 million SEC, a significant improvement versus a weak Q4 last year at 2 million SEC. On the last 12 months' numbers, which are now full-year numbers for 2025, we see that net sales remains close to 12.5 billion. Organic growth for the full year is 2%, with negative FX headwinds of 1.7%. In total, slightly higher net sales versus 2024. The full year adjusted EBITDA is 603 million for the full year, which gives us an EBITDA margin of 4.8% for 2025 compared to 4.4% in 2024. Adjusted net income for the full year is 274 million SEK versus 193 million SEK in 2024. Moving into the segment and looking at the Q4 country by country, starting with Sweden. Organic growth was just above 4% in the quarter, primarily a result of favorable activity level and higher variable income in our integrated facility management business and property services. Sales was actually also an all-time high. on a quarterly basis in the quarter. Adjusted EBITDA and margins are improving versus a weak Q4 last year. The action plan implemented during the year to streamline resource planning has helped, together with organization changes and cost reductions implemented earlier in 2025. Four signed during the quarter a new agreement with Huddingen Municipality and also extended contracts with Hitachi Energy and Telia. And the latter contract also covers Norway. And overall, it was a good activity level in the Swedish market with reasonably high variable volumes in the quarter. Moving then to Denmark, and in the fourth quarter, sales in our Danish operations declined due to a negative organic growth of minus 5%, but also negative foreign exchange effects of 5%. This negative organic growth was largely due to ended contracts, primarily Velux in the quarter. The negative effects from the ended contracts was partially offset by higher variable volumes from other contracts. During the quarter, TOPSA chose not to extend its contract with Core. As previously announced, we assessed that the total value of the contracts that ended in Q4, or that will end in the coming quarter, will be approximately 300 million, as previously communicated, and that also includes the estimated impact from TOPSA. Operating profit adjusted EBITDA for the quarter amounted to 20 million compared to 13 million last year. The operating margin was 3.0% versus 1.8% in 2024. We saw some improvement in the margin during the quarter as a result of the cost reductions made earlier. During the quarter, we extended an agreement with Aarhus University Hospital Activity in the market remained high with a number of large contracts up for tender in the near future, both in our own portfolio and in the market in general. Moving then over to Norway, and during the fourth quarter, sales in our Norwegian operations increased by a total of 7%, with organic growth of 12%. and a negative foreign exchange effect of 5%. Organic growth was attributable to high variable volumes linked to maintenance stops in the Norwegian oil and gas industry. While maintenance shutdowns occur annually, the scope of the shutdowns varies from year to year, and we expect to see a continued normalization compared to 2025 during the coming quarters in 2026. Operating profit adjusted EBITDA for the quarter amounted to 25 million SEK versus 24 million in 2024. The operating margin was 4.4% versus 4.5% in the prior period, prior year period. Thor extended its IFM contract with Telia, which we also mentioned in the Swedish segment. The next six months will see the start of several new contracts in Norway, such as with Avinor for cleaning service at Oslo Gardermoen Airport, and Sjage Ejendom, with KOR acting as a total provider of services at Skagen Altrum, which also will be the new location of KOR's Norwegian headquarters. Starting up new contracts may have a slight negative short-term impact on the margin for the coming quarters for the Norwegian operations. And then, finally, we move to Finland. And during the fourth quarter, sales declined by 2% in Finland compared with the year earlier period. However, organic growth was positive and amounted to 3%. with foreign exchange effects were negative and amounted to minus 5%. Operating profit amounted to 2 million at the same level as in last year, and operating margin was also relatively unchanged at 1.1% versus 1% in the comparative period. During the quarter, we secured a medium-sized cleaning contract with Turku Technology Properties. Moving on to cash flow and the balance sheet. And during the last year, as Ola was mentioning, we saw an increase of working capital. Both as a result of changing in the contract portfolio and year-end balance sheet effects, but also to a certain extent due to ways of working. A number of measures has been taken to reduce the level of working capital in 2025. And with that, our net working capital position has been restored to a more normal level as a percentage of last 12 months' net sales. As a result of the improved net working capital, our key metric last 12 months' cash conversion also improves in the quarter and has seen a steady improvement throughout 2025. And we reach now in Q4 99% compared to 57% for the full year 2024. And with that also now at a level above our target of staying at above 90%. Leverage that you see on the bottom right side of the slide decreased to 2.6 as the result of the strong cash flow and as we continue to deleverage. And with that, I hand it back over to you, Ola, to sum up the quarter.