Fagerhult Group AB

Thank you all for joining us today. I'm Niklas Willstrand, Head of Communications at Fagerhut Group, and it's my pleasure to welcome you to our Q4 2025 Resort presentation. On the call, we have our President and CEO, Gudil Sonneson, along with our CFO, Oskar Wallsten. Gudil will begin with a brief overview of our fourth quarter resorts, followed by highlights focusing on smart outdoor lighting, Oscar will then provide a deeper dive into the group's financial performance. To close, Bodil will summarize the key points before we open the floor for your questions. We will start with questions from the conference call participants and then take questions from the webcast. You can ask questions in the chat window on your screen and I will then read them out for Bodil and Oscar. Please note that today's session is being recorded and will be available on our website later today.

so with that i will hand over to you buddy please go ahead thank you nicholas and good morning everybody and welcome from my side as well to this webcast call so during the period we have maintained a strong focus on structural improvements and internal efficiencies to strengthen the group. While some business areas are currently working to stabilize their operations, others have successfully navigated the market volatility by focusing on the renovation segment and on continued innovation. And cross-selling initiative such as the expansion in data centers and the stronger push in sales are now creating better commercial drive, even though it's still very early days in some of the initiatives. We continue to work on the combination of sustainable and smart solutions, as you know, which is today also a strong focus on circularity. And also, we are pleased that our acquired brand, Trouto TLV and Capelon, are progressing according to plan. Our smart outdoor business led by Capelon is performing very well. This quarter, five new Swedish municipalities placed their first order. And we also reached a major milestone in Norway with our first deal on the market in the city of Modum. And this is especially exciting because it proves that we can successfully take Capelon's technology across border. And to give you an idea of the scale, we now manage over 1 million light points through more than 50,000 installed nodes. And an example of a circular initiative, we have launched Ribera from Iguzini, a new outdoor lighting solution, which is designed from the beginning with circularity in mind. And it's built entirely without glue or silicone, so every part of the luminaire can be fully recycled. And our brands are also very active in cutting emission and supporting the sustainable transition. So looking at the start of 2026, we face a tough comparison because of the unusually large orders that you probably remember that we booked in Q1 last year. We see some positive signs, but I would say that it's still too early to say that the market have officially turned. So let's look at the numbers, first Q4 and then the year to date. And order intake for the fourth quarter amounted to 1,844 million Swedish crown, representing an organic change of minus 9.8%. The decline was primarily attributed to the collection business area, while the professional business area reported a growth in order intake compared with the corresponding period last year, and this is the result of the acquisition of Trato TLV. The fourth quarter was the best quarter of the fiscal year in terms of net sales, which increased by 1.8% to 2,040 million Swedish crowns, which represents an organic decrease of 1.6%, adjusted for currency effects and acquisitions. And overall, the group reported an operating profit before EAC of 196 million, which represents an increase of 37.1% compared to last year. And the operating margin before EAC amounted to 9.4%. And in earnings per share before EAC was 0.70 Swedish crowns for the quarter. So to be clear, we are not yet satisfied with the results, but it's a clear sign of progress, especially considering that we have had no tailwinds from the market and our performance is driven by our own actions rather than any external factor. So when we look at year to date, organic order intake decreased slightly compared with the previous year. And an order intake for the period January to December of 7,928 million represents a decrease of 2.3% or 2.5%, almost the same, adjusted for currency and acquisitions. And the group net sales for the period from January to December of 7,891 million Swedish crowns shows a decrease of 5% or 5.8% adjusted for currency effects and acquisitions. And the group's operating profit before EACs for the period January to December, so the full year, was 607 million. An improvement when we compare the two half years. The second half year improved by 30% in profitability and in an operating margin of 7.7%. And earnings per share before EAC was 1.93%. And as always, Oscar will share more details when we get to the financial section. And as you know, I always have a special section. And in our previous calls for 2025, we introduced our four business areas to provide a better understanding of our operation. Having now covered each one of them, we will conclude the final report for 2025 by focusing on smart outdoor lighting and its innovative capabilities. And as cities and municipalities increasingly seek to reduce energy consumption and meet ambitious sustainability targets, our newly acquired Kepelung is a very strong and reliable partner. So we start by looking at growth drivers, and therefore I want to highlight to you. So we are seeing a global transition away from what we call high pressure sodium lighting, And this is driven by regulatory bands and the immediate 70% energy reduction achieved by switching to lead-controlled solutions. And our solutions makes it easy to reach sustainability goals by ensuring that light are only active when and where they are needed. So by using dimming and smart scheduling, we significantly reduce energy waste without compromising on safety and quality. Then the second point is that we have old 2G networks that many systems rely upon and they are currently being shut down. And this means that an existing infrastructure as well is becoming obsolete and needs to be replaced. And we at the Fagel Group provide a future-proof solution that ensures our customers stay connected and in control of their lighting as these networks disappear. So modernizing how we manage infrastructure allows for a complete overview of every light point. So by moving away from manual inspection toward automatic status reporting, it becomes easier to identify exactly where attention is needed. And this creates a much more efficient maintenance process and ensures that the lighting network is always performing at its best. So we are looking, when we look at the market, a very attractive market with a projected annual growth of 19.5% through to 2029. And Europe is currently the global leader, holding 35% of the world's installed base. with nearly 12 million units. Only a modest portion of these are currently equipped with luminaire controls. And the most exciting part is that beside that leadership, the market is far from mature. We're now entering a second wave where early LED installations are reaching the end of their life cycles. And this creates a natural opening, not just to replace the hardware, but to upgrade and modernize the control system at the same time. So let's zoom in on our home market, the Nordics, to give you a feeling for the opportunity. And there are approximately 6 million streetlights currently installed across the region. And the most part for us is that the lead penetration is only at 40%. So this means that over half of the market, roughly 3.6 million light point, is still running on old inefficient technology. And as cities push to meet their climate goals and phase out old systems, we have a ready-made runway to modernize the remaining 60% of the infrastructure. And simultaneously, we're also evaluating other countries outside the Nordics. When we go back to Capelon, what we do is that we turn basic infrastructure into a strategic asset for any city. We do this in a very modular way so the city can take a step-by-step approach. We will typically start with centralized cabinet control to give the customer immediate monitoring. From there, we scale up to individual luminaire controls, which is put on every luminaire. which is where we see the real, real, real energy savings through position dimming and motion detection. And the long-term value, however, is that this creates an open backbone or infrastructure if you want to. So once the network is in place, it's easy to add services for the future, like waste management, smart parking, and much more. And for us, this model is key because it offers a very low entry barrier for the customer. They can start with the cabin of control, while building a long-term pipeline for upselling as their urban needs evolve. So when we then look at Capelon and what they've been doing so far, they're a very proven leader in smart outdoor lighting. and is already trusted by 23% of Swedish municipalities. And if you look at the slide, you can see there are many names and they are already, all of them partnered with Capelon, but it doesn't, the momentum doesn't stop there. So in addition to these established names, we have many other municipalities that have signed up. I'll give you a few examples like Sundsvall, Lidingö, Nacka, Tyresö, Solum, Mariehamn, Linköping, Solna and Myrtala. has also started partnerships with Kaplan in various capacities. And I think the trust is also reinforced, but that we work with key infrastructure partners national like Trafikverket. OK, so. So this foundation. also provides an opportunity for growth so we can focus on strong references and a proven focus and open standards and seamless integration which means that we are very well positioned for geographic expansion which goes beyond our current market so let's zoom in once more and look at one of the deep roots and one of the long-standing customers of capellon which is the city of gothenburg which has been a customer for many years. And Gothenburg relies on our technology and they have around 950 cabinet controls and with that nearly 200,000 connected luminaires. And this extensive infrastructure allows the city to light up and dim almost the entire urban area efficiently. So I think that's a real great real-world example of how our solution provides the reliability and scale necessary to support major city operations for many years to come. So with that, I will end that part of the session and hand over to Oskar for more financial information. Please, Oskar.

Thanks, Bodil. I would also like to welcome everybody to the call. Good morning. It has certainly been a busy quarter when it comes to structural improvements, and I'm really looking forward to executing some of the coming activities related to cross-selling and operational efficiency, to mention a couple of things. All the many strategic topics continue to make very good progress. We have, like Bodil said, just started the journey. As Bodil mentioned, the organic order intake declined by 9.8%. and that is a disappointment. In the quarter, the order intake is positively impacted by FX and acquisitions by a total value of 33 million SEK. Sales is organically decreasing by 1.6% in the quarter. FX and acquisitions have a positive impact of 70 million SEK. Still, the fourth quarter was the best quarter this year in net sales in absolute numbers. were more satisfied with a Q4 operating margin, which landed on 9.4%, an improvement both compared to last year, but also an improvement compared to Q3. The operating cash flow was improved compared to the previous quarter, and it's almost on the same level as last year's Q4. The main driver behind the positive cash flow is the strong operating profit. Year-to-date order intake is slightly lower than last year. We see an organic decrease of 2.5%. Sales is lagging behind last year by 5.8% organically. Operating margin is 7.7%, which is lower than last year, mainly as a result of lower sales volume. Cash flow year-to-date is 740 million SEK. It's down because of lower profitability and the decline is to some extent also working capital-related. The rolling 12-month net sales shows a slight increase also in the fourth quarter, mainly thanks to the acquisition of Capelon and Trato. Like Boden mentioned earlier, the last quarter of the year was the best quarter in terms of net sales. The positive margin development continued in the fourth quarter. We now see a shift in the trend in the rolling 12 months operating profit after eight consecutive quarters of decline. Business area collection. The fourth quarter order intake of 774 million SEC entailed organic decline of 13.2%. The order intake for the full year amounted to 3,496,000,000 SEC. and entail an increase of 2.1% in organic growth. Net sales for the quarter total 960 million SEK, corresponding to organic growth of 0.9%. Overall collection maintain good cost control and hence a stable gross margin. The operating profit before IAC increased to 127 million SEK. Business area premium order intake for the quarter of 572 million SEK entailed an organic decline of 6.3%. And the order intake of 2,486,000,000 SEK for the full year showed an organic decline of 6.9%. Net sales for the quarter totaled 680 million SEK, an operating profit before IEC of 78 million. The operating margin before IEC landed on 12.5%, and it's an improvement compared to quarter four last year. This business area has benefited from an up-going trend in the renovation sector. One example of that is Project Relight in Norway, where Fagerholt Belysning is represented. Business area professionals' order intake for the quarter increased to 380 million SEK, mainly through acquisitions. Business area order intake for the full year of 1,184,000,000 SEK entail organic decline of 3.1%. The order backlog remains much improved at 436 million. Net sales for the quarter totaled 398 million SEK, up 46%, heavily influenced by FX effect and acquisition of TroutTube, which is including the business area numbers from 1st of July. The operating profit before IAC amounted to 21 milliseconds. During the quarter, business area professional has continued to focus on cross-sales collaboration, which we consider a success factor going forward. By utilizing existing solutions to expand brands' local offerings, we can strengthen our position in different markets. Infrastructure order intake for the quarter totaled 164 million SEK, corresponding to an organic increase of 2.0%. For the full year, the order intake is 737 million. which is an organic decrease by 7%. Net sales for the quarter total 179 million SEK. An organic decline of 7.1%. And operating profit before IEC was 3.7 million SEK. Just like business area professional, business area infrastructure has continued to focus on cross-selling collaboration during the quarter. By executing this way of working, the business area secured some key projects in Australia and UK. In the fourth quarter, the cash flow improved from last quarter to 345 million SEK, and it's almost at the same level as Q4 last year. The cash flow recovery in the last quarter is mainly thanks to the increase of operating profit during this period. The group has overall a good cash generating process, creating positive cash flow every quarter. During the last three to four years, you can see our strategy has been to reduce the net debt. This has enabled us to invest in new acquisitions. The recent investment in Trato and Capelon has increased our net debt to current levels, which are higher than before. Earnings per share increased during fourth quarter after a long period of decline. It landed on 193 for the full year. One sec, 93. We are not satisfied with this level and we're working very hard to improve the earnings. That was all from me and now back to Bodil.