Fasadgruppen Group AB (publ)

Good morning everyone and welcome to this presentation of Fasalgruppen's year-end result. In the room we have our CEO Martin Jakobsson, our CFO Kasper Tam and myself Magnus Blomberg. With that being said I hand over the work to Martin, please go ahead.

Thank you, Magnus. Good morning also from me, and welcome to this year-end presentation. I will also, of course, address the announced rights issue this morning. But first, I would like to highlight 2025 has been a transformative year for us. I would like to describe it as a year of deleveraging profitability measures taken. I would say that we've navigated a complex macroeconomic environment by focusing on what we can control, which is at the end of the day, cash flow margins and capital structure. And today we are laying out the roadmap for how Fasal Group will lead the market recovery for 2026 and beyond. With that said, I'd like to dive into the presentation. So first of all, the highlights, looking at the fourth quarter, I would say that the headline here is resilience delivered a 5.1% organic growth, which I would say is a testament to the underlying demand for our services, despite the broader construction slowdown, which has been ongoing for some time now. On an adjusted EBITDA level, excluding the divested Alnova business, we came in at around 110 million, yielding this more than 7.6%. would say that this is more showing the true earnings power of our core business today but even including alnova the margin improved year over year up to seven percent compared to six point four percent a year ago the operating cash flow stood out here at a record 240 million and this meant also that we brought leverage down to 3.25 in q4 before any issue that is which is then these 3.25 are down from 3.76 in q3 for those of you who remember that and of course we still see the Demand is good. I would say that with this order backlog development of 4.2% organic development, we prove that we are still in favor of strong demand. in general i'll get back to that where we see the best demand and if we take a look on england just a quick glance here before we dive into that later is that we still see delays from the building safety regulator and that is affecting our subsidiary clear line Then this morning, as I mentioned, we announced a fully guaranteed rights issue in order to bring down our leverage here down to 2.5 times in line with our long-term target. And this ensures that we have the dry powder needed for our next growth phase. But I will get back to that. Next, please. Then first I would like to comment here just some words about the markets. I would say that the interest rate cuts that have been done in 2025 have provided much relief to especially Swedish tenant owner associations. And these interest rate cuts are also, I would say, expected to improve investments going forward. There are deferred maintenance in the buildings. We also see energy efficiency improvements. The European Performance of Buildings Directive, which is called EPBD, is due to be implemented here by local law in all EU countries on the 29th of May 2026. And to come at this in short, the European Union has a strategy to at least double the annual energy renovation rate, meaning that we could be a sweet spot here for many coming years. Commenting on our net sales here, we saw a total increase by 6%. And as I mentioned, 5.1% was organically. I would say highlighting our regions, Sweden, Denmark, and especially Finland, was strong in, I would say, all above double-digit growth. On the Norwegian side, we still see some more weak market in Norway that has been affecting us throughout 2025. And here we are, I would say selective about the projects we take on to protect our margins. In UK then, as I mentioned earlier, we still saw BSR delays, but as we announced here in December, we've gotten some more approvals from BSR, meaning that I would say that there is potential for lifts of more approvals during 2026. Remember, Clearline has a very strong backlog and we are more looking into 2028 or so for Clearline products now. Then looking at our segments, the total solution segments grew roughly 10%, which is, I would say, showing that the customer's value, our full service offering there. And on the specialist solutions, we also saw the growth of roughly 6%. Then, of course, Clearline here was affected, as I mentioned, by BSR, which took down the sales here. Remember also in the period of 2024, which is the number in brackets here, 126.2, Clearline was only part of Fasol European for two months. Next slide, please. Then I would say here that on the profitability side is where our internal measures are showing up. As mentioned, the adjusted EBITDA came in at roughly 110, a margin of 7.6, which is, I would say, in this environment, a strong figure. On the total solutions side, We saw a small decrease in margin here, but roughly on the same adjusted beta level as last year. But what stands out here, of course, is the specialist solutions that improved quite significantly compared to last year. So the adjusted EBITDA came in at roughly 54 million compared to 8 million last year. Then this meant a margin of more than 10% compared to just 1.6 a year ago. So this is the true hero here in the quarter, I would say. But mainly this reflects better project execution and more favorable mix, I would say. And of course, we've seen as the market recovers, the specialist solutions segments, they are more agile, have shorter projects than the total solutions. That means that when the demand is there, we are also ready to improve the margins quite rapidly in that sense. Then looking on Clearline, of course, came in lower than which also affected But BSR delays, however, the 27% margin here is not what we expected, but it's still not bad. On the total adjustment side here, you see we have large adjustments of 118 million, which 99.4 is related to the investment of Alnova. We can shift to the next slide so I can show you some more. So this is the waterfall then from the reported beta up to the adjusted beta and also then the adjusted beta if you exclude the ANOVA. So in this instance here, of course, the divestment, we took a realization loss and that meant these 99.4. We also had some continued considerations that affected us by 15 million here. And we had some acquisition related costs of roughly 3 million. All in all, you could also mention here that, of course, Alnova made a loss here in the two months of roughly 8 million. So that's why we end up at roughly 110 on the adjusted side there. yeah okay then on the order backlog side we ended the year at 3.8 billion and of course a significant part of that is uh clearline who has been building a backlog um but i would say that this is important the 1.3 billion roughly that clearline has is is ripe when we get the bsr approvals and as i mentioned we are more looking into 2028 for clearline now then on uh I would also like to mention, usually we see a pattern where the order backlog builds up in the first half of the year and then we execute on the second half of the year and you can see that pattern somewhat in the bars in the down right corner and uh i would say that this is not anything unusual in that it's more of of how the market works for us then uh if we take a look on the swedish entities we've seen an organic or the backlog growth now for the fourth fourth consecutive quarter which is uh of course uh very strong sign remember here during 20 i would say already in 23 we saw effects of the swedish markets uh that it was struggling and on this if you take a look on the total solution side uh it's a somewhat lower compared to last year but uh remember we had a very large order in Copenhagen that affected, you could say, in the numbers last year. So if you exclude those, I would say that we are on par also on the total solution side. Then you see the specialist solutions or the backlog is quite stable. And then Clearline I've already commented on. So we can take the next slide, please. Then on cash flow side, we saw record strong operating cash flow here in Q4, 240.5 million. You can compare that to last year, which came in at roughly 185 million. It's a 30% increase even though it's roughly still the same subsidiaries included. I would say that this cash flow has been an optimization for a long time. And we have improved on our stakeholder terms. So it's, there's more to be done. I would like to highlight here, but of course, I'm glad to see when the cash conversion is above 200%. On the, I would also like to highlight the seasonal pattern, which we've said many times now, but usually in the Q4 has the strongest cash flow. And then for the full year, we came in at 99% cash conversion, just below our target of 100%. Take the next slide, please. So the average interest rate here for the full year came in at 5.8%, down from 6.1% a year ago. As I mentioned also, we lowered the leverage here from 3.76 in q3 down to 3.25 and in after the rights issue this leverage is set to go down below 2.5 which is in line then with our long-term target and I would also like to highlight here with the rights issue, we have an upped covenant level in 2026 and we also have improved interest rate levels. On the interest rate levels, we also dropped down two steps from where we are today down to where we'll end up after the rights issue, meaning savings of roughly 20 million yearly on just all else equal, so to speak, on the interest rate levels. Remember, we had roughly 145 million paid interest during 2025. And with that said, we can move on to the next slide, where we take a step back and look at how the full year 2025 came in. Our net sales grew by 10.6% compared to our target of 50%. On the profitability side, we had a margin of 8.2% compared to the target of 10%. On a cash conversion level, we were very close to meeting the target. in at 99 as mentioned and then on the capital structure side here before the rights issue we came in at 3.25 which was by the way also in line with what the covenant level was moving on please Then some words about the rights issue. So we today announced a fully guaranteed SEC 504 million rights issue. And some words about the commitment or the undertakings. I would say that roughly 320 million came in from the the large shareholders, Connecting Capital and Hauser, and also a large portion from our founder and chairman Mikael Carlsson. which took a large part of that. And then from the other board members and management, roughly 32 million came in, of which myself have an undertaking of 19 million. I would say key employees had roughly 29 million and then 120 million from other shareholders and investors. So, all in all I'm very, very pleased by the commitment and the strength that we proved with this. Remember also that no, no undertaker took any fee for this as well, which I would say is a very strong signal. Then, in... I would say, background and motive regarding the rights issue. We are, of course, strengthening our balance sheet with this, as we've mentioned here. And this is also making us able to grow in another way that we've not been quite constrained by that historically. So now with this, we have the possibility to do organic growth initiatives and selective acquisitions once again. Which we're very, very glad to be able to do. But remember here, we will not go on a shopping spree or anything like that. But of course, we will do selective acquisitions. Some key timeline here, I would also say that today we've then also announced We want to do an extra general meeting, which is then due on the 6th of March. The trading new subscription rights is due from the 16th to 25th of March. And then the publication of the final subscription level is then from the 1st of April. We can move on, talk some more about rights issue. Why do we do it now? I would say that we have a good momentum. We are seeing two consecutive quarters with organic growth and a healthy order backlog also growing organically. We see all in all that the market signs are improving. And this gives us also room for growth when we need it, not when we have to. So we do it in a preemptive strike, you could say. And then on how we see acquisitions going forward, I mentioned that we'll be selective around that. On the UK turnaround of BSR, as we've mentioned earlier, we still see a very strong demand in general for our services in the UK. And we also see that the BSR risk are somewhat lower, also in conjunction with the announcement made here in December. And we also get an improved financial agreement with the banks, which also assist here in the journey ahead. Next slide, please. some concluding remarks 2025 was the year when we did the hard work i would say we divested underperforming assets improved cash flow here in the second half and we strengthened our organic growth and our backlog In general, I would say that we're entering 2026 as a leaner, more focused and more financially robust company. Now, if we just have some highlights here, once again, remember that we had a strong organic growth, 5.1% in Q4. We saw improving margins both in Q4 and 2025 as the full year. And I would say that we are ready for the market turn, the organic order backlog was up here 4.2% in Q4. We are moving to below 2.5% leverage of the rights issue. We see the new capital coming in with very, very strong interest from shareholders, board members, key employees, without any fees, as I mentioned. Then moving back to this M&A agenda will be of course disciplined and selective. So to sum it up, I would say that we are strengthening today to capture tomorrow's recovery. With that said, we thank you for your time and open up for questions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad.

first question is from max bacco from scb please go ahead thank you um good morning martin and casper thank you for taking the questions um so perhaps starting off with clear line i mean as you mentioned during the presentation and as stated in the press release sent out there in december you have received approvals from bsr of some SEK 400 million of which majority of the work will be executed on here during 2026. So looking at KLI's total order book, some SEK 1.3 billion in total here at the end of Q4, how much of that is expected to be carried out during 2026 and how much has been approved by BSR, if you could comment on that.

Yes, so absolutely. I think it's easy to talk about pounds here in my world. So if you have roughly 100 million pounds in the order backlog, then we announced 32 million pounds worth of work in December. Then, I mean, a reasonable... BSR approval is still... Sorry, it's a lot of background, noise background there, Max, sorry. I don't know if you can mute. Out of these 32 million that is to be done in 2026, Uh, I would say that, uh, that is more or less all of that will be during 2026. So, and I would say that at least the same amount, so roughly 30 million more, uh, we already had, uh, approval of, so we have. uh i mean it's it's still everything it's a product business max so you can take it for what it is but uh in the vicinity of 60 million for 2026 is not an unreasonable figure to to have in your model there okay uh very clear

And then moving on to the Nordic operations, I mean, a very clear improvement here during Q4 with quite significant improvement in profitability. But at the same time, I mean, Q4 tends to be a quite small quarter. It is a bit dependent on weather and timing and so on and so forth, I suppose. So, how much of the improvement that we saw here in Q4 is reasonable to dedicate to, I mean, underlying market improvements and perhaps some market share gains by Fasal Gruppen and how much is reasonable to extrapolate going into 2026, if you understand?

Yeah, you could, I think you're aiming at, if you take the Q4 2024 was Of course, a very weak quarter for us in general, so the comparison levels there are what it is. But I would say that on that side, I would say still Sweden is improving from low levels. That's an important factor. Then I mentioned here some double-digit growth in both in Sweden, Denmark and Finland, but I would say that Finland and Denmark stood out during 2025 as the best years ever in Fasoligruppen, which of course is a strong testament even in these weaker market times, so to speak. But then, of course, Norway is hurting. When you put it all together, of course, I would say that I'm more into that we are taking market share here. which is then mainly comprising of Denmark and Finland. Then Sweden, we are seeing improvements as well, but not as big as in Denmark and Norway, if you understand what I mean there.

And the final question, very short-term oriented. looking at q1 here 2026 also quite dependent on the weather and when the season is basically allowed to start for you at least in the nordics and and so far it has been a quite harsh harsh winter um you have any any insights or comments regarding q1 and the start to 2026.

Well I mean of course it's not unusual that January is cold and of course it's been some extra cold in in this January but we are quite quite used to this kind of levels if you take it like that and of course when we I've tried to say it a lot of times also Max regarding if you take renovation is more seasonally dependent and it's unusual that you have large renovation schemes during midwinter times in the nordics so uh what if you take a look on the comparison numbers if you go back a couple of years then then on the new build side it's more more common that you work through the winter times then of course if we would have more a lot of new build uh then that can affect the productivity levels and stuff but i wouldn't say that Nubel is not that hot still. With that said, I'm not so worried about the weather in that regard. But of course, it's still a factor for us. It goes slower, but it's not like it's a super high activity level either. So hopefully that gives some flavor.

Yes, that was all from me at the moment. Thank you very much.

Thank you, Max.

The next question comes from Elvin Rolder from GMB Carnegie. Please go ahead.

Yes, thank you and good morning. I just have a couple of follow-up questions from Max here. But maybe beginning a bit unclear, you talked a bit about... the backlog throughput, so to say, here in 2026. But I just want to be perhaps clarifying a bit more on the near term of that, if it's possible, considering you're talking about that you're already looking into the 2028 orders for clear line. And how should we sort of bridge perhaps the coming quarter or two quarters that we have in front of us if we factor in these BSR delays as well, where there continue to be quite a big gap between what projects you can work on right now, and you have guys on the sidelines, so to say, so should we expect a continued like subdued margin here in the coming two quarters? Or how should we kind of bridge that gap, so to say?

Yeah. No, it's a good question, Elvin. I would say that as the planning is now, you could say it's still renovation that we do in Clearland. And believe it or not, it's also a bit colder in the UK, even if they have a bit lower on the degree side there, but usually a lot of projects start up in the spring or so. Spring comes a bit earlier there, but as the plan, or how it looks like at the moment at least, is that some of the bigger schemes are due to start here in the end of Q1. And of course, on the utilization rate of those, the more the better, if you put it like that. But with that said, I would say you can expect it. I would pencil it in from end of Q1 to Q2 there, somewhere there.

Okay, so we should kind of like expect still kind of lower utilization, so to say, beginning of the year. And then by the end of Q1, it should be quite a meaningful uptick in order to get to the numbers you said previously, I guess.

So we have a lot of, put in other words, we have a lot of project starts in the end of Q1.

Thank you. And then the other question was regarding capital allocation. I mean, you said that leverage will come down to 2.5 to the proceeds from the rights issue in your book, so to say, which will be, of course, quite significantly below the new covenant levels that you have reached with your bank. I was just wondering a bit about your philosophy. You said that acquisitions, of course, will be very selective, but are Would you still kind of prefer to get that level down even lower than 2.5 before you've been able to focus more on growth-oriented measures? Or should we perhaps expect acquisitions already this year? How are you kind of thinking about that, given that by the end of, I guess it's by Q1 2027, you will have three in the covenant ratio?

Yeah, it's a good question, Elvin. I would say that As I mentioned, we will not go on a shopping spree, but of course, when you fish, you have to lay out some fishing nets, else you won't get any fish. It's not like a supermarket in that regard either. With that said, you never really know when you end up with... I mean, there are some great companies out there. That could be a perfect pitch for Södertälje. But it is a balancing act with the leverage and of course the long-term target is 2.5 and we intend to keep it that way. Remember on the on the go financial goal we also say that it could be temporarily higher which has which has been the last couple of uh i would say quarters or so and uh um i mean we are still in the in the face that the market is recovering so it's a balancing act that's why we mean that we are selected

Okay, I think that was actually all from me for now. I will get back in line.

Thanks, Elvin.

Thank you.

The next question comes from Linus Alenton from Nordea. Please go ahead.

Hi, and good morning, Martin and Kasper. Just a follow-up here on the rights issue this morning. uh the payout for the clear line acquisition is uh dependent on the beta levels and i'm just wondering what levels would trigger the maximum payout of 80 million pounds here just to get a sense uh yeah i mean in

In that regard, I would say that the Clearline deal, as you know, was a preference share structure deal. It's easier to think it's an earner structure. And of course, in all earner structure, If you've done it correctly, the more the company earns, the better for all parties, so to speak. And we've not really said any exact levels of that, Linus. But of course, remember here what we said during... The acquisition, we said that the historical levels, they came in at 18.7 million pounds EBITDA, the last three years. And, of course, it has to be a significantly higher level than that. Significantly higher, in order for that to happen, so to speak.

Alright. However, I noticed that that obligations to the shareholders in Clearline went up this quarter. Is that the dividends that are accumulating on that post in the balance sheet or how should we interpret it? Because if earnings are down I guess it must be the dividends accumulating upright.

no no no no it's Casper here no it's not the dividends it's it's a timing uh difference when you do the discounting of of the value of the option okay okay uh yeah okay okay that's clear and uh the dividends that accumulate up where did they end up But there are no dividends accumulated today here.

Are the dividends to the clear line holders stacked up?

They are, but the first year is 2024 here. And that could be accumulated. Then there was no dividend accumulated for 2024.

Okay. All right. Yeah, I'll stop there. Thank you very much for taking the question.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

All right, so we have some written questions here. I'll start with the first one. So Martin, are you planning to do M&A with this new headroom, perhaps in the UK?

I mean, of course we like the UK market in general. We think I mean, remember, we talk a lot of negative stuff about BSR, but what they're really trying to do is something good. They are doing this because they want safer buildings. And, of course, we want to help them with that, just as an example. And at the end of the day, there's plenty to do with BSR. old buildings that are in need of renovation in the UK. So, we really like the market, we've been looking at it for many, many years. So, absolutely, we will look into acquisitions in the UK. However, it's what I've tried to say here, it's a balancing act now. First of all, we'll get this rights issue.

and into the goal and take it from there and next week i guess we can continue on the clear line here, why Clearline back only 2028, continue since at the end of post? Could you explain that question a bit more?

Yeah, I think there's been a misunderstanding here. What we said about 2028 for Clearline is that we have such a good visibility on the order backlog side for Clearline, so that we are now looking into orders or projects that are to be executed in 2028. That was what we said. But, of course, with the recent approvals from BSR, I have a good sense that Cleland will be quite active during 2026. I put it like that.

Thank you. And on the contracts that you're signing today for delivery over the six to 12 months, how does pricing compare to the margin profile of projects currently being delivered?

Yeah, I would say it depends on the market. in general on which region we are talking about but if we take the Swedish which is our biggest market that is of course on the rise and we are seeing if you take a look on the order backlog margin that is also improving here and I would say that just to give some flavor on the backlog margin there, I would say up roughly one to two percentage points a year ago or something like that.

Thank you. And then a question of the rights issue here. Why a rights issue at this moment? And why the size of it? since the current laptop is going in a positive direction, so to speak.

Yeah, we had especially a why now question here in the presentation where we said that we have good momentum and that we see better signs in the market. And we don't want to be raising capital when we desperately need it. We want to have it ready before the recovery fully takes hold. And the size is, of course, also a balancing act here on where it makes an impact for us. And I would say that I think it's a fair amount of size here for what is needed going forward. Hopefully that answers the question.

Thank you for that, Martin. We have another question here. I heard Caspi clearly regarding the clear line earn out. However, how is the accumulated dividend net income for minorities accounted on continuous basis?

So it's Kasper here then, but as I said, there was no dividend for 2024, and perhaps there will be dividend for 2025, and that is when we have done the annual report for 2025, that will be accounted for, and then so on, I mean, for the coming years then. So that's how it will work then.

I hope you understand that. Since there's not been an AGM in the Clearland companies, we can't decide on a dividend. So that is correct.

Thank you. We don't have any more written questions. However, we have one more on the line here. So could we please let Max Bakko

Just a follow up from Max Bakker from SCB, please go ahead.

Yes, it was related to the dividends to the preference shareholders, but you basically answered it already. But just to follow up, when the AGM has been held in clear line and it has been decided, I guess it's the net profit that needs to be determined exactly for 2025. Will you in some way reflect that future payout in the balance sheet for FASAD gruppen in any way or will it be you know outside of the balance sheet?

No that will be reflected in the balance sheet then.

Okay okay perfect yes that was all thank you.

Thanks Max.

Perfect. Thank you, everyone, for this session. And some final remarks from Martin.

Okay, thank you, Magnus. And thank you everyone for listening in to this presentation. Hope you've gotten some more flavor regarding our Q4 results and our rights issue. We are ready for 2026 and are eager to get this going. So looking forward to meet you maybe at the agm which is due here in may but if not then please don't hesitate to contact us if you want to have any investor meeting or analyst meeting or likewise so with that said thank you so much for today and have a great day