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.

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