Green Landscaping Group AB (publ)

Thank you and welcome to today's earnings call. As mentioned, my name is Johan Holmström. I'm the CEO of Green Landscaping and I'm joined today, as always, by our CFO, Markus Holmström, who will manage the financial section of the presentation in a few minutes. But as always, let me tell you about our most recent performance and put that into perspective. We closed the year with an EBITDA margin of 8.1% in the fourth quarter. And that represents a 7.1 EBITDA percentage for the full year. And in particular, this was following a weak first quarter. And then we have had market headwinds for the duration of the year, in particular in Norway. And the Q4 highlighted a mixed performance across our segments. So if we look upon Sweden, that showed an improvement year over year. And we have had a quite significant amount of work in terms of increasing the profitability that now is, I would say, turning a corner in Sweden. And there we're really looking forward to what's going to happen this year. Norway remained a challenging situation. So it started by a weak market condition and then it continued with market headwinds. And on top of it, we had let's say challenges in one of our companies in Norway at the same for this year and then at the same time if we look upon other Europe and that is basically Finland Lithuania Germany and Switzerland they are still delivering on still they are actually delivering at the very high performance I'm really impressed with what's going on there and also we do welcome the new companies who are contributing to the performance in that particular segment So during the year, we also made good progress on our growth agenda. And we, in the fourth quarter, reached our full year acquisition target, meaning investing in businesses corresponding to roughly 80 million in EBITDA. So in total, we completed four acquisitions during the year, three in Germany and one in Lithuania, and all with margins above the group average. So I think that's the highlight and the background. And moving into the presentation for the fourth quarter, just one page on who we are and what we're doing. So we are the leading landscaping company in Europe, and we do ground maintenance and landscaping business. So we are active in a very large market. The advantage of being in the large market is really about you can select the customers, you can select the type of services, and also we have the possibility to select the different geographies. We also have structured growth into the market because we have urbanization and we have environmental that really supports what we are doing. Being in a growth market that is very large is clearly advantageous to us. Now, given the type of work we are doing and the geographies, we have chosen to be a decentralized structure. Being local enables us to be close to the customer. We are quite agile in what we are doing, and it also means that we can have above industrial profitability as well. So we have developed a decentralized model over the years, and it serves us very well at this point of time. And then, of course, being a serial acquirer, We have an element of M&A activities where we invest in great companies, making the group better and also increasing the shareholder value. So that's a short introduction on the group. Now looking upon the financial performance and to summarize the year 2025, we saw a decrease in net sales by 2% organically, and that's reflecting the headwinds we had in the market was a negative 8%. And then we were quite happy to add another 8% in terms of net sales from investing activities. The EBIT A suffered by 16%, and that means that we delivered 444 million SEK in EBIT A. And the full year EBIT A margin shrank from 8.3% down to 7.1%. And the cash flow from operating activities came in at 340 million SEK. And then from the investing activities or M&A, we completed four companies. And that corresponds to in line with target of 80% acquired EBITDA for the full year. Now looking upon the fourth quarter more specifically, we can see that net sale increased by 1% and organically we were in negative 5%. So the trend is slightly shifting here and that is on the upside. And then of course the EBITDA decreased by 11% to 145 million SEK in the quarter. And that amounts to a healthy margin of 8.1%, even though we delivered 9.3% the previous year. There is a difference on the profitability in the different quarters for the year. And the fourth quarter is typically among one of the strongest quarters we have. And 8.1% is a good margin, even though it doesn't fully reach the previous year 9.3%. And then cash flow from operating activities came in at 206 million. That is slightly weaker than expected. And that means that our financial leverage are 3.0. And I know that Mark is going to develop on that topic further on as it came in slightly below expectations. And then of course, from the M&A activities, we completed two investment in the fourth quarter. Now, looking upon the long-term performance of the company, we have been on a constant growth for a fairly long time, where 2005 is actually flat. So that's, I won't say it's a breach of trend, but it's moving sideways in tough market headwinds. And we expect that to pick up again as we move into this year. Profit-wise, it's the same story that we're actually weaker in the 2025, given the market situation, but also the activity levels inside the companies have been quite high. So we do have higher expectations as we move into 2026. Now, Sweden. We have been talking a lot about Sweden and all the activities we're doing there, and we launched a fairly comprehensive program moving into 2025. uh where the closure of companies and basically cleaning up that one and that has been let's say developed during the course of the years that program is almost done so i'm happy to report on that one and that means that net sales decreased by 10 and that's a combination of market activities as well as the closing down of non-profitable companies And then we saw that EBITDA decreased by 80% to 112 million with a 4.5% EBITDA margin. And again, it was the Q1 that was really the weak part of it. And we do expect Sweden to pick up, as I mentioned. For the fourth quarter, We see an unchanged sales of 670 million and we see a slight increase, coming from low numbers, but increased by 34% to 28 million SEK, giving us a 4.2% EBITDA margin in the fourth quarter. And as I mentioned, we are having had a lot of activities going on in Sweden and we are basically looking upon that the trend curve will change as we move into this year for the region Sweden. Norway, for the full year in Norway, net sales decreased by 10% and organically we saw a negative 9% while we made one acquisition in Norway contributing with 3%. We see a significant decrease in profitability by 66% to 87 million for the full year and a rather weak margin of 3.7% versus 9.9%. And there are a couple of factors going on in Norway. So we started out the year with basically no winter activities, and we have a fairly high with the dependencies in Norway. So that means we had a week first quarter, and then we have the market conditions that was for the full year. And then on top of it, we had project write downs in one company. that affected us in the third and the fourth quarter. So I think that's the backdrop on what's going on in Norway. And the fourth quarter performance, there we saw that the sales decreased by 16% to 649 million. And we saw a significant decrease in EBITDA of close to 70%, meaning that they delivered 27 million in that particular quarter. And moving on into other Europe. So for the full year in other Europe, and this is really where we have our growth focus, we can see that the net sales increased by close to 40% to 1.4 billion SEK. Organically, we were flat for the duration of year and acquisitions contributed by 43%. And also that we had an even higher increase in EBITDA close to 50% for the full year to 287 million with a healthy profit margin of 20%. And the fourth quarter, we see that we had a net sales increase of 42%. And the EBITDA increased to 104 million SEK, giving us a 22% margin, which is basically all-time high. A very strong performance in the companies we have. And that's all over the board. It's Finland, Lithuania, as well as Germany and Switzerland who are contributing to a very strong performance. And then, of course, we completed two investments by the end of Q4 2025. And moving on to the companies that have joined us, we have Marco Schultz, Forst & Landschaftsbau. It's a company who was founded by Marco Schultz himself back in 1995. They operate in the area between Hamburg, Hanover and Berlin. So it's a rural area. They do offer a wide variety of services and among them landscaping, run maintenance, as well as forestry and woodworking. So it's a very nice company that we do welcome into the group. They have a sales of approximately 9 million euros with 60 employees. So it's a sweet spot company that fits very nicely into the group. And then we have one company in Lithuania. was UAB Economos. They were founded back in 2006. They operate in Vilnius, but they also do work all over Lithuania. It's mostly public customers, and what they do is basically children playgrounds and outdoor gyms and installations and services of those. It's not that big of a company. It's 3.4 million euros, but we have to keep in mind that... Their wages and cost of labor and so forth are significantly lower in Lithuania compared to Europe. So in order to generate the 3.4 million, they actually have a fairly decent operation in Lithuania. And we're really looking forward to working with this company going forward. And this also supports our ambition to build clusters of companies. And now we have the second company in Lithuania. And we find it advantageous when we have companies close to each other. So we actually can get the communication flow and best learning, best practices flowing between the companies. So we do welcome Econormous to be part of the Green Landscaping Group. So I think that is my part of it. And then I hand over the financial slides to Marcus. So Marcus, please go ahead.

Great. Thank you, Johan. And I will, as usual, cover the main financials. Q4 showed net sales of 1.8 billion, concluding our full year at 6.2, which reflects a total negative growth of 2%. Organically, that shows minus eight. Meanwhile, we had an acquisition of eight. Adding on to what Johan earlier said, just in terms of the organic growth development, we have during the year discontinued underperforming units in Sweden, which impacted the organic growth development on group level corresponding to 2%. But these measures will strengthen profitability and cash flow in 2026. Looking at EBITDA in the fourth quarter, 145 million, lower than last year. And as Johan just disclosed, a mixed performance between the segments. Our EBITDA margin at rolling 12 months for the full year consequently at 7.1, which is lower than our financial target, but still a testament of margin resilience in a tough market condition. I will cover cash flow in more detail in the upcoming slides, but the cash flow from operating activities amounted to 206 million compared to 282 last year. And as we were a bit weaker on cash flow, financial leverage in the quarter was sequentially flat compared to Q3 at 3.0. Order backlog amounted to 6.9 billion, which is lower than last year. And we see the continued decline in backlog for Norway, but to a lesser extent in Sweden and stable in other Europe. But it's important to note that the order backlog tends to fluctuate between quarters, so don't see it as a short-term indicator. And when it comes to earnings per share in QCOR, it declined 18% to 0.8%. which was a result of the lower profits generated in the period. But moving on to cash flow. In light with seasonality, our cash flow from operating activities contributed clearly positive in the fourth quarter amounting to 206 million. As we did not fully realize the working capital built during the high season, this is something that we are focusing significantly on, which is turning to actions. Q4 is our strongest cash flow quarter, but followed by Q1, which is typically also strong, and we expect the same seasonal pattern to continue this year. Working capital development and cash flow generation continue, as always, to be a focus area for us. And total cash flow breach in the quarter, as said, operating activities amounted to 206 million. Then we completed the acquisition, which UN presented, totaling a total cash consideration of minus 123 million in the quarter. Then we had CapEx and other lease amortization totaling to minus 83. And the net difference between new loans and repaid debt was positively 115. million in the quarter. Then in November, we also launched a share buyback program for 250,000 shares, which was activated and completed during the period, and it will be used to finance future acquisitions. And that altogether concludes overall cash flow of 104 million in the period. As I mentioned, financial leverage was sequentially flat compared to Q3, which is higher than our financial target and our long-term ambition is to return to the target. However, I want to underline that we maintain good headroom to meet our financial covenant in our financial agreements. Looking at our maturity profile for our interest-bearing debt, in October we successfully renewed our bank loans in line with our plan for the year, as they were maturing in 2026. Together with the bond issued during the second quarter, we now have secured and broadened our finance base for the upcoming years. And the new loan terms are more favorable than the previous one and will reduce our interest costs in Q4 and going forward. And we believe this is strengthening our financial position, but also sends a clear message that the credit margin And then concluding the year with our financial targets, and we've gone through them in the presentation, but we have a growth target of 10%. We managed to deliver 8% in acquired growth during the year, however, The total growth was impacted by the negative organic development we had in Sweden and Norway, partly due to the tough market, but also the mild winter we had in the beginning of the year. Then on EBITDA level, as said, we have a target of eight and we will conclude the full year at 7.1, which we're not happy to be below target, but we still believe in light of the market we have faced during the year that it is a testament of margin resilience in the market condition we have operated in. Financial leverage, 3.0. We have a focus on getting the leverage during this year that we're going into. And the fourth financial target is on dividend. And as communicated in the board, in the interim report for Q4, the board proposes that the AGM do not pay any dividend for fiscal year 2025, which is in line with previous decisions. And with that, I will hand back to you, Johan, for some closing remarks before we open up for questions.

Sure. Thank you. And it's really about two items here. That is the cash flow generation and what's going on in Norway, I think. But for the other sections or regions, the company is actually performing. So I'm happy to see where we are in Sweden, even though the numbers doesn't really support it at this point of time. But knowing the activities we have done and looking into the future, I'm quite confident in Sweden. We are having a lot of activities going on in Norway as well, but the market conditions in Norway is still challenging, I would say, even though we expect improvements in Norway going into the future. And then of course, other Europe, Finland's done a great work with Tapio and his team over there. Lithuania is a strong performance and Germany, Switzerland is also performing. So even though 2025 turned out to be a challenging year, all in all, as you said, Marcus, I think it shows resilience, what we are doing here. And I'm really looking forward to moving into the future and to some extent leaving 2025 behind. It was a tough year, but nonetheless, that's where we are. So let's open up for questions in that case.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Johnny Jin from Seb. Please go ahead.

Yes, good afternoon, Johan and Markus. A couple of questions from my side. I will start with Norway, I think. Profitability in Norway seems very weak and the margin is down from 740 bps year over year. So maybe could you elaborate more closer what is really happening in Norway and also do you see any signs of improvement at all going into 2026 or are these the levels we should expect to be representable for 2026 as well in Norway?

Yeah. Hello, Johnny. Johan here. Thank you for the questions. And I totally agree with you. We are not happy with the performance in Norway. But we have to keep in mind that given the type of companies we have in Norway, we have actually a couple of road companies who typically overdeliver when you have decent winter conditions in the fourth and in the first quarter. And those companies are selected by design because typically the landscaping companies do not have that active season in particular in the first quarter. So when we do not have any winter activities in the first quarter, which we didn't have in 2025, Norway is particularly hard affected by the winter activities. They really don't have the same possibility as the other companies have in terms of getting other things done when they don't have the winter activities. So it's by design. And when we don't have winter, then they are negatively impacted by that situation. And that is what's happened in the first quarter as they are road maintenance companies. However, profit-wise, when I look upon the activities we are doing, we are doing quite a lot of activities in Norway in order to improve the situations that should be visible going into the future. And I do not, on this point of time, actually see any major signs of market improvement. But that doesn't mean that we expect Norway to continue at this level. So we do have actions in place. We have done a lot of activities in Norway and strengthened organizations. We have a couple of new MDs and we have also cost reduction programs in order to right size the companies given the market situation. So we are not waiting to see that the market should recover. We have taken quite a number of active steps. in Norway in order to improve the profitability. And we expect that to be shown during the course of 2026. So we do not expect Norway to remain at these levels. And the base quality of the companies we have in Norway are actually quite good companies with very good entrepreneurs. So I think we will see a different performance in Norway going forward.

Yeah, I understand that. But if we stick to Q4, I understand Q1 had this snow season effect affecting the full year. But in Q4 specifically, I talk year over year in Q4. Then if I remember correctly, there were no super snow in Q4 last year. And I want to understand, it's a quite huge drop in the margin year over year. So I would like to understand what this... was driving that and can you and if I'm sorry correct you expect a better margin next year regardless of market improvement but can you elaborate there is it low hanging fruit or can you shut down any unprofitable business or what are you trying to do there no you have you have three

items or I should say causes affecting the fourth quarter. It's the market condition in Norway because there is a tough marketplace and the companies in Norway have been good in terms of keeping the revenue at decent levels. But they are doing that at the price of profit margins on the project they are executing. They're actually doing work and they have good customers and so From that perspective, it's actually, I can't say it's okay, but they are keeping themselves busy. They have order books. They are doing work. They're keeping the revenue in place. But the market is very competitive in Norway at this point of time, meaning that the prices are very low. And the companies know what's going on and they are winning contracts, but they do that at a lower rate. profit margins, given the market situation. So it's pure market. We have one company in Norway who we are talking about where we have project write-downs. But besides that, the companies in Norway are quite healthy and doing good work. And I think that's a major driver to the low profitability in the fourth quarter. And then, of course, I can always say it was a winter effect again. But yes, it wasn't really that good winter in the fourth quarter in Norway either. So we didn't have any contribution from the winter services in Norway as well. That is typically a higher profit margin business when it comes. So when it's snowing in Norway, we have a couple of companies who benefit from that situation. But the base reason I would say that is a market condition. It's a very competitive

Yeah, okay. We'll see. I will come back to the winter a little bit. But before I do that, I want to ask something about the cash flow. And you said that you're not happy with the cash flow and cash flow seems weak here in Q4, given that you have not released good cash flow year to date. So, I mean, despite this small working capital release in the quarter, you tied up working capital despite this negative organic growth. And I'll just try to understand this better. So, I mean, what sort of cash flow improvements are you trying to do going forward? And are you expecting to have a good release in working capital in Q1?

Yes, Jonny, starting to answer the last question. Yes, we're expecting a release of working capital in Q1 in light with seasonality, and that's supported by the actions we're now implementing and have implemented during the year. And as I said, we've been focusing a lot on the release of working capital during the year, and we're not happy with the full outcome of Q4, even if it was positive. keeping out in our all subsidiaries where it comes to make sure that everything is invoiced on a timely basis and collected when overdue. And that is our prime focus, securing that we get the cash on our bank accounts. Then we implement additional measures, but for where we're standing currently, that's the main focus for

Okay yeah that's fair but I mean in the quarter here I look in the cash flow and the change in current liability seems extraordinary high in the quarter and it's also quite high full year 2025 so what is driving that would you say?

It's more of a accounting timing when we have different when it comes to payment and receivables so we don't see an external order deviating from that but it's more of a timing effect.

Okay and then one final from me coming to Q1 here and the snow weather so how is the start of Q1 would you say given the favorable weather and in terms of profitability I think you said that it's better margin on snow so Should we expect Q1 margin to be in line with sort of a normal winter quarter or how should we put that in relation to the price pressure in general in Norway now?

Well, I think that we are typically careful with forward-looking statements. But if you look upon the weather reports we have had in Sweden in particular, I would say compared to last year, we are in a significantly better situation, even though we are only at the end of January. We have to keep in mind that the fourth quarter is another two months to go, which we do not know at this point of time. But I'm carefully positive on what's going on and having the situation we had in Q1. I know it's a lot of weather discussions here, but it was a very abnormal or unusual situation we had that occurs every five to ten years in Q1 2025. for the month of January in 2026, we have a much more normal winter, I would say. Snowfall in Sweden has been frequent, but it depends on where do we have the contracts and what does the contract state that we're supposed to be doing. So it's a mixed picture. But of course, I'm significantly happier with the month of January 2026 compared to Q1 2025. It's a very big difference.

Yeah, yeah, I understand. But the margin here, what sort of margin could we expect on this now? Because, I mean, Norway, you said it's very tough now and you explain the weakness in 2025 due to weather in Norway in Q1. And now the weather is looking good in Q1 2026. So what sort of margin should we expect from that? Is it fair to look at historical patterns or does it deviate from that?

It's a very detailed question, but the snow contracts we have are typically part of framework agreements. So that's multi-year or long contracts you have. When we talk about the market conditions, it's either the project-based business that is suffering, and that's the majority of the business we have in Norway except for the road maintenance companies, So yes, I would concur where you are leading to that. I would expect the, let's say the service agreements we have with the framework agreements, they should not be that heavily impacted. Then we always have the additional work. And when the customer are out of money, then of course you don't get that type of work. But within the fixed framework agreements or the fixed service agreements, that's where you have the snow. They fall into that category. So they should not be negatively impacted by the competitive environment as we are experiencing right now to the same magnitude as the other sector of the business. And I believe we have roughly 65% of the revenue in Norway that goes within the maintenance contract or framework agreements. So it's a big part of the business.

Yes, I appreciate that. Okay, thank you. That was all from me.

Okay, thank you.

The next question comes from Stefan Nutzen from Red Eye. Please go ahead.

Hi, Johan and Marcus. Thank you for taking my questions. First off, I'm curious about your European business and if you could elaborate on the factors that... But those operations maintain significantly higher profitability than in Sweden and Norway. And to what extent you can have best practices from Europe to be integrated in Sweden and Norway?

That's a very good question. I don't know in which area to start with here. But let's start with... Let's start with the first question in that order in that case. We have a few companies within that group who are very profitable. And when we invest in new companies, we have a baseline in profitability. We didn't have that when we started out in Sweden. So that's another topic because Sweden is a green landscape insurance market. They have a totally different history. But the companies we are investing in, then of course we are choosing and are quite picky in what type of companies do we invite into the group? What type of customers do they have? What type of profitability? Is it sustainable? And so forth. And that means when we're laying the foundation, given the experience we have, we have the advantage of choosing really good entrepreneurs who is running really good companies. that is what's reflected in the profit margins and then on top of it we have a couple of companies who are really over performing and that means that we are at a profit level in europe of 20 so that's the explanation behind that one sweden started out differently with the old green landscaping where we changed the strategy and then the acquisition of sense mark service in norway we actually had the same philosophy philosophy as we had with other Europe at this point of time. And that's why I'm quite confident that the quality we have on the companies in Norway are quite good. And it's actually a market situation that creates a situation in Norway. And that means we do not have that market situation in particular in Germany. It's a more stable environment. And as you have good companies in a stable environment, then you're actually able to have that type of profit margins. In terms of best practice, we did, I would say we have great companies in both in Sweden and Norway and in Germany as well. And yes, we are working actively within the different regions on spreading best practice because even if we have very good companies, there are always items that can be improved and building clusters where the companies are geographically and also language wise and so forth, that is really beneficial to the case. And then we as a group are able to learn from all the companies we have within the group on how to improve the operation in each and one of the companies and build resilience and build quality companies. And that's really the aim of the whole configuration we are doing that we are able through implementing best practices improve each and one of the companies within the group.

Thank you very insightful and then a second question like what's in your opinion what will be needed to improve the market conditions in Sweden and especially in Norway?

I would actually say that market conditions in Sweden are showing signs of recovery so i'm not overly concerned about the market situation in sweden so independent i would say on market development now i'm obviously promising too much but but my expectations are that we would see that we have passed a turning point in sweden and i expect margins to improve in sweden going forward I'm not saying that revenue should show a significant increase, but given the actions we have done, I do expect the profit margins in region Sweden to improve in the coming years. Norway is a different situation with the market conditions. There I'm more careful and I'm not betting on that the market will change. And that means we have to change the companies and how we run the companies in order to improve the profit margins in those entities we have in Norway. And as I said, even though the numbers are really bad for Norway, We do have good entrepreneurs. They are doing good work, keeping up with the revenue and keeping up the profit they have. I know it's a tough comment when you look upon the data, but it could actually be worse in Norway, given the market conditions. So our entrepreneurs in Norway are actually working extremely hard in order to improve the situation. So I have a great confidence in what they are doing, but they are in a very tough marketplace in Norway. Okay, thank you very much.

That was all for me. Okay, thank you. Thank you, Stefan.

The next question comes from Alexander Siljestrom from Pareto. Please go ahead.

Good afternoon, guys. Starting off with a follow-up here on Norway and looking at the quarter specifically, just wondering how much of the decline in organic sales growth that was related to sort of aggressive percentage of completion accounting in the comp from Q4 last year and also how much of the margin drag that was attributable to that.

Alexander, we have decided not to release the actual numbers, but as you refer to the project write-down we did in Q3 last year, that write-down was released in Q4 last year, and so that entity delivered strong profits. Meanwhile, as Johan referred to, we continue to have a challenging number from debt. entity in the quarter and consume the write downs in combination with the cost related to targeting the point for the underlying operation of the entity so that entity is actually delivering a loss in in q4 compared to very strong profits last year so um It is explaining part of, as the significant part, and what are we referring them to, roughly 30% of the decline year over year.

Okay, that's very helpful. So we can look at sort of the, try to look at the underlying development in Norway on the market conditions. Thanks for that. And then turning to Sweden, I would say quite solid underlying growth given sort of your exits. What's your view on market conditions? Are they improving somewhat considering that you seem to deliver growth here year over year excluding exits and When you talk about the margin uplift here into 2026, can we expect sort of 200 basis points? As you sort of mentioned, a noticeable uplift from here and that Q4 didn't seem to capture sort of the full momentum.

No, we actually have made it significant.

okay it's can you repeat the question please yes so just on on sweden um i think the these underlying growth uh seems quite uh solid such as personal market condition seems to be maybe on the positive note. And then also just the extent of the margin uplift that you're seeing to 26, considering that we didn't see the full extent here in Q4.

That's true. And thank you. Yes, as we are closing down a couple of entities, then of course that contributes negatively to the organic growth development. And if you clean the data from that one, the performance in Sweden is actually kind of decent given the market situation. And we do expect that we do not disclose, but it's a substantial magnitude of profit improvement we expect going forward in Sweden, given the activities we have done. And also that is in Sweden, that is public information. So if you look upon the companies and their performance as we are closing down, that would give you a rough idea on the negative EBITDA contribution that will disappear as we move in. We have a slight impact in the first quarter, but it will give you a neighborhood number on the total amount of negative contribution that will disappear going into 2026. So I would say it's a fairly substantial improvement we will see going forward. That's what I expect anyway. Market conditions in Sweden, when we talk to the managing directors in the local subsidiaries, they are definitely more positive. There are more quotes. They are writing more quotes. There's more work to be done. So yes, we are seeing that the market is improving in a positive way in Sweden. And of course, it will take some time as we have order books, we have contracts for the next six months and so forth. But we see, I expect a gradual improvement in the market in Sweden as we progress through 2026.

Okay, that's also very helpful. And then maybe a final one, just... Wondering about your ambitions here on M&A into 2026. Are you still aiming at 80 to 100 million in either the digital or somewhat lower considering leverage and also maybe you focusing more on the internal improvements?

They are not exclusive from each other so to say but it's very much true when you have the leverage at 3.0 then we are becoming careful so so i know that the yawning from sap is really pushing on the cash flow so are we and for the first quarter of this year we really need to see that we have a good cash flow generation going on there and that's what we have in the plan so assuming that we have a cash flow development as we expect then the target is 80 to 100 million. But of course we are evaluating that one because if we see that we do not deleverage in the rate we would like to see, then, of course, we're going to slow down on the M&A activities and use the cash for deleverage. It's a gas pedal. We own those type of decisions internally. But we do expect the deleverage in the first quarter, and we do expect the M&A agenda to continue. And the target number is 80 to 100 million EVK to be acquired during the course of 2026.

Okay. Perfect. That's it for me. Thanks very much.

Superb. Thank you.

Thank you, Alexander.

The next question comes from Karl-Johan Bonnevir from DNB Carnegie. Please go ahead.

Yes, good afternoon, Johan and Markus. Thank you for all the extra color that you've already given, but a couple of drill downs for me as well, please. Looking at Norway, just looking at that unit that you now described, being obviously very profitable in Q4 last year and now doing a loss in Q4 this year. How do you see the outlook for that unit going into 2026? Is that going to be normalized at a low level or is there still risk for further losses?

It will be normalized at a lower level.

And as I understand it, basically the rest of the Norwegian operation is doing quite well in considering the market environment.

Yes. Sorry, the third element you have that that is, of course, again, as we have two companies who are road maintenance, or one company is part of the business, road maintenance, and another large company is a road maintenance company. So yeah, you will always have a part of the activities in Norway, who were depending on snow removal.

So let's hope for the good snow, also to hit Norway in the rest of the quarter. And looking at your commentary on Sweden that you just gave about that, quotes are coming in quite nicely. You are building a good backlog. When you see the stability in the Swedish operation coming back, do you believe that we're also going to be able to close in on the 8% margin target that you have on the group level in the Swedish operation?

Wow, that's a good question. Well, if I give you, not for Sweden alone, but if you look for all the companies, when we choose to invest in a business, we basically have a 10% margin as the goal that we do not really want to go below that number. And if we are going below that number, we really have a hard deck on 8%. I will bring it up to the board or to the management team if we see that the company has a profit level that is lower than 8%. And that is kind of the minimum expectations we have for the companies within the group. And that doesn't mean we will have 8% in Sweden for 2026, but On the average, we don't tolerate companies who basically have profit margins below 8%.

That sounds very fair. But if you look at, say, the structure of the Swedish market, the structure of your Swedish business, there's nothing, say, fundamental that will mean that you will never close in on the 8%. That's what I try to aim for.

Yeah, but that's a very, I like the question and you are absolutely right. The way we look upon the market is that the performance of the company individually is more significant than the market per se. There could be differences in the market, except that we have a challenge situation in Norway, but given normal market conditions, there's nothing that should, that different Sweden from Norway, from Finland, from Germany. It's the company performance. It's not that we have a customer who doesn't want to pay. It's similarities in terms of customer. It's similarities in the projects we are doing. And we have companies in Sweden who easily makes 10%. So it's more on the individual company performance than what they are doing or where they're based geography-wise. So Sweden does not... show lower profit margins in the industry per se, that's where I'm coming from. And that means that if the companies in Sweden are not meeting the targets, we are not blaming the market in Sweden, they should be able to make that and we have companies in Sweden who easily makes plus 10%.

Excellent, excellent. And final one, looking at other Europe, congratulations for a stellar performance in Q4. And similar thing there, when you look at backlog, look at quotations and the business you see, they're coming into those units. Is that still on par with kind of being able to deliver towards these levels that you see for the moment in this quarter?

For the vast majority of the companies, we don't see any major differences. So from that perspective, I would say the markets... is moving sideways. The market isn't booming in Germany. It has been on the low side for the last three years. And if I look at it for the two, three, four years ahead, then I would actually say that there is room for market improvement in Germany versus where they have been for one year ago and where they are today. So if I were supposed to speculate, guess whatever you would like, then I would actually see that there could be room for market improvement in that market. And then of course, we have a couple of companies who are really high profitable wise, Lithuania to mention one of them. There we also see that, yep, those profit margins are perhaps not sustainable and will be normalized during the coming two years.

Makes sense. And I guess that's no different compared to how you earlier talked about it. Just one question also on the most recent acquisition. I noticed that there seems to be quite a big project business in that operation. And you earlier talked about maybe staying away from project design. I know there's different kinds of projects. What makes this one stand out compared to the previous one that you might have had problems with in the project business?

Well, they really don't have that big projects. They have decent projects because if they were a big project, then we would stay away from the company. So they are doing decent sized projects, I would say, all over Germany. They have very good relationship with 10, 15 customers who are recurring customers to that particular company, and they have a working relationship with them. So they have a very some foundation on what they are doing. So we like the type of work they are doing because they are doing the landscaping work when they are building new schools and that type of thing. So yes, they are slightly bigger than a playground, but it's not a big project risk company from that perspective. It's a repetitive customer who comes and it's business they know well on how to execute on.

It's more of a question that it's the right type of projects rather than not looking at projects, if you put it like that.

Yeah, I don't like the big projects to begin with, so we stay away from companies that have uh two big projects then you add a project risk to the portfolio and that i do not like so if you have a project up to two million two and a half million euros then it's still within scope of work but if you start talking about project sizes of four million then it becomes uh uncomfortable for us excellent very clear and good luck out there and all the best thank you very much and thank you for the question thank you

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 closing comments.

Okay, so thank you very much for listening in and thank you all for the questions because it provides an opportunity on giving color, so to say, to the numbers. So we do really appreciate that one. And as we discussed, we have good progress in Europe. I'm happy with where we are in Sweden. uh norway is really where we are focused on focusing on this point of time and the cash flow so those are the two main topics we are working on in order to improve and uh looking forward to q1 report in in a couple of months here so thank you very much thank you all take care