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.