Lindab International AB (publ)

Hello and welcome to this presentation of Lindab Group's Q4 report. I'm Ola Ringdahl, President and CEO of Lindab Group and next to me I have our CFO Lars Ynna. We will begin by presenting the results for the quarter and then we will move over to our focus areas for the year and an outlook. Following the presentation there will be a Q&A session. Let's begin with some highlights. Overall, I'm pleased to see a strengthening of the result compared to last year. Adjusted operating profit increased despite negative currency effects. Cash flow was strong and the board proposes a dividend of 5.60 SEC, an increase from 5.40 SEC the previous year. The positive development is driven by continued profitability improvements in our largest business area ventilation systems. Our efficiency measures have delivered according to plan, contributing substantially to the stronger margins. After a longer period of weak market conditions, ventilation systems achieved some small but important organic growth in the quarter. For business area profile systems, the challenges remain. However, an important milestone in the transformation of the business is that the exit from Eastern Europe is under completion. Now let's take a look at our sales development. In ventilation systems, growth in comparable units was positive for the first time since 2022, with 1%. That's a sign of strength in a challenging market. The important Nordic region showed strong sales performance, with Sweden demonstrating the most significant improvement. France, Ireland, and Italy also delivered solid sales numbers. However, Germany continues to decline due to a challenging market situation. When we look at our smaller business area profile systems, we saw a continued decline in sales. Sales decreased on the two most important markets, Denmark and Sweden, due to low construction activity for larger projects and for residential buildings. In the Swedish market, we have prioritized maintaining a stable gross margin, which in the short term has negatively affected sales and capacity utilization. On the positive side, sales improved in Norway as well as the sales through the builders merchants sales channel in Sweden. The active decisions to close down or discontinue businesses in both Eastern Europe and in Sweden have had a notable impact on the sales numbers. Now let's have a look at operating profit. For the group, both results and margins improved in the quarter. Adjusted operating margin increased to 6.5%. Operating profit has been adjusted for one-off items and restructuring costs of 106 million SEK. These costs primarily relate to structural measures aimed at aligning the fixed cost base with current market conditions. by optimizing the branch network in the major ventilation markets. The actions are expected to generate a full year savings effect of 40 million SEK from the beginning of 2027. In ventilation systems specifically, we saw a satisfying improvement in the result despite negative currency effects. Adjusted operating margin increased to 8.5% for the quarter compared to 7% the previous year. Continued efficiency actions and structural measures to reduce our cost base have contributed to the results. Profitability in profile systems decreased due to low sales volumes and low capacity utilization. The profitability development in profile systems is a clear disappointment. I will now hand over to our CFO Lars Ylner, who will take you through our cash flow and financial position.

Thank you, Ola. Lindab Group delivered a strong cash flow in the fourth quarter, generating 521 million SEK in cash flow from operating activities. Net debt decreased to 4 billion 262 million SEK, which is in line with previous levels. Our target for net debt to ABTA is that it should be below three times. In Q4, the ratio improved to 2.6 compared with 2.7 in the previous quarter. The financial net debt to EBITDA ratio remained stable at 2.1 at the end of December. Ola, now back to you and look at our focus areas for the year.

Thank you, Lars. Let's now look at our focus areas for profitable growth. First, some comments about business area ventilation systems. As already mentioned, structural measures and cost reductions carried out during 2025 have had the intended effect, contributing to a more cost-efficient organization and improved profitability as a result. We also see good effects from our insourcing initiatives, where we feed production volumes into our automated central factories, resulting in improved gross margins. In 2026, we will continue to streamline the footprint in Europe, both in terms of production sites and branch network. Let's move to the next slide, where we make some comments about profile systems. In 2024, Lindab took the decision to exit the profile systems business in Eastern Europe due to unsatisfactory developments. The divestment of the profile operations in Hungary was completed during the fourth quarter in 25, And in December, we also entered into an agreement to divest the operations in Romania, which is expected to be finalized by the end of Q1 2026. With this, the exit of profile systems in Eastern Europe is completed. And in that region, we will in the future focus on the ventilation business. Sales and profitability are still at unsatisfactory levels for profile systems in our home markets in Scandinavia. To increase volumes, we will strengthen our sales efforts and we are also planning further efficiency measures in the business area to improve the results that are currently at an unsatisfactory level. Now let's move over to a key focus area for Lindab Group going forward. and that is the acquisitions. Acquisitions will continue to be a cornerstone of our strategy. During 2024 to 2025, we acquired seven well-run and successful ventilation companies that complement us in certain product areas or geographical markets. We did notice in 2025 that the acquisition processes took longer time than before. But we continue to have good dialogues, we have a good pipeline and we expect to increase our acquisition pace again in 2026. Now let's go to our market outlook. Our market outlook is slightly brighter than before, but there are of course uncertainties in this world with geopolitical instability. According to forecasts from Euroconstruct, the European construction market is expected to return to growth in 2026. If we zoom in on the European ventilation market, forecasts indicate that it will grow slightly from low levels, but perhaps with Germany as a question mark. For the market influencing profile systems, a gradual stabilization is expected during the first half of 2026, with some indications of growth for the second half of the year. A delay in the market recovery cannot be ruled out due to these geopolitical factors. And that is why we are focusing so hard on measures within our own control to influence both sales and profitability. In the medium and long term, we have a positive market outlook. Our ventilation systems provide energy savings for buildings and help to create a healthy indoor climate. Thanks to efficiency measures and our implemented investment program, we have a solid platform for profitable growth when market demand increases. That concludes this presentation and Lars and I are now ready to take your questions.