Profoto Holding AB (publ)

Welcome and thank you for listening in to our Q4 report for 2025. We were acting in a challenging market, still challenging market, but we combine that with high own activity in sales and marketing. So I'm talking, my name is Anders Hedebark and with me here I have Linus Malmstedt. So as a summary for Q4 last year, our net sales decreased 19% to 163 million compared with a very strong actually quarter for 2024. Half of that decrease is based on the currency effect. And even though we had a Q4, we had a recovery from a weak Q3, we still had a lot of challenges in the American market. So in the US especially, but in general in North America, the market was very, very tough. Our EBIT was 16 million Swedish crown. That is 10% EBIT margin. But the result is mainly, as you understand, affected by the negative sales trend. But we combine that with lowering the cost during the year. So we still manage a 10% EBIT profit margin. Also, we had a legal cost level of 7 million, which was incurred Q2 to Q4, but was only invoiced in Q4. And that put pressure on especially the EBIT for the quarter. Our activities is very much higher, was very much higher than usual during the quarter. And in the end of the quarter, we started selling and invoicing our LED products. Generally, the activities in marketing and sales was very high and is continuing to be on a high level for Q1 as well. So we have for a very long time talked about starting to sell products to the continuous light market for video still and also for photography. So during the end of the quarter, we started to ship our L1600D, 600C and L600D. And all of those products are positioned to both cinema as well as the creator market. And I will talk more about that in a second. We see some sales impact, even though it is rather small for the quarter. our pro panel will start to invoice in the end of the first quarter but will have financial effects from the quarter thereafter so we're very much looking forward to that and with those with that product we have a great product offering even though it's not complete and we are aiming and we are then having a premium product catalog and a premium brand for the full industry needing both flash product as well as LED product. so premium is the key factor and and especially for visual content creators we are dividing our our and targeting the market in three customer segment the important customer segment number one is content creators which are buying both led and flash large studios for example ecom studios but not only that also brand owned studios also using both LED and flash, as well as for the cinematic market, film production market, which is mainly but not only using LED. So, first of all, visual content creators is our main focus at the moment, where we are selling both for the video market and for the still market selling LED product as well as flash product where they're shooting and doing both of those things at the same job. The main focus here is hybrid and it is very important because that is our next step in our market. We see this market growing as well as for the whole visual content creator market. So in this market, we are partnering up with our big dealers and during the last quarter, as well as coming into this year, we see we are we have even though the sales was down last quarter, we see a great we are optimistic about the future, even though the timing will be debatable exactly during the year when we see we'll see a sales increase. However, we are very active in our channel as well as both our dealer channel as well as directly online and also physical events so we are increasing the number of of activities in the market it is a new landscape but we are we are combining this with high activity We are also seeing in the cinematic market that our hybrid offering has high attractiveness, especially in the cinematic market. Hence, with this new landscape, we are updating our financial targets and we will talk more about that later in the presentation. Please go ahead, Linus.

Okay. Thank you. And as I mentioned, during the quarter, we saw a sharp decline with 90 percent compared to the same quarter last year. And that's a combination of currency effects. So more half of the decline is related to currency effects, but also that we actually saw a quite strong fourth quarter last year with several quite important product launches. So that's important to just bear in mind. And during the fourth quarter, we saw more or less the similar geographical pattern as we saw during the year with a fairly strong development or relatively strong development in Asia with China as the, I shouldn't say shining star, but they're doing really good and they are performing well. In Europe, we saw a fairly stable development. In the US, that was a tough year and also a tough quarter. We didn't see a shift in the underlying market sentiment during the quarter in the US, so it's still a tough market. And it's also important to bear in mind that we actually saw quite strong order intake on some tea products that we were not able to deliver, which we will now deliver during the first quarter of this year. and if we look at the full year it's more or less the same pattern the currency effect wasn't because I mean that's something that happened throughout the year so the currency impact is somewhat smaller for the full year as a whole but still it's important that We had a negative currency effect of 5% on a group level during the year. So all in all, we saw a decline with 16% for the full year 2025. If we look at for a longer period, as I have said before, but this is not my favorite slide, we have two really tough years with the decline, top line and also impact on the EBIT margin. So this is despite the fact that we actually have done numerous things on the cost side. But as you can see, the underlying EBIT margin has been on the downward slope. So now it's a new year. So let's see what it brings. I think we communicated during the second quarter last year that we will do quite substantial cost savings and we communicated that we would see an EBIT impact of approximately 30 million. and more impact on the cash flow with a positive impact on the cash flow side with 60 to 80 million. And if we summarize the year as a whole, we see that we have clearly achieved what we communicated. So all in all, we have reduced underlying cost base with close to 30% and the effects on EBIT and the cash flow is slightly ahead. And what on this slide, we had an illegal cost during the fourth quarter, which is adjusted for on this. So this slide shows the underlying cost base. So it's spread out through the quarters because during the fourth quarter, we had one of cost of 7.5 million with legal fees, which was actually related to the second and third and the fourth quarter. So it should be more even out throughout the quarter. So that has been adjusted on this slide. And this is a slide that we started to show last quarter is the quite substantial impact that we have on the relationship between capitalization and depreciation. So what you see is that we have increased the depreciation with a couple of millions related to the product launches that we have done. but more substantial effect on the capitalization side. And that's a combination of two things. One is that we have reduced the cost base and the R&D spend. So that's one effect. And the other one is actually that during the fourth quarter, the capitalization rate was actually on the low side. That has... we had a capitalization rate of around 50%, which is below the normal trend of around 75%. So that has, I shouldn't say have a negative effect of 5 million, but that was actually down the line effect during the quarter. And I think this is quite important to see that during the quarter, despite a sharp decline on the top line, we actually managed to deliver very strong underlying cash flow. And that's related to two things. One is that we have adjusted the underlying cost base, which has actually a positive impact, of course, but also that we have focusing on networking capital and to really monitor and have a strict focus on all the components in the networking capital. So we saw the effects during the quarter. And that has also lead to a reduction in the net debt of close to 50 million actually in reduction in the net debt. So all in all, a stable and quite strong cash flow given the circumstances. Yes.

so with the basis of what we just have discussed and the history and especially in in the market conditions and that we are shifting and our our offering into the market as well as the market demands are shifting more towards led the Board of Profot has decided to update the financial targets. And the targets will be to deliver a long-term organic growth that exceeds 5% per year. And this is driven by new technology and new customer segments. At the same time, the company shall deliver a 20% EBIT margin. Our dividend target remains the same as previously. And maybe you can talk about that.