Ratos AB (publ)

Good morning everyone and thank you for listening in to the Ratos Q4 call. I will start by giving some highlights for the full year of 2025, an important and eventful year for Ratos. A year of change with several strategic milestones that created a more focused and streamlined company. I'll give you some examples. The sale of Airtim, a supplier of technical ventilation solutions in the beginning of the year. The listing of our construction company Sentia on the Oslo Stock Exchange in June. Since then, the share price of Sentia increased more than 30%. And last Friday, Sentia proposed a dividend of 5.5 Norwegian krona, corresponding to a dividend percent of 96%. Diab has continued its focus towards more advanced materials and applications into new industry segments such as subsea and defense. And we finalized the year with a major add-on acquisition in HL Display of the German player Deinser, the largest acquisition in HL Display's history. 2025 also came with challenges that required operational improvement projects in some of our companies, but also made a restriction in plantation that resulted in a reduced and more optimized footprint that is better set up for the future. Plantation is a different structure compared to when we acquired it in 2016. And we did the required balance sheet adjustments in the fourth quarter to reflect the new structure. Today, we also announced that we have divested Exbin Group to Barnet service, Norway's leading railway contractor. This is an important step in the continued streamlining of Ratos to strengthen our focus on long-term value creation. We're pleased that Exbin Group will be backed by Banu Service, a strong and committed owner, as the company continues its journey. And Anna will come back to the specifics on the financial impact. In terms of the overall market situation, macroeconomic and geopolitical uncertainty had a negative impact on the overall demand situation in most of the Ratos segments in 2025. But if we now turn to the isolated Q4, we started to see a gradual improvement in net sales, mainly driven by increased demand in the defense and energy sectors. We also want some major orders supporting future net sales. In Q4, HL Display secured orders in the UK and North America of around 500 million Swedish krona, to be delivered over two to three years. After the end of the quarter, Abel was awarded a five year framework agreement with an estimated value of approximately 20 billion Norwegian krona. And Precisinfra secured a five year contract worth about 900 million Norwegian krona. Overall, we expect the uncertain macroeconomic and geopolitical situation to continue to impact our companies and their markets. And if we now move on to the net sales development in Q4 and for the full year. In Q4, we saw an organic growth of 3% for continuing operations and two out of three business areas reported growth. Industry came in at plus 2% and construction and services at plus 9% and consumer at minus 4%. So all in all, for the full year, net sales came in at minus 1%. In Q4, our adjusted EBITDA increased by 57% compared to last year. EBITDA was positively impacted by lower losses in plantagen and the contribution from the minority holding incentive. DIAV delivered robust sales growth with improved profitability. The EBITDA market has improved in all segments except industrial services, where the general market uncertainty remained, with longer decision-making processes having a negative impact on our consulting activities. The full-year adjusted EBITDA increased by 17%. The 2025 earnings per share, or EPS, increased by 19% from 2.36 to 2.8 Swedish krona, supported by improved earnings and lower effective tax rates. The Ratos board of directors proposed a dividend for 2025 of 1.4 Swedish krona per share, corresponding to 50% of profit of the tax. This is in the upper span of our dividend payout ratio of 30 to 50%. And if we now turn to the development by business area in Q4. For industry, organic net sales grew by 2% and adjusted EBITDA declined with minus 17%. Within industry, product solutions had a positive organic growth of 6%, with EBITDA growth of 23%. GEA benefited from the strong demand across several industries and geographies. In industrial services, we saw net sales declining with minus 1%, with a 44% decrease in EBITDA year over year. This came from weaker performance among the consultancy companies related to overall slower market, especially in the automotive segment. The ongoing automation projects in Speed Group also put pressure on the profitability in the quarter. And for construction and services, we saw that Precise Info reported net sales growth in the quarter, But the profitability was impacted by the product mix and the timing of projects. We also saw a worsening market for rail electrification in Finland, and it continued to impact the Exbin Group numbers. Adjusted EBITDA increased with 39%, and if you adjust for the Centia minority contribution, adjusted EBITDA increased with 12%. At yesterday, EBITDA more than excluding minority holdings came in at 9.8%. If we now turn to consumer, we saw organic net sales growth of minus 4% and plantation was declining with minus 6% versus last year's Q4. However, if you do like for likes comparison, sales was slightly positive versus last year, and EBITDA increased as a result of the executed reconstruction. COVID-19's profitability was negatively impacted by the lower volumes, partly offset by cost saving initiatives. Adjusted EBITDA came in at minus 106 million, an improvement from last year's minus 209 million Swedish krona. And with that, I would like to hand it over to Anna for the financial section.

Thank you, Gustav. So let us dig through some details of net sales and adjusted EBITDA. so looking on the left hand side in the bridge of the organic components we saw a really good contribution from this three percent organic growth uh ebit margin accretion of 70 basis points uh on the m a side uh we didn't have a lot of activities uh of executed m a for the quarter hence uh zero or very limited contribution from that Hence, we were really happy to see the closure of signing of Geinser within HL display. Moving along in the bridge, we saw a really good contribution from reconstructing activities implantation, for which the closed stores contributed 130 basis points on our EBIT margin. fx continue to impact us negatively this stems predominantly of sec strengthening towards norwegian krona our associated company sentia contributed significantly 120 basis points and we should remind ourselves that the same period last year so q4 2024 we did not have this minority share in sentia so this is not a bridge effect it's a full effect Last but not least, our associated company, Able, contributed slightly negatively, so margin dilution of 30 basis points. This has to do of project mix, so it's a little bit lower profitability than we saw same period last year. If we would have looked at the full year bridge, ABLE would have been a positive contribution. And ABLE actually leaves this 2025 with record high order book and a record year behind them. So moving into next page, this was one of the important happenings during quarter four. We have conducted a reconstruction in Plantagen, which meant that we do have a vastly different footprint. We've gone from having three markets in Nordic countries to two markets. We have closed down one third of our stores. And historically, Plantagen could generate revenues of 5 billion SEK and had EBITDA margins of above 15%. This is vastly different now. So the 2025 year ended at 3 billion SEC in sales. And what we were happy about is that the full year we reported a 5% EBITDA margin. But due to this vastly different structure, we made a conservative estimate here and hence an impairment of goodwill was booked in quarter four. Going forward, however, we do feel that Tantashen is a more resilient company. And also, it was good to see that we have broken this negative sales trend in Q4 and posted slight positive growth. So going forward, the focus will be of delivering profitable growth. And we are really happy of a new CEO joining as of April. Another important happening was that we signed a contract to sell Expin Group. This is one of the major overhauls that has been done during 2025, where we exited direct exposure towards construction industries. but also that we've decided that we are not the best long-term owner for the exping group and hence we are really happy to see bonus service a reputable and committed owner to support expand continuing journey This has resulted in a negative impact on our reported results of minus 800 million SEC. This is non-cash and that this has been booked in quarter four. We also do expect positive cash flow impact upon closing. Also, what is important just to remember that we do have a couple of different ongoing disputes. as we did discover some accounting differences, accounting deficiencies post our acquisitions back in 2022. This of course would constitute an upside going forward. Turning our attention to networking capital, a big impact here is our disposal of Centia, as Centia normally comes with highly negative networking capital. So we should focus on the gray bars. And comparing this quarter with same period last year, we saw that the relative networking capital came down, even though we saw a slight uptick in absolute terms. This is solely explained by some timing issues in accounts payable in construction and services business area. And looking at our cash flow, Q4 is normally a strong cash conversion quarter. So it is this time around where we almost hit 200% cash conversion mark. But also here we did see impact from the structural changes, especially Sentia again. and some impact from Plantage and from last year. But if we look at on the right hand side and focus on the underlying development, we did see a solid increase of 67% up. The only business area not contributing versus last year was construction and services. And again, has to do with timing of accounts payable. Looking at our leverage, we peaked at Q2 2025, had also to do with a Sentia disposal as Sentia normally has a very strong cash position. Now we are back at pre-Centia disposal level, so very similar to last year at adjusted 1.4 times in net debt to EBITDA. And just as a reminder, our share in Centia is not included in these numbers. And just looking at the share price from yesterday, this amounts to 2.6 billion SEC. And last but not least, we would just like to conclude on our previous financial targets, which were adopted 2020-2021 and have been now concluded. So EBITDA in absolute terms, we said that we would take that up to 3 billion SEK. Looking where we landed, and if we adjust for Sentia and Aire team, adding that back, 2025 is at 2.7 billion versus the three in target. Hence, we did not achieve that. And looking at, so we should have grown EBITDA by 15%. Our actual was 13. So close, but not there. Looking at our leverage target, in the graph, you can see that our average is 1.2 times, whilst the targeted range is 1.5 to 2.5. We can say that we have seen a lot more disposals in the past three years than acquisitions. Hence, the leverage is slightly lower than what the financial target would indicate. And then the third one was the dividend payout ratio. As Gustav said, for this year, the board has proposed 50% payout ratio. But if we look at the past number of years, the average has been 52. So now I hand back to Gustav for some final remarks.

Thank you, Anna. And I would just like to briefly summarize the year and the quarter. So 2025 was a year of transformation with several strategic milestones and operational initiatives towards a more focused Rotos. In Q4, we started to see gradual improvement. We returned to net sales growth. We improved the EBITDA. We won large orders. and we also did a very important add-on acquisition in HL display. Going forward, we expect continued macroeconomic and geopolitical uncertainty to continue, but the Rotos team ends 2025 with a measured optimist going into 2026. We would also like to invite you to our Capital Markets Day on March the 19th. It starts at one o'clock here in Stockholm. So if you're interested to participate, please send an email to the address here on the slide for registration. I will present our strategy going forward and Anna will present our new financial targets. But there will also be presentations by our companies and CEOs from Diab, HL Display, Nitech and Precise Infra, some of our very important platform companies. So welcome. And with that, I would like to open up for questions.