Trelleborg AB (publ)

Thank you and welcome to all of you to our let's say Q4 call of 2025. Peter Nilsson speaking and joined on the call also by Fredrik Nilsson our CFO and also supporting us here in the call is also Kristoffer Sjögren our Head of Investor Relations. As usual we're going to use the slide deck which has been on our webpage for some time now for some hours. and use this as guiding us through and as usual I kick off by some overall comments and commenting for our business areas and sustainability before turning over to Fredrik to guide us through the figures and then summing up with the summary and then ending up with the Q&A session. So once again back to the slide deck turning to page two the agenda highlights, starting and then business areas, financials, summary outlook and Q&A. Quickly turning to page three. We see, let's say, continued margin improvement in the quarter and we can say the quarter overall is actually somewhat better than it looks when you're looking at the figures. And I'll get back to that and commenting on that as we move along. Sales in the quarter, slim organic sales growth, slightly shy of our expectations, but it doesn't really mean that the business actually was worse. It's actually a slide in a few project deliveries in industrial solutions, which is pushing down the organic sales somewhat, but that's going to come back. I'm going to comment on that later as well. M&A adding 3%, and then, of course, like... most companies reporting Swedish Krona so a fairly heavy wind against us and from currency which is pushing down the report to say since Swedish Krona by nine percent EBITDA well managed we are delivering a record high margin in the quarter 18.4 which is best ever for us for Q4 let's say result of good control let's say a good mix and good overall cost control and good overall price control so I'm fairly happy with the margin in the quarter and also here of course we have a substantial currency translation effect of minus 140 which fully explains the absolute figure deviation compared to a year ago. We have items affecting comparability, 176, higher than last year, but in line with guidance. Cash flow, very strong, strong ending of the quarter in terms of cash, which we also see as a quality item for overall. We managed to cash good, which is both in terms of CapEx, working capital, So good delivery of cash, which of course is something we are happy with. Share buybacks continue, same pace as before, roughly half a billion a quarter. And on top of that, the board is also proposing the increase of the dividend from 750 to 8 kronas, which is going to be confirmed at the upcoming AGM in April. And you also know the acquisition here happening just after the ending of Q4, we're buying a Smaller, but important business for us in Austria, which is focusing actually to improve our efficiency and technology in manufacturing more than adding kind of external sales. But that is also something we're going to create some foundation for improved efficiency as we move along both. in the ceiling solutions as well as in medical solutions. So this is, let's say, the overall headlines. So turning to the page, next page, page four, commenting organic sales. And here is the one that actually looks, it is slightly better than it looks. I mean, Europe continuing. I mean, we've seen let's say, improvement in organic sales throughout the year, starting with a fairly solid minus in Q1 and then step by step in moving. And then we are up to plus four organically in Europe in the quarter. America's continuing in a good way, in a way, on a solid positive. And then we have Asia and the rest of the world turning negative. But I mean, the explanation is here, which is linked also to industrial solutions. It's actually a result of lower produce deliveries in a few countries here some if I may say so some odd countries like Taiwan Malaysia with Australia orders Morocco which is pushing it down while we continue to deliver a solid organic positive growth in the main market China and India so overall it's actually a better development than the let's say reported figure here minus four shows turning to the next page back to the agenda and quickly turning to page six and commenting on the business areas, industrial solutions, I've already been touching on that for a few times here, lower project sales and that is not really a result of lower order intake, I mean we have a good order intake, we continue to build the order book but there's been a few bigger projects which has been delayed And it's not really delayed causing by problems. It's more that some of this produce related to LNG and temporary also to construction, tunnel seals and stuff like that, the produce has been a bit delayed. It's actually full in the pipeline there and all the books for us and for the market is delayed. good but but nevertheless in in the quarter we impacted and i mean already comment on that we do not expect that to really bounce back already in q1 we will see it q4 and q2 next year and onwards what we're going to see so we are not concerned about the full year of 26 but it will be a little bit soft ending a little bit soft soft start of 26. But overall, once again, I want to say on this, lower project deliveries is actually deliveries, it's not order intake. Order intake is still strong, and we continue to build order book in this segment. Continuing to see, as I've already said, it's what we call diversified industrials. We're exposed to a variety of segments here and also within construction. we see kind of the more, say, window-related, if I may say, windows and facade sales, which is still a little bit depressed, while other segments in construction, like water infrastructure, is actually performing better. So there is, let's say, a mix within this, but overall, once again, positive, actually, in this area, and all of the business area is being cooled down by these kind of lower sales, lower deliveries in the quarter related to the project-related part of the business area. Automotive stable, good before small aerospace sales in industrial solutions, but that's developing nicely in the quarter. And we see actually a small decrease in EBITDA, which is fully let's say, explained by negative currency translation rate effects, because overall the margin is improving. We continue to invest in structural improvement here. We get the more efficiency in the structure. And then we have a slight, let's say, sales mix negative as well. Sorry, sales mix positive in the quarter, which is also pushing it up a little bit. But overall, better than it looks. That is kind of the overall situation. message that we want to send in relation to industrial solutions. We also note in industrial solutions there's also been quite a lot of acquisitions throughout the year and they are being integrated in a successful way and we see kind of also improvements as these businesses are getting even more, let's say, included in our daily operations. So moving then to the next page, page seven, and comments on medical solutions organic sales growth margins up and if you say a slight negative let's say development within teas within industrial solutions we say medical was slightly better than we expected by some extra orders in the quarter from some of our key customers and which then pushed organic sales up to plus five solid sales growth in Europe and Asia while North America still we call it sluggish which is still a little bit up and down it is a little bit volatile more volatile than we kind of should be our customers a little bit ordering in a let's say uneven way so this is something that we continue to monitor overall, still positive in MedTech, but once again, good development in Europe while still North America can be improved. Life science, although small in the business area, but continue to deliver strong growth and continue to look very positive. And also here we have EBIT A down, but also fully explained by the exchange rate effects. As you see, the margin is actually up year on year. supported by these higher volumes, but also in this area we are initiating some efficiency improvement. We have some restructuring within the business area which is going to improve the overall efficiency and we see the first improvements in this quarter. We also know with great satisfaction that we now have a factory in Costa Rica up and running, although at very small volumes to start with, but that is kind of offering new opportunities for us to both on the local market in Costa Rica, but also as a very efficient facility able to support our overall business in North America. So overall good development in medical solutions and definitely moving in the right direction. Then turning to page eight, ceiling solutions, solid organic growth. We see an improvement that we see here and we have seen also even though we have a That's a solid organic improvement. We continue to be loadable. We continue to see a good demand going forward and also here adding M&A to improve sales even further. And we see that actually industrial segments all over the world is improving. Automotive segment is down, mainly in Europe and somewhat sluggish here as well. So sometimes varying also in other areas and especially we continue to be be hurt a little bit in the aftermarket of automotive when he had this as a break related businesses which is still challenged a little bit and that is where we are also which is driving a little bit a negative mix actually if you look at the overall and which explains a little bit why we are not getting kind of the add-ons here by the higher volumes to push up the margin Aerospace continue to develop very well. Good order intake, order intake well above sales and continue to build a good order book. Also here, of course, the supply chain is fully loaded. And I mean, although the ambitions for Boeing Airbus is high, we don't expect them really to deliver as they are guiding. But nevertheless, we continue to see a very good development within aerospace. EBITDA a little bit up, margin a little bit up and then also here we have also of course like everywhere else a substantial negative lesser currency impact and we also note I mean we are of course as you know aiming for an improvement here in the margin and we are very certain that it's going to happen but in this quarter we are slightly hurt with these acquired businesses also here which is coming in with a slightly lower margin and also as I already mentioned a slight thin let's say also sales mix negative effect on the margin so overall good development and ceiling solutions moving in the right direction and the markets are kind of supporting us going forward here as well Turning to page nine a few comments on sustainability we continue to improve and we're getting to a level where yeah almost as far as we can go in this we've done a good job in this in many for many years, continue to improve year on year. 28% down in CO2. And looking at the next page, where we talk also share of renewable and fossil-free electricity, we're actually approaching 100% here, up at 98. And I mean, as you know, you cannot really improve a lot from this level. So this is more a challenge to maintain on this level. So good development in CO2 and good development in renewable and fossil-free electricity, which we are very satisfied with. So with that, turning to page 8, agenda, and then turning over to Fredrik on the financials. Turning to page 12, I guess, Fredrik, and then your turn.

Thank you so much, Peter. Let's start looking into the sales development. Report net sales decreased by 5% and amounted to 8,380,000,000 in the quarter. We have negative translation effects by 9% in the quarter. As Peter mentioned, we had an organic sales growth of 1%. And then we saw both ceiling solution, medical solution growing 5% organically, while industrial solution decreased by 3%. Structural changes added 3% growth of sales in the quarter. Moving on to page 13, showing more The historical sales growth over some quarters. And if you look at the fourth quarter, we achieved 4% sales growth at constant FX. Moving on to page 14, showing the quarter sales and the rolling 12 months. Looking for the full year of 2025, we have a sales amounting to 34.7 billion, which was flat versus last year. Looking for the full year, we have an organic sales growth of 1%. Structural changes added 5, which was then offset by negative translation effects of 6%. Moving on to page 15, looking at the EBITDA. And looking at the EBITDA excluding items affecting comparability, down 3% to 1,542,000. In the quarter, we have 140 million in negative translation effects. So if we look at EBITDA at fixed FX, it was up 6%. And then on the margin side, up from 18.1 to 18.4. And that was the highest margin for a fourth quarter. Moving on to page 16, looking at the full year, we saw an increase by 2%. and got an EBIT A for the full year of 6,286,000,000. And here we also have a substantial negative FX impact of 329 million for the full year. And looking at the margin for the full year of 2025, we have 18.3, which was the highest to date for a full year. Moving on to page 17, looking at some details into the income statement we have items affecting comparability minus 176 million in the quarter then we have 222 million that were related to restructuring and then we have a positive effect of 46 million which was revaluation of an additional purchase payment recorded earlier as the liability financial net minus 111 million in the quarter slightly higher than last year but that is mainly due to a higher debt compared to Q4 last year tax rate for the quarter 25% well in line with communicated guidance for the full year moving on then to earnings per share on page 18 if you look at the earnings per share exclude item 50 comparability up from 4.24 to 4.30, increased by 1%, and that is mainly due to higher profitability in the effect of the ongoing share buyback, which then has been offset by negative translation effects. If we look at fixed FX, earnings per share has been up 10%. Moving on to page 19, looking at the cash flow. As Peter also mentioned, we have a really good cash flow in the fourth quarter, up 3%, giving us a cash flow of 1,726,000,000. And to summarize it on a high level, we have a little bit lower capital expenditure that had a positive impact, and we continued also to generate a positive working capital movement in the quarter. Page 20, cash conversion. up from 89 to 93 on a rolling 12 months basis. And in other words, we continue to deliver a high cash conversion ratio, despite that we have invested on a high level through the year. Moving then on to the gearing and leverage development. We ended the quarter with a net depth of 7 billion, 216 million. We have done share by back of 508 million during the quarter. And looking at the equity ratio, end of the year at 20%. And our net debt in relation to EBITDA was one. In other words, our balance sheet remains very strong. Moving on to page 22, looking at the return on capital employed excluding items of comparability. 12.1 for the fourth quarter and here you can actually see that we are now have a couple of quarters with a sequential improvement from Q2 to Q3 and now also from Q3 to Q4. And then looking into 2026 some guidance for 2026 CapEx 1 billion 450 million for the full year Restructuring cost expectation is 375 million for the full year. Amortization of... Intenuables 650 and underlying tax rate 25%. And by that, I would like to hand back the microphone to Peter.

Great. Next page 24, then agenda, summary, outlook and quickly then to page 27. a quarter organic growth still although slim but where we're able to do good cost control and good sales focus deliver a higher margin and we actually see in the quarter which i started with it's basically underlying slightly better than maybe the report looks from the first first view on it we see an improved demand in the quarter We see that especially TSS and TMS, then medical and sealing is delivering good organic growth in the quarter and we're also with a good order intake. And also actually within industrial solutions, we also have a good order intake. But they have been impacted, what I said, let's say lower product deliveries in the quarter. We have some odd projects last year, same quarter, which we didn't have this quarter. We have, once again, a good order book. And we see we are not kind of concerned about the full year of 26, but it will be a little bit slow start also in 26, as we see it today within industrial solutions. But overall, once again, the message is that we see an improved demand in more or less all areas and continue to see a modern improvement. We are step by step pushing up the margin and as the Volumes will kick in here during 26. We do expect a continued margin improvement if you look at the full year. If we now get the volumes as we see in the order books at the moment, we have substantial as a lot of other companies and adverse currency impact as we're reporting in the Swedish Kronos. Nothing strange with this, but it's something that we cannot really influence short term. And we also note that we continue to do share buybacks at the level of roughly half a billion a quarter. So this is kind of the overall message for us from Q4 2025. And if you're looking at the outlook in page 26, we guide for kind of a similar demand in the first quarter. of 26 underlying actually we do expect continued good order intake but we continue the deliveries in industrial solutions to be somewhat muted which is then let's say bringing us up to that it doesn't mean that it could be still a few percentage points up but I mean it means that if we still believe let's say the organic growth in Q1 to be low single digit And so that is kind of the message we want to send. And then of course we all know that it is still somewhat turbulent geopolitical situation which could influence this if something happens. But I mean we cannot really prepare for that. But we are of course aware that there is kind of a little bit higher uncertainty than usual in the global arena at the moment. Turning to page 27, agenda Q&A, and then quickly turning to page 28 and opening up for questions.