Thank you, Ras. Welcome, everybody, to Alligo Year-End Report 2025, and thank you for dialling in on a Friday the 13th.

Sometimes I reflect on how time flies, especially when we are at the quarterly reports, because it feels like we are having more than one every quarter. This time, I was just reminded that this is my 50th quarterly report, so that is really time to reflect on how time flies.

Today, presenters, as always, is besides myself, CEO, it is also Irene Svensson Bellander, our CFO, but also now Deputy CEO. Congratulations, Irene.

Thank you.

That's a sign of the brilliant job you're doing, but it's also a little sign on that we will stick to the path even after my departure. That's a good signal.

The agenda, as it always is, just some highlights, we're not going to go through the report in its entirety, just some highlights. We normally bring at least one theme, but today it's not only one thing and it's not two themes, it's actually three themes, one slide each on the renewed efforts in Tools Finland, own brands, that is 1832, and one slide on smart services.

Hope you will enjoy that. We normally fly in with a couple of slides on Alligo Group: a little shy of 10 billion SEK in turnover, Sweden dependent volume-wise, even more on profit-wise, as you know; 2,500 employees, somewhere around 240 stores.

We acquire companies, get stores, and we merge some stores, and then we reduce stores, but as it is today, some 240 stores. We focus on own brands, as 18% of our sales as it is now, and we focus very much on small and medium-sized customers.

This slide is a bit busy, and it's not very easy to overlook, but we are a little bit proud of it because it illustrates to the far right how we managed to run non-integrated businesses at the side of the integrated business. We've built up a number of groups of businesses where we see growth potential within competence areas and product areas where we have in the integrated businesses, it's not totally new businesses.

It's areas that we do have in integrated business, but we'd like to focus on them a little bit more and keep the specialist competence that exist in those. One is the product media grouping, they are now 17 companies of around a little plus 600 million SEK in turnover.

Then the welding businesses, six companies with around 400 million in turnover. Then we have battery with Batterilagret, last year's acquisition, 280 million.

Then we have others, and it's a bit of a pity to have that headline of a number of very nice companies to feel like to be various, but HTP is one of them, working with the defense sector in Finland, developing very nicely. Then to the left, you have the integrated businesses, as Sweden, it's called Swedol, and Norway and Finland, it's called Tools.

That business is super-integrated logistically, IT, ERP, support functions. That it's really, really a true, true Nordic organization, integrated business.

But 20% of the group today is the other, the separate businesses that are not integrated. Acquisitions, four acquisitions last year, a little less than the year before, but more stores.

Batterilagret has some 26, 27 stores, so that added a lot of stores. The segments were to battery and product media.

We acquired some annual revenue of around 378 million and 115 employees, I think. Batterilagret had some 90 people, they are the biggest chunk of the acquired businesses.

This is something nice. You saw that earlier perhaps this week in a press release: we were awarded EcoVadis Platinum.

We are now top 1% of 50,000 companies around the world. Especially in our industry, we are in a real, real top position, and it's very important to build a profitable and professional organization going forward for defense contracts and for also the public sector and larger customers.

It's very, very important that you take sustainability seriously, and this is a signal and a sign that we have been doing that in a very good way. We are so incredibly proud to be awarded a platinum level for EcoVadis.

That's very important of many aspects. Highlights Q4: It's blue skies, but some clouds.

I don't know what it should really signal. It's a challenging market still.

It has not changed dramatically. We've seen that and said that many times that we hear signals and we see signals, and we see some early signals of improving market conditions, but it's not rising up to the sky yet.

Recovery in Sweden. Norway ended the year with a little bit of surprisingly weaker oil and gas sector.

We haven't really gotten the arms around it why. In the Finnish market, the recovery continues.

The market sentiments are stable, same behavior as before during the year. The customers are cautious, but we see good signs going forward.

We as management have been focusing on more or less the same things as we always are focusing, very much on driving sales. That is what is been needed to be added to this case when we now built this platform, driving sales.

We continuously work with cost reductions, try to add acquisitions. I think we've done it quite responsibly, even in a slower market, we have dared to invest in growth, and we have grown even in tough conditions, even if it hasn't been organic growth, it's been acquired growth.

We are working with reducing inventory levels. We have much more to do.

As we merged two reasonably different companies into one and trying to agree on one assortment to our customers, and we have more to do on the inventory levels. Price adjustments, the latest price adjustments went out beginning of February, and I think we've got a pretty good process of doing that in a professional way.

Good delivery capacity, and macroeconomic factors, it's still uncertainty, but for once, actually, we are a little bit benefiting from it. The trade tariffs freed up capacity in Far East, which is beneficial for us, we can get the minimum order quantities down, and also the strengthening of the SEK, or that the dollar has become cheaper, is also actually good for us.

For once, there are some macroeconomic factors that it's in our favor. In brief, revenue growth, 2.7%, and that we normally do, the top line, we grow.

For the first time in 9, 10 quarters, we actually can show organic growth. It's not gigantic, but we are so happy that we can at least say that we are back on organic growth track.

Cash flow good, 100 million up compared to last year. Adjusted EBITA margin of 9.0%, we are reasonably happy with that.

The gross margin continues up. Starting from a very healthy level of 41.1, we now this quarter at 41.8.

As this is not a margin-maximizing case. I'd rather trade some tenth of the gross margin to get growth, but we still believe that we do a decent job in knowing which contract, which customers to work with, and keep the gross margins up.

We need some top line to this, then it will be brilliant. This slide I showed on a internal meeting, we had 600 salespersons in Alligator, the Swedish sales organization, and I wanted a picture that illustrated the sunrise, but this picture was the one I got.

It's a dark, total pitch-black. It's our business that shines up the sky.

Sales, high focus in all countries, has been for a long time, it is still, and the achievements we have and the organic growth we have is the result of extremely hard work of our dedicated sales organization. We run these growth initiatives like it was a private equity case.

Increased share of own brands, we're focusing a lot on, but we have a little bit to do on sales efficiency, we think, still, how to put together the customer portfolios and so forth, how to run that more professionally. We have some things to do there, we think.

Acquisitions, we are happy that we could make the first acquisition in product media in Norway with Respond. We got a good footprint in Norway now, 81 million SEK in turnover.

Now we can acquire businesses to that platform, so that journey will continue in Norway. Operations-wise, except for a lot of good financial development in the quarter, we also did a refinancing.

So 3+1+1 is in place, increased headroom, it gives us good financial stability and also headroom to do acquisitions and so forth. Margin improvement, as I said, continuous development of sales of assortment processes, and Tools in Finland we'll come back to, and always super-cost-conscious in whatever we do.

The three themes I promised you. If we take the first one, Tools Finland, we started that during 2025, and it's the same activities as we identified then.

It's no new activities, it's the same activities, but we really, really need to ensure that they are being carried out. To be clear, it's the same evaluation of which shops are profitable or not, which customers are profitable or not, and how do we run the business.

We have a new country manager in place, a person I've known for 17 years, I brought him with me from my previous job to Swedol, and his name is Håkan, and he will succeed. I have no doubt about that.

He knows how to run a sales organization. Finland, it's a tricky market, there are very few companies who are really profitable.

We are in a decent place already as it is, but we are not happy with our profitability level and the structure of the business. We will drive even harder towards small and medium-sized customers, getting the private label share up, and look over our structure.

That project is already well in motion. Finland, we will continue to report on the progress, but we are doing what we said the whole time.

Two more areas starting from the far right and ending at the far left. If you take own brands, just a quick on 1832, it's now being launched, it's being sold, and has its part in our product portfolio.

A number of other things that we perhaps could have predicted and perhaps not is that if you have a customer complaining saying, "The price level has come up on the Gesto," and now when we can offer 1832, the customer many times choose to stick with Gesto but they had the option to take 1832. So 1832 plays different roles in our product portfolio.

It is a lower price, high-quality product, but it's also an offer for the customers that at the end choose to actually stick with Gesto, Björnkläder, and Univon, which are our higher-positioned brands. So 1832, we are very happy that we launched that so quickly.

It plays an important role today, and it will play an even more important role going forward. Then Smart Service, you've heard about that before, and we think we have the best solution in the business, and we are reasonably successful in implementing that.

We have 1,300 of these solutions in different customers in the Nordics. Some of them are Sandvik, Hitachi, Videre.

Hitachi, I will visit in a couple of weeks. We have others.

I don't know if we're allowed to talk about them. One is producing the world's fastest car.

I'm going to visit them in a couple of weeks, where we are well integrated into their production facility with our Smart Service. We have identified, invested in, and are now launching areas where we take away the product price out of the equation.

We build ourselves much tighter to the customer, these are really, really clever solutions which brings great benefits for the customers. Financially, our Deputy CEO.

Thank you. As Clein mentioned, the Q4 result exceeded last year's, and cash flow improved, leading to reduced leverage.

Additionally, stabilized demand in Sweden contributed to organic growth. As you can see in the income statement, revenue increased by 2.7% in the quarter, driven by a 4.2% growth from acquisitions and organic growth of 0.5%, but this was counteracted by adverse FX effects.

We had organic growth in both Sweden and Finland, while the demand was weaker across all customer segments in Norway. Organic growth in Sweden was driven by project orders for the defense industry, while recovery continued among larger industrial customers in Finland.

EBITA reached 249 million, representing an improvement of 25 million or 20%. The increase was due to improved results in Sweden and Norway, driven by stronger gross margins, cost reductions, and contributions from acquired businesses.

The improved gross margin is due to positive customer mix effects, better sales and assortment management, and to some extent, reduced purchase costs in US dollars. The impact from stronger margins, cost reductions, and contributions from acquired businesses is illustrated in the EBITA bridge.

As you can see, the cost reductions have offset the annual increases and the effect of inflation on other expenses. This is a busy slide, but as you can see, Sweden has the highest share of SMEs and own brands, followed by Norway, while Finland has the lowest.

This directly correlates with profitability in each market: the higher the shares, the greater the profitability. The lower gray boxes show the share of own brands in the integrated business.

As you can see, this share has increased in Sweden and Norway, which is one reason for the improved gross margin in those countries. Moving on to some highlights of each market's development in Q4.

As Clein said, the Swedish market remained weak. However, project orders for the defense industry increased, contributing to an organic growth of 1.8%.

Additionally, there was acquisition-driven growth of 6.3%, and the improvement in EBITA is due to higher volumes, higher gross margin, cost savings, and contributions from acquired businesses. The market in Norway was weak across all customer segments, and especially in the oil and gas segment, which slowed down in the second half of 2025.

Despite lower volumes, EBITA improved due to recent cost reductions, higher gross margin, and contributions from recent acquisitions. There was a continued sales recovery in Finland among larger industrial customers.

Despite this, results was weaker due to somewhat lower gross margins, investments in increased production capacity for Patria, and a review of the store network. As Clein mentioned, the new Finnish management places even greater emphasis on ensuring the execution of ongoing activities, while also reviewing the organizational structure.

Let me turn to cash flow. The fourth quarter is seasonally the strongest quarter from a cash flow perspective.

Operating cash flow improved from last year, driven by higher EBITDA and lower inventory levels for external brands, while investments in our own brands partially offset this progress. Even if the capital efficiency project contributed to positive effects in Q4, there is still more work to do.

We aim to reduce net working capital as percentage of sales from the current 28% to 24%, which was the level in 2022. Investing activities in the quarter primarily relate to the acquisition of the product media in Norway, and the organic investments were slightly higher than last year in the quarter, but still lower for the full year, and the CapEx to depreciation ratio was 0.8.

The ratio of net debt to EBITDA decreased as expected from Q3, ending at 2.5. The ratio is slightly higher than last year due to higher net debt following the acquisition of Batterilagret in 2025, our largest acquisition to date.

Our covenants related to interest coverage and equity-asset ratio, these are fulfilled at the end of period, and there is good headroom before reaching the thresholds. Furthermore, we have refinanced the business after year-end and increased the sustainability-linked facility by 500 million to 3.1 billion SEK.

The maturity is three years with an option to extend it by another 1+1 year. In summary, we maintain a solid financial position and will continue to invest in organic growth and take advantage of M&A opportunities.

Due to weak markets, organic growth and EBITDA margins didn't reach target levels. However, a strong focus on maintaining the gross margin, adjusting the cost structure, and consistently acquiring well-run businesses has partially compensated for weaker volumes.

As a result, we ended the year with an EBITDA margin of 6.4%, the same as in 2024, with profitability improving in the second half of 2025. The high acquisition pace has increased leverage, but we still have a solid financial position, and leverage remains within the financial target range.

When it comes to dividend, the Board of Directors is proposing a dividend of SEK 2.20 per share, representing 41% of net result, up from 36% last year. Throughout the year, we have also made progress in our sustainability efforts and improved on each target compared to last year.

For instance, 83% now meet our supplier standards, up from 77% last year. Handing it over to Clein for summary and outlook.

Thank you, Irene. In hyper-speed into summary and outlook.

Q4 and full year, we are happy that we in the Q3 could change the trend and start improving the results, and in Q4 start actually to show organic growth. There was two two quarters in a row with a trend shift.

We have high sales activities in all markets, that I can promise you. It's also a bit frustrating.

We have done more than ever, worked harder than ever, but in the market conditions which it has been, getting so little in return is extremely frustrating. It's no alternative than to keep on pushing and have this activity level so high.

We have done whatever we can to adjust to the market conditions, and that you know we've been quite early off doing that with cost adjustments, and maintaining the gross margin. It was even strengthened, and focus on acquisitions, even if the market has not been super-strong.

As Irene said, increased dividend from 2 SEK per share to 2.20. I think that's also a sign that we feel confident about the future.

Outlook 2026: As we've said quite a while, we are in a very, very good place. It feels stable.

All the structural grips are taken. We have some fine-tuning to do, especially on the stock, the warehouse levels, inventory levels.

We can fine-tune a bit, and we can keep on pushing for sales. There's no any structural grips needed to take as of today.

A very strong financial position, as Irene said. Even the refinancing in place sounds and feels very, very good.

The focus areas for 2026 is to continue push for sales, improve marketing, do responsible acquisitions, and now show you guys that we can really turn around the Tools business in Finland because now it's personal. We are going to do that, rest assured.

That was all from us now. Ras, handing it back to you.

Hi, Clein and Irene. This is Henrik at ABG.

I was just wondering if you could first of all maybe in any way quantify the gross margin tailwind you expect in the coming quarters given the current USD exchange rates.

It's also yeah it's it's perhaps one of the more difficult questions to to to answer. Depends a little bit on what what we will sell.

If it's a high degree of workwear, of course it's more beneficial because then you get the rotation on the on the inventory quicker, and we can start buying more. I just checked when when we started the the call, it was 8.93.

Of course if the dollar is on that level going forward, that is of course highly beneficial for us. We saw effects during last quarter or

yeah,

during 2025, and they will increase throughout the year. To give you a a specific number, it's it's difficult.

I'd also like to use some better position from that perspective to perhaps drive sales more. We are on a very decent level contribution margin-wise, gross margin-wise.

The dollar helps us a lot to bring down the the inventory levels, and will also give us a competitive advantage also to to use that in sales efforts in a more in a more of, yeah, tougher way. It's difficult to give you, I don't know, Irene, if you can give

It's

We tried to calculate it back and forth, and we had difficulties giving you a Everything is moving, so...

Of course, the yearly purchases is rather high. It's about $80 million, of course, it will have a positive impact.

It's a lot of factors that affect the gross margin, it's difficult to say.

We used to say, a 10 10 million, a 10% better dollar would give 80-90 million better result, everything else the same. It should have a positive effect to the result, but it also depends a little bit how the product mix is and the customer mix, of course.

Very good. Maybe one more from me.

You mentioned in Finland two larger customer relationships which are ending. Could you give us any sense of how large these customers are for you as a group and how quickly you will be able to adjust cost to this?

Those two accounts together are around €10 million. The bigger one is not yet terminated, even if we now is heading in that direction.

As of before Christmas, we already started the cost-reduction activities, it's well under

way.

Finland is quite quick when it comes to adjusting a cost base in relation to people, employment. That process is already well on its way, and will be mitigated quickly.

We will keep relationships with both those customers, but more on the workwear side, where we see better profitability than in the tools side and industrial components side. Around €10 million, we think.

Very good. That's all for me for now.

Thank you.

Thank you.

Yeah. Hi, Clein and Irene.

Hope you can hear me.

Very well.

A couple of questions from my side, then. It's obviously great to see organic growth turning upward again.

I think it was around 10 quarters ago we saw organic growth on the top line. I think perhaps is it possible to maybe give some colors on which customer groups are growing the most right now, and looking ahead, where do you see the biggest potential for 2026 in terms of customer groups?

The customer group we are really focusing are the smaller, medium-sized customers. By saying that, not losing, of course, the large customers.

It's all about the mix. In certain parts of the organization, we have tilted far too much towards large customers.

They are also very important in our group, but we need to increase the share of small and medium-sized customers. That is absolutely the focus going forward.

Keep the large ones happy and develop our business with them, but increase the share of small and medium-sized customers. Looking back, as Irene said, it's also the Q4, we got more normal orders from the defense sector, but also from the Q1 to Q3 last year, we had unusually high orders, being the last budget year for the defense sector.

The comparables were terrible, but that you know very well. The comparables were more reasonable.

Now we are on a level for the defense sector, but we see very good growth potential for the defense sector going forward in all three countries. I think we prove time by time by time that we have a very competitive offer, and we have a long, long history of working with the defense sector.

Besides that, we have our focus sectors as well. We want the industrial sector, where the Smart Service is very important, the recare, the wash and laundry service is very important.

Then we have the construction sector, where we have a segment manager who's running that very much. It's two large sectors, industry and construction, and a little spiced up with increased activities towards the defense sector should bring us in a better position going forward.

Should we view it that the defense sector is the most stable or positive one sector now, and we should expect maybe the construction sector to improve further in 2026 or other segments or sectors they are following it?

The construction sector, we as, I think, all other reporting companies have said the same thing, that it's not much visible yet, but we all predict at least to pick up. Nobody believes it will be in a very near future be on the levels of 2022 and 2023.

That perhaps was unusually high, and we will not see for a while. As long as it picks up the slightest, it will be beneficial for us.

We also have a good opportunity if we run marketing and we run sales the way we have planned to do to actually take market shares, and we know we have from time to time taken market shares in different sectors. To say that of overall is of course too bold and dangerous, but the defense sector is a great potential, and construction should pick up going forward.

Sounds promising. Just regarding the store channel sales which is connected to the small, medium enterprises,

you're

mentioning that is stabilizing, but it still seems a bit slow. How is the footfall in the stores?

Or is it simply that people are still only buying what they absolutely need at the moment?

Unfortunately the latter. We see that it is a behavior which is very well known in when the business is slower, and it's still there that they buy whatever they need.

We talk to a lot of customers, and they confirm, of course. If you used to come into a Swedol shop wanting a pair of new shoes, and you also bought a diesel heating fan, you just buy the shoes these days.

It's not those add-on purchases while you are in our shops, they are on much, much lower level. As you say, they still buy what they need.

That behavior is still there.

Obviously, that holds a great potential for 2026, then, in terms of both growth and margins.

Exactly. Exactly.

Just looking into 2026, at least from my point of view, which I also think is also backed up by some at least weather data here in Sweden, it's been quite cold so far in the start of Q1. I suppose that's not negative for you guys, or can you give us some glimpse on the future

here? No, exactly.

I can connect that to your previous question. If this weather would have appeared in a market condition as they were 2022 and 2023, it would have been much better because then you need to go to a Swedol shop to buy a snow shovel, or a heater, or start batteries.

They do. We sell a lot more of the winter-related products, of course, thanks to the weather, but we don't get the leverage on that sell.

They come in and buy a start battery because they need it. They buy a start battery.

They don't buy new gloves and a new pair of boots at the same time. As you say, of course, the weather we cannot complain about that.

No.

Sounds fair. Just jumping to Finland, then.

It's been tough this quarter in terms of profitability. What's the main reasons behind that drop in profitability, would you say?

Yeah. Some of the decline in profitability could be explained by somewhat weaker margins.

Some could be explained of the fact that we have invested in new production facility for Patria, where we produce a lot of

A components for military vehicles.

Yeah. We have also had some effects when it comes to reducing the square meters within the store network, so that has also had an negative impact on the profitability in the quarter.

As Irene said, the HTP business is a beautiful little diamond in our Finnish business, and it's profitable and has been growing nicely. Since our biggest customer there, Patria, has ordered more and more and more, we have moved to new production facilities, which was done in Q4.

Now going forward, their order book is full, and they are chasing us, "Will you be able to deliver as quickly as we are going to order?" It's been a transition phase that spills over into Q1 before we can ramp up, because which is quite nice to go and visit them, they're actually producing components quite, technically-wise, quite challenging parts, and being implemented into the vehicles, it's not only selling hydraulic hoses or batteries.

They're actually doing assembly, they're very well into the Patria production process. HTP, if they don't perform on the level they did last year, of course that hits the results in Finland.

It will come back, because our customer's order books is full.

Yeah.

Interesting. If I understood it correctly, the underlying margin is probably a bit higher than what we are seeing in this quarter, then, given that you're

Yes.

Yeah. Yeah.

Yeah. Also you mentioned that you have hired a new country manager into that region.

Can you maybe give some more colors on what the specific actions are in that?

It's more execution, and a lot of good things have happened in Finland. We felt we needed to up our game a bit in the actuals, getting things done.

We are planning and planning and planning. We need to now to implement things.

Håkan, I think you met him. We worked together for 17 years, and he is extremely knowledgeable in running and improving sales business.

He's been country manager in Finland some 3-4 years ago. He's been country manager in Sweden, he's been assortment and procurement manager.

I think he's had most positions in the group soon. He's the type of guy you send in when you want to make a long-lasting transition.

He is super motivated, and flies over every Sunday night, and take up the fight. It's a good spirit in the Finnish team.

The new name of the project is Sisu, actually. They want to show that we will dramatically change our development.

With Håkan at the helm, that will happen, I'm very sure of that.

Sounds really promising. Maybe a last question from my side, and it's regarding we saw very strong cash flow, and you see that the balance sheet is down to 2.5 times net debt/EBITDA.

Since you're still with us here, Clein, in Alligo,

and

I guess also that perhaps you're staying through Q1 as well, we don't know that yet, of course, but can we expect any new acquisitions before the new CEO is hired, do you think?

My departure and another one coming in does not change anything. We have the pipeline.

I talk to our M&A team yesterday and said, "Let's push a little bit more." It has to be that the seller is also, because we can be quick, but the seller needs to bring up the data we need to do a proper due diligence process.

We are ready. We have the balance sheet for it, we have the cases for it, and one should come in a near future.

It's not only up to us. We go full speed ahead on whatever we can identify.

Being a very fluffy answer to your quick question.

Understood. With this net debt/EBITDA 2.5 times, you think you will ramp up M&A even further this year versus 2025?

We would say like this: we don't see our balance sheet as any limiting factor. The cash generation we have in the group always, and the headroom we have now, it's not a limiting factor.

We are ramped up and has been ramped up even when it was 3.1. We try to acquire the ones we find.

We are very selective in what we want, and looking at the welding companies we acquired and the product media companies we have bought, we have acted so quickly and picked the best ones. It's fun to see when our competitors now buy the ones we didn't want to go forward with.

If you're quick, then you get a decent price level and you get the ones you want, especially in the welding sector that has been, also in the product media sector, of course. It's fun to see if you act quickly how well it can be done.

Mm.

Sounds like a good strategy. I think that was all my questions for now, congratulations on this trend shift on the organic growth.

Thank you, Emmanuel.

Thank you.

Thanks.

Yes. Good morning, Clein and Irene, and congratulations for being back to organic growth again.

Good to see, so. Also cash flow, I guess, and gross margin, a lot of nice things there and a lot of good color already for a lot of the questions I had.

A couple of detailed ones. Looking at depreciation and IFRS 16, what happened in the quarter?

Yeah. Actually, it was a little bit on a low level, but actually it has been on a higher level the quarters before, it was a little bit of an adjustment for the IFRS 16 to the previous quarter.

You need to look at it on a full-year basis to get the right picture on the level.

Excellent. Full year is if you divide that by four, that's a good quarterly assumption for next year basically.

Exactly, exactly.

Excellent. When you discuss the gross margin improvement of the 70 bps, you talked about the mix effect.

It sounded more like you talked about being customer effect than an assortment effect, just to give you a little more color on that. Is that the SMEs at the end of the day coming back slightly more now or maybe breathing slightly more optimism than the larger ones or?

Generally we are very cautious. Perhaps we discuss in the management team quite often if we are too cautious.

We said let's not go for growth and risk anything of the contribution margin or gross margin. We made jokes yesterday in the board meeting that we for so long have been talking about negative mix effects.

The larger customer is growing more than the smaller customers, and we sold more of the assortments that has been the lower gross margin. Actually now we do have positive mix effects, which is nice to see.

It's difficult to give you a very clear answer, but we look at customer category by customer category and product area by product area, and closely follow the gross margin development. What we're also doing, which is a bit risky and potentially could have costed us, but it hasn't, is that we actually reducing gross prices to increase our competitiveness, and by that also reducing the discounts to the customers.

That is of course a risky thing to do, but we're doing it very baby steps, step-by-step by step, and ensuring that if you take an assortment like start batteries actually this year, bring down the gross prices and the perceived price level is now improved, but you also bring down the discount level, the price of the customer is actually the same. We managed to decrease prices on a lot of assortments and gross prices and kept the margins.

That's something we are very proud of because it's a risky maneuver to do.

It's a big game to be played, no doubt, on that. Looking at the acquisitions and the impact they've had on this year, obviously very good profitability coming out of that segment.

Do you feel that there is any, say, normalization there down towards your corporate target, or do you see that the potential that you continue to find these kind of targets and the targets you already have continue to deliver towards that higher level?

You're touching on something very important if I interpret you the way I think. That is also why we don't integrate certain businesses, because if they're well-run, high profitability level, exactly what you are describing could potentially happen: you integrate them and they start moving in the direction of the integrated business, i.e., lower profitability levels.

That is one element why we'd like to keep them separate. In some cases, don't touch them much.

They develop nicely. Cheer them on and try to find some synergies, but don't do any radical grips.

Don't change what's not broken.

That's good. Looking at Sweden, just to help me bridge the growth you saw there, you report 12% growth.

You said 6% was coming from acquisitions, a little less than two from organic. What was the last 4%?

Yes. It's actually due to increase of internal sales, because when we look at it on a country level, we include internal sales.

Actually that has increased during the quarter because we had some disturbances in Vestby, we actually sourced from Sweden. That is driving some of the growth in the Swedish business in the quarter.

A little bit strange, but that was the way it was in this quarter.

Does that if you look at that on an item on the group level, then that basically just adjusted away?

Yes. Exactly, exactly.

Perfect. One final question from me.

Looking at getting the working capital to sales down to 24% from the current 28%, is that mainly an inventory thing or is there a potential in receivables, payables as well as you see it?

Mainly inventories. The payables, some potential, and we have moved in the right direction.

Receivables is in tough competition with our competitors, so that is a tougher thing to change. Payables, yes, to a certain extent, and inventory levels, yes, to a much higher extent.

Excellent. When you look at inventory, is it more of a question that you have the inventory to be able to drive growth or still have a lot of shelf warmers that you need to sort out, or?

We work closely. Sales and procurement work closely together.

They try to estimate the market some 9 months to a year ahead, because that's what it takes when you buy things from China or Far East. Two years in a row, we have perhaps been a bit too hopeful that the market will pick up.

We did not want to end up in a situation which we did in Swedol in 2015, where we pushed for own brands and it sold out directly. Then it took us two years to regain the confidence from the sales organizations, because they said, "Oh no, we're not going to sell our own brands.

It's out of stock anyway." We said early on, it's not going to be any big stockouts.

We need to have product at home. Then the market did not develop as we predicted, and then it's difficult.

You get stuck with the product. They don't get old.

It's not like milk, where we have to scrap it. It gets stuck in the stock longer than we had hoped.

Now we're going to sell it out and we will reduce and revise sales forecast going forward. That is the main thing.

External brands is easier. You can send it back in certain cases.

You can quicker stop the deliveries. What you order today, you get delivered on Monday.

Own brands, it's a much longer process and difficult to adjust to changing markets.

Excellent. Now looking at the, say, the cold winter weather we have faced in the Nordics here at least in the first quarter, to say, you didn't get much of it in Q4.

Have you had a lot of sell-outs of your own products or have you had the stock levels so you have been able to meet the demand that hopefully has been there?

I keep close contact with many shops, as we say, clothing departments, and none has said anything about that they don't have products. There was one winter boot that sold out, but then we have four other winter boots with exactly more or less the same functionality.

We have had products at home, absolutely, and it's a good opportunity. Exactly as you say, normally we would try to sell out winter gears in late March, but I've been pushing for start doing that now.

Because you also have a tendency, a customer, you buy one winter jacket, you don't buy two just because it's cold a longer period. We sold now the winter gears most customers need if they don't tear it up or burn it up or whatever they do.

I also said that let's bring this slow movers closer to the cashier, when you're on your way out, you don't buy a new winter jacket for 3,000 SEK, but perhaps you buy a new winter jacket for 800 SEK that we want to get rid of. That is what's starting now, and for the coming 10 days, it's still going to be cold.

We're going to push for getting the slow movers down. We don't need to scrap them.

They're not getting old, but we need to bring down the levels.

Just to get the feel for it, I remember when when you discussed the the weak Q4 2024 that that was, say, a negative snow shovel effect that you talked to meeting at a very strong, say, Q4 Q4 2023. As you talked about, snow shovels being down 60-70% at the time.

What kind of snow shovel effect have you seen in Q1?

Up a lot. As I said earlier, the the if it would have been this weather in 2022 or 2023, the one the ones coming in and buying those snow shovels, they would have bought many other things back in the days, but they today they buy the snow shovels.

I can share one little if you take start batteries, of course as for one example, that particular Don't say don't don't interpret me that it is across the line, but the start batteries when it was cold is up 40-50%.

Yeah.

Only the batteries. The ones buying the batteries, they don't buy no new boots or gloves or heaters.

The winter-related products, yes, they sell a lot more thanks to the weather, otherwise it would have been strange. We don't get this nice effect.

We're getting a good effect, I shouldn't say anything else. We don't get this really nice effect as we normally should have done in a weather condition like this.

Sounds very nice, though, still that somebody is getting some extra out of this cold weather. All the best, and thank you for all the extra color.

Thank you,

Karl.

Take care. Thank you.

Bye-bye.

Thank you. Most of them have been touched upon.

I'll try to read at the same time as I talk. "Could you give some color on the average ticket size for the store channels during the year and during Q4?

Do you notice a positive trend in number of customers?" Okay.

No, that's a very good question. We measure in all our shops how many visitors we have per day, and that is stable.

As I answered many questions on the same theme, the customers are there to the same extent. What they buy is less.

They buy exactly what they need. The average ticket size came down.

It has stabilized, but the average ticket size has come down. In a market condition as we have been through and we are hopefully at the end of, it's a lot of inefficiencies that happens in organizations like ours.

If you take tendering process, in a good financial climate, customers don't ask for tenders. In tough conditions, they ask for tenders for down to 10,000 SEK.

They ask us and they ask two different competitors, you need to tender. Even customers we have contracts with and we think we are the sole supplier, still the customers ask for tenders to test the price levels.

Also in the shops, there's a lot of haggling about prices, and they buy exactly what they need. In a market condition as we've been through, trying to reduce cost and get rid of people, that happens at the same time as inefficiencies increase.

The same number of people in the shops, but lower ticket sizes. Let's see, there was another one as the number of visitors 2024 to 2023.

I got the question if the number of visitors 2024 compared to 2023, but I would have guessed it was a little bit lower in 2024 than 2023 because the market condition was worse in 2024 than 2023. Without being 100% sure, I would imagine that the visitors in the shops were lower in 2023 than 2024.

Very good. Very good questions from everybody, as usual.

No other, Ras? No other from the line?

Thank you. Then I'd like to say thank you very much for dialling in.

We are reasonably happy for a decent ending of 2024, increased gross margin, result up, even a little bit organic growth, cash flow okay, increased dividend from 2 to 2.20, debt leverage from 3.1 to 2.5, refinancing, Irene, well negotiated with the banks, very good conditions and a 3+1+1, EcoVadis platinum levels. I think we can look back and say we are reasonably happy with the last quarter and a few weeks into 2026.

The market is more or less the same, but it feels like we are getting a little bit in return for the struggles we do. Even if the market continues on this level, we think we can develop okay.

If we get a little bit help from the market, we can develop better than okay. The focus areas are the same: focus on sales, getting the inventory levels down, structural grips are taken.

The journey continues, as I always end. Stay safe this Friday the 13th, and thank you for listening in.