Good morning everyone, and welcome to Teqnion 2025 Q4 Q&A. Thank you all for joining us today.

We will during the next hour or so give you, as partners and interested parties, the opportunity to understand your business as well as possible. We will be alternating between the emails that have been sent to our Q&A email before today, and the ones that you raise live in this Teams section.

As a reminder, you'll find the Q&A button on top of the Teams screen. As always, before we jump into the Q&A session, I would like to hand it over to you, Johan, to say a few words.

Thank you so much. Welcome to our call this morning, and this is my coworker Daniel Zhang, who's the Deputy CEO of Teqnion.

My name is Johan Steene. I'm the CEO and also one of the founders of this company group.

We are today, as we normally are, in Daniel's office here in Solna, north of Stockholm. 2025 has, of course, been a big year of transformation for us in the group.

We moved away from a rather loose organization that was very well-functioning when we went from no subsidiaries up to roughly around 20. Now we are in a place where we doubled from there, which means that we need more structure in our organization, and that's been a year of implementing that.

Just to reflect on why it took so long for me to understand that we need this, I don't really know, but you're used to something and you do it for a very long time and you don't see when things change around you, maybe. Luckily enough, nowadays I have really bright people around myself, and this team is a very strong team, and finally they managed to persuade me or lure me into actually changing the organization here.

Today we have a much more stable platform to work from and scale from. I gave ourselves a grade D- for 2025.

Maybe the last quarter or so, or the last half of the year could maybe have earned a D, but since we had a very weak beginning of the year, we have to settle for a D-. That's almost okay.

It's not that fantastic, of course. The improvements that has been implemented so far has freed up some working capital, the cash flow is back on some sort of okay level.

The organic growth, as you've seen, is down. We're not happy by that, but we're normally chasing organic earnings growth.

In this retrospect, we have made active decisions to remove some poor businesses and business deals that, of course, affects the top line, but also gives us a better bottom line when it comes to earnings. We're still in a rather weak economic environment, which also, of course, affects these things.

Just a reminder, and maybe I say that too often, but it's the organic earnings growth that we're chasing, and not primarily the top line. Normally, that will follow, of course, but in these circumstances, you might see this effect.

We also had a weaker Q4 than the Q3 when it comes to earnings. Some of that might be effects from the projects that are rolling out, but also and to blame this is maybe a little bit too stupid, but it's a rather long Christmas holiday, which meant both customers and ourselves were off work for quite some time at the end of the Q4 quarter.

Disregard that. What I'm most positive about at this stage is that we have a new organization in place.

We have two new business areas, one in the Nordics and one in the UK, with dedicated teams in each of them. We now have a platform that is so much easier to scale from, doubling again from 40 to 80.

During that period, of course, we will learn new things and have to adapt to the reality around us. We are really on a much better plateau, or foundation, today than we were a year ago, and that feels fantastic.

Now we can start working again. We're not done with all the improvements and all the things that needs to be done in order for us to be happy with our performance, but we have a much better platform to do that from at this stage.

Yeah. Once again, we're definitely not happy and proud of where we are, but we're in a much better place, and there's still a lot of improvements and repairs to be done for us.

We do it from a much stronger position today. Yeah.

It's the profitable growth that we're aiming for and that we're chasing, and nothing else. Sorry for the long intro, but

Perfect. Great.

Jumping into the questions, then. We have a few questions that are variations about organic change in revenue and bottom line.

Maybe we can just take all of them at once. Basically, the questions are if we can give some explanations about decline in organic revenue and also the differences between the different geographies, etc.

I know that we reported during the first half of the year that we reorganized and merged a couple of factories together. We have also scaled down some of the production sites in order to just target profitable businesses there, taking away some business deals that were not profitable or not over the long run something that we would like to keep up.

Some of this decline in growth or top line has been due to active decisions from our side.

Yeah. I think that it has been a tough journey during 2025, and as you may remember, we've talked a little bit about it, that there are no holy cows.

As our aim is to ensure that we create the highest, biggest share value for the long-term shareholders possible. In that, we have looked through all of our companies, all of the projects, different product lines, and ensured that we have cut down on things that are not profitable or not profitable enough.

Of course over the long term, we believe that we need to have organic growth, and through that, get organic earnings growth as well. In the short term, we've had a little bit of too many companies and product lines that were unprofitables, and of course, when you cut that, top line goes down, which looks bad, but as you can see, that has also translated into higher earnings organically, which is what we've been aiming for, of course, forever, but a lot during 2025.

We also got a few questions about the differences in geographies. As during the last year or so, we've talked quite a bit about that the biggest challenges that we've had are in the Swedish market, and mostly in certain cohorts.

That is where the decline have been biggest because that's where we have been slaughtering most of the products. In the UK, we actually have for Q4 an organic growth of around 9.5%, which is quite healthy in my own opinion.

There is, of course, some FX effect that translates to a lower revenue as well. During 2025, I believe the British pound lost roughly 8-9% against the Swedish SEK, when you translate that, something happens as well.

I think we caught most of the things there, but just to reiterate, over the long term, we do believe and we should have earnings growth organically and top line growth organically. In the shorter term, we have implemented on what we have discussed.

We've killed things that do not create value. That's the decline in top line and the increase in bottom line.

Good. Yeah.

No, yeah maybe, I just feel that the situation we're in in the world with the economic downturn has, of course, also affected some of the businesses. Since we are a rather diversified group of companies, some are affected in a positive way and some are affected very badly.

That does has, of course, also caused some effect on the top line when it comes to sales.

Good. We have one question here could be good that we take that right off the bat, as well.

Emanuel in the Teams chat is wondering, "Why has it not been disclosed that Teqnion is being sued? What is the amount of the claim, and has anything been set aside to cover a negative outcome?"

We talked about this in the last Q&A, and it was reported also that we have a legal case going on in Ireland. That is still going on, and it's going to be handled by the courts of Ireland, and it's not going to be handled by media or us talking about it outside the courts, we leave it with that.

Yes. Good.

Akash from P&R Investment was wondering since earlier, "Can you please reflect on this difficult last one-year period? What was the biggest lessons that you can take away from it?"

A lot of learnings. I think if you have to just take one thing, it's the thing that I already mentioned, that we need while growing, we do this for the first time.

We often, I should say, got the question that, "How today you have 10 companies, how would you manage to have 20 or around 20 companies?" The true answer that I think that we always given also is that we don't know.

We have to scale and see and learn along the way. At this stage, I think I was the biggest brake internally here at the head office when it comes to changing how we work.

When they finally penetrated my stubborn head, we started doing that last winter, and now we see the effects or the possibilities, I should say, of a well-structured organization where you have people in the right place at the right time with the right competence.

The biggest takeaway for me for this year is make sure that you have a foundation that you're able to scale from from the position you're in. The feeling right now, which is positive, is that we are in a place where we have a foundation, where we can scale again.

That was hard for me to really see and understand. I don't know why, but yeah, sorry.

Good. Further on from Akash, "2025 has been an exceptional year for M&A.

Looking ahead, qualitatively, should we view 2025 as one-off or close to the new normal with regard to deal activity?"

I think that we've been also stubbornly over the years talked about that we believe that we have the capacity to do a handful of acquisitions per year. Since the group and Teqnion has evolved, we also now have the opportunity or possibility to acquire better and better companies.

We look at more profitable companies today than we did two years ago, and absolutely four or five years ago. These business deals, even though that we still stick to the rather loose term of a handful of acquisitions per year, that should be much more earnings coming from those, future earnings coming from those handful of acquisitions than compared to what we did a few years ago.

Last year it was quite a few acquisitions because we have a very good general when it comes to searching up and making business deals in Daniel. He had a rather long pipeline going into 2025 and a lot of relationships ongoing with potential sellers, and it turned out that they were ready to sell, and we are ready to buy when the seller is ready to sell.

Yeah. Good.

Next one from Akash, "Can you please tell us a little bit about the new governance structure? What are the responsibilities of the UK and Swedish segment heads?

How are they incentivized?"

Do you want to start, and I

or Maybe.

Fight on my own.

The UK head David Barton and the Swedish head Martin Lagerbielke, they are acting as the CEO of the groups. Basically, all of the CEOs in the various countries will be reporting directly to them.

Johan, I, and Jonathan are sitting on the board of directors of each of those two holding companies. David Barton and Martin Lagerbielke will then reporting to us, which creates a much higher efficiency because it's impossible to duplicate Johan even if it would be very very good.

Then we have, of course, set out processes and structures regarding the mandate of these two country heads. Regarding incentivisation, basically they have the same incentive as everyone else.

It's built on earnings growth in their own segments.

Yeah. You get the percentage of the earnings growth compared to history.

Yep. Good.

Another question from Geert from the Q&A email. He is wondering, "Will all future acquisitions have an average EBITA margin that is above 9%?"

It's so strong words. It's very fixed goalpost when you say all future.

Disregarding that, yes. We are looking at acquisitions with better margins or better financials than the average of the group, and the average of the group is higher than that.

Of course, we are looking at better and better. Over time, we believe that's the trajectory we want to follow into the future, as well.

As long as we can.

The expectation is that they will not only be above 9%, but they will be a lot higher than 9%.

That's the outcome of the acquisitions from the last three or four years anyway.

Exactly. Larry in the Teams chat is wondering, "How many companies have you merged?

From the report, the majority of the increase has come from removal of earn-outs? How many companies did this involve?"

First maybe starting with the second question. It's not correct that majority is coming from removal of earn-outs.

For Q4 in 2025, the effect was 9 million, so that is a number, but it's far from the majority. I don't know, should we get into the technical details of earn-out revaluations work?

Yes.

Let's do this.

When it comes to setting up the price for an acquisition, it's an individual process for each business and each seller, of course, or each vendor. If we're looking at and building a relationship with a potential seller of a business that has been really stable when you look back into the financial history, it's rather easy to see that they will probably have the same type of normally single-digit growth going forward as well.

It's much easier. They know what they're selling.

We know what we're buying, and we can probably come to terms on how to structure a deal looking like that. It's easier to agree on the right things in the SPA when it comes to earn-outs, how long should earn-out period be, and what would the targets be in order for the earn-out to kick in.

Another rather normal situation is that the seller has implemented a lot of changes that should make the company stronger for the future, and you can also see by the financial history that they are growing stably from the last three to five years or something like that. Of course they wouldn't be satisfied with us paying the current earnings, a multiple on the current earnings figures.

Then we have to find a way if both parties are happy to proceed with a business deal, then we have to find a structure where they actually get paid what the company will be worth, let's say in three years. Normally, we have a three-year earn-out period.

Normally, that target is rather high because the seller wants it high, because they have strong beliefs in that they're going to reach that target. We try to down-talk that a little bit because we don't want the uncertainty into a business deal and we don't want anyone to be dissatisfied when we reach that day, which means that we will find a number that might be hard to reach in order to pay out an earn-out.

In those cases, when the overall global economy has been weakened, of course, it's even harder to reach that target, and we have reached those situations quite a few times now the last year or two.

Yeah. I'm going to do 60 seconds of some boring accounting technicality, but it might be interesting to understand.

When we reserve the actual earn-out that we believe will be pay out in the future on the balance sheet, of course, we have to do our best guess, but it also has to be a conservative number, which means that best guess plus a little bit of margin, because that is how accounting works. Then of course, with a little bit of optimism, sometimes we're right on target, it doesn't happen too often, but as a group, we used to be quite right.

Some are wrong in a positive remark, some are wrong in the other direction. What happens is that you get also an asymmetry, because when we book up an earn-out to the maximum on a balance sheet, and let's say that that company actually performs twice as well as we thought from the beginning, then nothing happens, because we cannot pay out more than what is actually under the SPA.

If another company actually let's call it same size is performing half of what we are expecting, then what happens is that we get an revaluation that goes through the other income in the income statement. Even though if you take those two companies, for Teqnion as a whole nothing happened, one became better, one became less, as a group, they became the same, then on the accounting part, you only get one of the effects.

Just to add to that, we do not value all the earn-out to the maximum. We do it with conservative assumptions to ensure that the debts are not undervalued, because that is very important from an accounting and audit point of view, but we do not put them at max.

Good. Maybe that was that piece.

Yeah. Great.

Then going back to the emails here, got an email from Veronica, private investor, "Good morning, Johan and Daniel. What is the percentage of potential companies being approached by you versus approaching you?

Has the number of companies approaching you increased during the last five years?"

To start off, maybe just answer the last bit of the question. First, yes.

Due to the fact that we've been around for longer and we've done more business deals which more people know us, and it's fantastic to get approached by a potential vendor because of word-of-mouth and that they talk to people that liked how we do business. Over the years since we started in 2006, depending on where we are and who we are, I should say the deal flow has been from different sources.

In the beginning, no one knew about us, we were very small, and we had to do more or less cold-calling to approach potential sellers or companies or entrepreneurs. After a few years, some of the Swedish brokers knew about us and sent us business deals.

We found some good companies there. When we started out, it was necessary and fun to learn how to approach potential entrepreneurs or sellers just actively from ourselves.

That is a tradition maybe not a tradition, but that is a way of working that Daniel also likes. He's been doing a lot of that from the day he started here, back in the January 2021, just to reach out actively to companies that we really like looking at and that has performed really well historically.

Then with Daniel's courage and business drive, we jumped outside Sweden and started doing acquisitions 3

and

1/2 4? 4.

4 4 years ago. The transparency from what you can find in financial history is much more limited outside of Sweden, which means that it's much harder to just be actively reaching out or cold-calling companies because you know very little about them, who's owning them, what are the earnings, and whatever.

Here in Sweden, you can find all that, it's much more easier. What we've been doing in primarily the UK is that we found really good partners or good, strong relationship with some business deal brokers that knows who we are.

They like us, we like them, and they find us more and more Teqnion companies to look at, and people that they strongly believe could fit into our culture and our environment. The business deals from abroad is mainly driven by brokers, but more and more as the second part of the question was asked, also nowadays by word-of-mouth, that someone knows someone that sold a company to us and they liked what they heard about that and they also contact us in order to see if we're interested in their company, which is fantastic, of course.

Maybe just to clarify that. The brokers that find us deals, they do this because for various reasons, but they are never paid by us.

They are always advising the sell side. "How long is the process on average from initial contact to a deal?"

I like the question. We received it a lot over the years, and I like to take the example of one of the companies from the first cold call that I reached out a very long time ago until we actually signed the SPA and transferred the shares, that was a little bit over 9 years.

We have potential deals in the future that's going to break that record, and the shortest might be 1 and 1/2 months or something like that. No,

I think we did it 4 weeks.

Okay. Okay, 4 weeks.

It's a very broad spectrum depending on, and we try to be flexible on that side. I think I mentioned earlier today that when the seller is ready, we need to be ready.

We want to be ready. We want to be easy to make business with.

Yeah. It's quite normal that it takes 6 to 12 months, I would say.

Yeah. "How often do you lose out to other serial acquirers?

Is the reason only price?"

Also varied over time. We like when it is priced.

It's people. It's even though that we are competing in a financial world with return on capital, it's a people's game.

When a potential seller meets us, they either think that they want to leave us with the trust of taking care of their life's work and work with us going forward, or they feel like, "These guys are not for me." The ones that tends to like our way of doing business and like the culture that we try to nourish, they can, from what we've seen and what we are very happy about that, they can accept a lower price for the shares than they would expect from selling it to another type of culture and another type of holder.

That is, of course, fantastic. We meet competition, and sometimes the seller likes us better, and in some cases, they like the other party better.

Yeah. I think what is important to stress here is that we meet with a lot of entrepreneurs and we get opportunities to buy only a very few of them for various reasons.

Some doesn't really hold up to the quality that we thought when we first looked at it. Some of them goes because of price.

Then of course, it's, as you say, it's so much personality, and one thing that we try to do is that we really really try to be transparent and open about who we are, and we encourage the seller to ask the hard questions before, because if we do this right, it's going to be a forever relationship. Yeah.

We encourage everyone, even if they sometimes don't want it, to take references, because it is, yes, it's nice to acquire a company, and you always have a honeymoon period. Then, over a lifetime, that's a long time.

For us, it's much much better to walk away from a deal no matter the reason than to just get a bump in the numbers and get problems later. Good.

Then we have another question here from Sven, who is a private investor, "Thank you for your clear communication in your quarterly update. Obviously, the complete write-off has large impact of the result.

How certain are you that it stays with one write-off? Should we expect more to come?"

It's impossible, of course, to talk for an eternity of future lying ahead of us, but as we are today, we're not seeing any of that. The turbulence in the world and everything that's going on, you never know for the future, and it's tough to make any promise when it comes to that, so that we can't do.

As it is of today, there's nothing that we can foresee.

Good. Then we have another question here from Francesco from Antelma Asset Management.

"You say that we've been, in your CEO words, forced to get used to a world marked by horrific and dark conflicts. You also invested in a company supplying critical components for military tags.

I'm curious about how you deal with this."

That might be a long discussion, but for me, it's always been clear. I don't know why, it's just the way I'm made, I guess.

I strongly believe that we shouldn't be aggressive to one another, and I also strongly believe that to have a strong defense that make sure that no one roll the dice and attack you is a very good thing to have. Unfortunately has been shown since the Russian aggression on Ukraine and other examples in the world.

It's very good to be able to defend yourself, and unfortunately, you have to defend yourself with force. For me, it's always been very normal to, within the boundaries of the law, make sure that we can supply defense industry and defense organizations with the right material.

I'm strongly believing that, and I'm going to continue doing that in the future.

Yeah. We have a live question here from Hai, "What's the current environment like for M&A in both UK and Sweden?

Given the current weak macro, how about other markets in Europe?"

I don't know exactly how to answer. I'm going to leave it to you, I think, but I'm looking forward to having a stable business area in the Nordics and having a stable, bigger business area in the UK, and together with Daniel, starting to investigate other geographical areas, but we're not quite there at this stage.

We're getting close to it, and it would be very very fun.

Yeah. No, I agree.

I don't have anything to add on the geography part. Regarding macro, I feel that I've been here for 5 years or so, and it has been maybe not the same macro, but similar-ish with some kind of gloomy outlook.

What we try to do now and always is try to find companies that are not so pure macro-driven. Of course, all companies are, to an extent, part of some kind of cycle, but we want to find companies that are in different cycles and have uncorrelated risks, so that we can do well no matter the macro conditions.

Good. Douglas from Samrisson Capital, "Hi Daniel and team, thanks for hard work.

A couple of simple questions from me. There seems to be a rather big difference in profitability between Q3 and Q4.

Can you please explain this a little bit more?"

I think I tried to explain it. Maybe you can do it in a better way, or more clear way, than I did.

No, but I think that we have not been good enough is, of course, the most honest answer. We should have done better, and if we don't think the Q4 was great, far from it, and that's why, as Johan wrote, it's a D-, maybe D if we are nice to ourselves.

Then of course, the Christmas timing did affect it. It's nothing that should affect if we did our jobs well enough.

Then there's also quite a bit of timing questions, we have a number of companies that are very project- or one-time project-driven. Those orders come in when they come in.

During Q3, we had a few of those that went well, and Q4, we expected a few of those, but have been pushed to later. In a group like this, you should, of course, expect to have a rather stable profitability over time.

Right now, we are still doing a lot of things to get to that point, but on a individual subsidiary level, quarter is not the right way to look at some of these companies, and right now, they still have a bit too much effect on the total group. Yeah.

Next question comes from Alexander at Slow Compounding, "Earn-outs performance hurdles. Generally speaking, a meaningful share of your acquisition consideration is paid via earn-outs over a 2-3 year period.

As a rule of thumb, how much does earnings typically need to increase over the earn-out period versus acquisition year for the earn-out to be paid out in full?"

We touched a little bit on it, but not in detail, of course. If the forecasts is something that stands out from the historical numbers, it's harder to reach those hurdles.

If it's a stable history, it's easier. The hurdles are lower, of course.

I don't know how much into detail we should go on that. It's a big topic to try to cover, and it's very much case-to-case depending on the person, depending on the financial history, depending on the business area the company is operating in.

Yeah. How is the market for that type of products and whatever going forward?

I think generally speaking and over time, and the key words here are over time, because for individual cases, it can be very different, but over time, we expect organic growth for the group to be GDP plus a couple of percentage points. Then as Johan mentioned, we look to acquire better and better companies, which means that for these companies, the expectations are usually a little bit higher than that in order to get the full earn-out payment.

In the Teams chat, we then have Steven, who writes, "Strong recovery, Daniel and Johan. On the long term, your objective is to double EPS every 5 years, 15% CAGR.

I understand the reason for you to double EPS every 5 years, but if we take the 15% CAGR, how much of the 15% would you want to be organic growth on the long term? I think that acquisition strategy slightly changed because of Daniel.

Do you aim for more organic growth with the new acquisitions?" You want to start?

No, but I can do it.

Please.

No, we don't look much at our peers because we try to do the best we can with what we have and our own resources. Of course, we have looked a little bit on how they express themselves and what they actually performed over the years when it come to those two metrics.

Normally what they say and what we've also said and what I strongly believe in is that we're going to have a few single-digit percentages of organic growth on the group as a whole, and we're going to acquire at least 10% or acquire 10% from that growth per year. That's, of course, very rough numbers, and it can be a little bit less some years and more in other years.

It's not figures or numbers that we look at and target. It's more the opportunities we have on the acquisition market and our whip on our own backs to make sure that the existing portfolio performs as well as we believe it can perform, where we should see the organic growth.

For us, we need to make sure that the existing portfolio and our beloved subsidiaries perform on their top level and gives us and themselves organic growth and preferably organic earnings growth, while we also make sure that we have a good deal flow when it comes to acquisitions and where we acquire better and better companies that will give the majority of the growth going forward.

Maybe also to add to that. We like the financial targets because it's the target that we want to keep forever and ever.

What is worth keeping in mind is that we come from a period with very suppressed earnings because a lot of things didn't go as we wanted them to do due to our own fault. We're also very young as a company, and if you take those two together, over the long term, as you wrote, yes, it's a doubling every 5 years of 15% CAGR over time, but in the medium term, we do believe that we can do much more than that.

In the medium term, it will be driven both by acquisitions, as you saw last year, we did a lot of acquisitions, but also due to the suppressed earnings, especially here in the Nordic region with Martin in place, we are expecting things to change. Good.

Next question comes from Prakhar Goyal here in the Teams chat. He's writing, "The recent margin expansion has primarily come from the gross margin expansion, which I think is mostly because of the UK acquisitions.

Is that fair? Is it fair to say that the gross margin you earned in H2 2025 sets up a new base?"

I think, maybe if I start the second part of the question, a little bit as you said in the beginning, we're setting up a new platform. We were, number-wise, in a good place a few years back, but we didn't really have the structure, process, people to ensure that we could grow from that base.

That is more and more in place now. Yes, the H2 numbers margin-wise is what we think should be some kind of new platform, or new low point, or whatever you want to call it, and grow from there.

The margin expansion, yes, it comes from that we have acquired better and better companies. That absolutely has an effect, especially given that there were quite a few acquired companies, but it also comes a lot from that we basically stop doing stupid things, i.e., removed revenue that didn't give us anything other than losses and gray hair.

Also, of course, supporting our coworkers within the subsidiaries here in Sweden and give them the courage to say no to poor margins businesses and say no to things and not chase the top line while losing on the bottom line. It's a lot of hard work also organically, or what to say operationally here, during the last year or so.

Yeah. Good.

Next question comes from the same person, "Even though your free cash flow profile has improved a lot this quarter, but a lot of it came from gross margin expansion and release of working capital. How do you think of your company in terms of free cash flow margin going forward?"

Also rough numbers. Yeah.

We acquire companies, right now in the group, we have companies still that are both underperforming when it comes to margins and underperforming when it comes to free cash flow and underperforming when it comes to other things as well that are things that we are working on and have been working on and will continue to work on. Going forward, if we allow ourselves to look into the medium-term future, we want to acquire companies and we want to own companies that have a result and free cash flow that are more or less the same.

Of course, due to accounting, they might not be the same every quarter, but over time, over a year or so, we would expect these companies to match free cash flow with results. The whole business model is based on, I think you wrote about that, cash is our raw material.

We want to acquire companies that have a very light balance sheet, which means that they don't need to reinvest in a lot of capex, they don't need to hold more inventory than they need, they don't need to be overly kind when it comes to receivables, which means that whatever they spit out, we use that to acquire new businesses. That is how we think about it going forward.

Free cash flow will jump between the quarters. Some of the quarters will look bad, and sometimes it because maybe they were bad, but when it comes to the working capital, we have some companies where we try to be opportunistic.

When prices are good, we will be buying them in, and then they might be sending out the stuff the next month. Over a year, we expect the free cash flow to be in parity with the results.

Good answer. Good.

Going back then to the emails. We have a question here from Marcus, private investor.

He's wondering, "Lower earn-out suggests acquired companies are underperforming initial expectations. What's the issue overall: overestimated synergies, weaker markets, or integration friction?"

We talked a little bit about this before. If we look at the groups as a whole, our take is that the group we acquired last year, the year before, the year before that, they, as a big cohort, are growing as we want them to.

However, there are some companies that are underperforming a little bit compared to the expectations. There are some companies that are better than the expectations, and due to accounting, we do a revaluation of the earn-outs, but overall it only goes in one direction.

Next question is also from the email. It comes from Margiin, "How do you view the opportunity to continue acquiring companies in Sweden, the UK, the rest of Europe, given how many competitors there are in the same space?

How do you view your business model? Are you exclusively a serial acquirer of industrial manufacturing companies, or do you see other ways to expand into other areas, such as software, investment, etc.?"

We try to stick with what we understand. It doesn't mean that we know everything about all the companies that we acquire, but we understand the business model and we understand the need of the product going into the market.

Over the years, we decided to focus on physical products, meaning that we are not acquiring, up until this day, software companies or consultant firms. If we support our customers with support, it's always in addition to a physical product that everything centers from.

That's how we see our business model, but it's definitely not only industrial manufacturing companies. It's companies that has a very narrow niche where they can dictate the terms for that little piece of the market when it comes to knowledge and application know-how, and where we can supply true customer value, which means that we hopefully can have a reasonable margin for what we deliver.

We see a lot going forward, we see a lot of more potential. We find this type of companies, and I don't see the reason why to look into any other niche at this stage.

This is a rather broad niche. We find companies in all different sectors.

We constantly find companies that are expert in a product that we didn't even know existed before we learned about that company, which is also not only interesting, but also very fun and keeps you alert and keeps you constantly questioning your knowledge about society because you always have to learn new things. You get humble by doing business like this.

We're looking at companies that know a lot about their product and the application where they're used, meaning quite oftenly that they have extensive skills when it comes to standards around that application or that product, lots of certification, like hurdles and moats for competitors coming in. Doesn't matter if the total market is rather limited, as long as you can dictate the terms within that market sphere.

Good. I didn't listen for the last 30 seconds.

I was thinking of what I should say.

I realized that, because if you would have been listening, you would have wanted to add something. No, but talking about what type of companies we're looking at and that we decided to focus on companies that sell physical product to other companies.

That's what we do. We do that in all industrial niches, definitely not only manufacturing industry.

No, exactly. Things that solves real problems and cannot be taken away by anything due to the laws of physics.

What I was thinking about is strange to think out loud in a live session like this, but Johan and I as people, it's up to you to judge, but what we always try to do is to be transparent and genuine about everything that we do. We always try our best to focus on earning money and creating value for the long-term shareholder, and that is on the basis that we do everything by the book and ensure that we follow legal ramifications and our ethics and morals.

As I said, that is what we're trying to do. It's up to you to judge if you believe in that or not.

That is also the reason why we have a open Q&A so that anyone, no matter if you like Teqnion, if you love Teqnion, if you hate Teqnion, or if you just hate us personally, want to join in under maybe a pseudonym, anonymously, and write things in order to do whatever you want to do. As you probably have seen, there are a few people that are focusing a lot on the Irish court case.

As Johan said, we will only comment on that when it's appropriate to comment, because we cannot say what other people should do, but we always will follow the rules and the processes, and we will update when it is suitable to update. What I want to add to that is we will continue to be open.

We will continue to have open Q&As and be open for discussion so that people can send in whatever they want. I also want you to know that there are certain people out there that are doing whatever they can to pressure Johan, me, our families, our employees, our CEOs, in personal capacity to scare us, pressure us, frighten us, whatever you want to call it, in order to cave in and give away Teqnion's money, your money, to other people.

We won't do that. We will continue to follow the legal rules of the countries where we are in.

We will honor the jurisdictions, we will honor our moral compass. You can please continue to do what you want to do with your lives, but we will continue to do the best for Teqnion.

That's the end of the Irish piece of this. Sorry for that.

Oh no, fantastic. I agree with everything you said.

Good. Going back to this, then.

We have a question from Kolappan Pillai in Teams. He's wondering, "Are we done with repairing low-performing companies, or are these low companies continue to drag organic growth for a while yet?"

Unfortunately, we will never be done with it, because we move the goalpost all along. As we, as a group, become better, we also going to make sure that the tail also needs to perform better in order to fulfill the obligations towards the Teqnion group.

Yes, no, we're not done. Yes, we will always continue doing this to improve the individual subsidiaries within the group.

It's fun to improve businesses, that's what we do, right?

Exactly. Greg, a private investor, is asking, "Thanks for a great job and the transparency.

One question from me: what is your dream acquisition?"

I think we missed it already. I never look back, because that's the personality, I think, I don't cry over things that could have happened.

Daniel has a fantastic nose for finding very niche, very good companies driven by fantastic entrepreneurs, and sometimes we are not the right taker for them, we missed a few of those, and some of them I sometimes think about when I get confronted with their products. The future is so long and so fantastically bright because we will always adjust our ways of operating due to our size and our abilities, and we will find the most fantastic company going forward.

I'm so confident in that, and that's, of course, one of the big drivers of just pushing energy into us to just continue doing this, because we know that we can do more and better, and that also goes with acquisitions going forward, of course.

Yeah. There are so many nice companies, and difficult to say what the dream is.

Just yesterday, I think I told you, but had the Olympics on when I was thinking about other things, and then they were doing curling, and then I thought, yeah, who makes this stones? Apparently, it's a Scottish company that makes those stones that are

It's Scottish granite, right?

Exactly, from an island outside of that where they have a lease until 2050.

Okay.

In

2050 we have an opening.

Exactly, exactly. That would be fun.

I think they call it Kays of Mauchline, whatever. Just for information, finding interesting companies that could suit our group it's fun, but that is not our USP.

There are so many companies out there, there's Google out there, giving away some thoughts about what could be an interesting company, that is not what is building Teqnion. Otherwise, I think we have a lot of really good, great companies in the group.

I think it will be fun to build a little bit more within those niches and see if we can find more similar companies that can become friends with each other.

I thought of one of those aspects the other day is we have several companies within the group where I would love to work operationally. It's so fun products, nice teams, fantastic management.

The dream company to acquire, it's constantly going to change because we change and the world around us changes, but the opportunities are endless.

Yeah. We have another question here from Prakhar in Teams.

"The backlog jumped 50% in fiscal year '25 year-on-year. How material is it to look at this?"

I think that it's important to view it not in a vacuum, but together with everything else. Everything equal, that going up is good.

We, of course, have a lot more granularity regarding which companies have increased it, and as the profitability of some of our companies are really really great. Some are at a 50% margin, EBIT, and some are far from it.

Obviously, the former group's backlog growing is much nicer compared to the second, but that is not something that we disclose. Of course, that going up is a good thing.

Yeah. Next question comes from Arthur De Munck.

Sorry if I mispronounced that. "Congrats on the comeback.

That is worth D- for me." Thank you.

Don't really agree, but thank you. "In the beginning of '25, you gave some insight about the amount of acquisitions you expected, which became a record for the year.

How do you expect it to be 2026 without going into specifics?"

A handful.

Now I think without going into the specifics, we will put more focus on doing acquisitions. We have

Sorry for interrupting,

but

one great effect, and maybe we didn't touch up on that today in the call, but of course, as we structured the organization in a much better way, it frees time for Daniel, and for me, and for Jonathan, and for other people at the headquarters, which means that we can actually do more of what we're supposed to be doing, and in Daniel's case, to search up great acquisitions. That is a huge advantage that we gain from the new organization.

Yeah. Also just keep in mind, we got the question earlier from Veronica regarding the usual timeline.

Let's call it that a normal acquisition takes 6 to 12 months, which basically takes us into Q3, Q4 2026, 2027 for a normal acquisition. We did one in 9 years.

Last year, I thought we would buy one after 13 years of discussion. This year, I think we're going to do it after 14 years of discussion.

So

Maybe next year it will be 15 years.

Exactly. Jokes aside, we, of course, internally have some thoughts about what could be realistic to get this year, but it moves a lot, usually not because of us, but mostly because when sellers feel that they are ready or not, and it has to feel really really good for them, because otherwise, we don't think it's going to be a good match.

What we're doing now will lay a foundation for a more optimistic, a more attractive acquisition pipeline going forward, that some of that will happen '26 and most of that, will happen later.

Good.

We got through most of the questions. I see that it's 2 minutes past 8 past 8.

9:00. With that, do you want to say something before we

I just want to thank you all for listening in. It's fantastic that you're interested in what we're doing, and we see that we have a much better platform, maybe that's the big takeaway from today.

We have a much better platform to scale from, and that feels great for us in the team.

Thank you everyone for joining, and look forward to see you again in a few months.

Thank you so much.

Bye-bye. Bye-bye.