Welcome this morning to the Volvo Group fourth quarter press conference. Today, we'll do as we always do.

We will listen to the presentation from our CEO, Martin, and then listen to Mats. Then we'll follow up with a Q&A session.

With that short introduction, I'll hand over to you, Martin.

Thank you, thank to Johan for that. Also from my side, welcome.

Always special with the full year also report, and of course also in more detail quarter four. Maybe then to get started.

As we are still in a period with uncertainty in our key regions and in particular for North and South America, where we have seen a continuation of cautious stance among our truck customers. Having said that, lately, in the later part of the quarter and also in the beginning of the year, there are signs of stabilization and somewhat a recovery.

While Europe had a positive volume development in the quarter, volumes in both North and South America were lower in the quarter and are expected to be weak also in the first quarter of 2026. That is, of course, related to the order intake that we had earlier in '25.

However, when it comes to the market forecast for the full year of 2026, we are revising our market forecast upwards for North America, as we do also for Europe, even if that is more marginal. Despite the many moving parameters, the group had a solid performance in the fourth quarter, with a flat level of sales if you adjust for currency and the divestment of SDLG, an adjusted operating margin of 10.3%, and good cash generation.

Operationally, we continue to drive what we can impact ourselves, not at least by utilizing our flexibility toolbox to maintain balance between demand and supply, and very important where we are in the cycle, to keep inventories at the right levels. Focus is also on effective cost control, commercial discipline, and the service business.

Services did have a positive development during the quarter with a strong underlying growth of 5%, adjusted for FX and SDLG, showing that our customers around the world continue to utilize their vehicles and machines, and that is, of course, a very important feedback. It also means that the fleet replacement rate eventually will have to increase.

That is a given. While having strict cost control—selling, admin, industrial—our priority on innovation and technology continues.

At the same time, also in these areas, we are continuing to gradually adjust and to have a correct time-phasing for our project and product portfolios. Having said that, there are segments that are moving quicker than anticipated with good growth prospects both here and now and moving forward.

The huge demand, a little bit surprising also, for smart, and not at least speedy, alternatives for energy and power is driving the demand for Volvo Penta's power and energy solutions, not at least for data centers and AI factories. With a recent launch in the beginning of this quarter of the gas-powered G17 engine, that is building on our existing technology and industrial stack, meaning that we can benefit from scale immediately, that position will strengthen further.

The same goes also for mining and defense areas where we will continue to increase focus. Moving forward in these turbulent times for global trade, we focus, and I've already said that, on activities that we can influence ourselves.

Apart from what I've said in terms of cost and commercial discipline and services, we continue to build on our strong regional value chains, combined with global capabilities. The world is moving from a more global, synchronized system more, instead, into a regional platform, and there Volvo is well-positioned.

As we conclude the turbulent '25 with solid sales and group margin, supported by underlying resilience, I would like to take the opportunity, when we have the full year report, to thank customers, business partners, and colleagues for great cooperation. With uncertain business conditions, strong and close relations they are always important, but more important than ever.

Finally, the world will still need efficient and effective transport and infrastructure and energy solutions, and the group is well-positioned to leverage these opportunities moving forward. If we look then into the fourth quarter, net sales declined to 124 billion on the back of lower truck volumes, but it was flat development when adjusted for currency and divestment of SDLG.

We deliver a solid result in these turbulent times, resulting in an operating income of 12.8 billion and a growing operating margin of 10.3%. Cash flow amounted to 19.3, which resulted in a net cash position in industrial operations of 63 billion.

Return on capital employed in industrial operation at 25.3% and EPS 4.73. Moving over to volumes, truck deliveries declined by 3% in the quarter to 56,700 vehicles, with drag in North and South America that have already said, offset by then growth in Europe.

For Construction Equipment, deliveries decreased by 46%, but when adjusting for SDLG, the machine deliveries increased by 9%. If you want to be even more granular, they increased by 10% for the Volvo brand, since Rokbak then, previous Terex, didn't increase as much.

So 9% excluding SDLG. Electrification, still with different uncertainties related to the electrification, not at least when it comes to a number of the enabling conditions.

Underlying demand continues to be rather slow, but orders for fully electric vehicles, adjusted for SDLG, increased still, but by 3%, and deliveries increased with 20% when adjusting for SDLG. This growth was mainly supported by 15% growth of electric light commercial vehicles in the Trucks segment.

That is not surprising. We are now more and more into the new Master also, Renault Master, for Renault Trucks in that segment.

Obviously that is also a segment that will continue to grow with last-mile deliveries, etc. Coming over to top line and sales.

If we start then with vehicle machines, overall sales of vehicle machines declined 1%, adjusted for currency and SDLG. Truck vehicle sales were down 4% on the minus 3% truck volumes, which showing that price discipline also in this quarter, in the softer market environment, is working well.

Construction Equipment, adjusted for SDLG, was growing with 13%, which was supported by sales of Volvo-branded machines in mainly Europe. Penta's 18% sales growth, FX adjusted, supported by North American data centers as well as the mining segment.

Also good demand in Asia. Buses had a growth of 28% in the quarter, primarily driven by the Prévost brand in North America and by the Volvo brand in South America.

Top line for service. Our service business, as I said, continued to develop well, and we grow 5% in quarter four, adjusted then for currency and SDLG—you will hear that a couple of times—with positive development in all business areas.

These developments, as I said and I think this is very important, are proof points of, one part, our push for more extensive service offerings that have been alluded to many times before, not at least when it comes to service, repair, and maintenance contracts, etc., but also then that our customers continue to utilize their vehicles and machines, and that the installed fleet needs to be renewed sooner or later. Buses were particularly strong with growth of 17%, driven by strong sales in Europe, Asia, and Mexico.

Penta also continued to be strong with 8%, and the same goes for VCE, excluded then SDLG, also had 8% growth. The group's service business pacing at 124 billion, 12 months rolling, represent almost 26% then of the group revenues, which is, of course, good in this part of the cycle.

On the truck side, very proud, of course, and maybe you did see also the press release yesterday. Super proud for our Volvo Trucks colleagues here.

Second year in a row, Volvo Trucks was the heavy-duty champion in the European heavy-duty market with over 19% market share. We really see that also on the back of strong customer satisfaction and a very competitive offering.

You did see the FH Aero here that has really been doing great strides into the market. Tremendous effort by the Volvo Truck team, and led by Roger and all the colleagues there, but of course the complete value chain.

Volvo Trucks North America, also important, delivered the first, or the 125 all-new Volvo VNL to Highlight Motor Corporation, marking the largest order of the next generation or the all-new then VNL in Canada to date. Now we are getting in also with this step-by-step with this volumes.

The first all-new Mack Pioneer was delivered to a customer in October, in the beginning of the quarter. This marks, of course, a significant milestone for Mack Trucks, bringing the rejuvenation of the product range into the market.

Also in October, Volvo Autonomous Solutions team and Waabi, the leader in physical AI, have successfully integrated the Waabi Driver with the Volvo VNL autonomous-redundant truck. With this integration complete, both companies together now are focusing on really deploying this and support broad commercial deployment.

Market environment. Always very interesting.

If I start with North America here, North American freight market, as I said, remains if you look at the figures and also the order intake during the bigger part of the year in recession. Far into quarter one, we believe that the North American will continue to be primarily replacement-driven on the back of an aging fleet.

The EPA '27 emission change will, in our view, only drive if anything, a modest pre-buy effect. Our current assessment of full year '26 is 265,000 heavy-duty trucks in '26, and we have increased then the forecast with 15,000 units versus the guidance provided in quarter three.

What we can say is that later part of quarter four and also in the beginning of this year, we are starting to see somewhat better activity level. If that is a sign that will prevail, maybe too early to say, but of course there are a number of parameters supporting that.

The European registration pace continues to increase, and we have lifted the '26 total market forecast up to 305,000, which is then 10,000 units versus the guidance we had in quarter three. Brazilian market contracted through '25, and we believe that the total market will continue to decline.

We repeat and reiterate our total market of 75,000 for '26, even though that there are some movements in Brazil, not at least related to FINAME and the financing. All of us that have been part of this for a while, we know that that has normally rather big effects.

Let's see if that can support on the upside, but for the time being, we reiterate that. Both for India and China, we are reiterating the market forecast as we had it also for quarter three—or in conjunction with quarter three, I should say.

Book-to-bill. The overall book-to-bill for medium- and heavy-duty amounted to 94%, both for the last quarter and for 12 months rolling.

We manage our industrial system well in quarter four, and had book-to-bill balance both in Europe and North America. Also as I alluded to with the right levels of inventory, that is super important where we are in the cycle right now.

For North America, we kept the balance by also working with a number of stop days, causing an underabsorption that Mats will talk about. That is the right thing to do now rather than to take a further structural adjustment downwards.

On the back of the weak U.S. demand during the fall, we will also have some stop weeks for Volvo and Mack in the U.S.

in the first quarter. We take stop weeks, as I said, in quarter one rather than to structurally adjust further downwards.

The reason is that we anticipate, also partly supported now by recent order activity, a gradual recovery during the course of the year and in line with our full year guidance that we are increasing then, as I said, to 265,000. In South America, we have been more restrictive with the order slotting in quarter four.

That is also explaining then the book-to-bill of 80%. We wanted to assure that we did sell out more retail inventories, and we now have a situation that is in good balance when it comes to the inventories.

Africa, Oceania in balance. In Asia, book-to-bill mainly impacted by number one, strong deliveries in quarter four in combination with lower demand in Middle East and Indonesia in the quarter.

On the market share then, Volvo Renault Trucks continue to deliver strong market shares for the full year: Volvo at 19% and Renault Trucks at 9.4%, giving a total of 28.4%. Volvo Trucks then ended as the market leader.

On the battery electric side, and despite that more OEMs are now delivering BEV solutions—by the way, which is good because we need to accelerate that for Europe—Volvo Renault still holds a 39.1% market share combined for the year. North America, Mack Trucks' self-help activities, not at least to stabilize the supply chain, paid off during the course of the year, and they have step-by-step now regained momentum.

Their share is now 8% for the full year, and later part higher. Volvo Trucks are back on the right track also after the introduction of the all-new VNL here, and so we also did see better market shares during the later part of the year, but then 8.5%, I think it was for the full year.

Brazil, Volvo remains market leader, market share of 23.2%. Australia has been transitioning during the year from Euro 5 to Euro 6.

We were ready with that rather early. Lost market share when market were selling out Euro 5s, but we have seen also a good momentum during the later part of the year, we expect that to stabilize.

VCE selected Eskilstuna, you're all aware of that, in Sweden as the location for the crawler excavator factory for the European market. Capacity of 3,500 machines in the 14- to 50-ton classes, and these excavators will be built on a mixed-model assembly line for all these models, but also for both electric and internal combustion engine.

The closing of Swecon acquisition, our wholesale and retail partner in Sweden, bigger part of Germany, and Baltics, is expected to close this week on January 31st. This acquisition will strengthen Volvo CE's market position further, not at least then in the very important service business.

Market forecast, similar picture you can say as truck. For North America, we are now guiding a flat market in relation to previous year.

That is a 5 percentage point upgrade since the forecast in quarter three. Same goes for Europe.

Now we say 5% as midpoint of the market, somewhat growth, and that is also an upgrade of 5 percentage points. China, as a matter of fact, same: plus 5% as midpoint, 5% percentage growth.

For South America and Asia, flat, and that is no change in relation to what we said in conjunction with quarter three. Book-to-bill Construction Equipment reached 180% in the quarter, driven by both North America and Europe.

North American demand is broad-based from the digital development, data centers, energy sector, onshoring of manufacturing, as well as the possibility for customers to write off 100% of the machine value the first year of operation. In addition, refilling of inventory at dealers given the better outlook now and where also dealers would like to have the right type of capacity to deliver to the market.

The European demand is encouraging with the larger markets, such as Germany, UK, Sweden, now gradually coming back, as well as the fact that dealer inventories are clearly moved into customers' operations. Also the other markets are supported with largely then positive book-to-bill.

For Buses, the transition towards electric vehicles in city traffic continues in quarter four. Just to mention one very important example, Volvo Buses secured an order from Vy Buss for 73 electric buses that will operate in the city of Borås from April '27.

The order comprises city and intercity buses, including articulated buses. Just as a small anecdote, they will also be produced in Borås, even if you are talking about regional value chains, maybe that is a little bit of an exaggeration of having that full circularity in the same city, but it happens to be there.

We're very proud. Book-to-bill 91% in the quarter, 98% that is more relevant for the bus business, as with rather long lead times.

That is a healthy and good book-to-bill in the quarter. Somewhat lower was on the back of somewhat lower demand in markets such as Brazil and Mexico.

Penta, as I said, it's interesting to see the high activity level when it comes to the power generation and industrial segment. Launched its first gas engine, both natural and biogas, for sure, to strengthen the lower-emission power generation offer.

This will further strengthen Penta's position to meet the global energy demand across many segments, and not at least data centers and AI factories. Again, that I think is interesting now, with more and more of the customers in this space wanted to have alternatives for lead time and volumes.

With the control system capabilities that you have today, to really bring in more engines with the right type of capabilities is a very efficient way of doing it for lead times, for cost, and for efficiency. The Volvo Penta IPS professional platform, the biggest now pod for propulsion systems, the biggest IPS, which was launched in '25 and opted for commercial use, but also for big yachts, has made strong inroads in the yacht segment, and very, very well-received, with several OEM now placing orders.

Volvo Penta has a positive demand momentum. Book-to-bill reached 109% in the quarter and 102% 12-month rolling.

Financial Services, finally. The portfolio continue to grow with stable new retail financing.

It doesn't look like it's growing here, but it's growing adjusted for currency. The sound portfolio performance was maintained, although increased delinquencies and higher write-offs, but if you see where we are in the cycle, I should argue that we have a stable and good situation well under control here.

The penetration rate full year '25 came in on a solid level of 30%. Also what is positive to see is the focus that we have had also on insurance offer from VFS, working together with the other business areas and the group brands to enhance the total offer for our customers.

By that, I will leave the word to Mats Backman, our CFO, to present the financial figures. Please, Mats.

Thanks, Martin. Looking into the fourth quarter financials then, and we are starting off with the group net sales.

Net sales decreased by 2% on a currency-adjusted basis compared to last year. Vehicle sales dropped by 4%, mainly due to lower volumes on trucks, while service sales increased by 4% currency adjusted, with contribution from all business areas.

European volumes increased, which led to an increased sales by 10% currency adjusted, driven mainly by trucks and Construction Equipment. In North America, FX-adjusted sales decreased by 8%, driven mainly by trucks, while sales were higher for both Buses and Penta.

In South America, net sales decreased by 18% currency adjusted compared to last year, and this was driven by lower truck volumes. In Asia, net sales decreased by 10% adjusted for currency, driven by Construction Equipment and the divestment of SDLG.

Excluding SDLG, sales increased with 21% in Asia. Other regions experienced slightly increased sales, mainly driven by trucks and buses.

Overall FX effect was negative with 11 billion due to a general appreciation of the Swedish krona. The main driver was the U.S.

dollar depreciating 13% versus the SEK. The adjusted operating income for the group was 12.8 billion, with an adjusted operating margin of 10.3%.

In Q4, earnings were again supported by the positive development of service business, continued lower operational expenses, and improvements from our joint venture business. The tariff cost increased during the fourth quarter, with a net impact for the group of 800 million, and we expect net impact from tariffs of about 1 billion in the first quarter.

In the fourth quarter, we continued to see higher underlying material costs in North and South America, and we had underabsorption costs in the U.S. manufacturing system on the back of lower demand levels.

The net R&D capitalization effect in the quarter was positive at 1.5 billion, with a year-over-year effect of 800 million. FX had a negative impact of 2.1 billion in the quarter, driven by the strengthening of the SEK.

In fourth quarter, cash flow amounted to 19.3 billion. The cash flow contribution in the quarter was driven mainly by strong inventory management, partly hampered by continued high level of investments.

Return on capital employed trend declined to 25.3% on a rolling 12-month basis, and the net financial position amounted to 63 billion, with support from the cash flow in the fourth quarter. Net sales for Group Trucks decreased by 3% currency adjusted, driven by lower volumes, partly offset by positive development of our service business.

Adjusted operating income amounted to 8.1 billion, with an operating margin of 9.5%. The lower adjusted operating income and adjusted operating margin were mainly driven by lower volumes in North and South America, higher material and tariff costs, partly offset by lower operational expenses together with good development of the service business and joint venture performance.

Currency had a negative impact of 1 billion in the quarter. For Construction Equipment, net sales decreased 8% FX adjusted.

Adjusted for FX and the SDLG divestment, net sales increased by 12% in the quarter. Adjusted operating income reached 2.6 billion, with an operating margin of 13.9%.

Product mix with less SDLG from the divestment in the third quarter and more heavy machines, together with positive development of our service business, were the main drivers behind the improved performance. In the quarter, the tariff continues to building up and had a significant impact on the financial performance.

The volumes were lower versus same quarter last year, driven by the SDLG divestment, and currency had a negative impact of 700 million in the quarter. For Buses, FX-adjusted net sales increased significantly by 26%, driven by higher deliveries on both buses and services.

Buses delivered another strong quarter with adjusted operating income of 683 million and 9% in margin. The result was supported by higher volumes with continued good price realization, together with service business performance.

In the fourth quarter, the tariff costs were building up and had a negative impact on the financial performance, and currency had a negative impact of 113 million in the quarter. Penta net sales increased significantly by 16%, adjusted for currency, which was driven by more industrial engines and the service business.

Adjusted operating income amounted to 608 million, with an operating margin of 11.9%. This was again on the back of strong volume development for both engines and services, despite unfavorable market product mix and higher freight costs.

Currency had a significant negative impact of 337 million in the quarter. Then looking into Financial Services.

The credit portfolio, adjusted for currency, increased to 256 billion, with a rolling 12-month return on equity at 10.4%. Portfolio performance continue to be good, with delinquencies and write-offs under control.

The adjusted operating income amounted to 889 million, impacted by increased credit provisions, but supported by the portfolio growth. Currency had a negative impact of 84 million compared to same quarter last year.

Then, finally, looking into a summary of our forward-looking guidances in the quarter, and starting with FX. Based on the currency rates end 2025, we expect a negative first quarter effect from transaction and translation of about 2 billion.

We expect R&D net capitalization at approximately 3 billion for the full year 2026, with a year-over-year negative effect of about 1 billion. Finally, the tax rate that we estimate to 24% for the full year 2026.

With that, I'm leaving for Martin to summarize 2025.

Thank you, Mats, for that. Let's go to that.

We are closing also the full year 2025. Just a few comments on that.

We can summarize the year with close to 480 then billion sales, with vehicle sales declining 5% FX adjusted on or vehicle and machine sales declining 5% FX adjusted on 8% less truck and 8% less CE volumes, with an on top of that, which I think is important, with also several production adjustments throughout the year back and forth and across regions. Another important piece of resilience is services, that did grow 2% FX adjusted, and as I said, our own activities, but also that customers are continuing to utilize the equipment.

Gross income margin was at 25.3%, despite volume decline, certain price pressure, even if commercial discipline was good, and tariff headwind. An adjusted operating income amounted to 51 billion, with a margin of 10.7%.

Cash flow at 22 billion for the year, and return then on capital employed came in, as it said, on 25.3%. The board of directors then proposes an ordinary dividend of 8.5 SEK and an extraordinary dividend of 4.5 SEK for approval at the Annual General Meeting in April, later this year.

By that, we end the presentation, Johan, and I think you will lead us through the Q&A session.

Right. Thank you, Martin.

Very well. We will do as always.

Please concentrate on your most important question. We have a number of guys on the telephone line, but we start in the room.

We start with Björn from Danske Bank.

Thank you. I don't normally say this, but congratulations.

Solid execution in the quarter. It's about time to say that.

On North America, again, you're talking about a replacement-driven market and also a minor EPA-driven pre-buy. Isn't this really about increased visibility?

Tariff situation is better visibility, EPA much more better visibility than previously. We have record-high truck age in North America.

Gut feeling, isn't this could be a really good year in North America? With that backdrop, maybe a comment on what to see about the underabsorption of fixed cost in North America throughout the year.

Yeah. If we start with your comment and analysis regarding North America, I think it's absolutely correct.

If we can continue to see that what it has been put on the table now in terms of tariffs from different regions, flows, etc., and on top of that the EPA '27 clarification and certainty, I think that is very, very important for our customers. The cautious stance among customer has rightly so been, what will happen?

How does it look like, etc.? We see that also a little bit in the volatility in the order intake because, of course, some of the bigger fleets, depending on where they are sourcing, etc., said, "Okay, we place orders, but we will also have a discussion later on."

I fully agree. I think this is very, very important if that will continue with a certain level of stability.

On top of it, with average fleet age, not at least that we haven't had an on-road, almost freight recession for a couple of years now, there is a fundamentals underlying that is supporting that. Then it's more the time-phasing to your point, and as we said, if we look at the order intake during '25, we had more of a hammock situation in quarter two, quarter three that was reflected in quarter four.

We said we will be brutally disciplined on our balance in inventory because we know also in North America, if you don't have that, there is an endless discussion about the inventory. I think we managed well, we had an underabsorption already in quarter four.

As we guided for, quarter one is still there, because that is more reflected later part quarter three, beginning of quarter four. Then we see already now a more positive situation for really late part of quarter one and beginning into quarter two.

There we start to see that it's more coming the effects that you are alluding to, Björn. If anything about the underabsorption, I think it's okay, Mats, to give a guidance that if anything, a little bit higher as we expect right now underabsorption in quarter one, even if I think we manage it well anyhow in North America for quarter four.

If anything, to be a little bit more granular. Again, right thing to do, muddle through now, keep the eyes on the ball, do what is right, because the market will come back in North America, and then you should be on the right level when it comes to capacity and inventory.

No, I think, and it's like you're saying, when it comes to underabsorption, we had an effect in the fourth quarter and that was visible on the slide I had on the operating income. Given what Martin talked about with the kind of stop weeks in the first quarter and then still being dependent of the order intake earlier in the fourth quarter, and then we see a gradual pickup from that then, but still underabsorption in the first quarter, yes.

We take one more question in the room from Agnieszka from Nordea.

Yes. Thank you.

I have a question to Mats. Could you please update us on your CapEx plans for 2026 and also going forward?

Maybe if you could provide also the status update for your Mexican factory. Do you still to plan to have an in-house battery production, or how you feel about these plans?

I can start with kind of the capital expenditures, and if you take a couple of years view on the CapEx, we are on a higher level, and you saw that for 2025. Especially driven then by the investments we are doing in Mexico.

In terms of timing, we will still have some of the investments in Mexico also in 2026, meaning that we will still be on an elevated level when it comes to CapEx, but I would say slightly lower comparing to what we have seen in 2025, and it's starting to normalize then, but still somewhat higher then driven by the bigger project that is ongoing then.

I think also, on that note, we have also been leaning in to a number of bets now when it comes to the retail business, which I think is super good and interesting. Volvo Trucks did it in Australia.

We have done a number of smaller things and then now Swecon, for example. What I like about that is also really continue to drive strong resilience for us, service business, but also competitiveness, because at the end of the day, our business to have the total offer close to your hands in a more and more world of hyper-competition, I think will be crucial and critical.

Then battery production, I think both when it comes to technology, time-phasing, and maybe what are the right levels of scale, a lot of learnings have been done. If I may a little bit maybe you don't start to build a 72-hole golf course directly.

Maybe start with nine, even a pay-and-play, etc., etc., and then you move along. A little bit same here with technology development, what is the reasonable scale, etc.

Two things: We will need that for different reasons. The Battery Act and other things and electrification will come and will be there as a very important part for sure for many different reasons, not at least for competitiveness, by the way.

It will be a time-phasing both when it comes to when will we start and how will we ramp it up, because how you're thinking about a cell and modular pack manufacturing today is rather different than only, let's say, 5, 7 years ago, I should argue. We have learned a lot being close to our partners here.

Good. Thank you for that.

We move on to the telephone line. We have Klas Bergelind from Citi.

Can you hear us, Klas? No one on the line there.

Then we continue in the room. Hampus from Handelsbanken.

Thank you very much. Two questions from me.

When do you think you will present the EPA 2027 truck, given that that's a big decision-making among fleets? Is there reason for you guys to maybe present it earlier this year with price increases to see how TOC will look for the fleets?

Second question is related to tariffs. If you could maybe model a bit for the full year, given the discount system we're seeing in 232.

Thank you.

I can maybe start with the tariffs then, and, like we said, about 800 million in net effect in the fourth quarter, and what we foresee is about 1 billion in net effect in the first quarter. Then we have the different business areas are kind of going in different directions now then, because if we're looking at Buses, for an instance, then you have a tariff kicking in with the Section 232 then with the business we have going from Canada into US.

There we have an increase then that it will gradually increase. The same goes to some extent for Construction Equipment as well then with the Section 232 is kind of helping the trucks, but it's not helping the Construction Equipment then.

When it comes to trucks, we are still building up, but what we foresee is a kind of a decrease then going in maybe to the second quarter then, sequentially then. To make any guesses beyond the first quarter in this environment, I find pretty tough then.

With what we know right now, it's the 1 billion in net effect in the first quarter.

Of course now and coming back to Björn's question also about stabilization, if that is continuing to be stable as quarters go along, it's an absolute situation with tariffs, and it's a relative situation with tariffs obviously,

and

eventually it needs to be compensated, obviously. There, as we see it, on the truck side, it is an opportunity basically.

Then you can say also that we had already before this pipeline plans for CE, both when it comes to wheel loaders and excavators for production in United States. That is ongoing, we saw basically.

Then when it comes to the presentation, yes, we will do that obviously, because it's coming in 1st January, and yes, we will present it during the year here. We will have a good visibility.

Given now the clarity of this, and not at least when it comes to the life length or the lifecycle demands, and you can say not relaxation, but clarity on that, I should argue that it's a more reasonable step for the customers also. That's the reason why we don't judge, to speak, the pre-buys to be significant in relation to previous events when you have had a much bigger step, basically.

Good. Now it seems that we still no connection with Citi.

All right, then we continue with DNB Carnegie, Mattias.

Thank you very much. I am interested to hear more about the US, which we've already talked a lot about, but given your relative advantage versus some peers in the US market, and also adding that you have a very strong lineup now with models both from Mack and Volvo, I would have expected to see stronger market share on the order intake in Q4, in particular in light of the big order number we saw for December.

Perhaps could you elaborate on, is there anything in particular going on in that quarter, competitive perspective, that sort of explains the lower relative market share?

I think, if you look at the order intake, I fully agree. December in particular was very strong for the industry.

I think it was north of 40,000, 42,000, or something like that. I think it's exactly related without knowing, but it is also a way of securing deals, etc., because as we go along, the market will be what the market will be, where are you producing, what do you need to do when it comes to your price realization, etc.

I think it's a little bit distorted by almost pre-ordering, to be frank. We feel rather good with what we had in order intake in quarter four, because I think we had 11,500, give and take now, Mattias.

If you think about it, that is the incoming then for later part of quarter one and quarter two. That is basically supporting a level of 200, if we are talking about stable or somewhat uptick in market share, that is supporting a level of 260, 265.

Then we are also saying that we are thinking about a gradual recovery. If you're not completely out of bounds when it comes to how the market will come or develop during the year, I think the order intake that we have had is in balance with what we see.

Again, it has been super important for us to have demand, supply, inventories in control, because if you're starting to get too much of disconnection there, it's also dangerous. I agree to what you say.

I think it's a little bit of, yeah, possible pre-ordering.

Good. We continue in the room, and we have Karl from ABG.

Karl Bokvist.

Thank you. Good morning.

On Europe, which seems to be improving a bit, you talked about it a little bit during the presentation, but is it due to any kind of asymmetrical country mix, or because you actually see the European truck market genuinely improving here?

Very good question. No, but I think it's rather broad-based, to be frank.

We have of course a lot of contacts with our European organizations. It's rather broad-based.

We did see it already, we have alluded to it a little bit already in quarter three reporting. We did see the volumes came in higher in deliveries and in orders for quarter four.

I should argue that it continues now in the beginning of the year. I get that question from time to time, how much is defense and energy and infrastructure and playing in, and the investment programs?

Not too much yet, which I think is also another support for Europe for the years to come here. This is more based on, to your point, Karl, the underlying market as we know it, that a little bit the same dynamic that we are somewhere expecting also for North America, but a little bit earlier here.

Good.

By guiding for 305, and it's rather good market, to be frank. Yeah.

Right. Good.

There seems to be some disconnection with the telephone line, we are free to continue in the room if anyone want to continue. Yeah.

Carl.

Otherwise, they can text it to you.

They can text.

No, but they can do that. Can send an SMS to you.

Yeah.

No worries. Meanwhile, I'll switch to Buses.

I'm not sure about the competitive landscape in the textile city of Borås, but when we think about the electrical transition on buses, which seems to have gotten along a bit faster than trucks, how do you think about the competitiveness there, how you position yourself in terms of performance, price points compared to, let's say, non-European competitors, for example?

No, we see that in quite many of the deals around the globe, not only in Europe, not even only in Borås, by the way. Around the globe, that in many deals we are meeting more or less 100% Asian competition, Chinese primarily competition in the tenders and the bigger deals.

As Volvo participating, there are of course differences here. Not at least when it comes to full electric offerings, we have been early out.

I think what is promising to see obviously, we're working of course a lot with our competitiveness when it comes to cost and the right type of execution and everything like that. Even more important is that I feel that and that is encouraging for other electrification patterns that we see, is that the city side of buses have been doing this for quite some time now, and are more and more not mature to really take the full equation into account: the famous TCO, the famous lifecycle equation both when it comes to revenues and cost and uptime, etc.

I think that is playing in our direction, not saying that the others are not doing a good job. We have the biggest respect for that.

I have to say that if I look back on '25 on buses, and maybe when I stood here 1 year ago, I should say that I'm more optimistic today than I was 1 year ago. I think we have found our place.

We know where we can, to speak, be successful and where we cannot be. In some of the deals where it's pure CapEx upfront play, we are not normally successful in that, because we have another business model when it comes to uptime, fuel efficiency, safety, not at least, and cybersecurity.

There is a question from Jefferies that texting in here. The question is on first, on the group functions and other, what are moving the lower cost base there?

I will say generally two things, given the big picture and the improvements we have seen then. As you have seen overall on the operating expenses, we have lower costs and that is going for the group functions especially.

Secondly, as you also probably know, we have some businesses, its group functions and other, and we have a bus business called Nova Bus that you probably recall, and that has been a turnaround if you're looking at this year where they have done really, really good, meaning that we have been going from loss-making into profit throughout the year. That is also contributing to the group functions and other then.

Those are the two kind of main items looking at the delta on that one.

Right. Also from Jefferies, they wonder whether the Mexican plant will have any drag on EBIT margin in 2026, given that they are sort of ramping during the year.

No. Not material.

It's a kind of a slow, gradual ramping, not material, no.

We think that will come in handy, by the way, also talking about the recovery, because we are anticipating then a gradual ramp-up, rather small volumes to trim in Mexico during the later, or you can say, second half.

Nay. Then we will move on from our let's see here.

One question Bernstein wonders, and we have Harry Martin from Bernstein, he wonders, given the EPA '27, etc., and the guidance for North America, how do you think about pricing? Will price on trucks still be tight in 2026, or will that sort of be possible to push price to some extent in '26?

Now, and you can add then,

Mats,

to this. I think first and foremost, and that you can see also in top line in relation to volume, etc., I think the commercial discipline in the group, but also partly in the market as we can judge it, has been better than if I may say so, normally in our industry, which I think is a good thing.

Better flexibility, generally speaking, in the industrial systems, higher share of services, etc. Pricing better.

Then there's no secret, obviously, that supply, demand, and normally when we see a recovery, when it really takes off and you're gaining momentum, there can be a squeeze, and then of course, in that part of the cycle, there are always opportunities. When will that happen during this recovery, given that we say that we are really anticipating a recovery, but still a gradual one during 2026?

Let's see. The dynamic will be there when that start to happen, obviously,

so.

I don't know, Mats, will you say something?

No, well said.

Thank you, Mats.

Next question is coming from London from Daniela at Goldman Sachs. She wonders, some of your peers are talking about autonomous commercial start in 2027, and where are you guys on that?

As I think is familiar, we are working, when it comes to autonomous commercial start, I think in that case, Daniela's meaning, the hub-to-hub, public, sort of on-road segment in US,

right?

We are already in commercial operations for confined areas, etc. As we speak now, we are running fully autonomous lanes in US together with our key partners there.

We have built up also terminals in order to host this and make it possible. Still, it is with safety drivers, but now we are getting really close to this, maturing the whole system.

This is, without being too exact, but this is not too far away. Even to say to Daniela that I think you are in the right neighborhood, if I may put it like that.

Which I think is a significant opportunity for the industry once that is happening, because if you think about it with automation and robotization, as an old production engineer, or it was a long time ago, not old, but I remember that during the '80s in particular and '90s, it was an over-automatization of the factories. You had an overbelief of things, and then you really found, to speak, the right type of balance on where should you have robots, where should you have CNC machines, where should you have different type of place-and-pick and smart, to speak, control towers, etc., and where should you have human interaction.

I think for the hub-to-hub concept, it's a very good way of looking at the same journey, that if you can really do it for hub-to-hub with terminals along the road, you will take out a rather big part of the equation that are bottlenecking, to speak, logistics today. That's the reason why I'm very optimistic about that development.

It was also a follow-up from Daniela regarding the fleet mix. We spoke about having more fleets into the mix in 2025.

Do we see that that continues also into 2026?

You want to say something, or should I?

No, you can start.

No, if you look at where we are in the cycle, I should always argue then when you're getting a little bit more of a broad-based recovery, then all actors are coming into the market. Because, obviously, if you are, as you said, in that respect, a smaller- or mid-sized fleet, you are even more cautious about, okay, how should I think about my replacement, etc.

I should argue, if we continue to see that more broad-based recovery that we talked about on Carl's

question,

the mix will be more evenly distributed and not leaning, because it's more in the down cycle where we normally have an overrepresentation of fleets.

Maybe to add, and I know that Daniela is normally on top of the kind of the revenues per truck as well and looking at the kind of the development over time, and I think that if you're looking specifically at the fourth quarter is also a question of mix if you're looking at the revenue per truck now, with a higher share of LCVs, light commercial vehicles, as well as geographical mix with less North America. I think that is also important to say.

Then Klas Bergelind from Citi, who was first on the line here, but here is his question here. He asks in Q1 2026, will you get any benefits from the Section 232 MSRP credit?

No, we see it's probably gradually into the second quarter rather than the first quarter.

Right. Also on Europe, you talk about better demand in UK, Sweden, and Germany in Construction Equipment, but how about improving demand for trucks at a country level?

What countries are you seeing any improvements?

No, but partly we've got that question here. Rather broad-based, and also certain signs that more of Central Europe is moving, that has been a little bit slow, not at least Germany, etc.

Rather broad-based, which I think is good, and it's also related to where we are in the replacement cycle, etc.

Right. I think we're ready to close, unless there are any further Mattias.

Maybe a bit premature, but you alluded to already have thought about adding capacity for Construction Equipment in the US before the tariffs. Could you give us an indication of if this could sort of fit within the current CapEx program for Construction Equipment, or sort of the potential timing, are we talking a year, 5 years, and potential magnitude of the investment?

No,

it's a great question. You can say that it's in the current because one of the advantages we have is that we have rather big, if I may say so, real estate facilities in Shippensburg that came along with the Ingersoll Rand acquisition back in the days.

Then we have reshuffled and the industrial footprint, but we see clearly that we need that for wheel loaders and excavators to start with. Thereby, we have a good starting point because they are made for that type of equipment, and we can utilize, to speak, the real estate.

We were there actually during the fall looking at that, I think it's well-incorporated. We will start during the later part of this year for wheel loaders and then gradually moving in, to speak.

I think that is an advantage that we have, that we have, to speak, rather good facilities both for powertrain on the truck side, and also then on the Construction Equipment side, that if anything, has been underutilized from a square feet, in that case, then standpoints.

We take one final one from UBS, we make sure that we cover all the banks here. We guided for 1 billion headwind from tariffs at the time of Q3 for Q4.

We came at 800. What was the difference versus what we saw in Q3?

We said about 1 billion, I think it's not a huge difference on that one, but to certain extent, timing. It's difficult to see if you see the accounting effects when you're building up inventories and having a positive impact from that, I would say more kind of a timing.

Timing through the balance sheet,

yeah.

Right.

You can always say exactly where do you have all the inventories when you start, and now we are getting more and more steady-state situation. On the other hand, we will work on the other side of the net effect also with commercial conditions as well.

Absolutely.

Right.

Good.

We covered all the banks. We're on time, thank you for coming.

We see you in a quarter.

Thanks a lot, everyone. Thank you.