Good morning, everyone, and welcome to this Q4 earnings call from a cold and wintry Stockholm. I'm Rikard Fröberg, CEO of Hexatronic, and I have with me, as usual, Martin Åberg, our Deputy CEO, and Pernilla Lindén, Group CFO.

Also with us today for the first time is Patrik Johansson, our brand new Head of Investor Relations. If I summarize the quarter in one sentence, I think I would say we are delivering on the plan that we have laid out.

Our net sales were 1.8 billion SEK, for an organic growth of 10% in the quarter. This also meant we swung back to 3% organic growth for the full year.

Adjusted EBITDA of 133 million SEK, or 7.2% margin. We also see that the important strategic shift that we have been talking about for a while now is continuing.

Our fast-growing data center and harsh environment businesses now account for over 50% of group adjusted profits. Fiber Solutions, which we know operates in a challenging market environment, saw an organic sales decline of 1%, and adjusted EBITDA margin of 5.2%.

Here, we're executing and actually expanding the performance improvement program we launched a few months ago, and we will come back with some more details on this. Data Center saw another outstanding quarter with 62% organic growth and, again, strong margins.

We also saw strong momentum for our Harsh Environment business area with 15% organic growth and an EBITDA margin that was meaningfully improved over last year. Cash flow was an absolute highlight.

Probably that Pernilla and I have been talking about this as an area of focus and improvement, and we were very pleased to see that the efforts are paying off, with an operating cash flow of almost 350 million SEK. In fact, this allowed us to lower our adjusted net debt ratio to 1.9 despite making an acquisition in the quarter.

A look at the key events in the quarter. Number one, the performance improvement program launched in September has been rather focused on our European footprint because of the headwinds in that market.

We have now also decided to make some adjustments to our American operations and are downsizing one of our factories there to better match the current demand levels. Number two, we're very excited to welcome Communication Zone to the Hexatronic Group as the latest addition to our Data Center business area.

Thirdly, we had some large shipments of submarine cable in the quarter. As you are probably aware, we see this as an interesting and attractive segment that we want to grow in.

Then, finally, after the end of the quarter, we have made some changes to the leadership structure within Fiber Solutions. Now, the diversification journey that we're on continues.

I think you've heard this and probably seen this slide a number of times now. It's an overview of the new business areas and segment reporting that we launched in 2025.

It's reassuring that every time we update this, we see an increased importance of the two fast-growing businesses, Harsh Environment and Data Center, that only a year or two ago were quite small, but today, in the fourth quarter, accounted for almost 40% of our sales and 60% of adjusted profits. While Fiber Solutions continues obviously to be very important for us, Hexatronic today is so much more.

Now, moving into the business areas and starting with Fiber Solutions, it was a quarter in line with expectations. We do not see any significant change, nor more better nor worse, in the market conditions.

There's continued softness in the fiber-to-the-home market, which impacts our microduct volumes. However, as we've also talked about, there are offsetting growth opportunities, and as noted in this quarter, we saw unusually high shipments of submarine cable to the tune of about 50 million SEK higher than in Q3.

This submarine cable is a business that it often has this type of lumpiness with big orders in one quarter. I would also say the general and the longer-term outlook here is quite favorable, but there might be some ups and downs in the quarters.

You can also see that currency has become a significant headwind to our top line, with almost 10 percentage points impact in the quarter here for Fiber Solutions. It's not unique to Fiber Solutions.

There's a similar impact on the other business areas, and I think also it's not unique to Hexatronic, but it's an important factor mostly on the top line. It also means while the -10% top line here year-on-year for the quarter looks quite drastic, the underlying organic number is -1% or relatively flat.

Adjusted EBITDA was on a similar level to the third quarter, which was expected. As we know, fourth quarter and first quarter have lower volumes, which obviously impacts EBITDA.

Also here, there was a bit of help from those submarine shipments in the quarter. The performance improvement program, we are on track and expect to largely complete the activities of the cost savings during quarter one.

In fact, we expanded the program so it also now includes a downsizing of the site in Clinton in South Carolina, where we simply had more capacity than needed. In essence, we're cutting the size and capacity of that site to give us a better utilization and indirect cost coverage.

The outlook, I think, is consistent with what we have said before. We expect the European market to remain rather subdued during 2026, but we also expect the North American business gradually coming back to growth.

This is partly affected by the BEAD program, which we now see gaining momentum and will start to have some market impact as of the second half, is what we are estimating at this point. We also note there was a recent European Commission issue of the Digital Networks Act, which, among other things, call for a switch-out date for copper for all member states.

This would obviously be positive for fiber build-out rates, but it's not immediate; it's more of a long-term supporter. Seasonality is expected to follow the historical pattern with lower activity in the fourth and the first quarter, and possibly some additional impact in first quarter if this unusually cold weather pattern remains, particularly in North America.

While there is softness in fiber-to-the-home, there are, as noted, growth opportunities in the overall fiber infrastructure, notably transport network and submarine cable. We see geopolitical trends as well as data center build-out as driving these areas.

The cost savings of the performance improvement program are now, with the expansion, expected at about 120 million SEK and still essentially full run rate by the end of the first quarter. Moving over to Harsh Environment, and here we're very pleased with the performance in the quarter.

It's the second consecutive quarter of 15% organic growth, and again, it is ROV and defense spending driving the demand. We saw an adjusted EBITDA margin of 11.4%.

This was significantly higher than the same quarter last year, but I think that was a rather weak comparable. As I've said before, we should also here look more at the long-term trend, and it is favorable, with a full-year adjusted EBITDA margin increase of about 1 percentage point.

Things are slowly but steadily moving in the right direction on the margin. We have a lot of work still to do, but we also have quite a bit of runway if we get it right, as this is a highly differentiated business.

As always, it is also a project-based business. Some individual quarters will show some variability, and we should look more at the year-on-year trends.

Outlook longer term is favorable, and we continue to work on productivity and profitability measures, particularly in Rochester Cable, and we also in this business area have still an ambition to make acquisitions, particularly within connectivity. With that, we're moving over to the Data Center, which had another stellar performance, and I will hand it over here to Martin Åberg to talk more about that.

Thank you, Rikard. The fourth quarter for the Data Center business area came in strong on both sales and profitability.

All our businesses performed well, which resulted in an organic sales growth of 62% in the quarter. It is mainly the service businesses that contributed to the sales growth.

Geographically, it was a strong development in both European market as well as in the North American market. We saw an EBITDA margin of 15.3%, and this compares to 12.7% last year.

It was a strong end of the year with installation activities that continued throughout the December month. Moving over to the market outlook that remains strong.

The market is expected to be driven by the hyperscalers that continues to report high CapEx and also very ambitious plans moving forward. If we look at our business mix, the cloud segment is our main customer segment, accounting for roughly 40% of sales, but we also have a strong presence in the data center enterprise market as well as towards other adjacent segments, which is also outside the data center market.

Looking at the long-term trend, we expect our addressable market to grow at approximately 10% per year. For our data center activities 2025, the organic sales growth was exceptional, it was at 37%, and going forward, we expect a sales growth that would be more in line with our addressable market.

The growth strategy remains with an ambitious M&A agenda and also an ambition to continue to broaden our service offering. End of November last year, we acquired Communication Zone, as Rikard said, which is an installation and service company that is based in Chicago.

The company was acquired from the two founders, and they will remain in the business and continue to develop our US data center activities together with the existing data center team we have in the US market. The acquisition is in line with our M&A strategy, which is to grow our data center activities in the US market and specifically to expand our service business, which I will come back to on the next slide.

Let us first start with some transaction highlights. The enterprise value was just over $20 million, plus a potential earnout of approximately $3.5 million.

This translates to an EV/EBITDA multiple of 6 times if the full earnout is achieved. Transaction was structured as a share deal, but in the US, when you're acquiring an S-corporation, it can be structured as an asset deal for tax purposes, and this gives us substantial tax benefits.

The net present value of those tax benefits amounted to close to $3 million, which brings the effective multiple down to a maximum of 5.3 times if the full earnout is achieved. If we then move over to the strategic rationale, the acquisition give us a strong presence in the Midwest region, and that covers states like Illinois and Ohio.

Most of the business is in the Midwest region, but it also strengthen our position through a few national accounts. This provides an interesting growth opportunity for us going forward.

Additionally, we also broaden our services through this acquisition. Then over to the financial impact of the acquisition.

Pro forma, it increases our sales with 13%. Margins, if we would have owned Communication Zone during 2025, would have increased from 17.9% to 18.3%.

Lastly, the acquisition was financed with cash and existing debt facilities. Moving over to the strategic rationale of the acquisition, below is what we presented a year ago when we introduced the three business areas.

The outspoken ambition was to broaden our service offering by acquisitions, and the background to that is that our existing customers, they have several adjacent service and installation needs, like installation of audiovisual solutions, indoor solutions, and also security solutions like cameras and card readers. Looking at the offering of Communication Zone, they provide all of these services today.

Additionally, they also make those services towards other segments, and this provides an important segment diversification, even though Communication Zone's main segment is the data center market. All in all, it's an acquisition that very well meet our growth strategy.

With that, I would like to hand over to Pernilla to summarize financials for the quarter.

Thank you, Martin. Total, we had a net sales of 1.8 billion in Q4.

That was an overall growth of 1%. Organically, we had a growth of 10%, and growth was driven by strong performance in both Harsh Environment and Data Center, while the Fiber Solutions organically had a decline of 1%.

We had 1% acquisition-driven growth from our recent acquisition from Communication Zone within our Data Center business. As Rikard said, we have a negative effect on exchange rate this quarter of 9%.

It's more or less all currencies that has weakened compared to the SEK. We had an adjusted gross margin at 37.5% compared to 41.4% prior year.

Gross margin that was decreased due to continued softness in the FTTH market, price pressure, and the typical seasonality, as well as the low capacity utilization and fixed-cost coverage within our factories within Fiber Solutions, as well as a small mix effect between our business areas. Adjusted EBITDA of 133 million SEK or an EBITDA margin of 7.2% compared to 10% last year.

The margin was negatively impacted by price pressure and lower sales in the FTTH business within our Fiber Solutions business, resulting in a reduced capacity utilization within our factories, which was then partly offset by strong development within our Data Center and Harsh Environment. Overall, an EBIT of 37 million SEK or 2%, and that was affected by one-time costs of 97 million SEK.

28 million SEK related to the performance improvement program launched in September, mainly related to Fiber Solutions Europe, and 67 million SEK related to the extended performance improvement program for North America of 60—yeah, 67 million. Net financial items of -35 million that is mainly related to interest.

Tax rate is mainly affected by nonrecurring items related to the performance improvement program. The performance improvement program we launched in September was focused on European footprint because of the market headwinds in the market.

The implementation of the plan is well underway. For the fourth quarter, we added 28 million as one-time costs, totaling to 230 million, which is in line with earlier communicated one-time costs.

Savings of this part is 110 million SEK for the full year, and a full run-rate impact is expected to be achieved in Q1 2026, and that is also according to plan. The cash one-time costs is related to severance, facility costs, transition cost, and legal costs.

Noncash items is mainly related to write-down and tangible assets and inventory. As Rikard said, we have now also decided to expand the performance improvement program and make some adjustments to our American operations.

The one-time costs for this part is planned to be 67 million and is related to write-down of fixed assets and a cost for downsize of the operations. 9 million of the 67 is related to cash.

The yearly saving is estimated to be 10 million SEK. Overall, the EMEA and North American performance improvement program will give 120 million in savings, and we'll have full run rate by end Q1 2026 and a cash payback in total of 1.1 years.

If we then look at Fiber Solutions, total net sales for Fiber Solutions of 1.2 billion SEK in Q4, with an overall decline of 10%, but organic decline of 1%. Decline due to weaker demand of FTTH equipment and price pressure.

Major shortfall is within our microduct business, and that is partly offset by a large submarine cable delivery in the quarter. Europe declined with 11%, that was related to mainly Germany and UK, and that was partly offset by Sweden due to the large submarine cable delivery.

North America declined with 16%, that is mainly related to Canada, with a slowdown in the build-out of FTTH. The conduit business in North America saw good volume growth, but low pricing, where year-over-year there is still a meaningful price decline.

APAC had a growth of 11% due to increased project deliveries. We had an adjusted EBITDA of 61 million SEK or 5.2%.

Profitability was hurt by the lower sales volumes, mainly within microduct, and then consequently, low capacity utilization, and then the continued price pressure. During the quarter, we had low CapEx investments in the quarter of 10 million or 0.9% of sales, which is mainly related to maintenance.

If we look at our Harsh Environment business, we had a total net sales for Harsh Environment of 310 million SEK or a growth of 5%, of which organic growth of 15%. Growth is mainly driven by the defense and energy sector, and as previously communicated, the companies within Harsh Environment have an international customer base and a majority of revenues from larger projects, which means the sales per geography can fluctuate between quarters.

Adjusted EBITDA at 35 million SEK and a margin of 11.4%. We continue to see positive effects from the improved production efficiency in Rochester Cable.

CapEx investments in the quarter of 15 million or 4.8% of sales, mainly related to production and efficiency improvements in Rochester Cable. Data Center: total net sales for Data Center of 369 million SEK in Q4, with an overall growth of 59% and organic growth of 62%.

Strong development for all units, especially the service business in Europe and North America, and acquired growth from our recent acquisition, Communication Zone. Solid EBITDA margin of 15.3%, and CapEx investment in the quarter of 2.2 million or 0.6% of sales.

Cash flow from operating activities before changes in working capital of 148 million SEK. Positive effect from working capital of 200 million in the quarter.

144 is related to inventory, where we have actively worked to reduce the levels for a period of time. 94 million SEK is related to efficient accounts receivable collection, partly offset by decreased accounts payable.

Cash flow from operating activities of 349 million SEK or 235%. Overall, CapEx investments of 27 million or 1.5% of sales.

164 million is related to the acquisition of Communication Zone, and group financing activities is related to amortization and lease liabilities. Net debt, which corresponds to net debt excluding lease liabilities, amounted to 1.6 billion SEK at the end of the quarter, which is a decrease of 124 million SEK compared to last quarter due to positive cash flow and positive FX effect of 27 million SEK, partly offset by decreased rolling 12 adjusted EBITDA, leading to a net debt in relation to pro forma adjusted EBITDA on a rolling 12-month basis of 1.9 during the quarter.

Giving the strong operational cash flow in the quarter, we were able to reduce our interest-bearing net debt. However, looking forward, we know that working capital has a seasonality effect, which might elevate the leverage ratio somewhat during the next couple of quarters.

On top of that, we have an earnout connected to prior acquisitions that will be paid out in Q2 2026, which will further increase the net debt. After that, we expect the leverage to come down.

At the end of Q4, we had 661 million of cash and 1.1 of unutilized backup facilities, which gives us a liquidity of 1.8 billion. We have a continued solid financial position.

I think it's time for me to sum things up. Again, in the quarter, we showed that we are delivering on the plan.

Organic growth was 10%, and adjusted EBITDA margin 7.2%, in line with expectations. We see continued market challenges in Fiber Solutions, where our performance improvement program is on track and expanded.

Data Center had another impressive quarter with phenomenal growth, and also Harsh Environment, strong growth and margin compared to last year. Cash flow was excellent, allowing us to reduce the net debt and slightly reduce our leverage.

That was the quarter. If we move on then to talk a little bit about the full year as we're wrapping up on 2025, let's take a look at that and also how we're trending towards the targets that we set earlier this year.

As these targets, we decided to set them by business area. Starting with Fiber Solutions, of course, we know that's been a tough year, but we are taking resolute actions to adjust the cost base and also pivot the business towards growth beyond fiber-to-the-home.

The main headwind here has been microduct volumes, but we see interesting growth opportunities in other product areas like submarine cable. We know we have more work to do, for sure, but we have confidence in our plan to turn things around, and we will start to see real effect of the cost savings in coming quarters.

Harsh Environment, the full year, we had a very respectable organic growth of 11%. Still a ways to go to the 2 billion SEK revenue target, but with double-digit organic growth and an ambition for acquisitions, I think we're on our way.

Adjusted EBITDA margin improved by almost 1 percentage point, and it all came from improvements in Rochester Cable, where we have been very focused on operational efficiency. Last, but certainly not least, Data Center has continued to overdeliver.

With the latest acquisition of Communication Zone, we now at a run rate of about 1.5 billion SEK, well on track with the growth we're targeting, and with margins that are actually exceeding the target. All in all, 2025 has been an intense year with challenges as well as successes.

We feel that we have a credible plan, and now it's all about continuing to deliver on that plan. I hope you will join us on that journey in 2026 and beyond.

Thank you. I think we open with that for questions.

Thank you, and hello, Rikard, Martin, and Pernilla. Done in the quarter.

Two questions from my side then, perhaps starting with the Data Center segment. You were very clear during the presentation that you expect continued growth momentum during 2026, although more in line with perhaps the underlying market growth.

Looking at the profitability, I think you came in just shy of 18% looking at full-year 2025, which is, as you said, above your target of 15%. Looking at 2026, do you, when you say continued growth momentum, is that also relevant for earnings?

Or do you see perhaps that profitability will come down from the very high level seen in 2025?

Thank you, Max. As you rightly mentioned, 2025 was a very strong year, and we expect a more normalized sales growth for 2026.

In terms of earnings, we are in a very good position. We acquired a company that has a similar profitability level, but we're also taking on some investments in the organization.

We don't guide on the profitability, but we're not saying that we will see that we have a further margin expansion. We keep to what we have guided before long term, that we would be at the 15%, but a strong outlook for '26,

too. Understood.

Then the second question relating to the Harsh Environment segment. You mentioned in connection with the Q3 report that depending on the length of the government lockdowns in the US, you might have some impact on order intake and then on sales from Q2 2026.

Do you have any update on that?

We have seen some impact of that, Max, also as I mentioned, the cold weather in the US has had some impact in January. There's still a couple of months to go in the quarter, I think it's too early to say whether it will impact the quarter or not.

For Q2 specifically, 2026, do you foresee any impact extending to Q2 as well from the government lockdown? Or is it more a Q1 thing?

I think it's more a Q1 thing.

Understood. That was all from me at the moment.

I will jump back. Thank you.

Thank you, Max.

Thank you. Hi, Rikard, Martin, and Pernilla.

I want to start with the working capital. You had a solid performance here in the quarter, and I noticed that you mentioned seasonality.

If we're looking at underlying seasonally adjusted numbers, do you see potential to improve the working capital relative to sales further?

I will take a first stab and then I will hand over to Pernilla for more color. There's always opportunities to further improve, and we're not stopping here.

I think we have done all the lower-hanging fruit, and it gets progressively more difficult from here. Then, yes, there's a bit of seasonality as well.

We want to make sure that we are ready for an expected seasonal ramp-up when you get to the summer half.

I think you have covered it all. Normally, we build some stock for managing the Fiber Solutions higher sales in Q3 and Q4, and that you can expect also this year.

Great. Regarding the expected improvement in Fiber Solutions in the US, does that include the duct and conduit that's unrelated to your fiber-to-the-home offering, if you understand what I mean?

No. Can you clarify that?

You sell to companies building power lines, for example, the part of the duct

and conduit that

is unrelated to the fiber. In the conduit business,

you're right. In the conduit business, we have some utility business, but it's a minority of that business and it's not a major impact.

I will say if we look at the conduit business overall, we continue to see volume growth, but as Pernilla mentioned, year-over-year it's price decline that is squeezing there.

You're mainly talking about the fiber-to-the-home then, I guess, in that expectations of improvements?

Yes, the BEAD program is focused on fiber-to-the-home, and this is where we see a robust market that we expect we will start seeing some growth gradually over the year.

Great. Thanks.

That's all for me. Thank you.

Thank you, Fredrik.

We have one written question here. One, taking a step back, what makes you categorize sales in Data Center versus Fiber Solution and Harsh Environment into data centers?

Have there been any reclassification in sales between Fiber Solutions and Harsh Environment into Data Centers? Then, three, top line has been performing very strongly in Data Centers, with organic growth of 62%.

Should we expect a similar organic growth rate in 2026?

Do you want to take that?

Yeah.

The background why we categorize sales into Data Centers, Fiber Solutions, Harsh Environment, that is basically how we are organized today in the business, mirroring that. In terms of reclassification in sales between Fiber Solutions and Harsh Environment into Data Center, that has not been anything, basically.

Top line been performing very strongly in Data Centers, with organic growth of 62% in Q4. Should we expect similar organic growth rate in 2026?

For the full year, we had 37% organic sales growth. As we said before, we expect it to be more towards the addressable market that we see, around 10% is addressable market.

Long-term expectations should be in that ballpark, yeah.

On the question on how we classify, it's mostly by the customer that we classify, not by the product. As always, there's no change to the classification, but of course there's some customers that might be slightly present in both, especially when we sell through distribution.

I think it's largely by customer segment.

Apart from BEAD, are there other drivers of the expected return to growth in Fiber Solutions North America?

We want to take market share, of course. We talked about some of our main customers for different reasons placing much lower orders in 2025.

That was one of the reasons why we had a soft year in North America. We see now at least one of them is beginning to ramp up their build-out rate again.

Two questions on Fiber Solutions: what positive impact was realized in Q4 from the cost-saving program, and should we expect a revenue decline quarter-on-quarter in Q1 given the large submarine cable sale in Q4?

Let me address them this way. We don't disclose the cost savings in the quarter.

It was rather insignificant. There was some, but it was rather insignificant in Q4.

It will start to be significant in Q1, but it will not be the full amount in Q1, and will be full run rate as of the end of Q1. Then revenue decline, I think we expect a similar seasonality in Q1 and Q4 is what we're typically seeing, and then I did talk about the lumpiness character of the submarine cable business.

In Q4, it was about 50 million higher than what we will expect for the submarine business in Q3 or Q1. Okay.

I think that was the questions. Thank you, everyone, for listening in and thank you for your interest and for your questions.

Have a good day.