Thank you very much. Good morning or good afternoon to all of you out there.

Hello, also from my side.

We appreciate you calling in, and just for the sake of order, we would like to present the report now in 20-25 minutes at most, and then allow for questions, of course. Then we have as a target to stop the whole interview here around 12:00.

Just another sake of order, we could possibly allow two questions per analyst or per person, and then you have to queue up again to allow as many as possible to put questions to us. All right.

With that said, once again, welcome. We're going to go through a number of slides, and I think that the headline as such gives a pretty good picture of what we are going to talk about, and we hope that you've read the report.

Of course, it's been a very transparent year to you regarding our recovery, if we call it, and we saw the signs already at the end of '24, and then gradually, quarter after quarter, we've seen the improvement, and then with the fourth quarter, which is typically a good quarter for us when we return to seasonality, it's a very robust development. Of course, there have been hindrances out there, political, and tariffs, and what have you, and the Swedish currency, which is very good to note on one foot that is strengthened, but it's been, of course, also quite dramatic when you invoice in other currencies.

Nevertheless, that's our task to solve or work with these issues, and there are no excuses, but rather saying that, okay, we have arrived where we are, giving all the conditions in the world. If we just have a quick look at the figures themselves, there you see, of course, the quarter and you see the year as such, and the summary is, when we look at the figures, that the growth is fairly modest.

It is even minus in the fourth quarter, but taking into account the currency effects on the whole full year, it's a bit better than 5% growth. In the quarter, it's even more than so.

It's just under 7%, I think, which means that we are truly recovering, and the margin is with us. The operating margin has come from just north of 10 in the quarter to 13.1%, which we think is fairly solid, and also for the year as such, we are back on track with 10.5% versus the 8% that we were in so pleased with a year ago.

Again, solid demonstration of strength, and we're going to go through respective business area. We look at these bars here in the graphs that you have ahead of you, of course, they are a little bit diminished by the fact that the currency has been so strong.

The last year's, I think, cut down with 1.8 billion kronor, so that graph would have been different had we had a fixed currency ratio. It's here when we look at profit after financial items, of course, they are influenced, but to a lesser degree, and now we see that the curve is going in the right direction again, which is very pleasing.

We see also that the seasonality is reinstalled, and we've been talking about that quite a bit because unless you've been following us for several years, the years '21, '22, '23 weren't really, if you call it, normal because the seasonality was not pronounced at all. Prior to that, we had a curve just like we more or less have had '25.

On Climate Solutions, which is the business area that you look at the most, perhaps, and sometimes we even called a heat pump company, which we rather be called something else, like a heating technology company, because that is, again, diminishing the other two business areas, and even Climate Solutions is not 100% heat pumps. Nevertheless, it's been a good year for us, and of course, we have fulfilled all the investments in product research and product development, and our factories and our equipment is up spick and span, which means that we are very ready to take on the challenges coming in the future.

That's a very positive attitude within the whole group, what we have achieved together. I mentioned that earlier this morning when I had a short interview saying, well, this is really a very good demonstration of strength.

Hans and I can only do so much, but we have a phenomenal organization behind us who understands the task, and we've been working together now for many years together, of course, and we had a slowdown '24. We just said, "Let's analyze that, make a program, and then charge ahead again."

That's pretty much what you see during the year and during the quarter for Climate Solutions and also the other business areas, which we're going to come to. If we just have a quick look at the figures for the year for Climate Solutions, we see that, of course, again, the modest might look not so phenomenal, but it's actually a growth of 7.6%, and for the quarter, it's just under 9%, which, of course, is contributing to the margin of 13%, which we have been working so hard to achieve, and which we also going to show you on the next slide, that, of course, it was not very pleasing to be under even 10%, which is the immediate target for all business areas, but to be under, that was a little bit painful, we have to admit.

Now we're back on 13%, and it's a very clear signal in the report that we don't aim to stand there, but rather move into this, should I say, broad span in the future and also already this year where we're standing. Looking at Element, same thing, it's been a challenging year for them, but some sectors are good.

The heat pump sector, the semiconductor sector has really improved during the last months. We had a weak period in the third quarter, and that was one of the main reasons why we couldn't really catch up to the targeted 8% operating margin, and we indicated that already in November.

Other than that, they are working very determinedly, and with all the challenges that we've all had, I won't dwell on each bullet point here. Of course, there again, we like to be back within the span of 11 to 10 to 8% to 11%.

Growth and margin recovery, those are the headlines for for the year to come. Here again, it's very narrow expansion if you look, or growth, but if we look at it from a should I, fixed currency point of view, then we have a growth of 6% for the year, and also for the for the full year, it's or for the full quarter is well above 5%.

It's catching up. Here, of course, there you have the the icicle sticking down 2005 where we had a very difficult year, but there was some money set aside, but now we've had two years below 8%, and we are very determined to bring it back within that span as I just mentioned a few few minutes ago here.

Looking at Stoves, of course, they've been dragging, and there we misinterpreted the market comeback, we can say. Stoves hit the toughest situation a little bit later than the other two, and even the first quarter '25 was not so bad really.

Then, of course, consumers were certainly influenced by all the worries in the world, and we've taken away costs, of course, and we are fully determined also here to return to a margin that we are more used to. If we look at the precise figures, we can say that the growth, of course, was very very modest.

It's even minus, and we are not really used to that. It was 5 percentage units drop if we discount the currency, but still even the fourth quarter was just on the verge being equal, taking the currency effect away.

We feel that we are scraping the bottom, and we hope now that it'll be a big leap jumping into that span, but that's certainly our target, together with, of course, a volume increase, organic growth. Before Hans comes in, I'd like to just show you the bars, as we typically show, and of course, we had a phenomenal growth there, '22, '23, even '21, and then we dropped down painfully so.

Now we are, even including the real currency effects, just passing the previous year, but of course, had we had another 18.8 billion there, we would have been at a different situation. Profit after financial items, we have a bit to go there.

They're determined to come back. As far as the margin improvements, we've said already, and of course, that's a combination of being very frugal with cost, utilizing our investments that we've had now so determinedly fulfilled, and of course, being very aggressive in the markets, so that's the good old, usual tools, and we hope to be able to show you better bars as the years are coming by.

When it comes to sales distribution, it's fairly much the same as in the past, where two-thirds roughly come from Climate Solutions, and Element 1/3, and Stoves a little bit less than 10. Of course, with Climate Solutions coming out with a fairly good margin, the results as such is, of course, dominated by that, and with Stoves fairly marginalized because of the relatively weak performance during the year.

Geographically, last slide before Hans steps in here, it's, yeah, North America, 31%; the Nordic country, which we consider being our home market, is less than 20%; and then 45% in Europe outside the Nordic countries. That's fairly stable, we'd say.

I think I hand over the reins to you, Hans, there.

Thank you very much, Eric. I'll continue as usual, to speak, and then we'll of course leave room for the questions.

Just one comment on the group before I head into the divisions again and then the balance sheet and so forth. As you saw, we have adjusted numbers.

That's something we very seldom have, really. We like to present exactly what we have proformed, in reality, we've only made adjustments twice, and that was back in 2005, as you mentioned, when we had a savings program back then, and then for '24 for that savings program.

This year, we did however decide to mention that these acquisition-related revaluations of contingent liabilities would need to be mentioned separately because they have very little to do with the underlying operations, to speak, the 178, 179 million. That's what we do every fourth quarter every year for all of our future payments for remaining shares in companies that we owned.

They are, of course, based on future projections. This year, we had a very fortunate situation in a way where a couple of companies and owners wanted to remain on board as owners for a number of more years and not step out soon, to speak.

We always welcome that because we want the people to be involved with flesh and blood. That was the reason for that adjustment.

Now, heading into Climate Solutions again, as Eric mentioned, we had a good and strong finish to the year by performing quite well in the fourth quarter, almost a little bit better than I had expected since December was the last December now for many years, which was employer-friendly, to speak. You could take a few days off and get a long vacation.

That did not hinder our companies from continuing to deliver and perform, which was very pleasing to see. It was a good finish to the year where we had good sales in the Nordics, especially Sweden, Denmark kicking in, and then Germany and the Netherlands, and to some extent the UK as well.

Then in North America, with the commercial sector being very strong, to speak, or relatively seen strong, that's our bigger area over there, but also US being a very stable country in terms of business. That contributed to this good performance.

Thanks to the volume coming in then, which you don't see due to the currency, but Eric went through it quite in detail, we've had an underlying good organic growth. That in combination with the savings program that we launched and where we've been really focusing on holding onto costs have generated both a better gross margin up by some 3, 3.5 more percentage units from Q4 of last year, and then holding onto the SG&A costs as well, making it possible for us to deliver a growth in operating profit of some 34+% coming in at this margin of 15.7.

Quite an achievement coming up from the 12 of last year and then landing in the full year for Climate Solutions at 13 up from the 9.3. We're back on track, and as Eric mentioned, we of course want to continue to develop from this level.

In terms of split of sales per geography, there have not been many movements. We're very stable in this situation.

The Nordics always represent just below a fourth, the rest of Europe is basically half, and then North America is about the same as the Nordics or slightly, slightly bigger. Moving on into Element, also had a relatively strong finish to the year, almost coming in at the 8%, which is the bottom range of the interval where we want to be.

This was not a given in a sense, as this is, as we typically say, our most global business area where we are exposed both to many geographies and also many segments where the majority have been stable, some have been growing nicely or kicked in again, HVAC with heat pumps being one of them, of course. Semiconductors coming back in the quarter, they were up in the first part of the year, but then had a decline in Q3 and came back, whereas white goods, automotive in Europe, and industrial still are in a slightly more challenging situation.

All in all, we were able to increase gross margin here as well in the quarter by some 2 percentage units, the operating profit coming in almost 17% above from last year, leading us then to landing a full year at 7% operating margin with a slightly better gross margin, keeping the SG stable, but still a little bit of road to go to get back into the 8, but clearly on the right track. In terms of split of geographies per sale, as I said, this is the most global business area.

Not so much of movements within this area. It's the others portion that has grown or changed a little, you can say, being the Asian part, which declined slightly since the other ones have grown or come back, you can say, but no major changes here.

Stoves, then, is, as you all know, the business area still struggling a little bit due to a difficult market. On the one hand, the low new build rates, people being a little bit uncertain due to the geopolitical situation and so forth have been holding onto these types of products.

One should not either forget that we come from a very special situation in the sense that during the pandemic and the homeowner trend that followed, we had a very strong demand in the business area, which then was continued once again, you can say, when Russia invaded Ukraine and people were really looking for a heating device which was not dependent on anything else than wood, to speak. With that in mind, we think that the business definitely will come back, but that it still is lagging a little bit behind before it will kick up.

Also here, we have obviously been working on cost control and focusing on trying to grow the business and keeping up the profit. Gross margin improved by 2 percentage units almost, or 1.5 at least, in Q4, and we were able to basically maintain the profit, and coming in at an operating margin just north of 10%, and for the full year, the 4% that Eric mentioned before.

In terms of geography or sale per geography, no big movements. Since quite some years back now, we have a big operation in North America, based in Canada, in the Vancouver area, and that has developed quite well in terms of sales, but of course, the tariffs have hit us in that respect.

If we then move on to the balance sheet and eventually cash flow statements and so forth, you see that the total assets have actually declined from 70 billion to 65. A lot of this has to do with currency.

If you see the intangible assets there, they've come down from 32 to 29 billion. There is a good portion of currency in there, but of course, also a result of depreciation, and that goes also for tangible assets.

Although we have continued to look at acquisition opportunities and always do, we have not brought so many companies on board, we have not had any add-ons here in the same way as before where the balance sheet always has expanded. You basically see the same effects on the equity and liabilities side where equity is lower than before, but that is very much a result of these currency translation effects that I just mentioned, but also the fact that we have handed out dividends, and you have the bridge on this in the report on page 12, I believe it is.

Pleasing to see is that both the long- and short-term interest-bearing liabilities have come down. We've amortized on our loans, we've reduced those by some or roughly 2.2 billion SEK, which has improved our financial strength, you can say, for future acquisitions.

Very pleasing to see is that the cash flow has, from the underlying operations, generated some 400 million more than compared to last year, which is pleasing in itself. We've also now had a release in working capital that we have been talking about.

In previous quarters, we've had a good development on inventories. We've step by step reduced those.

We've slightly increased our payables, which also has had a good effect, but we didn't in Q2 and Q3 get the immediate effect of our increased sales. Typically, we invoice a lot at the end of the month, and then it takes a little while before the effect of that kicks in.

A good portion of that did kick in now in Q4, we released some 700 million, then leading us up to having a good cash flow from operations after changing working capital of close to 4.9 billion. The investment in current operations has come down and will come down even further following the big investment program that we have gone through and are just about to finish.

Then a small portion there on acquisitions, and then the financing activities, that's of course repaying debt and also paying out dividends. The fact that the change in liquid assets is slightly negative there, that's fully planned.

I think a very good and strong cash flow behind us. Just a few key financial numbers here.

We still have a good portion of cash on hand. It's at 5.9, basically, slightly down, but just for the reasons that I mentioned, that we have used a part of the cash to amortize on our loans.

As you see, the interest-bearing liabilities in relation to equity has further come down. Very pleasing to see is that the net debt/EBITDA is now come down even further from the 2.9 in the previous quarter to 2.7.

Regardless of us having adjusted that number or not, the number is basically the same. It's either 2.72 or 2.67, it's a very small difference coming from that effect.

Then an improved equity assets ratio, making us a solid company. The working capital, we're continuously looking into that and working on that.

It's given a good effect during the year. We have as an intermediate target to land in at 20%.

We came close here with the 21.2, but having taken it down from the 22.8, as you see there in the picture. That's also heading in the right direction.

Just the very last key financial numbers. Obviously, return on capital employed and return on equity still have some ways to go to meet our targets, but they have definitely taken a step, both of them, in the right direction.

That's what we are continuing to focus upon, and with this year behind us, we're well positioned for that improvement. The very last page here is a little bit of a summary of what I've just talked about in terms of these financial numbers, where you can see the development of these key financials over the years.

Up until the very special year 2024, we've gradually improved both the operating margin and the net margin, and also the equity assets ratio. Return on equity has been suffering a little bit, but that is of course due to the strong equity in a way.

It's communicating vessels in a way. Following now the recovery here in 2025, we think we are heading in the right direction again to continuously improve these numbers.

By that, I think we are basically ready for questions, unless you would like to add something, Eric.

No, I think that we spent 26 minutes all in all, now we have 34 for questions. I was trying to speed up as much as I possibly could.

Perhaps I was too short in some instances, but you covered nicely, Hans. That's fine.

You go ahead with your questions, please.

Morning, Eric. Morning, Hans.

Thanks for the time. My first question is on the cost base.

It looks like the margin improvements mostly coming through in the gross margin line as you talk to. Cost of goods sold in the quarter down from 69% last year to 66% of sales.

Can you help us break down that cost a little bit? Interested how much of your cost base is driven by raw materials like copper and steel, for instance, how much is labor, and then how we think about the moving parts year-on-year.

All right. As we say, we have more intensive cooperation between both the companies in Climate Solutions and between Element and Climate Solutions.

That is bearing fruit, both when it comes to raw material reductions and also our new facilities, of course. They also allow us to be more rational, although the volumes are not totally satisfying yet.

Those are the two major factors that I would say. We kept pretty much the fixed cost at a level that is a little bit too high in the springtime and not too low in the fall.

The seasonality is very important. That's why we point on that.

We have to have a very stable R&D fleet of people and so forth, and we can't diminish them and go up in the fall. We have to have a fairly even amount of indirect and clerks and developers and so forth.

I hope I answered some of your issues there.

Just maybe any comment there in terms of your copper mix exposure?

Copper is, of course, an important factor, but we are mitigating that to a point with vessels now being to a larger degree also produced in stainless steel. That the alloys there are not hindering the mix to be slightly more positive.

Okay?

Thank you. Maybe just secondly, I was interested in the North America performance for Climate Solutions.

Looks like flat revenues year-on-year at around 6.8 billion kronor. If we look at the data from AHRI, that's showing a 37% decline year-on-year in November in volumes.

Interested in what's behind that outperformance versus the market. Is it a timing dynamic?

Any thoughts on the North American business would be great.

I think that there are perhaps many or several factors, but one factor we believe is that we've been fairly quick to monitor and to adjust the refrigerants to the market demands. In North America, it's not so much propane, or R290, but rather the 454.

I think that's one factor where the assortment has been adapted to the market presumably a bit quicker than some of our colleagues in the industry, and also the fact that the commercial segment has really been positively developing. Those are two factors that I think that makes our performance fairly stable.

Thank you.

Hi, good morning, everyone. Good morning, Hans and Eric.

Thank you so much for taking my question. My question is on the Climate Solution margins.

You had this nice chart in the presentation where you could see the historical margin levels, and you also guided that 13% to 15% in 2026. I guess my question is that from where we stand today, what do we need to have to get to the historical level of 14% to even close to 15% margins?

You talked about that you had a bit more efficiencies in your new factories. I guess that should help you to get there a bit easier than it was in the past.

What are your sort of expectations for volume growth to get there? Do you see any further benefits from efficiency gains or cost cuttings in the past 2 years to contribute to the margin improvement in 2026?

Of course, the factories are more efficient, but then, of course, we have to realize that the depreciations are kicking in. We are mitigating that with the higher efficiency.

To bring it further into the interval, or the span, that is a combination, of course, of growth and polishing even further on productivity and maintaining cost. That might be a hide-and-seek answer, but that's exactly how it is.

It was painful to bring down the cost, and we are doing our utmost to keep it at that. Of course, when we add costs, we know that that is for a very good purpose.

Realistically, productivity is coming along as the volumes grow, not saying that, well, we have to wait several years. We believe that we are on that growth pattern, and we believe that the growth, continued cost control, and increased efficiency, although dampened a little bit by depreciation, will bring us into that interval.

That's the whole organization's target when it comes to Climate Solutions. All right?

That's super helpful. Thank you very much.

Thank you. My second question is around market share and pricing.

Just wondering if you have any comments you could share in terms of your ambitions on market share and what are the pricing trends you have seen in Q4 and going forward.

We believe, now it's very difficult to comment on the whole industry, but we are not very much friends of decreasing prices. That's why we have always said that the price decreases we've seen in the market, they've been mostly linked to inventories being sold out, and we believe that's been a fair analysis in the past.

We believe also that once those overstocking items are out through the distribution channel, we have a more realistic pricing situation. We do not believe that there's any dramatic activities on that line.

In some instances, we even recognize that there'll be some slight increases of pricing. I think it's been matured, if I may use the word, when it comes to the pricing situation.

I hope I answered your question there, Uma, or was that fulfilled,

or? Absolutely.

Any commentary you can have on market share?

We believe that we are definitely not losing market share, but to say that we are gaining tremendously, but we are on very solid ground with the assortment, our activities, and we also understand and acknowledge that our partners out there in the market, they appreciate that we've been disciplined with our prices, with our product launches, and the feeling is that we are on the right track when it comes to also gaining market shares. I'd like to be more humble about an overall comment on that.

All right?

That's super helpful. Thank you very much.

Thank you very much. Two questions from my side, then.

If I could come back a little bit to the US and the commercial offering, I wanted to ask a little bit. I see that you're mentioning, for example, chillers being a product that is in good demand for you right now, and I can also see when I look, for example, in WaterFurnace that you seem to have a product portfolio that is suitable for data centers.

Just asking, has that been a positive growth driver for you in the US that could explain the discrepancy in the last couple of quarters relative the data points that were mentioned in an earlier question here on the call? Thanks.

We must say that we haven't really concentrated on data centers. We rather been very strict when it comes to penetrating those segments where we are historically relatively strong, but that doesn't mean that we don't have the ability.

There are so many companies rushing into that, we are not standing by the side and saying, "Well, we wait and see." We've been continuously preparing our products for the very suitable market in hospitals, educational centers, and so forth, and also governmental buildings, not neglecting perhaps the data centers, but we couldn't say that we have really put massive efforts in there, but rather maintain where we are and, of course, gradually looking at that and moving in there without forgetting at all our customers and our segments that we've been working so hard and working up or fostering, you can say.

That was a long answer too, because we know that that is, of course, very inspiring, but I think that is still to be further developed by us. That's not the reason why we have seen the growth that we've seen.

Okay.

Good, then I also wanted to ask, you mentioned Italy here as a market that is seeing sort of a return to growth, and I think this is the first time this year you're mentioning that country. From what I know, you also predominantly have a more of a commercial offering in that market with Rhoss and so on, but just wanted to hear a little bit, are you seeing better residential dynamics in that market as well, or could you spend some extra time on that also given the size of that market from a European standpoint?

Thank you.

On the commercial side, we see an uptick, and that again has to do with the product ranges that we have now launched with modern refrigerants and the appetite from the market to install those. I think we've been fortunate when it comes to the R&D.

On the residential side, we don't see any major change really, it's predominantly on the commercial one. Hans has a comment.

We often talk about people, to speak,

and

of course, you do need to have a company that is in good shape and obviously very good products, but you also need very good people running the businesses. I think we have been very fortunate to get good people on board in that country to drive the business taking the portfolio, the assortment that we have, and penetrating the market.

That has definitely contributed also to a good development over there.

You're absolutely right, Hans. I'm always a little bit concerned about mentioning that because then the headhunters out there trying to recruit people from us.

No, I'm just saying that jokingly. The whole success, we start with that, is built on people, and that we've been able to improve now.

It's just the two of us here, but the other 21,000 people out there, they are the ones that make difference, and we appreciate, of course, the management in Italy is very, very good, both the companies in Climate Solutions and also the people on the Element side, very professional, very devoted. I'd just like to underline what you said.

Thank you for bringing it up. Okay?

Absolutely. They're probably all listening into the call as well.

Thank you for the answers. I'll get back in line.

Thanks.

Thank you.

Thank you.

Thank you. Good morning or good midday.

First one is just on we've talked a little bit about what you've done on the product side in North America, but in the report, you do mention the cross-collaborations, etc. When looking at the European market, any particular product categories worth mentioning?

For example, you talked about the potential to expand into sizewise smaller heat pump products by using CFL, for example. Just curious to hear what you've done on that side.

That is very much to come. The figures for '25 have not been really influenced.

Of course, we've started, but that's really to come during '26. That is one factor that is, we believe, is positive, but we have to be cautious here not to mention too much compared to what we mentioned in the report.

Of course, product, presence, and cross-collaboration is important. We already mentioned purchasing and also R&D that is really coming on very good.

Winston Churchill, if you like to refer to him today, he said there shouldn't be any crisis that you shouldn't use for a purpose that's necessary. We believe that we have come closer to one another, both within the Climate Solutions and within the Element and across.

The psychology, and of course Stoves they also benefit from the material savings programs. We always felt that we were tight, but we must say that we've been tighter today than we were before '24.

That is to come as far as more to be seen. If you attend the show in Stockholm in 2 months, I'm sure you're going to see what we are talking about today.

Understood. Then the second question and a follow-up on that is perhaps more directed towards Hans.

The investment level, when looking at capital expenditure, just above or roughly 2.1 billion for the year, and either in how you view it in relation to sales or in absolute monetary terms, how one should think about investments into the next couple of years? Then I have a follow-up on that.

I think we've been fairly clear on this, that we had, in a way, an exceptional period now of investments that was launched some 5 years ago of 10 billion that we have basically come to an end with. Prior to that period, our investments typically were at some 3.5% of sales, and depreciation about the same.

We kept a stability between the two categories. Now in terms of investments going forward, we're finishing off these large investment programs and will come down to a more normalized level in terms of investments in percentage to sales as before, you can say.

It will be, of course, a little bit of a step-wise way coming there. As Eric mentioned, of course, depreciations will kick in instead now when these programs are being launched or these facilities and product programs are being taken into production.

All in all, after this period, we aim at coming back to the historical levels, you can say.

Understood. Because on a quarterly level for the group, capital expenditure was up a few hundred million on a group level, but in Climate, it was up from around 300 million to, I think, nearly 1.2 billion.

Is this related to finalization of something, or something else that we should keep in mind into '26?

Now, it's very much a matter of finalizing projects that have been going on. It takes quite some time to build a factory, for example, or take a new building into operation.

Then depending on what the market looks like, we have been adjusting the investment in the equipment, the machinery, and everything according to market demand. When we see that there is such an opportunity, to speak, we go.

It is linked rather to such finalizations.

Sorry, that was all from my side. Thanks.

Thank you, Carl.

Yes, good morning. I have two questions regarding growth in Climate Solutions for this year.

I assume that some of the organic growth last year was due to that you had heavy destocking in '24, and now in '26, you will confront a sort of normalized demand. However, you saw a little bit of uptick in the second 9% organic growth, and we also know that we've seen quite dramatic increases in gas prices, but also in electricity prices, but overall a cold climate here in Europe, etc., that drives maybe a higher replacement.

How do you see this short-term development here, but also if you can manage to see organic growth in '26 on a similar level as last year, even though you have a tougher comparison?

That was a long question. See when we can chop that up into a number of answers.

To start with, if you talk about destocking, we believe that the market now knows that the industry is such that the manufacturers, they can deliver. We believe that whatever comes in as orders goes out fairly quickly.

There's no buffer. Those days are over.

Of course, the market knows that we are all able to deliver. That's what I'm saying.

Gas prices, of course, they are one factor when it comes to installment of heat pumps, but it also linked to the price of electricity. If you just look strictly at gas and electricity and say, "Well, electricity goes up and then gas goes up equally," well, then nothing has been gained.

I think it's when you see that gas is going up and electricity is being reduced, that you really see the effect. I think that that's still in should I say, the politicians' hand, how should they handle gas prices knowing that the gas still is not totally free of hands in the eastern part of our world.

Gas is still coming in, I think that's a political issue. We believe that people in general, that's an analysis that perhaps is too quick to make, but we believe anyway that people are looking into the way of using electricity and heat pumps rather than gas.

We believe that that understanding is there now. That's what we see in Germany, that's what we see in Holland, that's what we've seen a long time in Sweden.

I don't know whether you like to add anything. That was a long question.

I hope I answered that as good as I possibly could.

My question was specifically if energy prices in general are on the rise, maybe you start look at more energy-efficient solutions even if the relation electricity/gas is not changed.

Yeah. No, we talk about the spark spread, and that's perhaps we are so influenced by the difference between gas and electricity.

Of course, if energy takes a larger part of the economy for each family, everyone would say, "Well, what should we do about it?" Then, of course, a heat pump comes in very naturally saying, "Well, we are going to save energy in our household."

Then you start looking at that. That is correct that if energy prices are going up, then the interest is stirred by installing something more efficient.

We've typically said, and I think you know this, that if the spark spread is more than 2.5, 3, we believe that it should be at that level or below to really be helpful or trigger the sales of heat pumps. The electricity price can be much higher than the gas price, and you're still very efficient or saving costs with a heat pump, but the difference shouldn't be too high.

Here, we also to some extent need the help from politicians to be a little bit more bold to make sure that these fossil heating devices pay for the damage they do, to speak.

Do you see any of these effects coming into force in the beginning of this year?

Sorry, your connection is a little bit

If you see any of this demand increase coming to be seen in the beginning of this year?

All respect, we do not make forecasting month by month. I think that you have to read the last sentence in our report, and the aim is to continue to grow and increase the margins.

I don't think it's fair to say anything today that we haven't said in the report because we have, although a very healthy portion of people calling in, we have to have that fairness to all investors. All right?

Thank you.

Hi, it's Zita Ekblom calling from Morgan Stanley. Apologies, I don't know why my registration didn't come through.

I've got two questions specifically on the cash flow statement, please. In the fourth quarter, you benefited from quite an attractive working capital inflow, which is very encouraging, and I know that you've had an ambition to continue to reduce working capital.

I'd like to understand how we should think about the working capital expectations into 2026 if we should continue to expect this to decline relative to revenues, because obviously that's quite helpful for margins. That's the first question.

Then the second question relates to your cash flow from investing activities. Just a little bit of confusion here for me in terms of what's in the slides and what is in your report.

In the slides, you allude to acquisition spend of 943 million SEK in 2025, but in your report, you talk about your investments being 179 million SEK. I just wanted to understand, is the difference between what is in the report and what is in the slides contingent consideration for acquisitions that you've already done in the past?

I'm just trying to understand that delta because it's quite large. That would be helpful for a bit of color.

Thank you.

All right. On the first question, I need to refer to what Eric just said, that we can't really give any projections here for the future that only a portion of you hear, to speak.

I think we were fairly clear on this anyway, that we as an intermediate target have to reach a working capital that is 20%. We came in at the 21.2 or 3 this year.

Obviously, we're continuing to look into working capital to bring it down, to turn the inventory quicker and so forth. That is the next step, and we won't be happy with that.

We would like to bring it down even further, but it takes quite some time and is a step-wise process, if you like. I think that's as much as we can say on the goal or target for the coming year in terms of working capital.

Then on your second question, I think it's important to point out that these contingent considerations, to speak, the ones, the 178, 179, that I mentioned earlier, they don't have any effect at all on the cash flow, obviously. That's a liability that we're booking for future possible payouts.

What these payouts will be will be determined upon the performance of these companies. That is several years down the road.

Then, of course, we have during the year had some payouts for if we have bought another 10% or what have you in according to the contract. They, of course, run through the cash flow statement.

I would suggest that we can take this in a call this afternoon or tomorrow to run through that.

No, that's great, Hans. That's perfect.

Just on the write-down that you took or the acquisition-related impact that was not in the reported and in the underlying numbers, I know that that's been taken through the central line. Could you give us some details, though, on what those assets actually are?

Was it assets that have been acquired for the Climate Solutions business, or is it assets that have been acquired for Element? Because there's really no detail in the release on what that charge relates to, just a little bit of color on the business unit or the division, I know it's centrally taken, but which division it actually is aligned with?

Thank you.

It was not a write-down of any sort. We've not written down any assets or anything like that.

This is just a consequence of we have a contract. For example, we've purchased or we own 60% of a company, and we have the both option and obligation to acquire the remaining 40 in a couple of years.

That's typically how we set up deals when acquisitions come on board. Then we sometimes renegotiate these, and in this case, we had a couple of companies and owners saying, "We would like to be owners for our 40% or what have you for a number of more years."

Then we need, according to IFRS and all the accounting rules, to predict a possible payout looking into the future. That's the money, to speak.

We made an adjustment or calculation and then adjusted the liabilities according to that. It's a positive thing in a way, and that's the funny thing.

If you think that things are going to develop better, you will have a cost. If things are going to develop worse, you might need to dissolve one of these contingent liabilities, and then they have a positive effect.

That's on the methodology, if I was halfway clear there. Then, yes, we do take them on central level.

Way years back, and it's quite some years, we had them on each and every business area. That distorted reading the numbers for each and every business area, we changed the accounting principle there on recommendation from the auditors, actually, to take them centrally.

That's what we do then, basically once per year where we make these adjustments when we have a budget in place, a 3-year plan, so that we feel a stability with the numbers. They relate to acquisitions within the three different business areas.

In this case, we made adjustments relating to two companies belonging to Climate Solutions. There were more adjustments made, but the ones having a larger impact were two companies within Climate Solutions.

One adjustment, to speak, or a payout that we did during the year, was for the portion of the Turkish company Üntes on board, which we acquired quite some years back, which has been a very good investment for us. There was a payout related to that.

If you'd like to do the number crunching, we can do that in a separate call. Very helpful.

Thank you.

Perfect. Thank you, Hans.

I will follow up. Have a good day.

All right. Great, thank you.

Thank you very much for calling in. Really appreciate that, and as usual, we try to be as transparent as possible.

Sometimes we believe that ethics would discipline us and say, "Well, we can't really answer that fully." We really appreciate having the ability or the possibility to talk to you and try to answer your questions.

As Hans said, if it isn't totally clear, you can always contact us directly. Now we have another year ahead of us, and we are just charging ahead.

Thank you.

Thank you very much.