Dometic Group Stock

Welcome to Dometic Q2 report 2026. Today, I am pleased to present CEO, Juan Vargues; CFO, Per Carlsson; and Head of Investor Relations, Tobias Norrby. [Operator Instructions]

Now I will hand the conference over to the speakers. Please go ahead.

Hello. Good morning, everybody, and welcome to the presentation and interim report for the second quarter 2026. Let's move into the highlights. As most of you are aware of, the market conditions are still tough. Uncertainty is still there. We have seen, as a consequence of the situation in Middle East, high raw material -- higher raw material prices that might be leading to inflation in the coming months. At the same time, the tariff volatility is still there. On one side, the American administration took away a number of tariffs, but implemented some new tariffs as well, the so-called 232 tariffs.

We see consumers still being cautious in the same way as our customers in the value chain, meaning OEMs and dealers and wholesalers. And we have seen as well, as a consequence of what I commented before, a situation where industry production, especially in the U.S., is coming down but also in Australia as a consequence of higher interest rates implemented during Q2. And we see also kind of a slowdown -- starting to see kind of a slowdown in Europe as well.

Looking at our performance, we delivered a negative organic growth of 1% with a positive single-digit growth in service and aftermarket according to our strategy. We are happy to see as well that distribution is coming on par with last year, and we see a decline in OEM for the reasons commented before.

EBITA margin coming in at 12.4% versus 14% last year. And the margin reduction is primarily driven by the increased raw material and freight cost. We see also increased SG&A, partly due to a bad debt provision for the Chapter 11 filed by West Marine in the U.S., affecting primarily marine, but also our Mobile Cooling Solutions segment. And then we continue to invest in product development and marketing following, obviously, all the product launches that we have done and the ones that we have on the pipeline.

We also have had a tariff refund, which is offsetting a part of the tariff cost that we have -- additional tariff costs that we have in the quarter. Free cash flow, over SEK 800 million in comparison to SEK 1.3 billion last year, leading to a leverage of 3.3x, which is on par with previous year, but also Q4 2025.

Considering the market situation, especially in the U.S., where we see the RV industry coming down additionally just when looking at the last 3 months that we have information from the American Association. Manufacturing is down 16%. We will see how the numbers look in June, but we don't expect any improvement in comparison to what we have seen so far. We also decided to extend the global restructuring program. As you all know, we were expecting growth in 2026. The growth is going to be tough to achieve and that means as well that we continue to adapt our cost to the new circumstances. In this case, we have done -- in the main program, we have done a lot, which is impacting our gross margins, meaning consolidating factories, consolidating distribution centers, some SG&A. In this extension of the program, we will focus more on the SG&A part of the business, especially, again, in the land vehicle segment, where we see the delay in the recovery of the market.

The expected savings are going to achieve SEK 150 million when we are totally done by mid-2027. And we are booking restructuring cost of SEK 100 million which is recorded as items affecting comparability. And of course, depending a little bit on the market situation and how the market evolves over time, we will continue to consider additional measures.

Looking more at the hard numbers, sales, close to SEK 6 billion with 1% organic decline. We also had 1% due to discontinued businesses. EBITA, SEK 739 million reaching a 12.4% EBITA margin in comparison with 14% that we achieved last year. Adjusted EPS of SEK 1.27 and a free cash flow of a little bit over SEK 800 million in comparison to SEK 1.3 billion. Two main reasons for that. The main reason is really high inventories in the quarter as a continuation of the high inventories that we had also in Q1. In this case, on top of the inventory that we built up on the expectation of having a much better year 2026. And remember that we are in Q2, which is a stronger quarter and then we have Q3, which is also a strong quarter.

But on top of that, we are also moving a couple of factories. We are shutting down a couple of factories as a consequence of the restructuring program that we are running. And in order to prevent problems, delivery problems during the move, we are also building extra inventories just to make -- to be on the safe side. And again, leverage ending up 3.3x.

Looking at the first half of the year, SEK 11.2 billion in total revenue or the same organic decline of 1% and the same also 1% in negative portfolio changes. EBITA close to SEK 1.3 billion or 11.6% as EBITA margin in comparison to 12.3%. Adjusted EPS of SEK 2.14 slightly below last year's numbers and a free cash flow of SEK 615 million, reaching the same leverage as we had 1 year ago.

Looking at the breakdown of sales. Again, 1% down with land vehicles 4% affecting primarily Americas, negative 16% for the reasons that we already commented. APAC is also down 12%. We saw a much better Q1. We saw a deterioration in Q2 rapidly. After the interest rate increases the industry really pulled the brake again, while EMEA shows positive growth of 3%. Happy to see the Marine continues to show organic growth, 3% as a continuation of 2% that we saw in Q1. And even Mobile Cooling came in at plus 5% in comparison to the plus 1% that we were showing in Q1. While Global Ventures down 16% and in comparison to minus 7% in Q1. And I will come back to those numbers later.

Looking at the breakdown of sales by channel. No major changes in reality, service and aftermarket becoming 31% of the total group, while distribution is coming down to 31% for 33% that we were showing last year. And this will change depending on the quarters.

We have service and aftermarket and distribution being very, very strong in Q2 and Q3 and then coming down in Q4 and Q1, while the OEM business is a little bit more stable during the year.

Looking at the different channels. Again, happy to see the second quarter of growth in service and aftermarket, distribution coming at the same level, and we have seen also in the last 2 quarters quite a bit of stability. And then the OEM for the duration driven very much by North America and Australia.

Just as a comparison, looking at some of the market indicators, we see the RV manufacturing in the U.S. coming down and see an acceleration in Q2 in comparison to Q1. We see registrations in Europe being very, very strong during the first half, partly driven, especially in February by the new model series, but then coming down in April, May a little bit better in June. So it's going to be super interesting to see what happens now in Q3, whether we see stability in Europe. And I can say meeting customers across Europe in the last couple of weeks that you have a mixed bag. We see some of the customers being optimistic about the second half, while some of the OEM customers, especially being more cautious about the second half.

We also see that the U.S. registrations are down in the U.S. We don't have, unfortunately, the same quality data for Europe. In Europe, we see that we are still growing quite nicely in the European side, while the OEM in the U.S. is still negative.

Looking at EBITA evolution over time, 12.4%, as I commented before, versus 14%. Gross margins continued to improve, 30.1% versus 29.7% 1 year ago. We have obviously a positive channel mix, with service and aftermarket growing while OEM is coming down. But we also have the savings performed or delivered by the restructuring program. At the same time, moving in the opposite direction, we have raw material cost and freight kicking in. And not the least driven very much by the new oil prices, but we also see metals, aluminum coming up quite significantly. We see steel starting to point upwards as well.

And then we also have tariffs refund in the quarter, which is having a positive impact. But all in all, still we see positive impact very much driven by the channel and the restructuring program. SG&A, on the contrary was negative, came in with 10% increase versus last year. Half of that is bad debt provision for West Marine that as most of you are aware of, filed for Chapter 11 2 months ago. In that case, we are taking, obviously, a cautious approach. We are booking the entire risk, while obviously, we are still negotiating and expecting to get some of that money back at the same time, as we continue to invest in product development and marketing.

Moving to the segments. Land vehicles down 4%. Again, Europe positive, while both Americas and APAC is negative. We see a slight decline in service and aftermarket and a continued decline in the RV OEM side. Looking at EBITA, SEK 246 million or 10.3%, reduced profitability very much due to the lower sales. We see also raw material costs kicking in -- higher raw material costs kicking in. And we have a flat development on SG&A despite the fact that we are still investing in product development and marketing. Marine positive. We are happy to see continuous growth with very positive service and aftermarket driving margins for the Marine business.

While a slight decline in OEM driven by North America, while again, Europe is pretty positive still today. I had commented a couple of times that the market -- the boating market in the U.S. and marine are slightly different. In Europe, you have more sailing boats, but you also have the yachts. And on the yachts, we have a lot of equipment. And normally, order books are much, much longer than what we see in North America. So good evolution in other words. EBITA margin coming in at 18.8% versus 19.6% last year despite the bad debt provision for West Marine. We have higher SG&A. We continue to invest in product development, not the least on the Gyro program that we are expanding at the same time as we are launching new products, and therefore, continue to invest in marketing as well. EBITA, as I commented, improved underlying if we exclude a bad debt provision.

Mobile Cooling. Organic growth, 5%. We see a very solid growth in North America. We see as well a good order intake. So the season is developing in a positive way, which we are very happy about. EBITA margin though down to 11.5% as a consequence of significantly higher resin prices that came just after the breakout of the war in the Middle East. And of course, we are increasing prices, but it takes a while before we see an effect. We started to see the effect in June and our expectation is, obviously, that we will see these margins coming up again during Q3 and Q4.

We also see in this case that we continue to invest in product development. And even the filing of Chapter 11 for West Marine did have also a negative impact on our margins in the SG&A line.

Global Ventures. 16% down, driven partly by mobile power solutions, which is very much connected to the RV industry, but also by residential in the U.S. where we have seen also our public competitors coming in with pretty negative numbers. So we had a pretty strong 2025. We are comparing with pretty strong numbers 1 year ago, but now it's turning negative instead. EBITA margin, 9.3%. And of course, in this case, we are talking about the small organizations. So it's a little bit more difficult to adapt cost, so it's very much driven by the lower volumes and higher SG&A as a percentage of sales. We will continue to put a lot of emphasis on sustainability and innovation as part of the sustainability as well. Injuries still kept at a very good level and well below our targets of 1. We see share of female managers at the same level as we have on the target.

Renewable energy, we'll continue to invest. We are up to 44%. We were 43% at the end of Q1. Innovation Index at the same as Q1. As you may remember, we have a target of 25%, and we will work hard to achieve that also at the end of this year. And then we have also the share of high-spend assessments on suppliers of 63%. We are coming from 53% in Q1. So even there, we see improvements in comparison to where we are coming from.

Looking at some of the exciting products that we are launching. And before that, we have been commenting this is the second quarter in a row commenting that we are investing in our product launches. We run a major campaign building up with the target of building up even more the brand awareness for Dometic, especially on the outdoor industry in Americas, and we have got a lot of good feedback after that, and we will continue to invest in the same manner moving forward as well.

Looking at innovation, again, we continue to invest in our portable products, in this case, the reel program. We are seeing good growth with this program, and we see also very nice margins. Again, coming back to the outdoor industry. We have the introduction of our new bed slide to facilitate how to use our mobile cooling and packaging solutions.

Moving into the more of the RV industry, we are launching our new electric water heater, which is delivering a number of benefits in comparison to the models that we are replacing at this point. And this is specifically for North American market. A lot of good new product launches in the pipeline. Moving from products to the restructuring program. Again, we extended with SEK 150 million in savings, so we will generate total SEK 900 million at the end of -- sorry, mid-2027 and SEK 750 million by the end of this year.

So far, we have closed one manufacturing site and we have a couple of them in the pipeline to be closed before year-end and 6 distribution centers. About 400 employees have been impacted so far. We ended up Q1 with savings running rates of SEK 400 million. We are extending out to SEK 490 million at the end of this quarter. So progressing according to our expectations. We had cash out in the quarter of SEK 84 million, which brings the total amount to SEK 339 million since the program started in Q1 2025.

And then as I commented already, 1% in discontinued businesses was affecting both Q2 as well as year-to-date. And with that said, I would like to hand it over to Per.

All right. Thank you. Hello, everybody. I will walk you through the financials then. So P&L-wise, top line close to flat versus last year where we had the sales in the service and aftermarket offsetting the decline in OEM, which is also then helping us on the gross margin as it is a positive margin mix for us. Gross margin up 0.4%, which is burdened by some couple of significant headwinds, including the raw material prices on the resin side and also on the metals, hitting the Mobile Cooling and to some extent, also the Marine segment. We also have significant tariff costs introduced in Q2 of last year, which did not fully impact us last year, but it's a full effect this year, obviously.

Offsetting that is the positive savings that we have from the restructuring program, together with the price increases and then also the tariff refund that we booked in Q2 which is, to a large extent for the quarter, offsetting the tariff cost.

Coming down to the operating expenses. As Juan talked about, we have the bad debt provision related to West Marine filing for Chapter 11 of some SEK 50-plus million and then we also have an increase in product development taking -- increasing then the SG&A compared to last year. EBITA before IAC SEK 739 million versus last year in running currency of SEK 877 million and a decline on the operating margin of 1.6%. Of course, we're not happy with the decline in the result. But at the same time, a solid result, I would say, considering the environment with headwinds, both in the market demand and on the cost side.

We recorded the SEK 100 million in items affecting comparability for the extension of the 2024 restructuring program. Looking at the finance net, it's down favorably. So we have a lower debt, lower interest expenses and then also a positive effect in -- on FX on our financial assets compared to last year.

Cash flow SEK 1.083 billion in operating cash flow, negatively impacted by the lower release of inventory or cash from inventory. We have a decline in -- we have a favorable impact on the inventory side in the quarter, but not to the same extent as last year. And this is due to a buildup relating related to the restructuring program, where we have moved on the manufacturing primarily within the U.S. of some $20 million plus. We also have had lower sales increase or flat sales versus an expectation of an increase in the quarter, which have resulted in a little bit of an inventory buildup. And then I think it's also worth mentioning that last year in Q2, we had a significant inventory reduction in Mobile Cooling due to production issues. So free cash flow is favorably impacted by lower interest paid, partly due to the lower interest cost, but also due to timing of the interest payments actually.

Looking at the financing, we repaid a SEK 2 billion bond in Q2 in April, actually, to reduce our debt. AR program is running, has no real significant impact net on the AR in the quarter. As we ended the quarter, we started quite strong sales increasing our receivables.

Okay, what's the next. So little bit of the trend chart here on the free cash flow. And as you see and as you're probably aware of, Q2 and also Q3 are important cash flow quarters for us. We have a negative kind of trend here, which I would say is partly impacted by the lower sales than over the period tying up less working capital. Now we are leveling out on the sales development, which is, of course, positive, but we continue to focus now on being efficient on our working capital, which takes us to the next slide then where we see the overview of the working capital. And we are down in inventory days versus last year. You see a little bit of an uptick there in Q2 which I just explained. However, then partly offset then by the increase in payables related to the higher purchases. We are at 25%. So that's a decline versus last year -- an improvement versus last year and flat versus Q1. Inventory is obviously a focus for us, which is the largest part of our working capital with SEK 5.1 billion. So that is a significant number and the number of days, 125, would also hopefully indicate that there is some potential for coming down going forward. And again, accounts receivable, slightly down versus last year, but close to flat.

Also related to cash flow, obviously, is the CapEx level. We are flat, I would say, slight decline in terms of investments into fixed assets. We are running a relatively low CapEx, I would say, in the company due to our asset-light supply chain. It's not a big burden for us cash flow-wise. R&D, as we talked about, is slightly up and actually significantly higher than our investments into fixed assets.

Moving over to the debt side of the balance sheet. Leverage is a little bit down versus Q1 down to 3.3x versus 3.4x and on par with Q2 in 2025. And we have actually a reduction of debt or net debt, if you compare to last year of SEK 1.2 billion. So we continue to work hard on our balance sheet. And this is obviously a focus area together with the working capital. And versus 2024, we are down SEK 2.8 billion in net debt. So that's a good improvement for us, but we don't fully see that obviously in the leverage ratio.

Right. Next. So looking at the detail of our outstanding debt. We have a good maturity profile, I would say. The net debt of SEK 9.3 billion sitting on the cash at the end of June of SEK 3.6 billion. And we do plan to use some of that to pay back SEK 750 million CF bond here in Q3. We did pay back, as I mentioned, EUR 200 million euro bond in Q4. Average maturity 2.7 years. And on top of this, we have obviously done the RCF of EUR 300 million.

Yes. I think that was the conclusion of the finance side. So I'll leave it back to you, Juan.

Thank you, Per. So summarizing Q2. We delivered a solid quarter, considering obviously the very challenging market conditions where we see lower volumes in a major part of the business considering the American market, considering APAC as well. We see as well raw material prices starting to kick in, having a major effect, especially in Mobile Cooling, but also on the other segments. We see consumer confidence still at pretty low levels and unfortunately, discussions about higher interest rates instead of decreasing interest rates.

We delivered, as I said, an organic decline of 1%, which we believe is good if you consider what we see around us. We are happy to see that we have a positive mix with service and aftermarket, which is a critical part of our strategy, growing. Even distribution looking better during the last 2 quarters. We see growth in Marine and Mobile Cooling for 2 quarters in a row. And we see even when looking at the Land Vehicles, Europe growing while the other 2 are down.

Backlog at the same level as last year. So the starting point for the quarter is in line with last year, which is positive as well. Leverage still under control, high but under control, and we keep working to improve cash flow and to keep fighting our debt, our existing debt, considering as well that we have reduced about 1/3 during the last 4 years, the net debt that we had after the pandemic. And then it's clear that we are a little bit more cautious, especially looking at American markets. And we put all attention to what we can influence, meaning growth in service and aftermarket, meaning the full implementation of the restructuring program. Adapting pricing, obviously, to the new situation with raw material prices and freight costs kicking in at the same time, as we continue to invest in product innovation and marketing, supporting, again, our future growth.

Strategically, as a consequence, innovation index of 24%. We are working hard to reach our target of 25% by the end of the year and then added another SEK 150 million in savings to the existing restructuring program, adding up to SEK 900 million total savings by the end of -- sorry, by the mid of 2027. By the end of this year, we will be at SEK 750 million.

And with that said, I would like to open for the Q&A session.

[Operator Instructions] The next question comes from Daniel Schmidt from Danske Bank.

A couple of questions from me then. Just trying to reconcile your top line statements and I clearly hear you in terms of sort of consumer confidence and high interest rates and all that. But still, you're only at minus 1% organically for the first half this year and you did say the growth will be hard to achieve in 2026. But at the same time, you do write that price adjustments have started to take effect and that order intake improved in June and that order book is on par with last year. Are you seeing a very volatile market during the summer? Is it harder to judge than it usually -- than it has been historically, or is this sort of a rather than -- rather safe than sorry statement? Or is the order intake back down again in July?

No, I think it's uncertain. There's a combination of the different things. So we saw April okay-ish, May was weak and June came in pretty strongly. So it's difficult to judge. We see -- as I said, I see some kind of stability in Europe. I see kind of stability on the Marine side, but I see deterioration in the U.S. RV industry, and I see deterioration on the Australian RV industry as well. Keep in mind that Australia just increased interest rates twice during the second quarter. So I would like to be much more clear than I am today, but it's simply too uncertain to say we are going to grow.

I believe, obviously, that you have a difference between volume and top line in krona and ore. I believe, obviously, that volume-wise -- with the feeling I have just now, volume-wise, we are not going to achieve the targets that we have for the year. At the same time, we have also price increases that will help organic growth from that perspective.

And are you realizing those price increases fully now? Or is there still more to come during Q3?

No, no. We saw -- the first improvement we saw in June. I mean, keep in mind that, first of all, it's difficult to increase our prices when the prices are so volatile. So you need to wait for a couple of weeks to see are the markets -- are the prices stable or not. One of the most difficult to stop is really resin prices. Resin prices are immediately impacted by oil prices. And it is 1 month, we get monthly updates on prices from our suppliers. And we are talking about major suppliers. Then of course, we increase prices, but it takes a while before you send the price list because you want to see some stability and then, of course, your customers are pushing back. So we started to see a clear improvement on the margins in June, we will see improvements in the coming months, clearly. But you have a time lag in cost increases and price increases.

Okay. And then the second question on Marine where you did take the bad debt provision, most of it, was my sort of understanding at least, maybe some of it ended up in Mobile Cooling as well. But given what you write in the report, that's around SEK 52 million. If you add that back, it looks like the Marine margin is 23% for the quarter. That's up 3.4 percentage points compared to last year. Is there a positive impact on tariff refunds in Marine as well? Or is this such a big jump?

Yes, there is, but there is also an impact -- a negative impact on additional tariffs. So you have tariff refund and you have new tariffs. You have the 232 that was implemented in April as well, kicking on the other side. So you have a positive effect is that you have a very positive service and aftermarket. And of course, we are -- we continue to work on traditional costs.

And how big was the tariff refund for the group in Q2?

I will not tell you. We are negotiating with customers and suppliers. That would not be super positive if we were commenting how much, as you may understand.

And just maybe just last one. You clearly state that you needed safety stock when it came to sort of restructuring that you were doing in Q2, around USD 20 million was probably the impact on inventory. Is that going to be released again in the second half of this year? Or is that going to follow us into '27?

I think we will see some improvement in Q3, but the major improvement should be coming in Q4 because we intend to close a couple of sites during the fall.

The next question comes from Agnieszka Vilela from Nordea.

A couple of questions from me. Maybe a follow-up on Daniel's question on the bad debt provision. Could you please help us and quantify the split between those in Marine and Mobile Cooling? How much have you included in the results there?

About 90% -- about 85% to 90% is Marine, 10% to 15% is Mobile Cooling.

All right. Great. And then just looking at the profitability of the Marine then approaching 23% or at about 22%. How confident are you that you can kind of stick at above 20% level in the coming quarters if we see, say, single-digit organic growth that you achieved in the quarter?

I feel confident and -- provided that we have -- again, we continue to run a plus 2%, plus 3%, plus 4%, we are going to see margins over 20%.

Perfect. And then also, Juan, maybe...

Just one more comment, which is also following Daniel's question. I mean keep in mind that these tariffs are killing when they are moving back and forth, back and forth. It is not easy to get back to customers. So some of the margin deterioration you have been in Marine is not just lower volumes. It takes a while before you get the clarity on how much is impacting every single product, calculating how much of increased prices and it's not just about customers will raise questions. Please explain to me. And then you need to break down.

So just now we have steel and aluminum from Canada obviously impacted by the new tariffs. So it takes a while before you get the price increases simply because it takes time to calculate. So I feel pretty confident that we will be above 20% provided that we have positive organic growth. So some positive organic growth.

Yes. Yes. Understood. And maybe I understand you don't want to kind of disclose how much tariff refunds did you get. But can you just tell us how does it work really? Like do you provision for that for your receivables? Have you received those money for the tariffs back already? Or how does it work really? And also like what should we expect for the gross and net tariffs, so to say, in the coming quarters?

We apply for it. There is a Phase 1, 2 and we have applied Phase 1 and 2 because they are open. Phase 3 is not yet open. And for the ones we have applied, we have received already a significant part of what we applied for. So it's coming in.

Yes. And tariffs on a gross level going forward, like the levels compared to what you paid already in the previous quarters?

Yes, it's very difficult to predict. But I would say, currently, it's running on the -- we see a constant level on -- versus our imports as a percentage of imports, so it fluctuates with the quarters but...

All right. And the last one from me really to Juan. You say in your comment in the report that you did see some encouraging signs late in the quarter. Just tell us what they were and kind of what markets and also maybe refer to what you're doing yourselves?

I mean it's very much about order intake and the order stock. So as I commented earlier, we saw April being okay-ish, not in line with last year but not far away. Then May was pretty weak. Then of course, you have 2 working days less in May this year than last year. But then June came very strongly both sales-wise and order intake-wise. And it was a little bit all over. We see, again, the RV industry in the U.S., tough. We see the RV industry in Australia specifically tough. But we see Europe still holding up pretty well, even if registrations in Europe have been negative in the second quarter.

When meeting customers, and I have been meeting lots of customers myself during Q2 both in the U.S. and in Europe, the Europeans is a mixed bag. I would say that some of the customers I'm meeting are still positive, optimistic about the second half, while some of the other customers, I would say, perhaps be more specifically German customers are a little bit more cautious about the second half.

The next question comes from Fredrik Ivarsson from ABG Sundal Collier.

First, sorry to come back to the raw mats. But when we think about the split or the bridge for Q3, what kind of headwind do you envision as you look into this quarter? Do you expect this to be worse than what you saw in Q2? And also, do you think you can offset the full piece through price increases? Or will we have a sort of net negative impact?

Well, I think on the raw materials side, we will continue to see headwind going into Q3. I mean everyone can follow the index, and we see some positive indications in terms of index. But of course, then you have the whole inventory impact where we have made purchases in Q2 that will roll into Q3. We have implemented price increases, which have started to take effect. However, giving a number here on whether it will offset or not, it's hard to do. I think we will actually have a bit more headwind in Q3 than in Q2 when it comes to the raw material P&L impact.

Yes, makes sense. And then on the price increases, do you think it is having impact on demand or are customers sort of absorbing the full increase?

Customers, I mean I can -- nobody gets happy, right, when you get price increases. Customers react. At the same time, where is alternative. So of course, the concern is what will be the impact on the consumer, not on the OEMs or the dealers. I think the major question here is, again, the consumer.

Yes. And then on Mobile Cooling, some price adjustments here as well, of course. And you said you saw some positive impact from those in June. And my understanding is that you expect the margin to expand in H2. First, can you confirm that my assessment is correct?

That's right. So I mean we are talking about resin prices. Resin is the prime raw material that we have in the Mobile Cooling business. And resin prices, you have a number of major suppliers, and they are adopting the prices on monthly basis. So basically, when the war broke out in -- at the end of February -- at the end of March, we got massive price increases. They continued in April and May. And of course, it takes a while, and I mean a while, before you can send first the price list to your customers because you need to have some kind of stability. You cannot have negotiations every week with the major customers. And then it takes a while before they implement it. They also have a notice period. So that's why we started to see the price kicking in, in June and those price increases will continue during the second half. So we expect to see a better position in the rest of the year than we have seen in Q2 in comparison to last year, of course.

Yes. And maybe if I could sneak in one last on the inventory buildup related to the factory consolidation. You said more than USD 200 million. When do you expect this excess inventory to be sort of cleaned out?

No, we said SEK 20 million.

Sorry, yes, of course. My bad, SEK 20 million. When do you expect those to be sort of cleaned out of the system?

It will be -- we will start to see something at the end of Q4, meaning that Q4, Q1, we should see that happening.

The next question comes from Igor Tubic from DNB Carnegie.

Just on the cost savings, the additional SEK 150 million that you expect to reach a run rate by mid-2027? Will this primarily come in 2027? Or should we expect any additional cost savings also already in 2026?

The vast majority will be 2027. You might see some in Q4 but the vast majority, we will see 2027.

Okay. And in terms of the cost -- restructuring costs of SEK 100 million in Q2 that you recorded. Will the cash impact later on? And how will that be split?

It will be -- take -- the cash impact will be during this year during '26, and it's almost all cash, for any write-down. I mean very minimal inventory write-down related to it.

At this time we are addressing primarily SG&A. We have been investing. As you know, we have been communicating. We are investing quite a bit in product development and in marketing. At the same time, as we see obviously that with the volume loss that we have seen in the last couple of years, we can adapt much more on the admin side and on the back office side. So we want to give the resources on the field and invest in innovation, but we see opportunities again to adapt to the new capacity levels.

Okay. And just out of curiosity, I mean, you mentioned that you have received already refunds for the Phase 1. I mean, why can't you communicate how -- the amount, so say, and for how much you have applied for Phase 2 as well?

Because you have -- on the other side, you have also a customer, right? And you have time lags between when we got the tariffs, and we could get price into our customers, we will communicate just now, I can tell you that we will have 200 calls in the coming couple of hours unfortunately. Again, you need to understand what is going on, right? That everybody is looking for exactly the same kind of data. And that data is used, obviously, to put pressure on the prices. So yes, and again, keep in mind that we always have a time lag between the tariffs or raw material prices and when we can get it back to our P&L. So we don't want to be naive and expose ourselves to give out more too early.

And again, I think it's worth mentioning again that the actual tariff cost is still higher than the refund that we have received in the quarter. the running tariff cost is clearly higher than the refund. Also the number of different refunds that was implemented.

But can I just ask you then because when I read the Q2 report last year, you mentioned that the impact isn't -- that your exposure isn't that significant in the U.S.? So I'm just trying to understand how much of an issue is this?

I mean if you take tariffs. I mean everything is dependent if you compare with what we had the first time when we got tariffs in 2018, 2019, this is relatively small. But of course, we are talking about hundreds of millions of kroner altogether.

The next question comes from Johan Eliason from SB1 Markets.

I was just curious about the comment you made about creating movement in the RV industry and there is development towards increased consolidation that could generate strategic opportunities for Dometic. What are you referring to here? Are you getting closer to divesting some of the businesses you have put up for sale? Or are you seeing other opportunities?

I mean there are always opportunities, as you know. But I mean, more specifically, it's clear that what happened with the merger -- the potential merger, still they need to get, obviously, authority approvals, right? We don't compete with Patrick whatsoever. Patrick competes with Lippert partly, right? The combination, Lippert and Patrick, is powerful in comparison to the OEMs. The question is whether OEMs are super happy or not about that merger. And normally, customers want to have options. Dometic might be an option, obviously.

So what you get the feeling is that in American market, just now everything is moving and that creates opportunities, clearly. So nothing more, nothing less. I don't see the same movements in Europe. I don't see the same movements in APAC. I don't see the same movements in Marine. I read not the least on the [ IAC ] industry, that customers are buying the suppliers, to my knowledge. The only customer that has acquired a supplier was THOR year 2021 acquiring Airxcel. I don't see more movement from that perspective affecting our business. But I see that the Patrick and Lippert is obviously a big one. If you consider the size of those 2 companies, being SEK 4 billion each in revenues is SEK 8 billion. That is a powerhouse. And I simply believe that customers always want to have options.

And at the same time, you have Thor finally trying to consolidate the different brands they've acquired over the years, which could be a potential negative for you. Have you seen any exposure to that so far?

No, not more than we have seen historically. I mean, if you look at the way the industry is running, especially the RV industry. The marine industry is different. On the RV industry, it's clear that you have the brands that are driving the business. It's clear that THOR has been communicating this, but it's nothing new either. So it's still to be seen whether we have an impact or not. I mean if we look at our numbers in the quarter and even on the year-to-date, we are very much in parity with the market just now. So we don't see any effects yet, at least.

And I mean, what is your sort of exposure to THOR? Is it the same as their market shares? Or is it above or below, would you say?

Less. Keep in mind, Johan, that they acquired Airxcel. Airxcel was one of our main competitors in the U.S. in 2021. So they have already that one.

Yes. And that's actually a good question. Would you say you have taken market shares from Airxcel since then outside THOR?

I believe Airxcel has been shrinking, but I believe that Lippert has been taking the market share from Airxcel. There's always a risk when you as an OEM acquire your own suppliers because they are not just supplying to you, they are supplying to your immediate competitors. And as you know, American market is pretty consolidated having 3 major players, THOR, Forest River and Winnebago, representing 85% of the entire markets. And they don't want to feed one another's P&Ls.

Just on market shares in the U.S., I mean, you lost market shares in fridges when the Chinese arrived. You lost some market shares in awnings when you moved to Mexico. And now obviously, you have not been able to gain the lost market shares from Airxcel. How would you see your competitive position in the U.S. market? Are you slowly fading out there? Or what's happening?

That depends on products. I mean we are still selling in refrigeration. We are still selling -- we are pretty big on sanitation. I would say that we are market leaders in sanitation. I would say that we are #3 on air conditioning. So I mean we are still alive. The market has moved, as you just said. I mean when we are talking about Lippert, you need to consider Lippert is importing Chinese products from the one they acquired to Chinese distributors in the U.S. And that's where, obviously, the volume, so Airxcel has been losing to Lippert as well.

The next question comes from Daniel Schmidt from Danske Bank.

Yes, just 2 short follow-ups. The repayment that you're planning to do in September, SEK 750 million, how much interest rate is that currently running at?

I don't know, actually. I have to come back on that.

Quite a bit lower, obviously.

It's [indiscernible] actually.

I don't have the percentage of the top of my mind. But what you will see is, obviously, that we are going to pay less, but we will pay in interest. We are going to pay less in krona but we are going to have a slightly higher interest rate percentage-wise for the remaining part.

And then just to repeat maybe when you talked about Mobile Cooling and the price increases that you've been conducting and you started to see the results of that in the end of Q2, you did say that you believe that you will expand margins in the second half of this year year-over-year, right?

Yes, in comparison to what we have seen. I mean we lost 1.5 percentage points, 1.6 percentage points in Q2. We are not going to see the same deterioration moving forward. It is going to -- you will see a recovery stepwise in Q2 -- sorry in Q3 and Q4.

Not only referring to Q2, also referring to H2 last year or maybe I got you wrong.

I was comparing to Q2. I was comparing to Q2. So that will depend a little bit what happens with oil prices because, as you know, oil prices went up dramatically. Then they started to come down, and now they are coming up again. So that will depend a little bit on how they behave.

Yes. Keep in mind that material prices will still hit us negatively in Q3.

And we have one question from the webcast audience that we will take now and the question refers to our aftermarket business, which is performing well at the moment. But how are we seeing the competition evolving? Are we seeing OEMs entering into this part as well? Are we seeing like new online players? Or...

The only competition that we have seen behave in a different way is Trigano. Trigano has started to acquire their own distributors, their own distribution a few years ago. They keep consolidating especially in France. Obviously, those dealers that were OEM dealers were also our dealers. So there, we have seen some movement in recent years, nothing new, it has been there now for 4, 5 years. Other than that, private label, yes. Private label, we have seen a massive inflow of private label into wholesalers across Europe. And one of the things that we have implemented is that we launched, as we communicated, I think, in Q4 or Q1, a new brand called Waeco, which is fighting back and where we see a very, very positive development during the first 2 quarters of this year.

Good. Well, back to the operator.

Yes, I can just confirm that -- what Juan said that the repayment, the SEK 750 million, we have -- is a higher interest rate than our average. So it should improve our average interest rate.

Good. Back to the operator, please.

There are no more in line for questions. So I hand the conference back to the speakers for any closing comments.

So thank you very much, everybody, for your attention and participation on this conference call. You can rest assured that we will keep working very hard to keep our margins, to protect our margins, to deliver cash flow. By that, hopefully, we will see, as well, leverage coming down after a few years fighting against high leverage. So thank you very much for your attention, and goodbye. Enjoy your summer.

Welcome to Dometic Q1 Report 2026. Today, I am pleased to present CEO, Juan Vargues, CFO, Stefan Fristedt, and Head of Investor Relations, Tobias Norrby. [Operator Instructions].

Now I will hand the conference over to the speakers. Please go ahead.

Hello. Good morning, everybody, to this Q1 report. Welcome to a sunny Stockholm, by the way. Wonderful that springtime is back and we have the light back.

So moving over to the highlights. We see an increased uncertainty following both the tariff situation and the geopolitical tensions in the Middle East. We see already now oil prices being very, very high. We see as well inflationary movements in terms of freight costs, in terms of raw material cost that will, down the road, have some kind of impact on consumer confidence. We continue to see retailers, dealers being very, very careful in building up inventories and ordering what they need. At the same time, we see also differences across regions. And most probably the region where we see confidence index being the lowest is in the American region.

Looking at performance, we are very happy to communicate that finally, after many quarters of negative growth, we are standing at the same level as last year. We are very pleased seeing the Service & Aftermarket coming back and showing a solid growth of 5%. Positive to comment that is everywhere. So we see the 3 regional businesses within Land Vehicles, and we see as well Marine everywhere also being positive from the Service & Aftermarket perspective. Distribution is slightly down 1%. Mobile Cooling being positive, which is good. And we see also that the sell-through for the Mobile Cooling business has been very positive during the first quarter. In reality, the one that we are still missing is the OEM that ended up at 4% down versus last year, but very much due to the RV OEM in the American region.

Perhaps even more positive is that both order intake and backlog continue to develop in a positive way. Positive development on EBITA margin, ending up at 10.6%, and really based on 2 different factors. On one side, we have a positive mix with sales and aftermarket growing. At the same time, as we also see the savings coming from the restructuring program continue to improve. At the same time, we have many product launches. We have been launching products, especially on the Marine side and on the Mobile Cooling side during the quarter. And in connection with the extra product development cost, we also have marketing costs to have successful launches for the new products.

And last but not least, improved free cash flow, even if it's negative, it's quite a bit less negative than 1 year ago and totally in line with historical numbers. So as a matter of fact, better than what we have seen in the last 4, 5 years in practice. Leverage ending up at 3.4x, which is slightly worse than 1 year ago, but following exactly the same historical pattern that we have seen due to obviously low invoicing levels in Q4 and low invoicing levels in Q1.

If we move over to the figures, as I already commented, organic growth of 0% with negative impact from currencies of 9% and then portfolio changes that continue to happen, delivering 1% in negative growth. EBITA, 8% down versus last year, ending up at 10.6% in margin in comparison to 10.4% and adjusted EPS of SEK 0.86 in comparison to SEK 0.88, so very, very close now. And as I already commented, negative cash flow, but quite an improvement in comparison to last year and a leverage slightly higher than what we had 1 year ago.

Looking at growth. Land Vehicles ending up at minus 1%, very much driven by Americas, 6% down. EMEA was positive 2% and APAC finally, minus 3%. Marine, positive 2%. So we had negative 2 quarters ago, positive -- sorry, positive, negative, positive again. So we are hovering around the same levels as last year. And at the same time, we have a pretty good order intake. Mobile Cooling, very similar to Marine, 1% positive, but also developing nicely on order intake, and then Global Ventures, 7% down.

Looking at the different sales channels, in reality, nothing remarkable, no more that Service & Aftermarket is growing and by that, becoming 30% of the total business, while OEM continues to go down slightly, ending up at 38%. Perhaps worthwhile to comment that RV OEM, that used to be 49% in 2017, stands today at 18%. So again, we are getting less and less exposed to the RV OEM market.

Looking at the different channels, positive evolution everywhere. I do believe that looking at the different charts, it is very, very clear that we see a positive trend getting now into neutral growth for the group. And hopefully, we will see also OEM coming into positive terms in the near future.

I would like to stay for a couple of seconds on this slide. And what you can see, the gray line is manufacturing. The green line is registrations. And it tells you a little bit where the different inventories look like in the different markets. Unfortunately, the inventories on Marine are much more difficult. We get production numbers, but we don't get -- the retail numbers include both own manufacturing in the U.S. as well as imports, and that distorts the picture a little bit. But if we go back to registrations on the RV side, we see that we suffered a major deterioration in the industry from 2022 to 2025, stabilized in the last couple of years, but not coming back to growth.

At the same time, we see also that there is balance between retail and manufacturing. At the same time, we see that Europe -- we saw Europe kind of postponing the drop simply because we had, as you may remember, problems with component delivery from the chassis producers to the OEM industry, which means that we still had pretty good years 2022 and 2023, but we saw a major drop in the second half of 2024 and a major drop in 2025. And of course, when looking at Dometic's evolution during the last couple of years and always commenting negative growth, what you can see is we got the hit in the U.S. first. As the U.S. was stabilizing, then we got Marine and we got as well Europe. So that has been very much the main reason for this delay in coming into neutral territory and hopefully showing growth in the quarters to come.

Again, coming back to inventories. We are very much there on the RV side. On the Marine side, we still hear and read from retailers in the U.S. especially that inventories are a little bit too high, while Europe looks far better. And by the way, we have seen growth on the Marine side, both in Europe and APAC during the last couple of quarters.

EBITA ending up at 10.6%. Good progress on gross margins. It's very, very clear that the restructuring program is kicking in and having shown improvements on top of all the other efficiency actions that we are taking. We have an SG&A higher than 1 year ago, very much, as I commented, explained by the investments that we keep doing in product development everywhere, but especially in the Mobile Cooling and Marine area, which are reflecting not just on the product development cost, but also on the marketing cost in connection to the product launches. We see margin improvements in Land Vehicles. We see that we are on neutral levels on Global Ventures, and we saw a decline on Marine and Mobile Cooling.

Looking at different segments. Land Vehicles, 1% down with good growth in Service & Aftermarket and again, a decline on the OEM side, very much driven by the RV OEM side in Americas. Strong margin improvement, 9% with, again, significant improvements driven by the restructuring program and all the other activities. And we continue to invest, as we have commented many times, on product development. Innovation is clearly the driving force behind organic growth and what we are working for.

Worthwhile to mention that we are still producing losses in Americas, but we see a major, major cut on those losses during the last 12 months. Marine, positive to see 2% growth with high single-digit growth in Service & Aftermarket, a slight decline, very, very close now to neutral territory also on the OEM side. EBITA margins close to 18% and it is very much -- the reduction is very much driven again by, on one side, delays on the price increases, so time lag between price increases and the cost increases. And then, of course, all the uncertainties that we have just now with the tariff situation in the U.S. At the same time, as we continue to invest, as I said, in product development, leading to new product launches and marketing costs.

Mobile Cooling, 1%. Here, we see good development on the U.S. market. We see a slight deterioration on the European and APAC markets. Margins of 5.7%, so deterioration versus last year. We see a little bit of the same that we have still time lags between cost increases due to the new tariff situation and price increases. And even here, we keep investing in generating growth moving forward.

Lastly, Global Ventures, organic growth of 7% down, with other global verticals continue to develop positively. At the same time, as we see Mobile Power Solutions still negative, driven by the OEM. That business is, to a high extent, linked to the OEM business. EBITA margins on a neutral level. On one side, we see continued margin improvements on other global verticals, the same, but we see some margin deterioration for Mobile Power Solutions, but totally speaking, neutral since we are also adapting our SG&A cost to the new situation.

Looking at sustainability, very good progress. We feel proud of what we are doing in that territory as well with injuries coming down, have been down now below the target of 1 for a number of quarters. We see also female managers at a decent territory. We would like, obviously, to improve even more, but we have seen a major progress in the last couple of years. We continue to invest in renewable energy, and we are in operations, and we are up to 44%. Innovation, again, the major driver behind organic growth, up to 24%. So we are very, very close to our target of 25%. And then we keep assessing our suppliers for their material, and we will secure that we deliver as well on our targets.

Some of the recent launches, we launched at the end of Q4, a new brand, Waeco, which is also not just a number of products, it's also a new business model where we are addressing major wholesalers, major distributors and implementing a totally different business model, generating high margins at the same time as we are capturing volumes. It is clear that we see a new demand for all the vehicles and we are addressing that new demand that we have been seeing accelerating in the last couple of years as a consequence, again, of the inflationary cost increases post pandemic. People are looking for lower price options, and we are addressing that. Positive reaction. Very positive reaction, even better than we expected during the first couple of months. Unfortunately, a little bit late since we are already now in Q1 and customers are placing orders normally in Q4 for deliveries in Q2, and we launched the product in December. But again, so far, very, very positive reaction.

Moving over to drinkware, another of the areas where we are investing, launching the first series of premium drinkware products where we are addressing also modularity and delivering a lot of accessories, not just the bottles, but also a number of different options, and we are expecting, on one side, good growth and good margin evolution, but we're also expecting that these kind of products will reinforce our Dometic brand globally.

Moving over to a new series of roof-top tents. This is also the third series of roof-top tents coming from Dometic, addressing the new market with SUVs and pickup trucks. And as a consequence of all the product launches, we keep collecting awards in different areas. In this case, we are talking about Mobile Cooling with new high-quality and premium Dometic branded products, both as hard coolers and soft coolers as well that we have been launching in the last couple of quarters and are starting to kick in as well in store.

Happy to report as well positive development on our restructuring program, the cost reduction program. As you may remember, this program will generate SEK750 million on running rate at the end of this year. We ended up Q4 last year at a running rate of SEK 350 million. We added another SEK 50 million in Q1, so new running rate of SEK 400 million and cash out in the quarter achieving SEK 20 million.

And with that, I would like to hand over to you, Stefan.

Thank you very much, Juan. Moving to the income statement, starting with our gross profit margin development. And this is really a very nice development that we have seen now for almost 2 years where we have had a continuous improvement of our gross margin. And it ends up with 29.6% in the quarter versus 28.7% the equivalent period last year. And that has then favorably been impacted by sales mix, but also the restructuring program and then partially been offset by the fact that we have still a certain lag between price increases and cost increases, including tariffs.

I mean, there has happened a lot of things in the first quarter. We have obviously had the decision by the Supreme Court in the U.S. and making some of the tariffs illegal. Then we have obviously had the escalating situation down in the Middle East, which has been starting to drive up input costs for our products. On operating expenses, in reported currency, we are down, but in constant currency, we are up 5%. And there is 2 things to that. We obviously have effects from our global restructuring program, which is driving down the cost as expected. But then we also have in the quarter some offset for increased product development as well as marketing related to product launches. You just saw a number of the examples here in Juan's presentation.

Looking at net financial expenses, which is on its way down as expected and driven by the gross debt reduction, which is going to continue here now in the coming quarters. Tax is on the same level as last year, and the effective tax rate is 33%, which is, as we have communicated before, affected by deductibility of interest expenses in Sweden.

Moving on to cash flow summary. As Juan already mentioned, very nice to see that the free cash flow is actually quite a bit better than the same period last year. You know that we have the seasonality where Q1 is always our weakest cash flow quarter. And now when we're moving into Q2, we are moving into the strongest one. And the same with Q3, it's also a very strong cash flow quarter here. But in the quarter, we have seen working capital, on the one hand, been impacted by higher inventory. It's, of course, measures to make sure that we have the inventory to fulfill the demand. And then we have seen on the other side, improvements in trade receivables and payables.

Mentioned was that the cash out related to the restructuring program in the quarter was SEK 20 million. Program to date, we have SEK 256 million in payout. And as you remember, we have talked about, it should be totally SEK 400 million, and we still stick to that. So there is SEK 140 million approximately to go, which will happen in 2026. And then CapEx is a bit lower than the same period last year, and we continue to prioritize investments in fixed assets. And we also have a new model, which actually means that we have less needs to invest in fixed assets going forward. If we look then on interest expenses paid, they are down as well as tax paid. So that is also helping to drive the free cash flow.

Moving on. Yes, here you can see what Juan was alluding to that, yes, minus SEK 192 million in free cash flow stacks up quite well in a historical comparison here. So I'm happy with how we continue to manage this well. If we look on working capital, the last 12 months, we are down to 25%, which is 3% units is better than the same period last year. We are 26% in the quarter. Inventory balance, SEK 5.2 billion in constant currency, that is then up versus last year. But as I mentioned, it's really to make sure that we can keep the service level to our customers here. So number of days, 121 days, and that's 10 days less than the same period last year. But as you can see, there is still potential to continue to drive that down towards around 100 days.

On accounts payable, the movement there is very much mix related, where do we have the major sourcing in the quarter. So a little bit more China, longer payment terms there. Inventory, we already talked about, and accounts receivable, you see that the days sales outstanding is starting to come down, which I would also expect due to the program that we have been putting in place.

Okay. Moving over to CapEx and research and development costs. We ended up SEK 72 million in the quarter, equivalent to 1.6% of net sales. And as I said before, we are making clear priorities, but we have also created a model where we underlying need to invest less in the machinery and equipment. On the R&D side, we are now on 2.9%, SEK 132 million in the quarter. And we are continuing to prioritize to invest in product development. We can also see that on our innovation index. As mentioned before, it's up to 24% now in Q1. And that is something that we will also continue to prioritize going forward.

Moving on. So if we take a step over to our debt maturity profile, the total gross debt is now SEK 15 billion as of the end of Q1. We have an average maturity of 2.5 years. And then we have an undrawn revolving credit facility of EUR 300 million maturing in 2028. Then we will pay back the SEK 2.2 billion in the remaining 2026 Eurobond here tomorrow using cash on hand. And then we also have a plan to repay the SEK 0.8 billion, which is a private placement that we have maturing in September 2026. So with this, you will see the gross debt continuing to come down and also the net debt driven by the free cash flow that we are expecting to generate during 2026.

Looking at the leverage ratio, it ended at 3.4x, as was mentioned before. It's all the different components that is very slightly all contributing to take it up from 3.3x as we had by the end of Q4. This is not unusual that leverage ratio is moving 0.1x in the first quarter. So from now, we are going to obviously come into the cash flow strong part of the year and the leverage will then start to move down here and in Q2, Q3, especially.

With that, I will hand over to you, Juan, to make the summary.

Thank you, Stefan. So summarizing Q1, very, very happy that we are leaving the negative growth behind us, and that we see as well improving gross margins and EBITA margins, positive order intake and order backlog that continues to develop in a positive way. We see a good sales mix with Service & Aftermarket showing solid growth with improvements in free cash flow. Leverage that ended up at 3.4x versus 3.3x. At the same time, as we see as well, still today, low consumer confidence, driven both by the volatility on the tariffs and nonetheless, by the new upcoming situation in the Middle East.

Due to that fact, we decided to withdraw the dividend, as you know, on the 12th of March. And already at the time, we communicated that the main reason was what the risk that we saw moving forward. We also commented that it was not a profit warning. Hopefully, you realize as well when looking at the numbers that what we said we are not collapsing became the reality as well. Again, we feel good about Q1. We feel good about the order intake and the backlog. Still, we don't know how the ongoing war in the Middle East is going to have an impact in Q2 or Q3. The theory is obviously that we are moving into Q2 in a positive manner with a stronger backlog. Then we will see what happens during these 3 months.

We are still of the opinion that we will see organic growth in 2026. But of course, we're also very mindful of the situation in the Middle East and the impact on, again, oil prices, inflation, interest rates and consumer confidence.

No matter what, we continue to invest strategically. We see product development and innovation index coming up. Of course, with that, we also have some extra marketing costs that we are kind of happy to expand since we are starting to move into a growth phase again. And we are also very pleased with the way the restructuring program is developing over time.

And with that said, I think that we can move into the Q&A session.

[Operator Instructions] The next question comes from Agnieszka Vilela from Nordea.

I have 2. So maybe just starting with the demand outlook. Mid-March, you were quite cautious, Juan, about the demand prospects, especially in the light of Middle East conflict, but yet you finished Q1 with flat organic growth for the quarter. And I wanted to ask, was there anything that really surprised you to the positive? And also maybe a follow-up on that. You have built some inventories in the quarter. Should we interpret it as a sign of you expecting higher sales in Q2?

Absolutely. So no surprises, Agnieszka. So no surprises. Again, the communication on March 12 was much more due to what could happen due to the war. It's very, very seldom that you see the war starting day 1 and then inflation, interest rates and consumers stopping to buy. You see that normally after a number of months. So I think we were very clear at the time of the communication, and we tried to clarify even a couple of days after the announcement that we were not collapsing. And I think that this is what we proved this time. We are happy to see the order intake and the backlog strengthening even more in Q1.

Then the question, and I think that at least our takeaway is that we take it in a very positive way at the same time, as I also believe that many people in the value chain are expecting to see higher prices down the road as a consequence of the higher inflation. And since we are at the beginning of Q2, it might be that we have an effect of people forward buying, so to say. At the same time, so you can take it in a negative way, you can take it in a positive way. Nobody wants to build up inventories. People are super careful on building up inventories. So again, we are starting the quarter -- if I'm coming to the second question, we're starting the quarter with a stronger backlog. In theory, we should see growth.

But we only have 1 month of...

Yes, 4 to 6 weeks. Yes.

Okay. Perfect. And then my second question is on the input costs for you. We do see some inflation in the polymer prices. So maybe if you could please remind us about your plastics exposure, maybe tell us how quickly the higher commodity prices are affecting you? Do you hedge? And what kind of price increases would you need to implement to neutralize the impact?

I mean, of course, I mean, it's not just plastics. I mean everything is just now going up and we see also moving targets. But of course, that we have been working very, very hard during the last few weeks, and we are implementing price increases as we speak. We have not seen any major effect in Q1, simply because you are sitting on inventories. But it is clear that suppliers are knocking on the door, and we are already now talking to customers. So our intention is, as usual, to cover up for the potential cost increases. And the cost increases will come, it's just a question of time. Just now, obviously, the target is to push back as much as we can at the same time as we are sitting on inventories. But at the same time, we also need to act very, very fast and start discussing with our own customers as well.

The next question comes from Daniel Schmidt from Danske Bank.

Sorry if I may be repeating something that you already said. I was late into the call. But I hear you in terms of order intake and order backlog heading into Q2 and what you said about your announcement on the 12th of March. And am I getting it right that for the month of March, you didn't really see any deterioration. Did you have -- because I assume that you did get hit by the winter storms in the U.S. in January and February, which caused some production shutdowns.

Yes. But at the same time, I do believe that you have one side with the storms, which is totally right. At the same time, we also see that in retail -- we are especially talking about the RV industry in the U.S., we see that retail was also down. So I believe that we need to be a little bit careful in the way we are interpreting the weather impact in the first 2 months. I mean, again, if we were just talking about production, I would agree with you. But of course, when you see the retail, and RV retail is also down, that customers are careful, then I believe that we need to wait for some more time to understand it. As you know, production was down 11%. If you look at the numbers, retail in February, they were down 22%.

I'm just getting to your momentum in the quarter. I understand what you're saying.

Q1 was good. March order intake was good and backlog was even better. Our backlog strengthened in March.

Good. And then a totally different question maybe. But in the recent days, there has been confirmations from both LCI and Patrick Industries that they are talking about a possible merger. Who knows if that's going to happen or not. But if that happens, do you see that theoretically at least as an opportunity for you guys in the U.S., especially to regain some shares where they are occupied by a possible merger and internally focused and so on?

I think there is -- of course, that what you are saying will happen anyway, right? It takes a while to integrate. So if that happens, it will take some momentum from the organization. But at the same time, I would like to point out, we are competing with Lippert. Basically, we are not competing with Patrick. Patrick and Lippert are competing with each other. The only area where we are competing with Lippert is -- sorry, with Patrick is that Patrick acquired a company 2 years ago called RecPro, turning $80 million. So we are talking about the OEMs, we are competing very, very little with them, for not saying nothing. And on the aftermarket, it's very, very limited as well.

So I don't see that, that will change. I think it might change in the short term, as you said, because, of course, it takes a lot of attention from the organization to integrate companies, and we are talking about 2 major companies. So it's not just the one absorbing the other. But I don't expect any major impact on the long term, simply because we are not competing with Patrick.

Okay. Good. And then maybe a very detailed question for Stefan. Other current liabilities are up a bit versus the end of the year despite currency going in the other direction. Is there anything in that number that's related to the court case or further reservations or anything?

The very simple answer to that is no.

No. Okay. Good. That's all for me. And I just want to thank Stefan as well for good collaborations through the years, and good luck.

Thanks a lot, Daniel. Appreciate it.

The next question comes from [ Lou Kocher from Amundi ].

Perhaps you mentioned it, but I didn't get it. What do you expect as cash payout for restructuring in 2026? And yes, P&L impact versus cash impact? And same for 2027, if there is?

Yes. As I mentioned before, we have said in the past, SEK 400 million in total cash payout of the program. We have program to date paid out SEK 256 million. So that means that we have SEK 144 million to go for -- and that is mainly -- it's going to come in 2026. So I don't expect there to be anything left for 2027. Then in terms of savings, as you know, the program in total should generate SEK 750 million in savings. We should be on a run rate, jumping into 2027, on SEK 750 million. We reported now after Q1 that we are on SEK 400 million in run rate savings. So if we overlay that with our plans, we feel that we are absolutely on track to achieve that.

And you could say -- I could add as well that in 2026, what is going to happen is that it's going to be a little bit more backloaded than in 2025. And the reason for that is that we have some major activities that we are working on, but we will see the effects later on in the year.

The next question comes from Fredrik Ivarsson from ABG.

Most of the questions I had have been asked, but I have one on Marine. And I guess when we listen to all the boat manufacturers, it's a little scattered view, I think, with the high-end manufacturers being quite optimistic and talking about higher backlogs and so forth, whereas the mass market is more cautious. First, do you share this view? And second, how are you positioned towards this backdrop in that case?

I would agree that we saw -- you go back to the last few years. First, we saw what Americans call for blue collar boating coming down dramatically. Then it took about 18 months before we saw the bigger boats coming down quite a lot. Then we saw the low-price boating stabilizing about 8 months ago. And now we see the bigger boats moving upwards really during the last, I would say, 6 months. So it feels good. Order intake has been promising. At the same time, when you read all the information about American Marine retailers, they're still cautious. So I simply believe that we need to wait a little bit more, because we might be seeing what we saw with the American RV industry a couple of years ago that it went down, manufacturing started to build up, retail didn't come back, and then the manufacturing came down again.

So we are kind of hovering about the same levels that we were manufacturing 2 years ago if you look at the RV industry. So I believe that we need to see this for some more months before we can see now it is moving. The fact is that our order intake has been growing. So from that perspective, we feel positive, but I would like to understand a little bit more in 1 or 2 quarters, so we see that consistency.

On top of that, we also feel that the inventory situation is still not on an optimal level by the dealers in North America, but it has certainly improved. So it's...

That's true. And then that's very much on the American market. We are looking at Europe. Europe looks good. And we had high-digit positive growth in Q1 and even APAC looks good. Having said that, obviously, the U.S. market stands for 75% of the global markets. So improving. We are still not there, but it is improving clearly.

Okay. Great. And on the positioning, could you remind us of where you are?

So we are very well positioned in steering systems. We are very well positioned in full systems. We are very well positioned in ACs. I would say that those are the 3 main categories. We have seen as well. So that's on the OEM. We see the aftermarket side, we have seen very nice growth in Q1. We saw also growth in Q4. So aftermarket has been showing positive numbers now for a couple of quarters. And again, from an OEM perspective, we have very strong positions. And we need to keep in mind as well that the market is much more fragmented, obviously, that we don't have, what can I say, any Dometic lookalike offering to put it in some way.

The next question comes from Daniel Schmidt from Danske Bank.

Yes, me again. Just 2 follow-ups and another detailed question I forgot last time to Stefan. You're repaying this bond tomorrow, SEK 2.2 billion. Could you give us any indication of how much that will change your financial net on a quarterly basis going forward?

That is running with a financing cost of 3%.

And you were getting basically just 1%, 1.5% on the cash that you held?

Yes, sometimes a little bit more actually.

So maybe a percentage point or a little bit more maybe in a positive impact on the financial net. Is that fair?

Yes. It will. I mean, we are on 4.2%, 4.3% on average cost of our portfolio right now. So this will take it up a little bit. But in absolute terms, as you are after, it will go down. And it will continue later in the year when we have the SEK 750 million in private placement that we are planning to pay back as well.

Exactly. Okay. Good. And then I guess you already touched upon it, but I missed it as I missed part of the call. Any details on the European market on the RV side? You grew in the quarter. Was that both OE and aftermarket? What was the momentum in the quarter?

We see the OEM business evolving in a positive way. Registrations across Europe were very positive, I have to say. And we see order intake as well being positive for us now for a few months. So I'm optimistic. Even the Service & Aftermarket has been improving lately, absolutely.

So I'm far more -- I mean, if I think about the different geographies, it's clear. I feel far more optimistic about the RV and the Marine industries in Europe that I feel about the U.S. market. I see U.S. consumers showing much lower consumer confidence than the European ones. Europe is not flying, don't get me wrong. But again, inventories are gone, manufacturing is starting to build up. Service & Aftermarket is moving also into positive territory. Where you see on the American market that inventories are relatively low, but retail is still negative as a consequence of consumers entering the stores but not pushing the button. And as far as that doesn't happen, of course, it will be slow movement.

The next question comes from Agnieszka Vilela from Nordea.

I have 2 follow-ups. Maybe starting with your SG&A development. I mean you have quite good progress on the gross margin, but now with the SG&A cost being higher, much of that benefit is kind of disappearing or fading away a bit at least. But could you just tell us about your investments in marketing and product development? I mean it's all for good reasons, but how would you evaluate the success of your initiatives there? How much the new products should add to your growth? And also, should we expect this kind of cost to be elevated for the coming quarters?

I believe that we will see that cost, especially in those 2 segments being higher for another 1 or 2 quarters and then they will be coming down. But at the same time, as I said, we have been investing quite a bit on product development. We believe that it is super important. We have been preparing ourselves for a growth phase. And to develop the products if you are not launching, doesn't give you a lot. At the same time, as you know, Agnieszka, we are trying to reinforce the B2C side. The B2C side from a marketing perspective is simply higher cost. At the same time, it's also bringing higher margins. So I believe that you need to see the combination, gross margins and SG&A. And hopefully, we will be showing positive balance moving forward.

And then my second follow-up is on the Marine business. You grew organically by 2% in the quarter, but the operational leverage was quite low with EBITA still falling 17%. So can you just remind us what was the driver behind the lower earnings? And how should we think going forward about the earnings progression in Marine?

The main issue in the Marine business is obviously that we are producing in Canada. We have a situation with the tariffs. As you know, things are changing on a continuous basis. And at the same time, you have also some time lag between the cost increases and what we are provisioning on tariffs and potential tariffs and the price increases that we are applying. So it's very much a time lag. We should expect that to improve moving forward.

And could you just quantify the tariffs you're paying on the Marine side, ballpark?

I don't have that number on top of my mind.

No, we don't have that available right now. But I mean, we obviously know what we are paying, but what has happened now in the first quarter where the Supreme Court were declaring some of them not appropriate, so obviously impacting the dialogue somewhat with some of the customers. So it is a challenging environment to operate in terms of this, where things are changing very, very frequently.

And it is a challenge, because no customer, I mean, that's also valid for us when we are a customer, I mean, you get crazy when you get new price list every second month. But that's the reality that you need to play just now, right? So we implemented new prices as late as 1 month ago that we are not seeing, obviously, the effects on the Marine side.

We have clearly -- Agnieszka, you're totally right, we have a time lag in the Marine side between the tariff situation and the price increases. Again, as late as 1 month ago, we applied new price. Plus what we talked about before in SG&A investments, especially in product development.

Yes, yes. Absolutely.

We have a few questions from the webcast audience that we can take now then. And the first one relates to the backlog. How did we see it change during the quarter? And then what's the typical maturity in the backlog?

So good progress in January, flattish in February, better in March again. And normally, our backlog, we are not an industrial, right, so our backlog is somewhere 4 to 6 weeks. So we are starting the quarter 2 in a stronger situation than we were starting in Q1. But again, we cannot take any conclusions on how May or June will look like. The starting point is positive.

Thank you. Then there's a question on leverage. Do you stick to the target of 2.5x. And how should we see -- what's the fair expectation of the leverage evolving towards this 2.5x?

We can absolutely confirm that we stick to the target of around 2.5x. We are now coming into 2 strong cash flow quarters here. So my expectations are that we are going to move towards 3x and potentially even slightly below, but I don't foresee that we are going to achieve around 2.5x during 2026.

And finally, a question on CapEx. There was a mention of lower CapEx need going forward. Can you please elaborate on that?

Yes. I mean, as we have been running the different kind of restructuring programs, we obviously have created something where we have been outsourcing to a higher degree than what we have done before. So that is one driver. And then just by the fact that we have fewer factories as we have been closing factories during these programs, we have gone from 31 factories down to 22 now. So it's obviously also reducing the need for CapEx in machinery and equipment.

And it's a logical consequence. I mean, it has been very much on purpose since we introduced a new strategy. We want to have a similar level of CapEx, but the profile of the CapEx was going to change by investing less in maintaining factories, investing less in machinery, but investing more in tooling in connection to innovation. So that's an important one.

Good. That's it from the webcast audience then. So back to the operator, please.

The next question comes from Andreas Lundberg from SEB.

Andreas with SEB here. Back to the leverage question, you're targeting 2.5x, you say. How comfortable are you with that given the cyclicality of the business? Wouldn't you consider even a lower level would be more suitable?

I mean, the target is expressed around 2.5x, right? So in certain times, it could be below 2.5x. In some other situations, it could be on 2.5x or even slightly above. So depending on where we are in the cycle, I can agree with your comment. And typically, historically, I mean, we have been deleveraging somewhere in the neighborhood of 0.6x per year. And now when things are starting to -- yes, it's maybe difficult to talk about normalization, but a little bit more stable, I would still say that we still have that deleveraging potential in our model.

And yes, things also change over time. And keep in mind that we moved from 2x to around 2.5x over the time when the market was growing, when everybody was asking Dometic, "Guys, isn't this the moment to grow additionally by acquisitions?" So the market turned very, very sour. We have been fighting super hard to come down to around 2.5x. And once we are approaching to 2.5x, then we will discuss whether it is the right target or not. But just now, we are still far away from 2.5x. So we have a clear target to reach around 2.5x.

I think it's super important from our side, we understand the situation. We are working extremely hard. And again, financial targets change over time, but this is not a time to discuss a change. This is the time to get into the financial target.

And earlier, I think it was a year ago, we talked about potential divestments or exits in certain categories. Where do you stand today? Or where does your thinking stay today?

The same working, but the market has not been very, very positive for divestments either. So it's clear that we have been talking, we have been out to the market with a couple of assets. And we have been very, very close to completing one of the deals, and then we had the famous Liberation Day. And then things changed overnight. The willingness of potential buyers to invest at that moment changed. So we are working very, very hard. And hopefully, as the market stabilizes, it's going to be a little bit easier to divest those assets. So we continue to work on that. But again, the environment has not been appropriate for money.

And I also think worthwhile to mentioning here is that for this to make full sense, I mean, there is a strategic assessment, of course, but that it should also make financial sense. I mean, we need to get a certain valuation and it's not a fire sale in itself. So that's obviously a part.

Okay. And then lastly, on the cost savings side, what kind of cost savings remain?

We have a number of projects that are just now ongoing. As you may understand, these kind of decisions are very, very sensitive. You don't want to communicate before you are ready to communicate. But that's why I commented earlier today that they are going to be backloaded. We are working just now on the preparations, making sure that everything is going to work out. And we will communicate the different steps as they are happening in connection to these quarterly reports. But you don't want to get concerned unnecessarily.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you very much, all of you for attending the call and for showing interest in how Dometic is evolving. And I would also like to take the opportunity to thank Stefan for these years. It has been a tough environment. I believe that you have contributed in a great way to our development even if the times have been very, very tough. So thank you very much and all the best in the future.

Thank you very much for these kind words.

And for all of you, thank you, and hopefully, we see you soon. Bye.

Bye-bye.

Welcome to Dometic Management Q&A Board's proposal regarding dividend. Today, I am pleased to present CEO, Juan Vargues; CFO, Stefan Fristedt; and Head of Investor Relations, Tobias Norrby. [Operator Instructions]

Now I will hand the conference over to the speakers. Please go ahead.

Good morning, everybody. This is Juan Vargues speaking, and welcome to this conference call. The reason for this call is obviously that both [indiscernible] in the U.S. last week, attending the trial that we had with the counterpart on the Igloo lawsuit, meaning ACON. And we testified both Wednesday and Thursday and arrived back to Sweden on Friday evening at 5:30. As you all know, we sent a press release on Thursday. And the reason for that is that last Thursday was the very last day to send the invitation to the AGM. And in connection to that, during the few days before Thursday, we were obviously observing what was going on, on the market.

We realized that the war in the Middle East started to have an impact. We saw oil prices at $62 a barrel on the 15th of February, at $74 on the 4th of March, $103 on the 12th of March. We started to hear comments from dealers, especially in the U.S., both from a Marine perspective and RV perspective. We started to read comments. And of course, in such a situation, it's about taking a decision. We could take the decision to continue to run the AGM as nothing happened or really consider proactively whether the situation in the Middle East will have an impact on our customers, not today, but tomorrow, in the months to come, especially considering, obviously, that March is, for us, the heaviest month in Q1. And then we have a Q2, which is also the heaviest every year and a Q3. And we don't know whether the war is going to last for another week, 2 weeks or 6 months.

So in such a situation, you need to take a decision. And the decision, the proposal from the Board was obviously to withdraw the payout of the dividend, just in case. That's very much really what happened during the week. Right or wrong, the decision was taken. And that's what we communicated as soon as we could on Thursday last week.

And with that introduction, I would like to open for the Q&A session. So please go ahead.

[Operator Instructions] The next question comes from Fredrik Ivarsson from ABG Sundal Collier.

Juan, you said you're starting to hear comments from players in the RV and Marine industry. Can you elaborate some on that statement? What kind of comments are you hearing?

Yes, I mean the impact of oil prices, the impact of inflation on consumer confidence. And there are also reports from Baird from last week and the week before starting to talk about the oil prices and the potential influence that oil prices will have on the American consumer, especially on the RV industry and the Marine industry, since we are talking obviously on high-ticket discretionary spend.

Okay. So it's more, I guess, precaution more than you're actually seeing the markets pulling back orders and stuff like that.

Indeed. Indeed. It's forward-looking.

Got you. And then it would be interesting since you were in the U.S. in the trials last week, if you could give some kind of reflections from those days.

Positive, both Stefan and myself testified. We feel optimistic as we always felt. Our attorneys, and we have many of them, feel very optimistic as well. Unfortunately, just now it's about waiting. And we know, I mean, the communication from the attorneys is that most probably we are not going to have any final verdict before year-end or beginning of next year. So just now, it's nothing more than we can do. What should be done has been done.

Okay. And last question. Obviously, March is the biggest month of the first quarter, but can you say anything about the first couple of months on trends and various pockets in the industry?

A little bit of the same comments that we have been commenting in the last months. We have seen order intake, which is coming very, very close to an inflation point. We see the backlog in the same situation. We experienced a better January, a little bit weaker February, but nothing special. So more of the same. I mean, again, 2 weeks ago, as you remember, we were quite optimistic about 2026. I think the change that we see just now is obviously how oil prices, inflation will impact consumers. And of course, historically, we had that experience. Of course, if the world stops next week, you will have a situation. If the world lasts for another 6 months, then we will most probably have a different situation.

The next question comes from Agnieszka Vilela from Nordea.

I have a few. Maybe again, coming back to the demand situation right now. I think you actually wrote in the press release that the demand and trading conditions are somewhat weaker than anticipated already for you. So this is my question. I mean, are you really seeing it already in your orders or sales? And also if you could comment maybe more -- a bit more in the detail on the development across the business areas and geographies.

It's very much related to the U.S. at this point. I mean we see Europe in a better shape. We have registration numbers for January and February. They were positive. We know -- we are aware that there is a tax situation in Europe, which is most probably also benefiting the high registration numbers in January and February. We see WACC pretty stable at this point. So it's very much the Marine and the RV side in the U.S. where we are experiencing those kind of comments, and we see that it has been a little bit softer in the last couple of weeks.

Perfect. Maybe if you could also help us to kind of quantify this kind of downside in the U.S. It's not that it's full stop that you see already. Is it?

What we can say, I mean, it's clear that we have read in a number of comments that Dometic is collapsing. What I can comment is that we are not collapsing.

Yes, and then maybe on cash flow expectations also. I mean, Q1 is usually a negative free cash flow quarter for you. On the other hand, you had a bit softer cash flow in Q4 building inventories. But with what's happening, should we still expect a negative free cash flow quarter in Q1?

Yes. You should expect negative cash flow in Q1. You can probably look at last year and you get a good indication.

The next question comes from Daniel Schmidt from Danske Bank.

Juan and Stefan, coming back to the geography, and I hear what you're saying in terms of the U.S. is where you see the weakness. Why is that the case? Why isn't this sort of a global impact?

Well, I don't know whether we are going to see that in Europe or not. But obviously, inflation, the risk for inflation will have an impact sooner or later. And for us is more when is the situation in the Middle East going to stabilize. And of course, when you see the oil prices going through the roof in the last, I would say, 10 days because it has been 10 days, then you need to start thinking what is going to happen? What kind of influence is that going to happen in 3 months from now?

I mean the other problem that you have is lead times and logistics. That is not having an effect on us yet. That might have obviously in the coming weeks, but we don't see that happening to us at this point. And the same with logistic costs. We don't see that in our numbers just now. But of course, if the situation continues, sooner or later, we will have an impact. So you see, it's not -- what we see the comments from the dealers are primarily just now coming from the U.S. That's what we see.

And then I think we can also add, Daniel, about tariffs. I mean it's -- on the one hand, you could, of course, argue that what the Supreme Court decided in U.S. could, in the long run, be positive, right? But I think there is also still uncertainty on what is really going to happen there. And that uncertainty is obviously not beneficial for the consumer sentiment.

Are you sort of between the lines saying maybe that dealers in the U.S. are more jumpy than they are in Europe?

Yes, they are faster. I mean there's...

And more nervous?

Yes, absolutely.

In general, on the back of the tariff situation...

I mean, you have the interest rate situation, right? It has been promised a number of times that interest rates would come down. But of course, at the same time as oil prices are coming up in the way that they are doing, I think, it's easy, especially for the kind of vehicles that we are talking about. I think it's easy to understand that they are nervous. And again, it's not coming from us. I mean you can read already comments from Baird.

I don't know if you are following Baird and the comments, right? I have one in front of me saying our dealer samples suggested continued retail declines and a stable to improving inventory comfort. Notably, recent actions in the Middle East and related volatility in oil prices has dealers concerned. So I mean that's what's having an impact, obviously, just now on the sentiment.

Because you have a bit contradicting data of the same days that you guys were out and maybe that the difference is that this is big ticket and of course, quite fuel dependent. But you also had big sporting goods out the same day, guiding quite well for 2026 in terms of like-for-like growth and all that the small ticket items...

And I have to say that we have not seen anything on the Igloo side. But of course, then we are talking about $175. Is the high ticket -- what we have seen so far is the high ticket items, which are connected to the boats and to the RVs.

And connected to the fuel price?

Yes.

All right. And in this situation that you might end up in. We'll see where this takes us. What is your sort of plan in terms of counter actions?

I mean, I think we have demonstrated so far that we are pretty good at adjusting our cost and working on our cash flow. And of course, that will be more of the same. So it's clear that after what we have seen during the last couple of weeks, we are looking for more opportunities at this point in time.

But that is still to come? Or have you already sort of decided on more actions?

We are always working on actions, Daniel. But of course, it's not the same. If the market goes down with 5% or it goes down with 10% or 15%. We are not expecting 10% or 15%. We are simply being proactive and cautious, nothing more, nothing less. We are working on a continuous basis with contingency plans. So you have the restructuring program that was announced in December 2024, and then we work with contingency plans. What happens if the top line drops 5%, what happens if the top line drops 10%?

So in the restructuring program that we -- that has already been launched in December 2024, there is further actions already decided for 2026, which has been a part of the plan, but the execution is going to happen this year. And it's very much activities in North America.

Yes. All right. And maybe just a nitty-gritty question on January and February that you talked about a little bit. The winter storms that we had in the U.S., which impacted production of RVs at least from late January to early February. Is that part of your comments? Did you see that impact as well?

Yes. And we see OEMs working -- running just now 4-day weeks instead of 5 days. And we know that retail in January was down 15%, while manufacturing was down 11% from an RV perspective, while Marine was down 17% on retail.

Yes, and February...

We don't have the numbers for February. They will come most probably at the end of next week or the week after. But we know as well, as I commented before, that the OEMs are running for 4-day weeks.

All right. And then maybe you talked -- you got the question on the Igloo case, and you said it will take to year-end according to your legal counseling. Wasn't it sort of a maximum of 6 months when it comes to the ruling or it could be 9 months equally?

Yes. Normally, we should get away in 6 months. But of course, they are careful in telling you that it could be also in the beginning of next year. I mean for us, the sooner the better, right? We are optimistic about the case, and we believe that it's going to be good for us to leave it behind us.

Because there is the post phase now after the trial, right? And the 6 months starts to count from when that post phase is concluded and each side should file some type of additional summary information and so on. So it's when this 6-month period starts to count. And according to our legal advisers, they said end of the year, beginning of next year.

Okay. Okay. And maybe just to summarize my questioning, you don't want to give any more detailed guidance on how you think the quarter will end in terms of organic growth and your cost savings from the cost saving program. Is that on track or worse or better than you expected?

The restructuring program is running according to plan. Yes. And on guidance, as you know, Daniel, we don't guide forward.

But in terms of the cost saving program then, do you think it's going to be a fairly linear savings throughout '26 in line with -- or is that back-end loaded?

As I said, we have decided actions -- and they are more back-end loaded, if I say so. So it's things that -- they are in preparation now, but they will be executed during the year and the effects will start to come through more in the second half of this year. But then we, of course, have full year effects of what was already done last year and so on. So it's -- there is obviously things like that. But for the additional new activities, effect is going to be seen in the later part of the year.

Okay. And you mentioned the cash flow should be in line with Q1 last year.

Somewhere in that neighborhood, but it's going to -- my view is that we will have a negative cash flow.

The next question comes from Eric Blake from Fitch Solutions.

I was just wondering if you could tell me if this is going to have any impact on your previously announced plans for repaying the outstanding 2026 bonds?

No. Yes, the answer is no.

The next question comes from Johan Eliason from SB1 Markets.

Juan and Stefan, I wanted to follow up on the debt repayment here. You said you will repay a bond and then you sort of highlighted potentially an additional SEK 800 million after the summer. Is that in any way related to your view on the dividend payment that you are prioritizing bond repayments as we speak?

That is absolutely one of the reasons to -- as we noted in the press release, to keep the financial flexibility. So it's -- that could be one of the consequences. But I mean, it's -- the EUR 200 million in May, absolutely, we are going to repay that. And then the SEK 750 million in September, it's a little bit depending on the party who is sitting on that private placement with us. So it's -- but we have a readiness to pay that back as well. So it's -- that's within the potential planning, yes.

Okay. Good. I think there are many reasons for you to try to run a stronger balance sheet going forward. So I would view this as a positive decision from my point of view.

The next question comes from Mads Lindegaard Rosendal from analyst.

So could we touch a little bit on your COGS? We have seen many commodities rise this year and now also, as you say, oil. So how should we think about COGS this year? How hedged are you in your key COGS? And could you also just for memory, list your key sensitivities when it comes to COGS?

Yes. On the COGS side, we are hedged absolutely to a certain extent. We are also by the fact that the inventory that we will need for the main season here just starting off, I mean, we have already a lot of it already. So it's not 100%, of course, but I mean, already a portion is -- or a pretty decent portion is already there, so to speak. So it's -- then we obviously have the whole situation with tariffs, which eventually also impact COGS, right? And there, I think the world is kept a little bit in the dark.

I think we have an idea what we are going to do with that and so on. And so -- but that's obviously a little bit of an unknown, if I say so. We had also planned price increases, obviously, already implemented, but also implemented from the 1st of Jan here. So it's like I said before, there is still a lot of uncertainty around that part. So -- and if we talk about what type of materials, we have obviously polyethylene or polypropylene, which is a big component in our mobile tooling business, but also in some of our other businesses. Then we have things like aluminum and copper. We have obviously electronics. So that would probably list the absolute main things that we have.

Okay. So if there's a headwind, it would be more visible next year rather than this year? I mean, if prices stay where they are now for these key inputs.

I mean, we are obviously selling stuff also in the later part of Q3 and Q4. But -- so there will be -- there could be potential effects then, but mainly more than for next year, I agree.

And of course, you have moving targets as well, right? Because we have been suffering from the tariffs clearly. And just now, the tariffs for some of the countries are coming down. So I think it's a moving target at this point. And of course, if they are kicking in and they are kicking much, then we will also need to adapt prices. But again, then we are talking about consumer confidence again.

So you have 2 different questions. What is going to be the effect on COGS for Dometic, but also what is going to be the effect for pricing for the consumer down the road, not just for Dometic, right? If the raw material prices are coming up, that will impact all suppliers, and that will impact our customers as such.

The next question comes from Daniel Schmidt from Danske Bank.

Sorry, I just had 2 short follow-ups. Could you give an update on you, Stefan, and your positioning? What's happening there? Are you leaving by the end of April as communicated? Or are you staying longer? Or are you going to have somebody in place soon?

I am leaving at the end of April and the rest of the question I hand over to Juan.

And we are working on that, and we will communicate, obviously, as soon as we are done. But it is moving. The process is moving, obviously.

Okay. Okay. And then just the nitty-gritty, you said that OEMs in the U.S. are running at 4-day production weeks now in March. Was that 5-day production weeks in March last year? Or is that on the same level as last year?

Yes. It is slightly lower.

Okay. So it is a step down year-over-year simply?

Yes. And keep in mind, I mean, we don't have the numbers for February, right? But we have the numbers for January. January, as I commented before, retail was down 15%, while production was down 11%. So I think they are trying to get into the same level as retail. So they don't build up inventories.

Yes. And is it sort of when you talk about dealers and you say both in Marine and RV, is it sort of equally from both channels or both end markets that you hear the same? Or is it tilted towards one or the other?

It's both. It's both. It has been more clear. There is more information, far more information in terms of RV industry, the marine industry, but we also get the comments from the marine industry.

The next question comes from Agnieszka Vilela from Nordea.

Just one follow-up. On ACON lawsuit, you sounded quite optimistic about the hearing that you had last week. But just for us to assess the risks, if the verdict goes against you, what is the maximum earnout that you would need to pay out?

Well, in our opinion, we are not going to pay anything, in our opinion. What they could claim is the first tranche and the first tranche is $75 million. The second tranche is just on the skies.

So the second tranche is not kind of under this lawsuit, no?

But I mean the first tranche is $183 million. But I mean I mean we are sitting here and speculating now because we are speculating against ourselves because we don't believe we should pay anything. But if threshold is met, then it would be $75 million. But we -- as we are not even by $75 million, obviously, we are by 0. So it's -- but just that you have -- I mean...

We have not won yet, formally.

No.

So we need to wait. What we can comment is obviously that our legal counsels are very optimistic that we feel good after testifying. That we got obviously feedback from our attorneys as well. They continued last Friday, was also a positive day for us. That's what we know.

So with that said, thank you very much for your attention. We really appreciate it. And hopefully, you got some more clarification on really what happened during the week and why we communicated in the way we did. And with that said, thank you very much. Have a good day, all of you.

Welcome to Dometic Q4 Report 2025. Today, I am pleased to present CEO, Juan Vargues; CFO, Stefan Fristedt; and Head of Investor Relations, Tobias Norrby. [Operator Instructions].

Now I will hand the conference over to the speakers. Please go ahead.

Hello? Can you hear us? [Technical Difficulty].

Okay. So good morning, everybody. Well, I would like to start by apologizing for the technical problems, but we are back. So good morning, everybody, and welcome to this Q4 and full year webcast for 2025. With that said, let's move into the presentation.

Starting with the highlights, market, the overall market conditions are still challenging. Consumer confidence is still not where we would like it to be. And at the same time, retailers and dealers as well as OEMs are still cautious in building inventories. Having said that, we also feel that inventories at retail level are improving. They are just now at a low level, and it's very much just now a question about consumers starting to buy.

Looking at growth, 3% negative organic growth for the quarter, with Service & Aftermarket down 3%, which is obviously an improvement in comparison to previous quarters. Distribution, back to growth, very much driven by Mobile Cooling. And then we see also improvements from an OEM perspective, where still, Marine slightly negative. We also have LV slightly negative, while we see improvements in other areas.

EBITA margin, 6% in comparison to 7.3%. But then we also need to consider that we have a major effect on -- when like-for-like. So we have a substantial negative effect by currencies -- driven by currencies, and we will get back to that on the details. At the same time, as we previously communicated at the end of last quarter, we also have negative impact in Mobile Cooling specifically from increased labor cost since we added about 250 new people in the organization at the same time as we also have the price corrections to compensate for the higher tariffs in Mobile Cooling.

Looking at free cash flow, we ended up at SEK 20 million, which is a bit lower than 1 year ago, even there, very much influenced by the currencies. But at the same time, as we have seen a more positive order intake, backlog starting to come to the same level as last year, and we have been building inventories for the start of the season in Q2. At the same time, we also had later invoicing in the quarter this year in comparison to last year. All those factors are having an impact on the free cash flow. Leverage ended up at 3.3x in comparison to 3.1x in previous year.

If we move over to numbers, sales ended up at slightly above SEK 4 billion for the year with 3% organic growth, 12% FX, meaning obviously a substantial impact, and then 1% negative by the portfolio changes that we are doing. EBITA ending up at SEK 245 million or an EBITA margin of 6%, as I commented before, compared to 7.3% last year. We got a negative EPS in the quarter of SEK 0.67, adjusted negative EPS of SEK 0.39. And as commented before, cash flow of SEK 20 million -- free cash flow, SEK 20 million, a leverage of 3.3x.

Moving to the whole year, ended up at SEK 21 billion in sales with a total negative effect of FX for the year of 6%, 8% down organic growth and the same 1% on portfolio changes. With EBITA landing above SEK 2.2 billion, or an EBITA margin of 10.6% versus 10.8%. And of course, considering the negative growth, we feel quite proud of what we are achieving, working very, very hard to keep our cost in control despite the negative top line decline. EPS ending up at SEK 1.34, with an adjusted EPS of SEK 2.52, and a free cash flow of above SEK 1.4 billion.

Net sales, obviously, we are still not there, but we're starting to get close. As you can see on the graph, we are coming from hovering around 10%, 11%, 12% quarter-by-quarter for the last 3 years. And we saw Q3 landing on minus 6%, now minus 3%. And as commented before, we see order [ intake and backlog ] improving. Difficult to say obviously when we are going to see Dometic moving into positive territory, but it's quite clear as well that we are getting very close.

Looking at the different segments, Land vehicles ended up at minus 4% with Americas down 10%, EMEA positive for the quarter, plus 1%, APAC minus 10%. Marine came back to a negative growth of 3% after slightly growth shown in Q3. And we don't see that as anything strange. Obviously, the market needs to stabilize. We are coming from pretty negative growth. We saw plus 1%. Now we see minus 3%. We're expecting obviously to see improvements moving forward as well. Mobile Cooling, good to see that we are back to growth and optimistic about the expectation for 2026. And then Global Ventures, minus 3%. And we'll come back later to some more details on the different segments.

Looking at the different channels, no major differences, in reality, is -- really, we see Service & Aftermarket becoming a little bit higher on the share, while the OEM channel is becoming a little bit lower, ending up at 39%. And just as comparison, we are coming from a situation, 2018, where the OEM side stood for 62% of total sales.

Looking at the different channels, again, it's quite obvious that we are moving in the right direction. Service & Aftermarket, we were [indiscernible]. We were positive in Europe, while we were negative in Americas. Distribution, as I commented, we have positive in parts of Global Ventures and positive on Mobile Cooling having an effect -- 2% positive effect on the distribution channel.

And then OEM is also quite clear that on one side. The European market is stabilizing. We see -- especially in Southern Europe, that we are starting to see growth, while Central Europe is still sitting on a little bit too high inventories even if they are coming down. So we expect even, from that perspective, improvements moving forward. We also saw, as a matter of fact, the commercial vehicles showing growth for the quarter, and we have seen growth for the entire year. So that's also a positive sign that things are improving.

Looking at EBITA, as I commented at the beginning, 6% versus 7.3% last year. Looking at the underlying margin when comparing like-for-like, 2.9% higher than 1 year ago. FX, again, we will get back later, but had a major impact in this specific quarter. We also have the additional labor cost and the comparison to duty drawbacks in Mobile Cooling, that we commented in previous quarter, was going to have an effect also in Q4.

We are happy to see gross margins improving, ending up at 28.7% versus 26.8% despite the lower sales. So it's clear that the restructuring program is biting quite a bit. And on top of the restructuring program, we also have a number of other activities to increase efficiency overall in the company. And then even if we are showing negative EBITA development in the quarter, we also see that both Land Vehicles and Global Ventures are showing better margins despite the currency situation.

Moving to specifics on the -- moving on the specifics to Land Vehicles. We have, on Land Vehicles, net sales of SEK 1.8 billion with organic growth -- negative organic growth of 4%. We got decline in both channels. But as I commented before, growth on the CPV channel as part of Land Vehicles. And we also showed growth in EMEA for the first time during the last 5 quarters, which is telling us really that the LV -- RV business in Europe is stabilizing.

EBITA, higher SEK 66 million in comparison to SEK 23 million last year or 3.6% EBITA margin with clearly a positive impact of the global restructuring program. As we commented, when we announced the program, the LV segment was going to be the one showing the major impact during that program. We see both increased profitability in EMEA. We see reduced losses in Americas and APAC still delivering pretty high margins despite the drop on the top line.

Marine, down in organic growth, 3%, with sales and aftermarket stabilizing as well, flattish in comparison to 1 year ago, and single-digit decline in the OEM channel. EBITA, almost SEK 200 million or 18.5%. So a slight decline on the EBITA margin, defending, in other words, protecting the margins pretty well despite the drop in the top line. In this case, the margin decrease is very much due to the currencies, as Stefan is going to come back to. And then we see even there that we are doing a pretty good job in reducing cost to compensate for the drop on the top line.

Mobile Cooling. Organic growth, positive. That was a positive in the quarter. We see a strong recovery in North America in Q4 in comparison to Q3. On the negative side, obviously, the margin in the quarter is not coming as a surprise. We also already announced that we had on one side the positive onetime effect of SEK 63 million coming from the duty drawback. At the same time, as we also had inefficiencies caused on one side by labor since we employed again about 250 new people at the same time as we have additional training costs and at the same time, as we implemented prices, but the prices are kicking in in January. So we are not expecting negative effects from those factors from January this year.

Moving over to Global Ventures, ending up 3% negative as well with good continuous organic growth in other global verticals. At the same time, as we see decline in Mobile Power Solutions driven by the soft RV industry, even if it's improving. And even here, we are pleased to see that our EBITA margin is improving 7.1% and also in absolute value, is improving to SEK 28 million in comparison to SEK 24 million last year. As a consequence on one side of the sales mix -- positive sales mix, at the same time as we keep working on reducing our cost.

On sustainability, we are happy to see progress in all areas but one. So injuries coming down to, I would say, all-time low. In this case, after a lot of investments that we have been doing across the company, to improve in this area. Female managers, up to all-time high, 31% in the quarter. We would like -- obviously, we will continue to work in that area. But again, showing progress. Energy, renewable energy operations, 37%, and also beating our own targets, while innovation index, the same ending up 23% in comparison to 21% 1 year ago. And that's a super important one because that has an immediate impact as well on climate. So new products drive lower climate.

[Audio Gap]

So looking at the products in the Marine area, we have a new sanitation product for sailing boats that we just launched. And then last but not least, also starting to see the synergies coming from our Mobile Power business and introducing new products in the Marine area, where we are going to increase efficiency by connecting a number of different batteries into one single device.

Happy to report as well that our global restructuring program is running slightly better than expectations. As you may remember, we are expecting SEK 750 million in savings at the end of 2026 -- running rate at the end of 2026. And so far, 300 employees have been impacted. We have closed 1 manufacturing site and 5 distribution centers. We are running at the end of December at a rate -- a saving rate of SEK 350 million. And we had cash out that also impacted obviously our free cash flow in the quarter of SEK 100 million, a little bit higher than SEK 100 million. And totally for the year, the cash out has been a little bit above SEK 200 million.

And then we keep working on the divestments. Unfortunately, we cannot communicate anything yet, but we are working on that. And then on discontinued businesses, we stopped a couple of businesses, leading to a 1% negative organic growth for the year -- for total year. And we will see that number now fading away step by step.

And with that said, Stefan, stage is yours.

Thank you, Juan. Good morning. And we are starting with the Q4 income statement. Gross profit-wise, we continue the positive trend in improving our gross profit. And that is despite that we have a SEK 30 million negative effect from the tariff/labor cost increases within Mobile Cooling. Then we have an underlying development in the EBITA margin. So let me save that for the next slide here, and so we will come back to the different details on that. Further comments that on operating expenses that we have reductions driven by global restructuring programs and other measures. And at the same time, we feel that we are able to invest in strategic growth areas like product development and sales resources.

On the net financial expenses in the quarter, we can see that the interest on bank loans is slightly higher than last year, and that is very much driven by the fact that we have, in the short-term perspective, had higher debt than basically needed with the plan that we are going to repay debt. We have also done that in the later part of the quarter, and we will continue to do another repayment in May 2026. So that has been driving up the net interest on bank loans and financial income somewhat. On the tax side, the tax rate is negatively affected by nondeductible interest expenses in Sweden. And then we also have made a tax provision in the fourth quarter for ongoing tax audits.

So let's move over to the specification of the EBITA in the quarter. And as you recall, we had in Q4 last year, a duty drawback repayment of SEK 63 million related to Mobile Cooling, which was a onetime off, and that did, of course, not repeat itself this year. Then we also, as communicated in Q3 that we have a delay between the price increases we are taking out to compensate ourselves for tariff cost and higher labor cost, also mainly in Mobile Cooling. That is SEK 30 million. So that is the second part for the adjustment. If we sum that up, then we have an underlying EBITA of 6.8% versus 6% last year.

And then we have the currency impact, of course, especially the dollar has been swinging a lot. It's almost a SEK 2 difference to the dollar between Q4 last year and Q4 this year. And that have had an effect which, measured in EBITA margin, is 2.1%. So that's the specification on how we come to the 8.9% underlying versus 6% last year.

Let's move on to the next, coming into our cash flow statement. We have a somewhat lower operating or free cash flow than what we have seen in the past. And from a working capital point of view, we have seen that -- and also that we talked about in Q3 that we also have to build up inventory to meet demand, that we are expecting to come. And then there is also a currency effect in the free cash flow impacting it. It's approximately SEK 250 million. And then obviously, there is also an underlying lower profit that is impacting the cash flow.

Then we have a cash out related to our restructuring program of SEK 103 million in the quarter. That means that program to date, so starting to count from Q4 last year, we have now had a cash flow effect of SEK 270 million on our restructuring program. And as you remember, SEK 400 million is what we have said will be the cash flow impacting part of the restructuring program. So on the free cash flow before M&A, interest expenses paid is down and also taxes paid are down. And then as you can see at the bottom, we did a repayment of USD 229 million in the loan here using cash on hand, which is perfectly according to plan.

Yes. Moving over to the next slide, you see the free cash flow development more in a time horizon. And if we look into 2026, I mean, I still feel that the free cash flow, it's probably not going to come up to the full level of 2025, but slightly below that level is my expectation for the full year 2026.

Looking to the working capital. There, we see positive development here. The working capital over the last 12 months is 25% of net sales. It was 29% of net sales last year. And if we look not on an LTM basis, but in the quarter stand-alone for Q4, we are down to 23%. This is, of course, driven by the inventory balance, which is now SEK 4.8 billion compared to SEK 6.5 billion last year, and we can also see that the days of inventory on hand is down to 119 days versus 138 last year. So I think we -- I'm satisfied with how we have been able to drive down inventory during the year.

Then there is still further potential to optimize working capital going forward, where the target is 20% of net sales. And you can see the different components here and obviously, where we have the most profound development within inventories. The other 2 stays pretty stable.

Moving over to CapEx and R&D expenses. CapEx is a little bit down in the quarter, and we are also making strategic decisions about where we spend, so -- but it's also partly related to timing. If we look on R&D, it's now 3.5% of net sales, and that has been clearly a target that we have had continued to develop and launch new products, which we also see in the innovation index, which is continuing to come up.

Moving over to our debt maturity profile. As you see, we have some debt falling due in 2026. The SEK 2.2 billion is the remaining part of the 2026 Eurobond, SEK 100 million we paid off when we did the new bond in September in 2025. And that is intended to be paid off with cash on hand. Then we also have SEK 0.8 billion falling due in September, and we are keeping our options open here. But if the cash situation allows for it, we are considering to pay it off in September.

Looking a little bit on our debt portfolio. It now has an average maturity of 2.7 years. And we have also extended a USD 233 million term loan to 2029. And then the undrawn revolving credit facility of SEK 300 million is maturing in 2028.

So with that, we move over to our leverage ratio, which ended at 3.3x, which is 0.1x up versus Q3, and it's, of course, driven by the reduced EBITA and which is then the impact from lower net sales mainly. And we are highly focused in the organization on protecting margin and reducing working capital and which we have seen in the past. And that work, of course, continue combined with a very clear growth focus as well. And we are, as we have said all the time, committed to drive towards our target of around 2.5x of leverage.

So with that, that was my last slide. So I hand over to you, Juan, to conclude the presentation.

Thank you, Stefan. So looking at the business, we continue to see a market stabilization, and we see also the signs in order intake and backlog situation. EBITA in the quarter was, of course, disappointed even for us. And of course, the currency is not a lot that [indiscernible]. But nonetheless, we were disappointed clearly.

Massive impact from currencies. We already commented after Q3 Mobile Cooling, and that was obviously confirmed during the quarter. Happy to see that Land Vehicles, that has been the toughest, obviously, segment, very much impacted by the RV industry, is showing better margins as well as Global Ventures, despite, again, the currencies.

Free cash flow, I want to repeat myself. Currency did have an important effect even here, but we also built up some inventories in preparation for the Q2 when looking at better order intake and backlog. We have lower profit, clearly, which is also impacting the free cash flow. And on top of that, we had this SEK 100 million due to the restructuring program as cash out in the quarter.

Leverage, 3.3x versus 3.1x. Difficult to predict when we are going to move into positive territory, but we feel that we are getting very, very close. We have seen the trend moving from, again, around 10%, 11%, 12% into 6% into 3%. And, again, we feel confident that the order intake and the backlog is going to lead us to positive territory, provided, obviously, that the geopolitical situation doesn't have more negative impact on the consumer confidence.

Strategically, we keep working exactly on the same topics, innovation, super important for us and our future, ending up at 23%, an improvement of 2 percentage points versus last year. I'm happy to see that the global restructuring program is biting and how our gross margins are improving quarter-by-quarter.

And with that said, I would like to open for the Q&A session.

[Operator Instructions]. The next question comes from Fredrik Ivarsson from ABG Sundal Collier.

First, you talked about the stronger order backlog, obviously, and a gradually stronger demand. My question is, did you see any big swings from the previous quarter? Or is it just smaller, gradual improvements that you see?

No, we have seen a step-wise improvement quarter-by-quarter since Q1. So it's a major improvement if you're comparing with Q1 step by step. And it is a little bit in all areas, I would say, including the OEM channel, has been showing better numbers during the last 2 quarters.

Okay. And then on the FX drag, 2 percentage points on the margin in Q4. Do you have any guidance for us as we look into Q1, Q2 in terms of FX? And maybe also if you could say anything about the specific impact from tariffs during the front end of the year?

Yes. That was an obvious question. And I can say, I mean, just to give you a little bit of guidance, I mean, if the dollar changes plus/minus 5%, that will have an effect of SEK 47 million on EBITA and equivalent on the euro side is SEK 37 million -- and I am -- and that is on a full year basis, right? So it's -- so I mean, where are the currencies going to go here? But I mean, we have actually been spending some time on that to try to understand that. And our view, and that is, of course, followed by 100 disclaimers, but -- depending on certain things. But I would say that maybe we will have to assume from the rate that we are using by the end of December until the end of March, a 5% to 7% movement on the dollar and maybe a 3% movement on the euro. But that is just -- I mean, as you know, the P&L is driven by an average. So it's obviously not moving as fast as the closing rates here.

But I would say a negative 5% to 7% in the dollar rate and then a minus 3% on the euro rate. And then you obviously need to use the numbers that I gave you here in the beginning. And we are actually considering to have a specific call with analysts on the currency effects so that you can -- that we can talk about it in such a forum. But so it's going to be negative, but not as negative as we saw now in Q4. I mean it's also a little bit unfortunate, obviously, that Q4 is a small quarter and these type of effects also -- because of that, has a bigger effect on the margin as such.

Then tariff-wise, we are expecting that we, from Q1, will have compensated ourselves with price increases and -- which we also communicated in connection with the Q3 report. So we don't see any changes in that.

Perfect. And if I may squeeze in one last one for you, Stefan, on cash flow, coming back to what you said regarding the 2026 expectation, not fully reaching last year's level, I think you said. In that statement, what do you assume in terms of working capital because you still seem to be quite positive on the upside in working capital?

Yes. No, But I still see that we have more to do on inventory. Then, of course, there is also going to be a component in here where we need to increase inventory to make sure that we maintain the service level to the customer. But we still have pockets where we know that we will have to continue to work with that. And I mean the ambition in the big trend is to come down to 100 days of inventory. And as you know, we are on 119 as we speak. And will we be able to take that full step in 2026? Maybe not, but still moving towards that target, I would say.

But then we are also working with the other components here in finding ways to improve that. So I still feel that we will continue to move towards the 20% working capital to net sales here. And as you saw in Q4, we are on 23%, and we are on LTM, 25% basis. So continue to move towards that level.

The next question comes from Daniel Schmidt from Danske Bank.

Two questions from me then. And just coming back to organic growth and the lack of organic growth so far, you mentioned that you've seen order intake improving since Q1 last year. It doesn't sound like that has changed recently heading into Q1 this year. Just simply, doesn't that mean that you are in positive territory in terms of sales organically now or sort of the delay between order intake and sales longer than normal? Or have you seen cancellations during the year of sort of the backlog? Or what's happening there?

Now what happens, obviously, that this is a gradual recovery month by month and quarter-by-quarter. So we are much closer in Q4 than we were in Q2 in comparison to Q1. So the major drop we saw really in the second half of 2023 and 2024. And then we entered Q1 2025 on a low level, and we have been recovering since then. Keep in mind how the market has been evolving. First, you had a drop in North America RV. As the market on the RV in North America was stabilizing, then we got, in the last quarter, the second half of 2024, the European market dropping big time, at the same time as Marine was dropping. So the American market has been improving, while the European market is starting to recover now during the last 3 months.

So again, it's not that you have a big bang upwards or downwards when -- normally, being global is an advantage. In our case, because of the magnitude of the drop in the different geographies, that's the reason for showing this negative growth for so long in comparison to many other companies. If you look at our American colleagues, they have been dropping 45%. But then after 18 months, they are back. As we have been recovering in some areas, we have been deteriorating in some other areas. We see the recovery on the order intake is all over. I wouldn't say that this is in one geography. We see improvements all over. But still, we don't see the sales yet.

Then you have, at the same time, a little bit what we have seen with Mobile Cooling, that people are super careful in building up inventories. So they place an order, and then they see whether they have the sell-through or not. And then depending a little bit on how they see it, they will wait another period of time. So I believe really that we are getting into more stability. But to tell you that we are going to show positive growth on the 15th of February, I would be lying to you. I believe that we will see still what we have seen in Marine, 1 quarter, plus 1% or plus 2% and then another quarter, minus 3%. It's very, very seldom that you are dropping 10% and then all of a sudden, you're moving to 10% growth. I believe that we are going to be most probably one more quarter and then we should be seeing the growth coming back.

And more positive on the European market, clearly. We see that Southern Europe and the Southern European players are starting to manufacture again. They were not doing that a few months ago. We said that the German manufacturers are a little bit more hesitant. They are still talking about -- the dealers in Germany are still talking about a little bit too high inventories. While at the same time, we know that companies like [ Klaus ] or like [ HAIMER ], part of 4, are more optimistic about 2026, and we see a major gap between manufacturing in 2025 and registrations. Registrations in Europe ended up at minus 2%, while manufacturing after 9 months was down 17%, or 25% if you look at rolling September. So that's telling me, obviously, that we are reaching the breakeven point somewhere.

Yes. I was just sort of maybe referring to that you potentially now have said that order intake has been improving for maybe 12 months as we get through this quarter, but let's say, 9 months. And -- but maybe you're also saying that sort of the certainty in the order intake is a bit less, it sounds like, when it comes to dealers postponing orders and so on.

I mean we saw that, and we have seen that in Marine, we have seen that in Mobile Cooling, that people are still hesitant to build up inventories. So they place orders, and then they wait. So everything is depending just now on the sell-through. The good news is that altogether, the inventory levels are lower. So it's going to be more and more difficult to postpone the orders. That's what we are trying to say.

Yes. Okay. And then secondly, we talked about it in Q3, the Igloo court case being moved to March from September. Is still March the date for the court and any sort of -- any changes to what you've provisioned?

No. So we still feel very confident about our provisions, and we will be in trial, I think, it's the second week in March.

I mean our point is still that we don't believe it lacks any merit this quarter. We still believe that we should not pay anything more. That's what we basically say.

What is the length of such a trial normally?

Yes. Because -- I mean, there is a trial. And then if it is a fast judge, she will -- it's a she, will take a decision directly in the -- after the hearing, but they have up to 6 months' time to come with their verdict, so to speak. And then there is obviously a chance to appeal after that from either side. So it's like we have said all along, it's -- it could be a lengthy process.

The next question comes from Johan Eliason from SB1 Markets.

Juan and Stefan, just a short question on market share developments. You have a little bit of a history losing some market share during the pandemic to the Chinese in the fridges and the warning side. How are things developing more recently in the current quarter, obviously, disregarding the business you are closing down? Are you keeping? Taking? Or are you still losing some areas?

No, I think it's very much in the same situation. So obviously, what we are referring to is obviously Chinese company is very much active in North America. And I don't see that the situation has changed anything. On the rest of the business, it is very much the same. So obviously, we are into a number of industries, and we are into a number of different product areas. Sometimes you lose 1% here and then you win another percent there. So I do believe that -- I don't see any changes altogether.

Good. And I think you mentioned that you hoped you would regain some market share in the earnings moving it back to the U.S. again. Has that materialized or...

No, not yet. We are working on that.

The next question comes from Agnieszka Vilela from Nordea.

I have 2 questions. The first one, my understanding is that when it comes to tariffs, you have been protected by the USMCA agreement when you imported things from Canada and Mexico. Does the situation change at all with the Section 232 right now? Do you have like -- did you expect more tariff burden? Or it does not apply to your products?

We don't see any effects so far. Then of course, we have Mr. Trump's statement last week about 100% on tariffs on a number of different products. We don't have any more detailed information, but obviously, the communication has not been official. There's going to be on when it's going to be. So we are in a waiting mode.

All right. Understood. And then apologies, I missed the beginning of the call and maybe you commented on that. But can you just explain the profitability development in Marine specifically? What were the headwinds there? And also, should we expect these headwinds to sustain during 2026?

I would say that in Q4 specifically, Marine is the segment that has been impacted the most by the currency effect. So that -- we obviously -- I mean, who knows what's going to happen with the currencies? But if we are staying with what I mentioned before, I mean, our assumptions on how we believe that the currency is going to develop based upon our average rates, then I would expect that impact to be less going forward. But that's, of course, with some disclaimers, no doubt.

Okay. And maybe just a follow-up on Marine as well. Just looking at the organic growth development in the business as well. Now you -- I think the organic growth declined by 3%, somewhat worse than what was the case in Q4. Any kind of flavor you could give us when it comes to your expectations for the Marine business specifically into 2026.

I can give you some indications, Agnieszka. On one side, we have the European market, which obviously size-wise is much smaller than the American market, but we had 2-digit growth in the European market, Marine in Q4. On the contrary, we had negative growth in the American market. On the American market, what we see is that on one side, marine dealers are still very cautious and talking about high inventories. At the same time, we see as well that engine manufacturers are starting to show nice growth on engine manufacturing, which is going to bigger boats. And that could benefit us. The question is when are we going to see that in our order intake and in our sales. But we have a couple of indicators that are positive. The one that obviously needs to change is dealer sentiment on the American side.

And now we have a couple of questions from the webcast audience. The first one being about our restructuring measures, whether or not the current ones are enough? Or do we feel that we need to come up with additional measures?

You will never be done, right? Because there is always something more to improve. But our perspective just now is that the market -- we have indications the market is improving. Priority #1, #2, #3, #4, #5 is to put management attention on growth while keeping, of course, full control on the cost while carrying out the restructuring program we have. Just now, we are going for growth. And we intend to show growth in 2026.

And then there's a question on our account receivables program. If you, Stefan, please, could provide a few comments and expectations on that.

It's a program that we have been putting in place. It's a tool. I was speaking to that. We were also working with the other components of working capital, and that is an example of what we are working with. So for some of our customer bases, we have that in place now. And if I would look on what that would mean by the end of the year, so let's say, by the end of 2026, I would say that it would contribute with another SEK 300 million to SEK 400 million. And then, of course, as we are a very seasonal company, it will be significantly more in certain parts of the year. But if we look on it from end of year to the end of year, I would say, compared to where we ended 2025, I would probably say that there is another SEK 300 million to SEK 400 million to be gained out of that program.

And then a short question on FX and in particular, full year 2025, the impact on EBITA, approximately, margin.

There we have -- it's significantly less than what we have seen in -- I mean, we were talking about 2.1% units in Q4. And on the full year, it's 0.4%. So this is -- this has been an accelerating situation. And also, of course, versus the comparison to 2024, where the dollar ended with SEK 11.1 at the end of 2024, and now it is more on SEK 9.1. So it's dramatical development that we have seen there. But for the full year, 0.4% units on the profitability or on the profit margin.

And finally, if we can share some more comments on leverage in 2026, ambitions, expectations.

Yes. But I mean, as one important driver, of course, here is obviously growth. And as Juan quoted before that the very clear ambition for 2026 is obviously to show growth, even though it's not going to be -- you should not expect double-digit growth. It's going to be low to mid-single-digit growth, I would say, in our base case here. So that is, of course, an important part. But then to drive the other parts of free cash flow as well in order to be able to reduce the net debt. And we also -- with the -- yes, plan on how to pay back gross debt, we are also going to reduce our financial net as we go. So I still feel that we should see a reduction in leverage in 2026. Then the question is how far that is going to be? I could say personally, I would be disappointed if that would not be at 2x at the beginning and so that we get out of the area with a 3x at the beginning. So if you see my point.

I think just to fill in, if you go back to the last 3.5, 4 years, it has been very much about protecting margins, protecting cash flow, releasing inventories. It has been about navigating along a very, very, very tough period of time in any consumer business. At the same time, we feel that we are very, very close to turning. And that means as well that we need to also spend as management team moving from the defense to the offense. Just now, it's about growing the company, and that will have obviously a major effect, both on free cash flow and leverage without forgetting cost control. So we can assure you that we will keep working on restructuring program. We will keep working on protecting margins. But at the same time, we simply need to see the results of all the hard work that we have been doing also and get back to growth.

Good. And with that, I think we have one more question from the conference call audience, please.

The next question comes from Daniel Schmidt from Danske Bank.

Yes, it's me again. Just 2 short follow-ups, maybe Stefan. You mentioned reduction of debt in '26, and you outlined that on the slide earlier today. But what is the run rate in terms of financial net you think heading into Q1? Just could you give us any indication on a quarterly basis?

[Technical Difficulty]. Okay. Daniel, can you hear us now?

Yes.

[indiscernible]. Can you repeat your question? We didn't really -- we were...

I was just wondering, we talked about reducing debt and all that, and you did a lot towards the end of Q4, I think, if I'm not mistaken. What is the current run rate on the financial net heading into Q1 now on a quarterly basis?

Now I would say that Q1, there is not going to be -- it's going to be a little bit down, but not significantly. But then after May, when we are paying back the bigger -- the remaining part of our Eurobond, it should be trending down. So I would say I mean we are a little bit above SEK 200 million now. So we should probably see that coming down with -- to, let's say, SEK 180 million or something like that.

Okay. Okay. And then just a detailed question on the tariff/labor cost impact that you had in Q4. I think that combined was SEK 30 million, and now you're raising prices to adjust your profitability in Mobile Cooling since of January. How much of that SEK 30 million can you sort of counteract with this price increases? All of it? Or still you're going to end up with higher labor cost that is still going to have a negative impact? Or how do you view it?

No, I see that on the pricing, our expectation is really to cover up for the increases that we saw during 2025. Absolutely -- now we increased prices, Daniel. The problem is that they are not kicking in before 1st of January.

Some of them.

So most of them kicked into the year, but we had a couple of major customers, obviously, where -- the prices are kicking in in January -- 1st of January. So we should -- our expectation is that we are going to cover up for those inefficiencies that we had in 2025 and the tariffs, of course.

As of the full quarter Q1, there won't be any sort of delays into Q1?

Price increases should be effective from the 1st of January.

That was the last question at this time. So I hand the conference back to the speakers for any closing comments.

So we would like to thank you for your attention. It's clear that we are not happy with the performance that we showed in the quarter. We have a number of underlying indicators that are positive, but we cannot be happy, obviously, when our EBITA, for whatever reason it is, is lower than 1 year ago and our profit margins are lower than 1 year ago. And our job is left. We keep working very, very hard to prove that we are going to come back to growth, that we are going to see margin improvements and that we are going to see higher free cash flow next year.

And with that said, thank you very much for your attention, and have a good day.

Welcome to Dometic Q3 Report 2025. Today, I am pleased to present CEO, Juan Vargues; CFO, Stefan Fristedt; and Head of Investor Relations, Tobias Norrby. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Good morning, everybody, and welcome to the presentation of this third quarterly report. I would like to thank you all for participating today. We know that this is a very busy morning for many of you. And with that said, let's move rapidly to the highlights. Starting obviously with still tough market conditions where the most effect is really by consumer confidence still staying at pretty low levels all over the world. We see also retailers, dealers, OEMs being keeping to be still today being very, very careful in building up inventories.

At the same time, we also see encouraging signs of stabilization in order intake, and we see few quarters. We see improvements already in Q2, clear improvements as well in Q3.

Looking at performance, a decline of 6% organically with Service & Aftermarket showing an improvement in comparison to Q2, moving from minus 12% to minus 4%. Distribution declined by 6%, very much driven by Mobile Cooling Solutions, and we will get back to that. There are some aspects or some reasons for that negative decline.

And then OEM also showing negative minus 8% organically, which is a good improvement versus first quarters. and where we see Land Vehicle Americas moving in a positive manner as well as Marine after many quarters being positive in the quarter.

Strong EBITDA margins landing at 10.4% versus 8.6% for last year, a combination of one side of the margin improvements led by cost reductions. As you all know, we are running a restructuring program that has been kicking in since day 1, and we see very positive effects out of that at the same time as we are working in many different areas. And at the same time, we also see that all segments with exception of Mobile Cooling are improving our margins in comparison to the last quarters as well.

And again, we will comment specifically on Mobile Cooling Solutions. And strong cash flow, free cash flow, EUR 527 million and a leverage landing on 3.2% (sic) [ 3.2x ] in comparison to 3% -- to 3x last year.

Looking in more detail to the numbers, almost SEK 4.9 billion in revenues with 6% organic decline -- 6% decline driven by FX and then 1% decline led by the portfolio changes that we have been doing, leaving some of the businesses that we have been into before. EBITA, just a little bit over SEK 0.5 billion over an EBITA margin of 10.4%. Looking at adjusted EPS, we ended up at SEK 0.64 and again, a free cash flow of SEK 527 million. And leverage, I already commented, landed at 3.2. Looking at the year-to-date numbers, almost SEK 17 billion in revenues with a decline of 9% organically, 5% led by FX and the same 1% led by portfolio changes.

And EBITA just below SEK 2 billion. And good to see, obviously, that we are getting closer as well on the EBITA margin where we landed exactly the same level as 1 year. So we have seen a recovery in recent months in comparison to the first half of the year. Adjusted EPS, SEK 2.90 and a strong free cash flow of SEK 1.4 billion. Looking a little bit deeper into the sales evolution over time, Land Vehicles ended up at minus 9%, which is a clear improvement versus Q2 with Americas showing 3% negative growth, which is a substantial improvement in comparison to the situation we saw in Q2.

EMEA showing a degradation as well as APAC in comparison to last quarter, very much led still today by the OEM side. Marine positive, was great to see after many quarters and also showing a positive order intake, which is positive for us, obviously, Mobile Cooling, 8% and then Global Ventures, minus 6%. When looking at the different channels, no major changes in reality, perhaps to point out that the OEM side is for the first time in many, many, many years below 40%, while both Distribution and Service & Aftermarket are moving 100 basis points upwards.

And just as a reminder, looking at the RV OEM situation, we are just now -- RV OEM stands for 18% of total business in comparison to the 49% in 2017. So obviously, we are a less sensitive company to the cyclicality that we have seen on the OEM side. Looking a little bit more in depth into the different channels. We see a clear improvement in Service & Aftermarket. Still, we see that -- we see volatility month-to-month, but again, moving in the right direction. Distribution, very much affected by Mobile Cooling Solutions. And the main reason for that is really inefficiency in Katy, Texas since we had to employ above 200 new employees and by that training, a lot of training cost us inefficiencies, we will see this negative effect in Q3. We will also see that in Q4 and then it's going to be gone.

And then -- so we will come back to Mobile Cooling, but we have a double effect on one side that had a negative impact on the growth and that had also a negative impact on the margins. Looking at OEM, we see a clear path moving forward, different segments. So we see LVA turning positive in the quarter, and this is the second quarter in a row that OEM in LVA has been positive, and we also see Marine turning positive, while we see still -- LVE and LVC being negative.

Positive to see, obviously, when looking at our results, strong margin recovery in comparison to last year. We see strong gross margins, almost 30% compared to 27.3% last year, very much driven by cost reductions. Again, on one side, we have restructuring program, but we also have contingencies driven in all segments simply because we still see negative growth coming in. And we also have a positive impact on the sales mix.

When looking at operating expenses, another area where we are working very, very hard. We see a decline of 6% in constant currencies despite the fact that we continue to invest in a number of areas. We see product development, one of the areas where we are investing the most, but also building up our sales organizations in a number of segments where we see a stronger growth moving forward. We see, again, margin improvements in all the segments with the exception of Mobile Cooling in the quarter. When looking at tariffs, not much new here to comment in comparison to last quarter.

As you know, we have good protection in the U.S., having 9 of 12 factories that we have in North America based in the U.S. In the short term, obviously, and this is still carrying a lot of uncertainties moving forward. We -- it's very much about passing prices to the market, something that we have done in a pretty good way, and we have compensated for everything, but for a few customers in the Mobile Cooling Solution area. And that's really the impact that we see negative in the quarter of SEK 35 million that will be compensated by the pricing. We implemented prices already twice in all of the areas, by the way. But in the specific case of Mobile Cooling, we had a couple of customers where we prolong the time for kicking in with the new prices. This is going to have also a negative effect in Q4. And from Q1, We will not see any more negative effects.

Looking at the different segments, starting with Land Vehicles. Total organic growth, negative organic growth of 9% with soft distribution on sales and aftermarket, while we see as well a double-digit decline in OEM in both EMEA and APAC, but positive growth in Americas. We see also a pretty strong recovery of margins for the entire segment, 6.3% versus 3.7% with clear profitability improvements in EMEA, a decline -- a slight decline in APAC, but still showing very robust margins. And then we see as well reduced losses in Americas. And we will continue, as you know, to drive the recovery on the Americas situation. And as we informed a couple of times during the last quarters, the most of the restructuring program that we are driving, it will have an impact on LVA and LVE.

Moving over to Marine. Positive Q3 quarter with organic growth of 1%. We see OEM coming back to growth. We still see a single-digit decline in Service & Aftermarket, but we also see a positive order intake that should help us as well in coming quarters. EBITA recovered as well. We are again over 20% in EBITA margin, 20.8%. And as a consequence of the mix and also the cost reductions that we are driving in the segments.

Then Mobile Cooling Solutions, a double hit, I would say. On one side, we didn't manage to see growth due to the labor constraints that we had in the factory that are costing us in efficiency. At the same time, we also saw a negative effect on the margins coming from both the tariffs. Again, that will be gone in Q1 next year at the same time as we have the labor ineffeciencies. And we also have negative wage impact simply. The Mobile Cooling business is highly seasonal. Historically, we always had a couple of hundred of non-immigrant foreigners working on our factories to keep up with the capacity needs. And the U.S. administration did some changes on forcing us to increase the salaries. Again, we are compensating on prices, but we have a time lag. And those negative effects will be gone from Q1, as I commented before.

Moving over to Global Ventures, where we see also a negative growth of 6%, with growth in Other Global Verticals, very positive in some of the areas and then still decline in Mobile Power Solutions driven by the soft RV industry. Good margin improvements, 11.5% versus 9.2%, very much driven by Other Global Verticals.

Happy to see as well our progress in the sustainability area with injuries well below target, 1.5. We see as well that we are on target in regards to female managers, and we'll keep working hard in that area moving forward as well. We see renewable energy also quite a bit already now above the target for the year. We keep assessing our suppliers, our vendors, and we ended up at 60%, slightly below the target for the year. And of course, we will reach the target at the end of December. and we see also progress in innovation where we landed at 22%, a couple of percentage points above last year.

We are talking a lot about sales decline. We are talking a lot about cost reductions, but we keep investing in the product area and product innovation. This is for the first time. It's the first time that as the Dometic brand, we have soft coolers. It's a totally new area for the Dometic brand. We have soft coolers under the Igloo brand, but we're also launching a new series of soft coolers under the Dometic brand for the first time and we have great expectations.

Also from a branding perspective to help us to reinforce the Dometic brand among consumers.

Then if we move over into the gyro. We have very, very positive reception by customers. We have been introducing the products in a number of different shows around the world. We see order intake kicking in, in many different areas. I'm happy with the results. And on top of that, we are getting a lot of awards, which is always helping us when visiting new customers offering a totally new product area for us as well.

And again, we are getting awards, a lot of awards, not just for the gyro in the Marine industry, but also for many other products that we have been launching in the last 12 months. So positive to see that our investments are paying off both in terms of awards and order intake.

And then on the restructuring program that we initiated 1 year ago, as you all know, will generate savings of SEK 750 million when it is completed at the end of 2026. We closed down so far 1 factory and 3 distribution centers affecting 250 people altogether. And we are running just now at annual savings of SEK 250 million as the running rates. We had a cash out in the quarter of SEK 35 million and year-to-date a little bit above SEK 100 million. We keep continuing on our portfolio, and we discontinue one of the product areas that we had before. This is leading to a negative organic growth of 1% and we keep investing on -- sorry, keep spending time on the divestments. Still, we have not seen the finalization of any of them, but we keep working and are convinced that we will see the results moving forward.

And with that said, Stefan, let's go a little bit deeper into the results.

Okay. Thank you, Juan. Starting off by summarizing the P&L for the third quarter. we are very satisfied how the gross profit margin continues to develop, 29.6% versus 27.3% (sic) [ 27.4% ] last year. And the increase is driven by sales mix. We also have the restructuring program and other efficiency measures that are taking effect.

Then we also need to mention here that Juan has mentioned a couple of times of the effects, especially in Mobile Cooling, where we have a time lag between the tariff cost as well as labor cost increases versus the mitigating price increases, and that has had a negative effect in the quarter of approximately 0.7%. And we expect that to continue in Q4, as was mentioned before. But from Q1 next year, we expect that the price increases are done to fully mitigate this development.

Moving over to operating expenses. We have reduced operating expenses in constant FX due to the decline in net sales, it has increased somewhat in percentage of net sales. We keep on investing in strategic growth areas, as we have mentioned, and you have seen some of the results of that in terms of product development, Mobile Cooling and Marine are definitely 2 areas where we keep on investing deliberately.

Other operating income and expenses, SEK 18 million, a small number in the quarter, and it's mainly related to a part of the FX effect. Net financial expenses is up a little bit in the quarter. However, the net interest on bank loans and financial income is down SEK 197 million versus SEK 214 million, and then we have a negative FX revaluation effects and other items leading towards that. On tax, we have an effective tax rate of 32%, which is equivalent to SEK 54 million in tax in the quarter.

Moving over to the summary of our cash flow. Operating cash flow-wise, we see that we are continuing to drive efficiencies in working capital, coming back to that in a second. Then we have cash out related to restructuring of SEK 35 million in the quarter. And then as you can see, we are carefully managing our capital expenditure and where we spend. Free cash flow before M&A, as we mentioned before, paid and received interest is spending down and then we have been paying lower tax.

Then cash flow for the period has also been impacted by that we did a bond issue of EUR 300 million in Q3. Coming back to that. At the same time, we also did a tender offer of EUR 100 million, so -- which was then a partial repayment of the bond that is falling due in May 2026. And then I would also like to underline that we are going to see further debt repayments in Q4 and in 2026.

Moving over to more of how has the free cash flow developed over time. And as you can see, I mean, SEK 527 million. It's not on the same level as last year, which I did not expect either, but still solid level, I must say. And then you can also compare it to the other periods before that. So satisfied with the level of free cash flow in the quarter.

Moving over to the working capital components. You can see that working capital over the last 12 months is starting to come down 26% compared to 30% in relation to net sales. And if we look on the quarter stand-alone, it was down to 21%. So we are moving in the direction that we have been talking about, where the target is to reach around 20% of net sales. And you can see on the inventory balance, we are SEK 4.6 billion now compared to SEK 6.3 billion 1 year ago, and the number of days is down to 124 versus 139. So things are moving in the direction that we have been planning for and expecting.

As you can see, accounts payable level is staying stable as well as accounts receivables. Then moving over to CapEx and research and development. We are prioritizing among our CapEx project, and we have been spending a little bit less than SEK 100 million in the quarter. It's 2% of net sales versus 1.7% in the last 12 months, that's equal to 1.3%.

If we look on R&D, as I said, we continue to keep up that level very deliberately because we believe in that this is important for the future. And the R&D expense to net sales is now 3% compared to 2.7% 1 year ago and 2.8% last 12 months. And as I mentioned before, it's a strategic important growth areas for us, example being Mobile Cooling and Marine.

Next is going to talk about the debt maturity. As I mentioned, we did a EUR 300 million bond on a 5-year maturity with a fixed rate of 5% in the quarter. And the proceeds are going to be used to refinance our debt portfolio. We already did EUR 100 million in connection with this transaction by doing a tender offer on the 2026 bond. So there is EUR 200 million left on that one.

And then as I mentioned before, you will see further debt repayments here in Q4 as well as in 2026. We have a USD loan that matures in '28, but it can be prolonged 1 year to 2029. And the average maturity is 2.8 years, which is obviously a longer average maturity compared to last year. Average interest rate is 4.8%, and we still have an undrawn revolving credit facility of EUR 300 million maturing in 2028.

So moving over to our leverage. Maybe we can -- I mean, leverage went down 0.1 versus Q2 and which is obviously positive. And you can see in the table down below that it is mainly our cash flow development that has contributed with that development. We are obviously having a high focus across the organization on protecting margin and reducing working capital, as you know. And we just keep on repeating that we are committed on achieving our leverage target of 2.5. That is important to us. and it's -- but it is difficult to give an exact timing of when we will achieve it.

So with that one, I hand back to you to give a summary of the quarter.

Thank you, Stefan. So I mean, in tough times like we are going through and we have been going through now for 4 years, we have to control what we can control. And from that perspective, I feel good that we are improving our margins. We had a tough first half. We saw improvements at the end of the quarter. We have seen more improvements in Q3. And our intention is obviously to keep showing improvements moving forward as well.

We see -- even if it's still tough and difficult to predict, we see a market stabilization. I'm happy to see the order intake improving and happy to see the backlog becoming stronger for every month. I have been spending a lot of time on the marketplace. I have been visiting a lot of shows. I have been meeting a lot of customers. And again, it's still tough out there, but the sentiment in the value chain is slightly better than it was 3 months ago and much better than it was half a year ago.

So that's kind of sending some positive signals and some faith that we are getting closer and closer to positive territory. I'm happy to see cash flow. We are working extremely hard on our working capital on driving down inventories, but not just on inventories. I think we do an excellent job on receivables and we do an excellent job in payables, trying obviously to improve as much as we can our capacity of releasing cash and improving our leverage.

Tariffs situation, lots of uncertainties, of course, but we are dealing with that in a good way. We had a negative effect in the quarter. But again, in comparison to what we expected on the 4th of April, I believe that the organization has done a terrific job landing the situation with our customers and our customers are also keeping faith in what we are doing every single day.

Moving forward, difficult to predict, as I said, but the starting point in Q4 from a top line perspective is a little bit better than we had 3 months ago. And hopefully, we will see that even in the future. And then from a strategic perspective, we keep investing despite all the cost reductions that we are doing in a number of areas. There are 2 areas that where we are not cutting. The other way around, we keep investing in product development, innovation, and we keep investing in building up our sales organizations.

And of course, we need to finance that, and that's why we are driving a restructuring program, which is clearly paying off. And with that said, I would like to open for a Q&A session. Please.

[Operator Instructions] The next question comes from Agnieszka Vilela from Nordea.

I will ask them one by one. So on growth, Juan, you sound cautiously optimistic about the OEM business now in Marine and in RV in the U.S. But when I look at some of the peers commenting on the market development such as Malibu Boats or Winnebago, they do point to still flat wholesale volumes in 2026 in RVs and even declining both retail and wholesale in Marine. So can you give us an explanation why you are relatively a bit more optimistic on that?

I mean everything is relatively in line, right? I mean we are coming from a situation where we have been kind of shrinking 11%, 12% quarter after quarter after quarter. For the first time, we see order intake moving upwards. We see the fact that we delivered 1% organic growth, and we have a different backlog situation that we have seen. I fully agree with you that we are not going to fly.

I don't see the market turning back anytime soon, but I see an improvement. I see obviously that we are launching new products. I see that we are taking orders. I still believe that we might be seeing as well what we saw on the American RV industry, growth for a number of quarters and then slowing down for a couple of quarters, stabilizing the market. So that's the expectation.

I don't see that we are dropping 11%, 12% again from where we are. So that's on the Marine side, Agnieszka. On the other side, Americas, I think, it's pretty stable, just now. I think that, again, retail is still coming down slightly at the same time as manufacturing is adapting again, as you have seen in the last couple of months and expectation is that it will be balanced between retail and wholesale in Q -- sorry, in 2025 and expectation for 2026 is a growth of some 3% versus 2025.

Perfect. And then the second question is on EMEA and profitability in the business. When I look what we expected in Q2, you beat our expectations quite significantly. Now in Q3, you missed a bit. So just if you could give us some factors that are affecting profitability right now in EMEA. What are the tailwinds, maybe savings and less logistics costs? And what are the negative impacts in EMEA right now for you?

So you have a couple of questions. I mean, first of all, we had a better mix in Q2 than we have in Q3. So after OEM, the balance of the aftermarket and OEM was different. Then we have a second issue. We -- as you know, in EMEA, we have also an important business for us, which is the CPV, the Commercial Passenger Vehicles. We have the situation of one of the main customers we have, JLR, did suffer a cyber attack. In that business, we have decent margins and that had a negative impact, both from a sales perspective, but also from a margin perspective. So those are the 2 main differences that we have in EMEA.

So on JLR, I mean, their factories have been closed for a big part of the quarter.

Okay. Can you quantify the impact on your EBITA in the quarter?

No, not on EBITA, but it had quite an impact on the EMEA numbers specifically.

On sales.

On the sales, absolutely.

I mean, CPV is generally a more profitable -- or yes, it's an over-average profitable business.

The next question comes from Daniel Schmidt from Danske.

A couple of questions. And then maybe turning back to Marine. I appreciate that it's quite difficult to exactly know if this is a longer turnaround or not. But I think given that sort of retail is not super strong, but it's also a function of the fact, I guess, that it's been quite hefty underproduction in Marine over the past 4, 5 quarters. So I guess there's some catch-up to be done there. Is that your feeling as well?

Yes, it is. But at the same time, I need to comment as well, Daniel, that we might be seeing what we saw on the RV side that we had a couple of positive quarters and then might slow down before getting stability. So again, I do believe that we need just now to be super agile, right, on the way up and the way down as we have been on the RV side. I mean, the good news, when I perceive still, Daniel, I mean, again, you can take it from a negative perspective or a positive perspective.

The positive perspective is obviously that I don't see the market coming down 12% again, that even the decline in retail is becoming smaller than what we have seen. At the same time, as you are totally right, production has been very, very low in comparison to retail. So there is a catch-up. So my feeling is that some manufacturers, they have started to produce again. But then, of course, if retail doesn't come in Q2 when the high season starts in the U.S. specifically, then we might have a slowdown again.

And then you have another factor, which I would like to comment because, obviously, a lot of the questions that we get are always about the U.S. market simply because it's 75% of the market, the world market. But we have positive growth in EMEA that was pretty nice in the quarter, and we had positive growth as well in APAC. So as a matter of fact, for us, the growth in Marine in the quarter was not negative, but we want to fly in Q1. And just again, 75% of the business is in the U.S. So I was telling you that the rest of the world, we performed better.

Okay. And could you say something about the pace? This is very detailed and sorry for that. But given that you are shifting from decline to growth now in Marine after 8 quarters in a row of decline, could you say anything about the pace you saw from July until now basically when it comes to Marine on a year-over-year basis in order intake or in sales or anything?

It has been pretty stable in sales. We have seen improvements on the order intake. So our intake was positive -- the order intake was more positive than sales in the quarter.

But keep in mind, Dan, that the part of that order intake is obviously for delivery also next year. So not everything is going to be delivered now.

In the coming weeks.

In the coming weeks or in the coming quarter.

Yes. But even though there's no sort of big meaningful improvement in top line in Q3, it is back to growth, but the margin is up quite a bit, and of course, it comes back to the savings. But is there anything -- has there any impact at all when it comes to the gyro that you've talked about? Is that selling. Has that been delivered in Q3? Is that having an impact? Is that going to have a bigger impact in the coming quarters?

We are delivering the gyro. It doesn't have any substantial impact on the margins. On the contrary, you have, as I commented, the geographical mix, which is benefiting us just now.

Okay. And then when we -- as you mentioned, if you look at OEM on Americas on the LVE side, it is the second quarter in a row that you are performing better than the market. Is that the function, you think, of the work that you did last year in trying to get back to on certain customers that have been maybe discarding you a little bit and you're back to the model year '25 and '26 now. Is that what we're seeing because the market was -- it looks to be a little bit down on shipments so far in Q3 and the same was -- I think it was flat in Q2, the market and you were up a couple of percent. Is that what we're seeing?

We have a lot of activities ongoing. We have -- so that's what I can tell you is that we are working very, very close to our customers just now. We're spending a lot of time. I am visiting quite a few of the customers myself, getting the feeling. We see positive -- we get positive comments in the recent shows as well, both in the U.S. as in Europe. So I'm optimistic. I mean we are not there, obviously. As you know, we shrunk more than the market for a couple of years. And of course, our intention is to recover part of what we lost.

Yes. And then on EMEA, if you look into the last quarter of this year, I think there was quite substantial production shutdowns, especially from one of the bigger players. Do you see the same development happening in this year? Or will there be less shutdowns, you think?

I think that we will see improvements versus last year simply because last year was brutal, right? I mean Q4 last year was very, very, very healthy. So I don't expect -- I mean, as you know, this industry is always kind of correcting by running shortened weeks, still to be seen what's going to happen in connection to Christmas, but I'm not expecting the same negative effect that we saw in Q4 last year.

You're reading and you are talking to more or less the same people as I'm talking. I mean the positive is more optimistic today than we had 1 year ago. I mean 1 year ago is really when all these massive shutdowns took place, right? Now we have seen very low production numbers for 9 months basically.

And registrations are bit higher than production.

Absolutely. I mean registrations, if you look at registrations, registrations after 9 months are down to minus 4% in Germany, minus 2% for Europe, right? So of course, that after 1 year, you will get more and more into balance.

Yes. And then sorry for missing the very early part of this call, but you did refer to labor irregularities impacting Mobile Cooling in the quarter, and you said something about needing to hire 200 people. Is that coming back to immigration policy in the U.S.? Is that -- was that the reason? And what was the impact in terms of impact on profitability? And is that continuing into Q4? Is that ending now?

It's Q3 and Q4 and then we are going to be done.

Yes. So I mentioned that the impact for Q3 was approximately 0.7% on the profit margin as a whole. And then it will continue into Q4 somewhere 1% to 1.5% units on the margin. And then from Q1, we expect these effects to be fully compensated by price increases. So it's...

And that impact, is that both the tariffs and the labor irregularities combined?

Yes. It is mainly tariffs and the labor efficiency/labor cost. There is also some currency effects in there as well. But the majority is related to the 2 first ones.

Okay. And also, sorry for dwelling here. But Juan, you mentioned at the end of your remarks, I think that the starting point on -- from a top line perspective is a little bit better. Was that referring to the start of Q4 compared to the start of Q3? Or what was that comment relating to?

Yes. So we have seen order intake improving quarter-by-quarter, right, since Q4 last year. So we had a pretty low Q4. Backlog situation was pretty low at the end of Q4 last year. Then we saw a further deterioration in Q1. We saw a clear improvement in Q2, and we saw an additional improvement in Q3. So our backlog situation at the end of the quarter is much better on the backlog situation than we have had at the beginning of Q3, which is positive.

The next question comes from Gustav Hageus from SEB.

If I can ask a question on the organic growth in the quarter down with 6%? You mentioned customers trading down in aftermarket. You mentioned some price increases, but more to come. So it would be very helpful if you could try to sort out the components in organic decline here in respect to price mix and volume and what you expect in terms of prices now, if you can quantify that a bit with your new price hikes going into 2026, that would be helpful.

I mean the vast majority of the prices is going to take place from a Service & Aftermarket perspective. And then the other one is really on Mobile Cooling, what we have seen. We compensated for the tariffs in both Marine and LVA. We almost compensated for the tariffs in Mobile Cooling. But again, we had a price time lag for a couple of customers, and they are major customers for us. So that's where we have the difference.

And then, of course, we are doing minor price adjustments depending on the market, depending on the product and depending obviously on the competitive situation. So I would not expect massive price increases moving forward as far as the market looks as it does. I think we need to be careful just now, and we also need to find the right balance, obviously, between keep improving our margins, but also starting to recover some volume now when the market seems to move into a little bit easier situation.

Sure. But the negative organic growth in the quarter, is it fair to assume that the volume growth was bigger than that number? So we had...

No, but I wouldn't overestimate how much bigger. I think we are a little bit bigger, not much.

Do you think single-digit volume decline in the quarter. Is that a fair assumption?

Yes, it is.

Okay. Okay. And you mentioned the order intake improving sequentially. Do you see any trends in terms of mix, what type of products that are sold. And in terms of price versus competitors, if you can have a comment on that given that you have quite a lot of exposure from internal production versus some peers?

Yes. So we see -- let me say, there were 2 questions. The first 1 was -- the second one is competition. The first 1 was?

Sort of did you see any improving mix sequentially?

Yes. So we have seen very clear improvements on the OEM side. We have seen very clear improvements on the distribution side. And then on the contrary, Service & Aftermarket has been a [ second ] month.

And that comment relates to mix, so gradually improving mix in those 2 first? What was that comment on?

But again, if we think about the 3 channels, we have seen very clear improvements on the Marine side, right, is on the OEM altogether, but especially on the Marine side and LVE, we still see that LVE and LVC are tough still today from an OEM perspective. But again, altogether, the OEM channel is improving quite a bit.

We see the distribution channel also improving. And there, we have, as you know, a number of businesses where the biggest one is Mobile Cooling. So as I said, Mobile Cooling order intake is improving quite a bit as well. and then Service & Aftermarket has been pretty flattish in comparison to where we are coming from. So still a negative order intake, less negative, but still negative.

Okay. And in terms of pricing in U.S. versus some competitors, I guess, in particular, in Mobile Cooling and so forth, are you following also nondomestic producers in terms of price? Or are you -- yes.

No, I think the difference -- the main difference is that we were pretty early. I feel some of our competitors were pretty late, but we see that all of them are increasing prices step by step. So I feel the difference, obviously, that most probably they built up a lot of inventories just in case as soon as Mr. Trump was elected, while we implemented the prices in connection to the tariff implementation.

Okay. And then final one for me, I guess it's a bit speculative, but on the net debt-to-EBITDA gearing target, what you chances are that you'll come below 3 as we end the year?

I think we are now moving into the part of the year where cash flow is a little bit less strong, right? Q2 and Q3 is the 2 strongest cash flow quarters that we have. So it's -- I would probably say that 3 years would be nice, but I would still feel that I think we are still going to end above.

The next question comes from Fredrik Ivarsson from ABG.

Sorry, I got in a bit late, so excuse me if you already discussed this, but I'll try. First one on Mobile Cooling. We've seen sales declining, I guess, for 3 years now, and we've been talking about inventory reductions among retailers for quite some time now. Do you guys have a view on the inventory levels at the moment where you're at, especially Igloo in the U.S.?

Inventories are not bad on the channel, what we can see, right? I mean then, of course, you have -- we have seen 2 months pretty nice inventories coming down and then you get major orders and then all of a sudden, the sell-through is a little bit worse. So I mean, something that we didn't comment on the report is that the last month, meaning September was pretty rainy in the U.S. And for the Mobile Cooling business, that has a lot of impact.

So we cannot say that we perceive inventory levels in the Mobile Cooling channel being high just now. They are gone. I think people on the contrary are very, very, very careful in not building unnecessary inventories. So everybody is placing the orders in the very last minute. And that's a change from where we are coming from pre-pandemic, where people were building up inventories in advance. Now people are -- I don't know if we can talk about Just In Time manufacturing, but retailers are as much Just In Time as they can and putting on us being ready.

Very clear. And then staying on Mobile Cooling, it seems to me like the margin is almost set to expand in 2025 despite all the issues you mentioned and then obviously, sales being down 20% organic over the last 3 years. So my question is, where do you see the margin in this business under more, say, normal circumstances?

I mean we commented from the beginning, right, that we expect Mobile Cooling to be 15-plus EBITA. That's where we -- and that's still below, so to say, what the Dometic brand is coming from, right? But we believe that lifting from where we acquired the company to 15% is a pretty nice achievement. If you look at what we have been delivering during the last year, we have seen an improvement year-by-year, and that's our expectation.

And I mean if you look on the product launches that we have been showing here over the last couple of quarters in Mobile Cooling, I mean, that is products that is certainly going to contribute to that development.

So I mean this is one of the areas, clearly, where we are investing a lot in product development. We are investing in building up our sales organizations. And despite all the investments that we have, still, we see margin improvements. Now we have a couple of one-offs this quarter, and then we had also the production issues in Q2, right? But apart from that, we see an underlying improvement year-by-year, a clear improvement year-year.

Yes. Yes, I appreciate that. And a follow-up just on the one-off you mentioned just now. Juan, did I hear you right? Do you guide for 1% to 1.5% on the group margin impact in Q4?

Yes, based on both the tariffs and the wages and the labor efficiencies.

Okay. So like SEK 40 million to SEK 60 million.

It will be gone again from Q1.

Yes, absolutely. Good. And maybe last one from my side. I saw the Igloo lawsuit trial moved to March from September. Do you have anything to comment on that?

No. I mean from our side, the sooner, the better since we feel very, very confident that we are going to win the case. So there is not -- we have not provoked that delay. It's not us trying to delay. It's the other way around. We would like to get it done. the discussion beyond us.

The next question comes from Rizk Maidi from Jefferies.

Sorry if this has been tackled. So I'll start with tariffs and Section 232 extension in August. Just wondering if this drives you to -- if there's any impact direct or more importantly, indirectly on the business, and I'll start there.

I think that we will have to see where this ends in the bidder end. But I mean, with the price increases and other measures we have taken, we believe that we have -- when the time lag has closed, we believe that we have taken the measures to compensate for the increased tariff cost.

Okay. And then secondly, on Service and Aftermarket, I mean, the decline now, as you said, Juan, was less than before. Historically, you talked about this bullwhip effect. Maybe if you could just talk about sort of sell-in versus sell-out here. This market has historically been quite resilient. This is exceptional. Do you actually expect to recoup those big, call it, destocking years sort of -- does that need to reverse at some point in your view? Or that's basically you see it as a post-COVID buildup in inventories that would never go back to?

No, I think that we are human beings. I think that's going to come back. But in order to get into that point, we need to get consumer confidence. We need to see the traffic and the foot traffic into the stores, the foot traffic, both physically and digitally to increase for the dealers to there to build up more inventories that they are doing today. Just now it's in the very last minute. But again, I'm fully convinced. Remember, if you go back 5 years ago, we -- the flight industry would never come back, right? The carriers would never recover, and you know where they are today, right? I think it's time.

Understood. And then perhaps last one on my side, just perhaps an update on divestments of noncore assets. How much has been achieved? How much is left? I don't know if you can communicate on this? And how do you see the appetite from potential buyers at the moment and the valuations you're able to get?

So you have 2 different areas. One is product areas that we are leaving that we are discontinuing, low margins, we don't see that we can get into a #1, #2 position globally, and then we don't want to be part of that. As you know, we have already left 1% and is more to come. We will see changes over time. And then we have the divestments where we are working extremely hard. We are in discussions with a number of partners. But obviously, we still have a gap between the sell side and the buy side. And as we said, I mean, we want to create value. We don't want to give things away. And if we need to wait until the market looks in a better way, then we will do it. But again, all those discussions keep on going.

The next question comes from Johan Eliason from SB1 Markets.

Juan and Stefan, just a few questions here at the end, maybe on the cash flow again, you already alluded to where you sort of think net debt will end up to. But are there any particular issues we need to bear in mind when modeling the final quarter cash flow? Or are there any sort of higher charges from the restructuring programs or tariffs being paid out, et cetera, that could potentially impact the fourth quarter cash flow? I guess, otherwise, the pattern this year has been a decent cash flow, but a bit weaker than last year. And I thought that would be the case for Q4, but I just wanted to see if there's anything to bear in mind there.

I think that you should look on the seasonal pattern, right, of our cash flow. That's number one. Then we were talking about that we had SEK 35 million in payout in Q3. I think you should expect that to be a little bit higher in Q4. And that will then, of course, also give you an indication that the cash out has been a little bit lower for 2025 compared to what we did believe in the beginning. But that's more related to the timing of certain activities. So that will be a little bit more that is flowing over to 2026. So -- but I think you should expect the payouts of that to be a little bit higher. So I think that's what I should comment. I mean it's like I've said, I mean, '23 was the best year ever. '24 was the second best year. And then I think 2025 is coming thereafter. So it's probably a good way of thinking about it.

Good. And then you are leaving some areas where you see are not competitive. You have seen some competitive pressure. I think you talked about the big fridges over in the U.S. previously. Are you seeing any changes in the competitive picture now after tariffs and all what you have out there?

Not much that far. I mean what we have seen is that we were pretty early increasing prices on the tariffs. Most of our competitors in the U.S. were slower, I guess, that they built up inventories in connection with the election. And -- but we have seen that all of them are increasing prices step by step. So I do believe that we need to wait a little bit longer to see what happens. I think that a lot of people have been living on inventories.

And we have one question from the webcast audience. Could you please give some color on the inventory situation in the different distribution channels?

We commented before. We see inventories in both APAC and EMEA coming down stepwise simply because of the difference between retail and manufacturing in the last 12 months. We see the U.S. LVE side. So the RV side in the U.S. is in balance, total in balance. We see Marine still unbalanced. In the marine side, 70% of dealers, American dealers still feel that they are carrying too high inventories. We are talking about distribution, we don't see any inventory buildup. I think that what we see there is that dealers and retailers are carrying as little as they possibly can.

They rather lose business than they carry inventories. So everything is in the last minutes. And then on the Service & Aftermarket, it's exactly the same. So wholesalers nowadays, bigger distributors are not carrying inventories. They want manufacturers like us to carry the inventories. And dealers and smaller dealers, they are gone. So I believe we got a question before. Do you think that this kind -- the typical inventory buildups are going to come back? I'm fully convinced that they will. But in order for that to happen, we also need to see consumers starting to spend more money. I think we have been suffering the entire industry or industries. It's not just this industry. I mean we see that everything having to do with consumers with the exception of food is behaving in a very similar way.

And we have one question remaining in the queue, I believe.

The next question comes from Daniel Schmidt from Danske.

Yes. Just 2 short follow-ups. On the savings program, it sounds like you're quite happy with the progress so far and a run rate of SEK 250 million by the end of Q3. How should we view that going into '26? Because it's quite meaningful steps that are supposed to be taken in terms of savings in '26. I think you've said run rate SEK 750 million as we leave 2026. And of course, it comes back to the actions that you need to take, how are they sort of scheduled for '26? Or how should we view that? Is that back-end loaded or even through -- evenly distributed through the year or...

I would probably say that it's a little bit more back-end loaded because you're obviously going to get the full effect is coming -- going to come gradually after the implementation. But we have some bigger projects, right, that is going to take until like mid next year before they get fully implemented. But on the other hand, we also have some other activities that is going to be completed now in Q4. So -- but I would probably say it a little bit twisted towards the second half. But I mean, we still confirm SEK 300 million run rate saving at the end of this year and SEK 750 million by the end of next year.

Yes. Okay. And then just maybe coming back again to the CPV incident in EMEA, you got the question and you said that it had an impact on sales, sounded meaningful. Would you dare to estimate how much that was in top line impact for you guys?

It was -- well, in terms of krona, we are doing about SEK 30 billion for EMEA.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you very much to all of you for your attention. As we commented at the beginning, we know that it's a very busy day for many of you. We will keep working hard to protect our margins, but also to keep investing in the areas where we see the growth moving forward. And we are fully convinced that we are going to get down our leverage to the target. We cannot say when, but that's our firm intention, and we will get there. So thank you very much for your attention, and have a great day, all of you. Thank you.

Thank you.