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Welcome to the Instalco Q3 Presentation 2026. Now I will hand the conference over to the speakers. Please go ahead.

Thank you. Good morning, and welcome to Instalco's presentation of our report for the third quarter of 2026. My name is [ Per Ostal ], CEO of Instalco. And with me today is our CFO, Christina Kassberg; and for the Q&A, our Head of Investor Relations, Mathilda Eriksson.

The third quarter is normally seasonally weak. This year, we improved the margin not only compared with last year, but also compared with the second quarter. And that is not something we usually see, and it says quite a lot about where the business is today. Let's change slides. Let me start, as usual, with a short reminder of who we are. Instalco is an installation group with more than 7,000 employees working within heating and plumbing, electricity, ventilation, industry and technical consulting.

From this quarter, Germany is our fourth operating country through [ Fabry ]. The model is the same in all 4 countries, specialized local companies close to the customers, supported by common standards, tools and governance from the group. Much of what we do is driven by long-term needs such as energy efficiency and electrification, and that has not changed.

Then a quick look at the last 12 months numbers. Net sales amounted to SEK 14.6 billion, and we ended the quarter with an order backlog of SEK 11.7 billion. That corresponds to around 80% of our sales over the last 12 months, up to 77% in the second quarter, up from 77%, I would say, in the second quarter. EBITA is now right above SEK 1 billion, and the LTM margin improved to 6.9% from 6.6% last quarter. So in general, a strong development.

Cash conversion is the exception. It came down to 74% from 90% in the second quarter, largely as a mix effect from our growing share of industrial customers. I think Christina will come back to that later on. So let me sum up the quarter in 4 points. First, we continue to grow organically and profitability improved again. Getting both at the same time is what we have been working towards. And this quarter, we did it again.

Second, the development differs between our countries. Sweden had a strong quarter. Many of our Swedish companies are doing well, especially those working with industrial customers as well as our scaffolding companies. In Norway, challenges remain. The project delays we talked about last quarter have lasted longer than we expected. And also here, Christina will come back to what that has meant.

Third, Instalco 2.0. In the beginning, a year ago, it was about clearer responsibilities, better follow-up and stronger operational governance. And today, that is simply how we work. Now we are building on it. During the quarter, we stepped up our sales training and gave our subsidiaries more hands-on support so they can run their projects more profitably.

It's also about developing our offering. One example, [ Enervion ], our Finnish start-up in energy storage, started work on 2 large-scale battery storage projects during the quarter. And finally, [ Fabry ] is now consolidated, which makes Germany our fourth market. It contributed already in its first month. So Christina, I will leave the details to you as usual.

Thank you, [ Per ]. Let's start at the top line. Net sales increased by 16.4% to SEK 3.5 billion. Organic growth was 8.2%. Acquisitions added 6.8% and currency 1.4%. Sweden stands out with organic growth above 15%. The order backlog grew by 30.1% and by 14.2% organically. Acquisitions added 12.7%, mainly [ Fabry ] and currency the rest.

On the backlog to sales ratio that [ Per ] mentioned, [ Fabric's ] full order backlog is included, but only 1 month of its sales. That lifts the ratio and the effect will fade gradually over the coming quarters. Service made up 36% of sales in the quarter with strong growth in absolute numbers. Here, Sweden and Norway made up the increase.

So what did that mean for the earnings? EBITDA increased by 41% to SEK 254 million, and the margin rose from 6.0% to 7.2%. The improvement comes mainly from Sweden and in particular, from our companies with industrial clients. Their margins are driven by technical expertise and the ability to meet each customer's specific needs. On top of that, we see the effects of better project selection and follow-up within Instalco 2.0. One month of [ Fabril ] also contributed positively.

A noteworthy thing already touched upon. If you look at the chart, the third quarter usually dips compared with the second due to seasonality effects. This year, it did not, 7.2% compared with 7.1% in Q2. Let's go through the segments, beginning with Sweden, where we saw good progress. Net sales rose to SEK 2.4 billion. Organic growth accelerated to 15% and acquisitions added another 2%. EBITA increased to SEK 179 million from SEK 105 million, and the margin improved from 5.0% to 7.4%.

As I have mentioned before, an important driver for this development was our companies with exposure to industrial clients. But it is also worth noting that the improvement is broad. A majority of our Swedish companies across geographies are delivering higher earnings than a year ago. The order backlog amounted to SEK 7.3 billion, up 16% from last year.

Turning to the market in Sweden. The Swedish market continued to improve in the quarter and the signs of higher activity are becoming clearer, especially in the metropolitan areas. Residential is showing cautious signs of picking up from low levels. Public investments in defense, health care and critical infrastructure remain important drivers. Costs are still high and private investors remain cautious. Competition is also still tough, but with more projects coming to the market, we can be more selective.

Norway, on the other hand, had a weaker quarter. Net sales were SEK 553 million, up from SEK 518 million, but the increase is explained by currency. EBITA came in at SEK 20 million compared with SEK 28 million last year, and the margins fell from 5.4% to 3.5%. In Norway, results continue to be affected by the delayed project starts we have described earlier this year. The delays are mainly due to permitting and decision processes on the customer side. Several of the larger projects are now expected to start at the beginning of next year, 2027, which is later than planned.

The quarter was also burdened by certain project losses and some credit losses. The projects are still there and the order backlog stands at SEK 2.6 billion, up 35% year-on-year. But until they move into production, utilization in parts of the business will likely remain lower than we want. In the theme for this quarter, [ Per ] will come back to this. The Norwegian economy is doing well, but the installation market remains challenging, though we are seeing signs of stabilization.

Residential is still weak, but public investments, commercial properties and renovation are more promising. As mentioned, several project starts have moved further out in some cases into next year. Data centers stand out with a strong growth and several larger projects under construction or in planning.

Then to our third segment from this quarter, this is Finland and Germany. First, a note around Germany. [ Fabry ] comes into our numbers with a 1-month delay. That means our September holds their August, a typical holiday month in Germany. From Q4, we will have a full quarter. For the segment as a whole, net sales grew to SEK 536 million from SEK 435 million. [ Fabry ] with 1 month in the numbers added 36.9%, while organic growth was negative at 13.3%.

There are 2 main reasons for the organic decline in Finland. Last year's third quarter was strong, which makes for a tough comparison. And a couple of our Finnish companies have had a weaker year with lower activity between larger projects. We are working actively with them. The rest of the Finnish business is developing well, not least within energy storage. Over the first 9 months, organic growth in Finland was 5.2%, which gives a fair picture of the trend in a segment of this size.

EBITDA increased to SEK 56 million from SEK 48 million. The margin was 10.4% compared with 11% last year, which is still the highest of our 3 segments. The order backlog amounted to SEK 1.8 billion, which is more than a doubling compared to a year ago. Acquisitions in this case, [ Fabry ] made up 132% of this change.

In Finland, we see cautious signs of market improvements, but the recovery is slow and competition is high. Traditional construction is still weak, while data centers and industrial investments drive demand. Over time, the data center build-out should absorb capacity and improve the competitive situation in other segments, too. In Germany, the installation market is showing signs of recovery with clearly more positive sentiment than in the economy as a whole. Energy efficiency and modernization of buildings create long-term opportunities.

Let me end my part with cash flow, which was weaker this quarter. Cash flow from operations was negative SEK 66 million compared with a positive SEK 133 million last year. EBITDA improved to SEK 366 million, but a further SEK 281 million was tied up in working capital. This is largely a mix effect. A growing share of our business is with industrial customers, including our scaffolding companies. These are some of our most profitable operations, but they tie up more working capital.

Invoicing and payment terms are often longer and a larger part of the work is invoiced afterwards. You can see that in the report, both in higher trade receivables and in higher contract assets. The pattern is similar for our technical consultants who invoice in the same way, report growth and good profitability. It is, however, worth noting that the receivables are with established customers and overdues has instead developed positively compared to last quarter.

On a rolling 12-month basis, cash conversion is now 74%, clearly below our target of 100%. When looking ahead, historically, the fourth quarter is our strongest cash flow quarter, but part of the change is structural. As the industrial share grows, our working capital will be somewhat higher than before. That makes invoicing discipline and payment terms in our subsidiaries even more important, and that is where our focus is here and now.

Cash flow from investing activities was minus SEK 270 million, mainly from the acquisition of the majority stake in [ Fabry ]. This was financed through debt. Our cash flow from financing was also impacted by the purchase of minority shares in subsidiaries. As a result, net debt increased. Since [ Fabry ] only contributed 1 month of EBITDA in this quarter, the reported leverage ratio doesn't yet reflect the business we now own. Pro forma with the full 12 months of [ Fabry ], net debt to EBITDA was 2.9x. The reported figure was 3.3. [ Per ], back to you.

Thank you, Christina. Let me put the last 12 months in the context of our long-term targets. Sales have been developing well organically for several quarters now. And with the consolidation of [ Fabry ], the contribution from acquired companies also goes up. The EBITA margin is 6.9%. That is still some way from 8%, of course. But a year ago, it was 5.4%, and we have covered a good part of that. Cash conversion, as Christina just said, is 74%. It is, of course, a priority for the whole management team to improve this.

Leverage is above our target of 2.5x, around 3.3x reported and 2.9x pro forma. Our dividend policy and our climate targets are unchanged. For this quarter's theme, I want to spend a few minutes on something that is fundamental to our business. What actually drives profitability in the installation industry. And this is something that we get quite a lot of questions around and a topic that interests me personally a great deal. In fact, it's one of my favorite topics.

We often talk about market conditions, growth and order intake. And of course, all those are important, but they don't tell the whole story. Even companies operating in the same market with the same technical discipline can deliver very different margins. Having worked in this industry for many years, I have seen how much of that difference comes down to the decisions made in the individual companies and projects. So I'd like to share a few perspectives on the economics of our industry and what we believe really matters for profitability.

One of the most fundamental drivers of profitability in our industry is simply supply and demand, and it's not rocket science. When there are plenty of projects available, installation companies can be more selective. Competition tends to be less intense, and there is generally more room to price projects at attractive margins. When demand weakens, the opposite happens. More companies compete for fewer projects and pricing comes under pressure. This is definitely something we have seen over the past years.

An important part of this is maintaining discipline in how projects are calculated and priced, particularly in a competitive market, it is essential to make realistic assumptions about costs, productivity and risk rather than allowing the price a customer is willing to pay to dictate the calculation. As market conditions improve, the opportunity to be more selective increases, of course. And combined with stronger project discipline that creates better conditions for profitable growth.

Of course, a good estimate is only the starting point. The next challenge is delivering on it. And that starts with choosing the right projects and understanding the risk involved. Experience with similar projects is extremely valuable, both when calculating the tender and when planning the work. Good planning is essential. You need the right resources at the right time, but you also need good coordination with the customer and other contractors. Delays or changes elsewhere in the project can have a significant impact on our ability to work efficiently.

Then there is the actual installation work, getting things right at the first time makes a big difference. Having to go back and correct work costs both time and money. And let me give you a great example from one of our subsidiaries that work only with electrical installations for residentials, a market that has been very much under pressure. Example, the electrical installation in a normal 3-room apartment usually takes around 70 to 75 hours. This special company do it in about half that time.

And you hear that it is easy to assume they must be cutting corners and I underline that they are not. The speed comes from how the work is organized, not from doing less of it. They have, for example, standardized the way they work all the way from how materials are delivered to the site to the order in which each step is carried out. Everyone knows what to do and when. The logistics are planned in detail and the work is done properly in the first time to a very high standard. That is a big part of why it works. They almost never have to go back and fix anything.

They also work on fixed price. That means every hour they save goes straight to the margin. And that is why they have made money on their projects through this downturn despite tough pricing. That was the example. And throughout the project, you need to know your numbers. Continuous financial follow-up allows you to identify deviations early and take actions before small problems become large ones. Finally, there is a commercial side, of course, managing change orders, documenting additional work and making sure you are compensated for what you deliver. None of these things are particularly complicated in theory, but doing them consistently well across a large number of projects is what separates a good installation business from a less successful one, I will say.

Then a few words about business mix. There is sometimes an assumption that certain types of installation work are inherently more profitable than others. For example, that electrical installations have different margins from plumbing and ventilation or that service is always more profitable than project work. But in practice, the differences are not necessarily that straightforward. Service often has higher gross margins, yes, but it also comes with higher overhead costs. So when we look at operating margins, the difference is not often that significant.

What we find more important is the nature of the customer and the end market, the company's expertise and experience and the characteristics on the individual projects. Industrial customers, for example, can offer attractive profitability, particularly where specialist expertise and a deep understanding of the customers' operations are important. Contract structure also matters. Fixed-price projects can offer attractive margins, but also greater exposure to execution risk, of course. Partnering and similar models where we share the risk with the client tend to give more predictable outcomes.

And regardless of the type of project, good cooperation with the customer is always essential for efficient execution. Ultimately, what matters is not simply what type of installation work you do, but how well you can run the business, and that brings us something we can influence ourselves. This is also the thinking behind much of our work within Instalco 2.0. So over the past year, we have taken important steps to strengthen how we manage our businesses and projects. We have increased our focus on project selection and risk assessments, making sure we take on the right projects under the right conditions.

We have also worked to strengthen financial follow-up so that deviations can be identified and addressed earlier. And importantly, we are making better use of the knowledge and experience that already exists across the group. With more than 175 companies, we have an enormous amount of expertise within Instalco. The opportunity is to make sure that good practices don't stay within the individual companies, but benefit the wider group. And this is not about centralizing how our companies operate. It's about giving our local management teams better tools and stronger support to run their businesses. And I believe we are already seeing the benefits of that work in our financial performance.

So to sum up the third quarter, we grew organically and improved the margin again to what is normally a weaker quarter of the year. Sweden drove that improvement. In Norway, the delayed project starts are still holding us back, but the projects are there, as Christina said, and so is the order backlog. The backlog strengthened further, both organically and through [ Fabry ], which gives us a good starting point for the coming quarters. Cash flow was weaker, yes, and getting working capital back on track is a clear priority for us.

In the market, activity is gradually increasing, although the picture still varies between countries and customer groups. Instalco 2.0 continues to deliver. When we launched it a year ago, it was about the basics, clearer accountability, better follow-up and stronger operational control. That is still the foundation, but we have kept building on it with self-assessments in our companies in the spring and this quarter, more sales training and more hands-on support to our subsidiaries. So if you want to put a number on it, we are probably closer to Instalco 2.5 by now. And with [ Fabry ] now part of the group, Germany is our fourth market.

And with that, I would like to thank you for listening and open up for questions. First from the telephone conference, but those of you following via webcast can submit written questions as well that Mathilda will read out.

The next question comes from [ Simon Johnson ] from ABG Sundal Collier.

I want to start there with the unusually strong margin here in Q3, especially very strong in Sweden. Can you maybe break the performance down a little bit? I know you talked a bit about mix effects and so on, but make it a bit more clear what the different segments below the surface and what's the market and what's internal improvement, if you can give any color on that.

Yes. I mean a very strong August and September in Sweden, I would say, we have the holiday in July, but strong August in September. I would say, a broad improvement across many subsidiaries. That is the main reason. It's not just that or that. It's a broad improvement across many subsidiaries. And I think 2.0 has had a big impact on that. So I would say that that's the fact. I don't think you can see any changes in the market, any significant changes in the market. It's more like that we have improved across many subsidiaries. That's the simple answer, I think.

[ Simon ], I can also add slightly to that, as [ Per ] is saying, we are definitely seeing a broad improvement across essentially all different types of subsidiaries, but especially strong performance are coming from our companies working more towards the industrial side.

So broad recovery in general, but even more in the industrial companies? Or is it more like a mix effect of industrial companies with higher margins? Or how should we do that?

I think it's hard to say. But I think as Mathilda just said, I think, of course, we see an effect from the industrial side, maybe a little bit more than from the ordinary. But I think it's a mix, and it's very hard to say to tell exactly. But the improvement is broad, that is for sure.

Broad improvement and even stronger improvement in industrial companies.

Okay. Perfect. And I think you also highlight on the market effect that we haven't really -- I mean, it's not mainly driven by a better market. So does that mean that when you see competition and pricing conditions improving here maybe into next year that the market should give you another lever on the upside? Or how do you think about that?

We hope so, I would say. I will also add to what I said here that, of course, we can see that the market is picking up. And I think that's for sure, slowly, but it's picking up. And the demand -- you know about the data centers, you know about the defense industry, of course, it's picking up slowly, but still also residentials. So a positive direction, but a little bit uneven. And I can add to that, Sweden is strengthening. Norway remains challenging with those delayed starts and maybe a little tougher price competition. And Finland is subdued, but appears to have bottomed out, I would say.

All right. Another follow-up on that, given the mix change that we now see with strong performance for the industrial companies or companies with industrial exposure impacting here in Q3. How should we think about seasonal swings more in general in the future? And especially if you look at Q4 here, for example, it's usually a very strong quarter and usually a very strong uptick also from Q3. Do you think that, that pattern will be a bit different here, maybe more even? Or how do you think about that? How should we think about that?

I think it's an interesting question, definitely. But I think we have no -- I mean, there is -- maybe, Christina, you should -- but I think over a quarter, it will not change so much. So if the project is there, if the backlog is there, I think we can just execute on it and I think it will do. But so the difference between the quarters are rather.

I can swap over to the expectation around the cash conversion. And Q4 next quarter is historically the strongest when it comes to cash conversion. So that should give a better cash conversion for next quarter than we had this one. And -- but bear in mind, as we have said in this presentation also that the growing industrial share means somewhat higher working capital over time.

All right. So it doesn't sound like you expect any major changes in margin seasonality.

On the margin seasonality, I think we probably see the Q3 being better than Q2 as a bit of an exception. It's not something we're expecting all the time going forward, but it's definitely a receipt that the internal work is going well. However, I think normal seasonality patterns remain.

Then on Norway, you talked about market and project delays and so on. In the meantime, I mean, or maybe first off, when do you see that growth should come back in Norway?

I mean with the order book that we have or backlog we have, order backlog we have, I think it's just a matter of time when the project starts. And we think we have been delayed now twice, I would say, a couple of months. And now everything seems to start up here in quarter 1, everything, I think the projects that have been delayed, of course, starting in Q1 2027 I mean we are coming closer and closer, of course. But the order backlog is good, and it's just execute on that. So my best guess is absolutely early quarter 1, 2027.

And we can add that in Q3 for Norway, they didn't manage to fill the gap in combination with the seasonality effect and some losses also from projects and customers. Q2 was -- if we look back the previous quarter, they were a little bit better to fill the gap between projects that has happened during Q3.

So does that mean that if you turn to margins then for Norway that there was a bit of a onetime effect in Q3 then? Or should we expect that, that gap that you mentioned should persist in Q4 potentially leading to weak margin?

I said, the delay is now more pushed into beginning of 2027. So no high expectation for a change in that during Q4.

And we also believe that our order backlog in Norway has good numbers or that kind of thing. So we are not afraid about the order backlog as is. But the delay, of course, if we have an overhead cost, it's hard to -- that's running -- it's hard to do something really, really. Of course, we are trying to receive smaller projects during this time or increase our service part and so on. But still, it costs us...

All right. One final from me, if I may, on the gearing cash flow. You talked about the cash flow a bit here. But if we focus on the gearing, I mean, you are above the target. You say that Q4 is seasonally strong for cash flow. How fast do you expect to be able to delever and reach the target?

Let's say what we have, of course, now in Q3 already mentioned. We had a higher debt and a higher gearing ratio this quarter. That's for sure. And this comes from the investment and financing activities during the quarter that was very well planned and prioritized in advance, also well communicated. So it's no surprise in it at all. But going forward, in the coming -- closest coming quarters, the capital allocation will be more cautious and with clear focus on cash conversion and delevering. But of course, we don't state any forecast in it, but it's a focus to get it down from the level we stand at the end of this quarter.

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

We do have a couple of written questions from the webcast as well. So for the first one, the order backlog is growing. Where does the growth come from? And how quickly will it convert to sales?

All in all, growth in all segments with a good mix of project sizes and several multiyear contracts in Norway. But as I said, some larger projects have long durations and delayed starts, so conversion takes time. But important to say is that we have no cancellations. It's a timing of it.

Thank you, Christina. And one final written question as well. Can you say something about [ Fabry's ] expected margin for the full year and what it was in Q3, if not already covered on the call?

Yes, to say. In Q3, we only had 1 month of [ Fabry ] in the quarter, only August and August in Germany is a holiday month. So -- but they have contributed positively and will give us a full quarter in next Q4. 2025, as communicated, they were at a margin at 12.7%. So we are looking forward to their contribution to the group.

I believe that was all the questions. [ Per ], over to you.

Thank you, everyone, for listening in. And thank you so much. Let's finish the call.

Okay. Welcome to this presentation of Instalco's report for the second quarter of 2026, and my name is Per Sjostrand. I'm CEO of Instalco. And with me today is our CFO, Christina Kassberg. And for the Q&A part, our Head of IR, Mathilda Eriksson. In short, I will say that we see the effect from the changes we have implemented and that Q2 is an important step for Instalco in the right direction.

So as always, I will start with a short snapshot of Instalco today. We are the leading installation group across the Nordics with an established platform also in Germany which I will get back to in this presentation. Our strength is our decentralized, decentralization local companies close to customers, combined with common standards, tools and governance. And with over 6,000 employees, we are exposed to market segments driven by long-term needs such as energy efficiency and electrification.

Slide 3. First, for a quick glance at our LTM numbers, where the majority are taking important steps in the right direction. Net sales amount to SEK 14 billion, as you can see, and we ended the quarter with a backlog of almost SEK 11 billion. This represents a steady book-to-bill of around [ 77% ]. And on top of that, we have our service businesses, which made up 35% of sales in the quarter. Our EBITDA for rolling 12 months amounted to SEK 927 million, corresponding to a margin of 6.6%, a continued step up compared to Q1. And despite the somewhat weaker cash flow from operations in Q2 we maintain a high cash conversion at 90%.

So let me start with a brief summary of the quarter. First, we delivered strong organic growth across all the segments. That reflects a market that is gradually improving, but also that we are executing better across the group. Profitability also improved compared with last year. We are seeing the benefits of better project selection, stronger execution and increased operational discipline. Our order backlog strengthened further during the quarter, giving us a solid foundation for the coming quarters. The market picture is still mixed, but activity continues to develop in the right direction.

And finally, in Instalco 2.0 continues to gain traction. The work we started last year is becoming part of where we operate every day, and we are seeing the effects in more parts of the business. I think that was the big picture, Christina. Let's dive into the numbers.

Thank you, Per. I will start with looking at net sales and order backlog development during Q2 Net sales grew by 10.3% to almost SEK 3.9 billion. Currency had a slight positive impact on the outcome. Organic growth, on the other hand, remained positive and strong at 8.4%, and we saw growth in all 3 countries. When looking at where the most growth came from, we can see a strong increase from companies working with industrial clients. Geographically, the biggest sales growth came from West and South of Sweden as well as Norway. Our order backlog also reported even more growth of 17% or 14.8% organically. The backlog increase was primarily driven by Norway but also came from Sweden. In addition to the backlog service continues to provide a solid foundation for the business.

In the quarter, it amounted to 35% of sales, and we delivered growth in absolute numbers of 9% in our service business, driven by Sweden and Norway. Then moving on to earnings, EBITDA grew by 22% to SEK 274 million, corresponding to a margin of 7.1% compared to 6.4% a year ago. Last year, Q2 had a one-off costs of SEK 11 million. Adjusting for this, the comparison margin amounted to 6.7% and still this year is still better. The year-on-year development reflects both improved operational performance and the higher volumes in the quarter.

Margins improved in most of our business areas. The biggest improvement year-on-year came from industrial-facing companies as well as the North of Sweden and our technical consultants at Intec. We are not yet where we want to be, but the quarter marked an important step in the right direction.

Next, I will look into each country in more detail. First up, we have a look at Sweden in Q2. Overall, net sales grew by 10% to SEK 2.8 billion with an accelerated organic growth of 9%. The order backlog increased even more by 13.1% compared to a year ago to SEK 7.5 billion. The EBITDA increased to SEK 197 million, corresponding to a margin of 7% compared to 6.6% last year. The stronger margin and improved earnings reflects higher volumes and operational improvements supported by a gradually improving market. The Swedish market continued to improve during the quarter, and the signs of recovery are becoming clearer.

Activity is increasing, especially in the larger cities where more projects are now moving into the execution phase. In Stockholm, this is especially true for somewhat larger projects. We are also seeing early signs of a recovery in the residential market, although from low levels. At the same time, development remains uneven across regions and customer groups.

And now for a summary of Norway. Overall, net sales were up to SEK 625 million and organic growth amounted to 4.9% FX effects impacted positively. EBITDA amounted to SEK 42 million compared to SEK 36 million last year. This corresponds to a margin improvement from 6.5% to 6.8%. We are proud that Norway managed to showcase both growth and improved earnings despite experiencing delayed start dates in several projects. This due to permitting and decision processes. This is a timing issue rather than lost demand.

And our subsidiaries have managed to navigate these new projects to cover the other wise lower utilization. Norway showed the continued very strong development of the order backlog, which increased by over 40% compared to a year ago or 35% organically. The Norwegian market remains challenging, but we continue to see signs of a gradual recovery. Activity is strongest in Oslo and the southern part of the country. supported by public investments in hospitals, defense, infrastructure and data centers. The residential market remains weak, while commercial projects are developing more steadily. Competition is still high, but pricing has become more rational than before.

And last but not least, a summary of Finland. Net sales grew by 8.6% to SEK 432 million, organically by 9.3% with a negative impact from FX. The order backlog decreased slightly by 3.8% compared to a year ago or minus 3.3% organically. EBITA amounted to SEK 35 million compared to SEK 30 million last year. This corresponds to a margin improvement from 7.3% to 8.1%. The improvement was primarily driven by a continued fairly strong contribution from companies delivering projects for the industrial customers, while performance in the Finnish installation operations was more subdued. The Finnish market remains weak, but we believe it has reached the bottom.

Residential construction and larger private investments are still at low levels, while industrial projects and renovation continue to drive activity. We do not expect a broader market recovery in the near term, although market sentiment has improved somewhat. At the same time, investments in the energy transition, defense and digital infrastructure continue to support the [ mat ]. Data centers are also becoming an increasingly important growth area in the Finnish market.

Before I hand over to you, Per, let me briefly touch on our cash flow. In Q2, cash flow from operations amounted to SEK 104 million, which was weaker than the same period last year. The main reason is that more capital was tied up in accounts receivable, following the strong growth and high level of invoicing towards the end of the quarter.

Importantly, we have not seen a corresponding increase in overdue receivables which gives us confidence in the underlying quality of the receivables book. Strong cash flow and healthy balance sheet remain key priorities for Instalco, and we continue to maintain a disciplined approach to working capital allocation and selective investments.

Yes, that concludes the financial review from my side. So Per over to you.

Thank you, Christina. And let me put the rolling 12-month performance into the context of our long-term targets. Our financial targets are measured over a business cycle, and we continue to make steady progress. The combination of stronger organic growth and improved profitability is encouraging and reflects that both the market and our own execution are moving in the right direction.

As you saw, our EBITDA margin improved further to 6.6%. While we are not where we ultimately want to be, the direction is clear. And we continue to see benefits from our better project selection, stronger execution and the work under Instalco 2.0. We know that we can do better, of course. Cash flow was weaker during the quarter, mainly because more capital was tied up in receivables following our strong growth towards the end of the period. We remain focused on working capital discipline and continue to target 100% cash conversion over time.

Our leverage remains somewhat over our own long-term target of 2.5x net debt to EBITDA. At the end of the Q2, it sits at 2.6x. The same as in Q1 despite us paying the dividend in May and the acquisition of TSM in April. And finally, our climate ambitions remain unchanged. Sustainability continues to be integrated into -- in how we develop the business over the long term. Before we moved to this quarter theme. I would like to spend a few minutes on the transaction we announced after the end of the quarter. As you might have seen, Instalco has increased its ownership in the German installation group Fabri from 24% to 51%. This makes Germany our fourth operating country and giving us a majority control of the business.

This is not a new strategic direction, it is the next planned step in the partnership that we announced in late 2024. Our ambition from the beginning has been to build a long-term platform in Germany together with Fabri founders and management team. And this transaction is an important milestone in that journey. So with that, to give you a bit of flavor. Here, we have 2 screenshots of Fabri's website, one from 2024 and one from yesterday indeed. Since we first invested, Fabri has doubled its size the development has been driven by continued acquisitions and strong entrepreneurship within the group. More importantly, it reinforced our conviction that the decentralized model works well beyond the Nordic countries.

And you know, Germany is Europe's largest installation market. Fabri has established a strong regional platform with attractive local companies and an experienced management team. The transaction itself is straightforward. We have acquired an additional 27% of the shares, increasing our ownership from 24% to 51%. The acquisition has been financed within our existing credit facilities and therefore, fits well within our disciplined capital allocation framework. The ownership structure that has -- that was agreed from the beginning remains unchanged going forward, meaning the founders continue to have a meaningful ownership stake alongside in Instalco, and I think that is very important.

Let's move to the next slide, there. What is perhaps most important is what's changed -- changes and what does not. Fabri will continue to operate with the same local management, the same entrepreneurial culture and the same decentralized way of working that has made the group successful. What changes is that Fabri now becomes part of Instalco's consolidating reporting, and we expect closer collaboration across the organization.

[ Marcus Siebert ], the CEO of Fabri, will also join -- CEO, of course, of Fabri, will also join Instalco's Group management team. We already see a strong exchange of experience between our Nordic companies and Fabri and becoming a majority owner gives us an even better platform for sharing best practice, developing capabilities and supporting continued profitable growth. So Germany represents a significant long-term opportunity for Instalco, and together with the Fabri team, we look forward to continue in that journey.

So with that, I will say also let's move into the CEO theme for the quarter. And before we move into Q&A, I'd like to spend a few minutes on the topic -- on a topic that we believe will become increasingly important for Instalco over coming years. And one we -- and [ when ] we have received a lot of questions on over the past few months, I promise you. AI is changing many industries. Most discussions focus on software or semiconductors, but much less attention is paid to what has happened in the physical world to make AI possible.

For us, AI is not just a technology -- technological trend. It affects both the demand for technical installation and how we run our own business. And let me explain directly what I mean. The first perspective is the market. AI requires physical infrastructure. Data centers need electricity, cooling, ventilation and advanced control systems. Higher electricity demand also drives investment in grids and energy infrastructure. Data centers are a growing [ end-market ] for Instalco, we already delivered projects in this area and see good opportunities to grow further. We evaluate every project based on the right balance between risk and return. And I will say there is another important effect. Large AI investments absorb installation capacity across the market, no matter which company is doing the installations. That improves market conditions in many other types of installation projects as well.

So AI creates opportunities in 2 ways through growing demand for data center projects and by strengthening up the broader installation market. The second perspective is our own organization. We believe AI can remove friction from everyday work, allowing our employees to spend more time on activities that create value for customers. It can support the entire project life cycle from analyzing tender documentation and planning projects to administration, documentation and follow-up.

So during June, we launched Instalco AI across the group. It provides a secure common platform together with both general and specialized assistance that are available throughout our decentralized organization. The important point is that this is built to support our people, not replace their professional judgment. Our project managers, engineers and installers remain the ones making the decision. And before we move on, let me make one personal reflection. I have worked in this industry for almost 45 years. I have seen the introduction of computers, CADCAM, Beam, [indiscernible] many other technology shifts. But I can honestly say that I have never seen a development with greater potential than AI. This is exactly why we decided not to wait. We wanted Instalco to move early learn early and build capabilities early. I want us to be among the companies shaping this change, not reacting to it afterwards.

And that brings me to the third point. AI can support our business, but it cannot install a ventilation system, connect an electrical panel or commissioning a building. Installation work remains local, physical and increasingly technically advanced. As buildings becomes more complex, the need for skilled professionals actually increases.

So while AI changes how buildings are designed, operated and used it also increased the importance of technical installation expertise. We see this as an opportunity from 2 directions. It supports demand in our markets, and it helps our people work smarter every day. Together, that strengthens Instalco's long-term position.

So with that, let me finish with a few concluding remarks. In Q2, we delivered strong growth together with improved profitability. It is encouraging to see that all segments contributed with organic growth, while our focus on execution continues to strengthen margins. The market recovery is gaining momentum, although it remains uneven across geographies, segments and customer groups. At the same time, our order backlog has strengthened further giving us a solid foundation for the coming quarters.

Instalco 2.0 continues to gain traction. The work we started last year is becoming increasingly embedded in our daily operations. and we are seeing the benefits in more parts of the business. During the quarter, we also launched Instalco AI across the group. We see AI as an opportunity both to support productivity in our operations and to benefit from the long-term demand it creates for technical escalations. And after the end of the quarter, we took the next strategic step from Germany by becoming the majority owner of Fabri, it's a natural continuation of the strategy we presented in 2024 and strengthens our platform for long-term growth. Overall, we leave the first half of the year with a stronger business than we had a year ago and with confidence that we are moving in the right direction.

And with that, I would like to thank you for listening in and open up for questions. [Operator Instructions]

[Operator Instructions] The next question comes from Oscar Ronnkvist from SEB.

Thank you, and good day, everybody. So my first will be for some details just on the Fabri acquisition. So first of all, just on the margin side, the SEK 125 million turnover. Is that sort of coming with a 12.7% margin as in 2025? Should that be a sort of a reasonable assumption? And then just on minority, et cetera. I assume that you will report the 49% as a minority and not any sort of with call options, et cetera.

Mathilda, are you ready for that question?

We haven't published any margins apart from what was press released yesterday and the SEK 125 million is a pro forma from Fabri's website, including an acquisition they made a couple of weeks ago. But I mean has reported impressive margins. They're operating in a slightly different market than we are in Nordics. And of course, we're hoping that they can maintain a level like this, but we're not making any promises.

When it comes to minority interest, I think Christina is the best to answer on that one?

We will consolidate the Fabri now when we have the 51% in the group and the minorities of 49% will be noncontrolling items. So according to IFRS, as nothing else than that [ expected ].

Perfect. Then just regarding the data center comments, you say that, obviously, it has an impact on market pricing as capacity is tied up in data centers from either you or your competitors, so if we look at the order backlog, which was developing quite nicely in the quarter. So have you seen this shift in pricing already? Or is it more that you expect to see that going forward?

I think we have seen it -- maybe we have seen it already. As you said, it ties up a lot of resources. And I think also when we talk about data centers to participate, we have scaffolding, we have ventilation, we have heating and plumbing, maybe there is some huge demand for electricians, of course, in a data center to install all the equipment and you have to allocate a lot of resources, maybe it should be -- we are a little bit more cautious around that. But on the other side, we are willing to participate in those projects, and we have a discussion around that, of course.

So the answer is yes, we can see changes already in the market due to data centers.

Got it. And just regarding your capacity on delivering on large data center orders. Is that -- are you in those procurements? Just thinking of the larger ones that maybe have been announced from a competitor? Or are they a little bit out of your scope, would you say?

No, it's not other scope. I mean we are partners. If we [ shoot ] us, we are definitely a partner in those discussions. So we have, I mean, a dialogue around data centers and with the colleagues in the construction market.

I think I can add on just reiterating Per's comments from before, but we're as always, evaluating every project on a risk-reward basis. So we will only go for projects that suit us and our capabilities.

Perfect. Yes. I had one question on the Finnish margin. Obviously, you've been very, very strong over the last 3 quarters, took a little bit of a dip in this quarter, albeit obviously stronger year-over-year from the 7% last year. So could you just add some color? Do you think that you saw some sort of dip was the sort of [ 11%, 12% ] elevated? Or is there any sort of comments on the sort of run rate we have?

I mean Finland still come in above 8%, and I'm satisfied with that. I think that's a rate, and what Finland is also our smallest segment, SEK 1 billion a year. And I can't -- of course, it can go a little bit ups and downs there. They are very focused on industrial, the more heavy industrial part in Finland. So I think I'm satisfied with 8% or above. So I'm not worried, but it can fluctuate a little. That's for sure. from quarter-to-quarter.

Yes. Got it. And then sorry, just a last question, if I may.

The cash flow, you talked about stronger and, I suppose, with the receivable tie-up in June, if I interpreted correctly. So is it fair to assume that you had sort of strong acceleration towards the latter part of the quarter? I think you made some comments about that.

Yes, you are totally sure about that. We tied up more capital with -- around accounts receivables in the end of the quarter. And it's no problem to sort of say, overdue accounts receivable. So we are confident.

Okay. It looks like we currently have no more people in the queue for the telephone conference. Or no, we just got one.

The next question comes from Karl Bokvist from ABG Sundal Collier.

So I'm just curious on the Swedish development here. When we have had these comments for a couple of quarters now, we have improved market activity, more projects becoming available, you're a lot of things internally as well. And we've been talking about how we need to get a few things in place, so to say, before margins really start ticking upwards because of contracts taken earlier in time and so on and so forth.

So when we now look into the next perhaps 6- to 12-month period, can you now say that the orders that are to be executed upon are on a better level.

I think overall, we can say that. But of course, we -- it's I mean we have several cases here. The risk assessment that we have done, I think it's better today. That means that we have taken in more stable orders or less risk in the orders. I think that is one thing. We see an improved market activity, as we mentioned, and I will also say that execution, what we have worked with so much in Instalco 2.0 is also gaining us. So I think it's a combination, but I'm rather comfortable around the Swedish market as well as what we can achieve in the Swedish market. So it's a combination, as you can hear, but I think we are where we want to be right now.

And also if I can add one thing. I think we can now see in the larger cities like Stockholm and increasing -- is increasing activities. And that is very important. I mentioned it before because that is the engine of the construction market in Sweden. So that's also something to add to this discussion.

All right. And then in Norway, when you say that some progress starts were postponed due to external permitting, et cetera, and that represents a delay. Of course, maybe there are several projects and they are kind of stacked time-wise a bit differently. But when you have these comments in the report, are we like talking about a 6-month delay or 2 months delay just thinking about growth opportunities here?

It's very much project by project basis, some have been moved into 2027, and others have been moved for 2 to 3 months. So it's very hard to give an average.

Okay. All right. That's -- yes, just this might be difficult, of course. But when Fabri now enters the business, and you say that it's similar in a couple of ways and of course, much better profitability. But is the German business in any way different in how they work with working capital and the net contract assets and so on?

I will say no, but looking at Christina, I mean they are very strong local companies. I think they have a very close relationship with the customers I mean, they get paid in time. I don't know if there is any...

In general, the CFO answer would be on that question. We will consolidate Fabri according to IFRS like the other Nordic business. So in that sense it's installation, but in another country. But of course, let's see how everything develops in the coming quarter when we consolidate and take the questions. Very well there.

Thank you. We do have a couple of written in questions from the webcast as well.

I think if we start with the first one is how has the market developed during the quarter?

Yes, I think we have mentioned it several times now. But overall, I mean, we are positive. That's for sure. but still large differences between regions and end markets, as we have also mentioned several times. So I think -- I mean, looking into Sweden, clear improvements Norway, selling, but stable. Finland, weaker market maybe, but I think they will recover in short. And that in -- so improved market conditions, absolutely. That is -- but it's slowly development, I think. And what we mean with improvements is that there are more and more projects to calculate or even [ offer ] on. So I think, yes, we are rather optimistic.

Another. Quite a nice one for you, Per. Mr. Sjostrand, how are you able to motivate and do such an impressive turnaround since August '25 and so quickly? Would love to implement saying into my own workdays in management.

Once again...

Essentially, I think he's asking, how did you manage to complete this turnaround in such a short time?

It's my job. It's my job. So yes, that's -- I think it's just but of course, I will underline this. This is a team effort. It's not just one person. Maybe I can introduce a lot of things, and I can come up with ideas, but it's a teamwork. And everyone has been so enthusiastic around what we have now launched. So I think it's like a piano plays itself. So yes, that's my simple answer.

Thank you. Next question is around Fabri. Can you afford more M&A after Fabri [ step 2 ]? And what is the pro forma leverage after this transaction is completed? And I can just add that up, of course, in Q3.

I think, Christina or one there...

I would say we are comfortable. Even accounting for a cash outflow now in the next quarter, Q3 for Fabri, consolidating in step, step 2, as we call it, we maintain good headroom on the stated bank accounts. And remember, in our external reporting, we don't need to -- we don't include Fabri's EBITDA for the last months. But in bank covenants, you do that. So we get their pro forma numbers in due in [ Q2 ] also. So continue M&A. We maintain a selective approach to capital allocation just like before.

Okay. I currently have now more people in the queue, and we have one final written question as of the moment.

Intec has had margins above the group for several quarters? How does it look in Q2?

I mean Intec still continues the trend to deliver above group margin, as you said. And I think the trend in the I think it's also that we are as always, I will say that we are taking on a lot of new startups all the time. So of course, it affects us, but starting up a company or a group, of course, is costly. But with that said, also, our estimation is that they will still have double-digit numbers.

And I think that also the consulting industry should exceed what we talk about when we talk about installation margins, so I think there's no reason to believe that they will not still an ongoing exceed our margins from the installation part.

All right. We have no further questions at this moment.

Okay. Thank you very much for joining in, and have a great summer. Thank you very much, everyone.

Welcome to this presentation of Instalco's report for the first quarter 2026. My name is Per Sjostrand. I'm CEO of Instalco. And with me today is our CFO, Christina Kassberg; and for the Q&A part, our Head of IR, Mathilda Eriksson.

The start of 2026 is further proof that we are moving in the right direction. And as always, I will start with a short snapshot of Instalco today. We are a leading installation group across the Nordics with an established platform also in Germany.

Our strength is our decentralization, I would say, local companies close to customers, combined with common standards, tools, and governance. With over 6,000 employees, we are exposed to market segments driven by long-term needs such as energy efficiency and electrification.

First, for a quick glance at our LTM numbers. Net sales amounted to SEK 13.7 billion, and we ended the quarter with a backlog of almost SEK 10.4 billion, which represents a steady book-to-bill of around 75%. This is a sign of more activity in the market as well as proactive selling from our companies. At the same time, we will still have the available capacity to take on more projects when the market improves further.

Our EBITA for rolling 12 months amounts to SEK 877 million, corresponding to a margin of 6.4%, a significant step-up compared to Q4. The strong cash flow in Q1 as well as throughout the last year kept our LTM cash flow from operations above SEK 1 billion, showcasing our strong focus on improving working capital. And this means that we report a cash conversion of 100%, and that is exactly on target, in fact.

Then let me briefly summarize the quarter. We are starting to see clear signs that the market is improving. Activity is picking up, although it's still uneven. And we see that in our order backlog, which is growing in all 3 countries.

At the same time, this is not just about the market. The work we are doing is making a difference and Instalco 2.0 is gaining traction. There is, of course, still a lot of work to be done, but we are confident that we are doing the right things. And that -- and this means that we are seeing improvements in both organic growth and in EBITA -- on EBITA level.

We also continue to strengthen cash flow. And importantly, we have fewer major negative project deviation. That's very important. That gives us a more stable business and a better foundation going forward.

And for now, I will hand over to Christina, who will take you through our financial development in more detail.

Thank you, Per. I'll start with net sales and order backlog and how they developed during the quarter. Net sales grew by 4.4% to slightly above SEK 3.4 billion. Currency had a negative impact on the outcome with minus 1%. Organic growth, on the other hand, remained positive at 4.9%, and we saw growth in all 3 countries.

Our order backlog also reported even more growth of 15% or 14.2% organically. On order backlog, we saw good growth in all 3 countries and the most in Norway.

What I said in Q4 also holds true for Q1. Especially for the Norwegian order growth, it is important to keep in mind that many of the projects taken have long durations. I would therefore caution against expecting it to quickly go to execution.

In addition to the backlog, we have our service business, which remains an important stabilizing factor. For the first quarter, service amounted to 33% of sales.

Then moving on to the earnings. As expected, the quarter was impacted by normal seasonal patterns with lower activity during the first 2 months of the year, followed by a strong finish in March. EBITA amounted to SEK 201 million, corresponding to a margin of 5.8%.

The year-on-year development reflects both improved operational performance and to some extent items affecting comparability in the prior year. Overall, we are seeing gradual improvements in underlying profitability, although the development remains somewhat uneven. Improved margins continues to be a key priority across the group.

And before we move on to the next slide, from this quarter, we have moved to country-based segment reporting, Sweden, Norway, and Finland, to better reflect how the business is managed. I will now walk you through each country.

First up, over to a slide that summarizes Sweden in Q1. Overall, net sales grew to SEK 2.45 billion with an organic growth of 1.5%. The order backlog increased by 7.6% compared to a year ago, to SEK 7.1 billion. The EBITA amounted to SEK 124 million, corresponding to a margin of 5% compared to 4.1% last year.

The stronger margin is the result of the segment no longer being burdened by last year's one-off costs combined with operational improvements. Improved margins and earnings are evident across the majority of geographical areas. At the same time, performance continues to be weighed down by a persistently challenging market and some delayed industrial projects.

Sweden experienced even clearer seasonality effects than the other countries and is still working through projects taken in a tougher market environment. The market is showing clear signs of recovery with higher activity and more projects moving forward. At the same time, the development remains uneven. Decision-making is still relatively slow, but we are seeing more inquiries and better opportunities to be selective.

Demand in technical consulting, automation, and digitalization continues to strengthen, indicating a gradual improvement. The industrial market remains mixed with stable development in areas such as electrification, defense, and parts of the green transition. But as always, it is important to keep in mind that installations is late cyclical.

And now for a summary of Finland. Net sales grew organically by 30% to SEK 431 million. FX impacted negatively by minus 6.2%. The order backlog increased by 9.9% compared to a year ago or 8.9% organically. EBITA amounted to SEK 52 million compared to SEK 7 million last year. This corresponds to a margin improvement from 2% to 12%.

The improvement is explained by higher utilization and better project execution in several companies as well as a very strong performance in companies with projects towards industrial clients. These companies are based and reported in Finland, but the largest share of their customers and projects are located in Sweden. And internally, these companies belong to our business area industry.

As for the Finnish market, activity remains low with residential construction and larger private investments still largely on hold. A broader market recovery is not expected in the near term and overall sentiment remains cautious. At the same time, investments linked to the energy transition, defense, and digital infrastructure continues to support underlying demand over time.

And finally, a summary of Norway. Overall, net sales were up slightly to SEK 552 million and organic growth amounted to 3.6%. FX effects impacted negatively by minus 2.6%. EBITA amounted to SEK 26 million compared to SEK 18 million last year. This corresponds to a margin improvement from 3.3% to 4.6%.

The improved margin is mainly explained by better utilization and a more favorable project mix compared to last year. Several companies have achieved good profitability in ongoing projects. More proactive sales efforts and somewhat less aggressive pricing pressure have also contributed positively.

Norway showed very strong development of the order backlog, which increased by over 40% compared to a year ago. Norway was showing good order intake over the past few quarters, which drives this number up, but it also represents a sequential uptick of 18% compared to Q4.

It is, however, important to remember that some of these are, for us, larger orders with longer durations. I would, therefore, caution against expecting it to quickly go to execution, especially since the macro environment continues to create some uncertainty around investment decisions and project timing in Norway with several projects in Phase 1 showing delays regarding to the start of Phase 2.

In Norway, the market continues to stabilize with clearer signs of recovery, although at a gradual pace. Activity remains strongest in Oslo and the Southern regions, supported by public investments, while we also see some improvements in commercial segments such as logistics and technology. Competition remains high, although pricing discipline has improved somewhat.

Then on to the cash generation in the quarter. In Q1, cash flow from operations amounted to SEK 234 million compared to SEK 223 million a year ago. The increase is mostly related to the stronger earnings and somewhat higher adjustments for noncash items related to unrealized FX losses.

We still managed to showcase a working capital release of SEK 75 million, although this is slightly lower than last year's, mainly due to tougher comparables with a larger reduction in accounts receivables and contract assets in the prior year period. Taken together with a strong development throughout this and previous quarters means we ended up with a cash conversion at 100%.

In total, the cash flow performance gives us confidence in the direction and the quality of our execution. This cash flow profile strengthens our financial foundation and increases our flexibility going forward.

So by that, over to you, Per.

Thank you, Christina. And I have to say a fantastic work done with cash flow, you and your team have done. It gives us a lot of opportunities going forward. So I'm very satisfied with that.

So then let's have a look at our performance on a rolling 12-month basis in relation to our financial targets. Our targets are defined over a business cycle. You have to have that in mind. And in the current market, we continue to prioritize profitability and disciplined project selection over pure volume growth.

Despite this, we are happy to have reported 2 quarters now in a row of organic growth. And we have complemented this with a strategic acquisition, TSM Taksakerhetsmontorerna, announced in mid-April.

The EBITA margin came in at 6.4%, a clear improvement from just 1 quarter ago, but we are still far from satisfied. The implementation of Instalco 2.0 is progressing according to plan, and we see room to improve further in our operations.

Over to cash -- operational cash flow. It was again strong with a conversion rate, as Christina mentioned, of 100%, at our target, supported by ongoing improvements in working capital efficiency.

Our leverage remains somewhat over our own long-term target of 2.5x net debt to EBITDA, though it has continued to come down and as of the end of Q1 sits at 2.6x.

The Board proposes a dividend of SEK 0.5 per share for approval at the AGM next week. And of course, we remain firmly focused on delivering on our climate commitments as part of our long-term targets.

Let's go to the CEO theme for this quarter. And let me take a few minutes to explain how our business is composed and what actually drives our performance.

Instalco is built as a group of specialized companies. And over time, that has resulted in a well-balanced portfolio across projects, disciplines, customers, and end markets. And this is because -- I mean, it means our performance is not dependent. It's important to say also that our performance is not dependent on any single segment or type of project, and I think that's very important to mention.

If we start with the type of work we do, these charts show our net sales for 2025, broken down in different ways. I think you can find them in our annual report. Around 70% of our business comes from service and renovation. And these are typical smaller ongoing or repeat assignments offered closer to the customer and somewhat less correlated to the business cycle.

In addition, the majority of our projects are not fixed price. This gives us more flexibility in execution and reduce the risk in more complex projects. And taken together, this means that a significant part of our business is either recurring or has a low risk profile.

Looking in or at how the business is distributed, we have a broad mix across disciplines. No single discipline dominates and we combine several technical areas within the group. And the same applies to our customer base. We work with a wide range of customer groups from construction and industrial companies to public sector and property owners. This variety reduce our dependency on individual segments and gives us a more stable foundation over time.

At the same time, this is not static. As part of Instalco 2.0, we are working more actively with our customer mix, including more proactive sales, it's very important, and clearer prioritization built, for example, [ ABC ] categories. So this allows us to gradually shift towards the right type of customers and projects over time.

Finally, if we look at our exposure across end markets, we see a similar pattern. This chart also show net sales for 2025. And compared to previous years, we have now broken the end market down into more categories, including logistics, warehousing, energy production, and data centers.

So despite shifts in the market over time, our overall exposure remains well balanced. And going forward, we will continue to actively shape this mix as part of Instalco 2.0.

No single end market dominates, and we maintain a presence across several segments with different underlying drivers. This reduces cyclicality and makes the group less sensitive to changes in any one part of the market. And overall, this composition also -- of the group gives us multiple drivers of performance and supports a more stable and resilient business over time. I will underline that.

So before wrapping up, I want to briefly return to Instalco 2.0. As you understand, this is my favorite topic.

While the previous section focused on our business mix and multiple drivers of performance, this is the framework that underpins how we execute across all of that. And this is a slide we showed last quarter, but it's worth repeating.

Instalco 2.0 is not a one-off initiative. It's a long-term shift in how we run the business. In Q3, we defined -- 2025, we defined the framework and aligned the operational model. In Q4 2025, we moved into execution, embedding it into daily operations.

Now during Q1, that work has continued according to plan. The rollout is progressing. The structure is being applied more consistently across the group, and it remains our top priority. We are still early, but this is about building a more disciplined and consistent way of working over time with continuous improvement at the core.

So let us return to the quarter and summarize the key takeaways. We continue to improve EBITA. And this quarter, the progress is broader with more parts of the business contributing. It's a step in the right direction even if there is still more to do. I will also underline that.

At the same time, we are seeing clearly -- clearer signs of recovery in the market. Activity is picking up, but it remains uneven. And given the continued uncertainty in the global market environment, we maintain a disciplined and selective approach.

Operationally, we delivered strong cash flow, as I have said earlier, and an even stronger financial position, which gives us increased flexibility going forward.

Instalco 2.0 is continuing to gain traction. The changes we are implementing are becoming more visible in daily operations, and we are seeing the benefits of a more structured way of working. This is very much thanks to the engagement across the organization and the work being done at all levels to continuously improve.

And importantly, we are operating with greater discipline in execution with fewer major negative project deviations, contributing to a more stable and predictable performance. All in all, we are moving in the right direction step-by-step from a stronger position.

So -- and with that, I would like to thank you for listening, and open up for questions. First, the telephone conference --from the telephone conference, but those of you following via webcast can submit written questions as well. Thank you very much.

[Operator Instructions] The next question comes from Oscar Ronnkvist from SEB.

So my first question would be on the margin. So in Finland, obviously it looks very strong as it has done over the last few quarters. So I just wanted to hear your thoughts about the sustainability of that level. And also I wanted to sort of hear on the opposite side in Sweden, if we adjust for the one-offs last year, I think the margin is down around 170 basis points. I think you talked about project margins being quite soft in the delivery that you have in Q4. So just wanted to hear if you have any comments on when the lower project margins are sort of out of the delivery.

Shall we start maybe with the question around Sweden? I mean, in Sweden, we have improved margins. We have a more stable underlying activity. And also, I also want to say that our project portfolio and our back -- order backlogs, they are more stable. The projects are more stable. We are not writing ups and downs all the time. We have more -- the foundation is very, very solid, I would say. You don't see that so much in the margins, but I have -- I think I'm rather satisfied with that as well. We have worked in another way with order backlogs and order intake. So I think that will improve. So that's Sweden. We don't see it yet, but I think that will come.

Finland -- I mean, you were talking about Finland, Christina, as well. I mean, we -- of course, we had a low margin last year. So the uplift is very encouraging, and it's driven by higher utilization, improved project execution, and strong performance in companies.

I also want to add that while these industrial companies in Finland are reported in Finland, much of the business is in Sweden. So it's integrated with our industrial operations there. Maybe you should look -- put that together. And also given the small size of the Finland segment, we can, of course, expect quarterly volatility since individual projects have a larger effect on the whole. So we, therefore, recommend analyzing performance over rolling 12 months rather than individual quarters.

I don't -- do you have something to add to that, Christina? No?

No.

Okay.

My next question would just be on the turmoil recently we have seen in geopolitics and specifically on potential cost inflation. And I mean, if you can recall what you did a few years ago when we had high cost inflation, we see fuel prices coming up, et cetera, et cetera. So can you talk a little bit about how you are dealing with the potential cost inflation now in some of the contracts that you have and also higher fuel prices, et cetera?

A very good question, and it's always actual. But I mean, the situation is clearly more uncertain. That's for sure. This is not a new territory for us as an installation group. And we have a lot of lesson learned from 2021, 2022.

So from an operational perspective, this is something we try to actively manage. And we have closer supply -- lesson learned, we have closer supplier relationships, and we are used to handling price fluctuations. And we are also working more consistently with contract structures, price clauses, for example, project selection and that reduce risk over time. So we are aware of the -- of course, we are aware about the situation, but we are taking actions to meet that, I would say. And lesson learned from 2021, 2022, definitely.

And just to follow-up, have you seen any significant pressure on any sort of cost inflation near term or?

Not yet, not yet. I mean, for the first quarter, the impact on our businesses has been very limited, if any, I would say. So no, we haven't seen it yet. But of course, we understand that it will come.

I think the final question just on more technical, maybe you can speak now on the CapEx levels. I think they are a little bit higher than usual in the quarter. I just wanted to see if there's anything structural. I think it was CapEx to sales of around 1.3%. Normally, it's around half of that approximately. Anything structural? Or is it temporary in Q1?

I would say, from the start, we are a CapEx-light business, but some investments are necessary, of course, and these can fluctuate a bit from quarter-to-quarter. And significant for Q1, we had some more CapEx investment in our industrial companies in Q1. So that is what you -- can be seen in this quarter.

The next question comes from Karl Bokvist from ABG Sundal Collier.

I had a follow-up there on the Finnish business. I hear what you're saying here, but just to be a bit mindful of the fact that I believe about a year ago or so, you had some very profitable projects in Norway that you actually flagged that you had had good project execution and also said that in the next -- in the upcoming quarters, things would not -- perhaps not be as good. So just to kind of verify or double check here, also given the high organic growth in the quarter. Is there anything similar happening here now where the Finnish companies are approaching the end of a few very profitable completed projects?

Hello, Karl. I think, as for Finland, they have also had good order intake. That's continuing also going forward. But then, of course, 12% is an exceptionally strong margin. And as Per mentioned, it's important to remember that it's quite a small segment. So I think quarterly variations here will not be unexpected.

And I would say, they are doing very well. So I mean, it's not just [indiscernible].

But it's not like we will see a few very abnormal quarters. I understand the variations, but just to get that kind of answered.

So the second question is -- yes, sorry?

I think 12% is a very, very strong performance. We're probably expecting continued good performance, but we're not going to make any promises on margin levels.

Then on -- we can both look regionally, but also just on a group level, it's encouraging to see that the contract sales business is still growing or growing for the second quarter in a row. At the same time, we see services being down a little. I'm just curious here if it has to do with some of the underlying units shifting from service work to contract work, or if there's anything worth flagging here on the service business side of Instalco.

I mean, we are showing growth for the group as more project-related business has picked up. And this grows quicker than service. And it's, therefore, natural that service as a percentage of sales comes down somewhat. And as for individual quarters, services in absolute numbers can, of course, fluctuate somewhat. But it's a balance between projects and service, and so that can fluctuate.

And we are very comfortable with what we now see here and we are comfortable with that level that we have.

The next question comes from Johan Dahl from Danske Bank.

Just trying to drill a little bit deeper on the Swedish performance. I was wondering if you can divide it slightly on -- I'm talking about this margin decline year-on-year in Sweden. Can you divide it in -- slightly in contracting service? Also if -- do I interpret you correctly that you're referring to a more stable order book that will materialize and sort of rectify the situation during '26? So how should we read your comments there on the stable and the quality of the order book?

That's a good question, of course. But I would say that we have a more stable order book. We have -- there have been -- we took on contracts in 2024, 2025 that we see still have sort of dragging us. But I mean that it's a more healthy business today. Seeing result of it will take some time, not years, but still quarters. So my gut feeling is that, as I mentioned, is that we will see improvements in margin here. And I will be very surprised if that's not coming up -- coming in quarters ahead. So I'm rather comfortable even though we have a lower or a flat margin in Sweden. But I think they are doing the right things. We are taking all the actions that we have decided on. So I'm not worried. I'm rather comfortable about the Swedish, how they perform and will perform in the future.

So it's more a pricing issue than utilization issue in Sweden [indiscernible] is that right?

Yes. Exactly. Exactly.

Can you provide some or any update on the German venture such as timing, latest MTM earnings and possibly cash outflow?

I mean, first of all, a long-term agreement underpins the collaboration between Instalco and Fabri. And now we are -- as you might know, we are approaching the next phase of ownership, in line with our multiphase model. But at the same time, execution is dependent on the right timing and preparations. We are -- I think we can talk around about the second half of 2026 now. They perform well. And I'm sitting in the chair there, of course, as a chairman. But also, I think that they perform well, and we have no signs of ups and downs or that the market will go down. So I think so far, so good. And we will follow our ambitions to sign off -- sign here. And...

Yes. And all in all, I can add that, as said in Q4, the timing for step 2 is still expected to become relevant during the second half of 2026.

The next question comes from Johan Lonnqvist Sunden from DNB Carnegie.

First one is also a little bit -- sorry for sticking on the Swedish margin, but just -- I think it's quite important to get just a sense of what's happening because you're talking about margin improvement, but what we can see on an adjusted basis, margin is going down. And you refer -- you highlighted in the report that building automation showing black numbers for the first time. Is there any other part of the Swedish business where we see adjusted EBITDA margins going up year-over-year here in Q1 that's worth mentioning?

We have a strong industrial sector. I think that -- also, we have not so many write-downs. But of course, we have to take in consideration companies -- sorry, projects that we took in 2024, 2025. They are, as I mentioned, of course, we haven't finished them all. So I can just repeat what I said. I think the industrial part is doing well. And I think other parts of geographic areas also, there have been an uneven situation, but I think they are catching up now, the southern part of Sweden and maybe Stockholm as well. So I don't have any other answer on that.

To add to that, that if we look at the different geographical areas, we are seeing, even on an adjusted level, improvements in a lot of the business areas.

Yes. And I could also maybe add that Sweden expect -- had a clearer -- more [indiscernible] expect than the other countries this quarter.

Yes.

And as I said, still working through projects taken in a tougher market environment. But also Sweden had a good pickup of the margins in the third month in the quarter in March.

And we had...

I think someone caught in your comment there.

Yes.

What did you say? Sweden had weather-related problems or?

No. The seasonality effects in Q1 was tougher in Sweden than in other -- our other countries in this quarter, but showed -- Sweden showed a very good pickup in March. So...

When it's very cold outside, even if we are often inside the buildings. But when it's cold outside, the whole pace of our industry is going down. And we had a very tough situation in January, February due to the weather. So I think you have to have that in mind as well.

Yes, tougher than normal, so to say, in that sense.

Tougher than normal, absolutely, with both cold and snow.

And is it possible to give any kind of comments on progress beginning of Q2? We're now end of April.

Sorry. You know the answer. Sorry. We will not give you any comments. But we had a strong March.

And my final question is on the cash flow. And it puzzles me a little bit the kind of level of how much tax you pay and the kind of difference you book in the P&L and what we see in the cash flow. Can you give some kind of reason why you're having such a low tax cost booked in the P&L versus how much you pay in the cash flow statement? It's been the theme now for quite a while.

Yes. I could say we have lots of entities, as you know, 150 entities, and from one quarter to another. We don't make year-end tax calculations in each quarter as we do in the full year and in Q4. And that's the main reason, I would say, that you can't draw the final conclusion on the tax level from a single quarter.

And how should we think going forward? Are you in a situation where you paid a little bit too much? And the taxes paid should come down? Or is it...

You can take the conclusions when you look at the numbers for the full year and calculate this -- that from 2026 also. We don't have a new pattern here.

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

Thank you. We do have a written question coming in here.

Has the number of electricians, plumbers, and similar tradespeople in the Nordic market declined in recent years? Or would you say that the overall capacity in your segment remains broadly unchanged?

No, I don't think it has declined. I don't think so. But on the other hand, I haven't those figures or numbers right here, but not decline, but maybe it's rather even. But I don't -- I'm not sure about that.

That was it for the written questions.

Thank you very much, everyone. Thank you.

We do have one more in the speaker queue, I think.

Uh-huh. Okay.

Okay. Thank you very much, everyone. Good work. Thank you.

Welcome to Instalco Q4 presentation, 2025.

[Operator Instructions]

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

Okay. Welcome to this presentation of Instalco's report for the fourth quarter and full year 2025. My name is Per Sjostrand, I'm CEO of Instalco. And with me today is our CFO, Christina Kassberg; and our Head of IR, Mathilda Eriksson.

The fourth quarter concludes a challenging year, but also marks an important shift driven by our own actions. As always, I will start with a short snapshot of Instalco today. We are a leading installation group across the Nordics with an established platform also in Germany. Our strength is our decentralization. Local companies close to customers, combined with common standards, tools and governance. With over 6,000 employees, we are exposed to market segments driven by long-term needs, such as energy efficiency, and electrification.

Over to Slide 3. First, for a quick glance at our LTM numbers, which for the fourth quarter also represents the full year. Net sales amounted to SEK 13.6 billion, and we ended the year with a backlog of SEK 9.5 billion, which represents a steady book-to-bill of about 70%, exactly where we want it to be. It allows us to be disciplined in the projects we take on, focusing on quality and profitability rather than growth for growth own sake.

Our EBITA for the full year amounted to SEK 800 million, corresponding to a margin of 5.9%. When adjusting for one-off costs taken in the first and second quarters, this would amount to SEK 875 million, corresponding to a margin of 6.4%. Despite the extraordinary circumstances around these one-offs, I believe that this is the cost of doing business in a project-based environment and we have, during the year, taken several steps to take down our risk.

With or without adjustments, we are, however, not satisfied with this level but the quarter shows that we are moving in the right direction. Service remained strong and again accounted for 38% of net sales in the fourth quarter. The strong cash flow in quarter 4 also -- as well as throughout the year, kept our LTM cash flow from operations above SEK 1 billion, even despite the decrease in earnings, showcasing our strong focus on improving working capital.

Next slide, yes. Well, let's move on to a quick summary from the quarter. Our improvement initiatives are beginning to deliver results. For the first time in 7 quarters, EBITA increased compared to previous year. We are proud of the progress, but not satisfied. The improvement is primarily driven by our own performance market conditions vary geographically and the installation market is late cyclical. We are not relying on the external environment. Instalco 2.0 is making a tangible difference in daily operations, sharper priorities, clearer accountability and more consistent follow-up. A focused approach to doing the right things, collectively and with precision.

Our financial position has strengthened and our leverage has come down significantly, improved earnings, improved POC ratio and a clear focus on cash flow are reinforcing the balance sheet and increasing financials as well as strategic flexibility.

So for next and now I will hand over to Christina, who will take you through our financial development in more detail.

Thanks, Per. Let's start off with looking at how our net sales and order backlog has developed during the fourth quarter of 2025. Net sales grew by 4.4% to almost SEK 3.8 billion. Currency had a negative impact on the outcome with minus 1.4%. Organic growth, on the other hand, turned positive at 4.9%, and we saw growth in both the reporting segments. Our order backlog also reported growth of 5.6% or 7.5% organically, again, impacted by FX. Most of the growth came from Norway, but we also saw a strongly increasing order intake from a few of our Finland-based subsidiaries that mainly work towards industrial clients. Especially for the Norwegian order growth, it is important to keep in mind that many of the projects taken have long durations. I would, therefore, caution against expecting each to quickly go to execution. .

In addition to the backlog, we saw our service business, which remains an important stabilizing factor. For the fourth quarter, service amounted to 38% of sales and at the same level for the full year. Then on to our earnings. EBITA in both millions and margin. Q4 tends to be seasonally strong with lots of projects wrapping up by the end of the year. This pattern continued also in 2025, though December saw activity going down for both ourselves and our customers due to the holiday period. In total, EBITA grew by 39% compared to last year to SEK 272 million. This corresponds to a margin of 7.2%. The higher margin and improved result are explained partly by prior year items affecting comparability and partly by improvement -- implemented operational improvements.

The outcome breaks the negative year-on-year EBITA trend observed over recent quarters. The adjusted EBITA margin is unchanged year-on-year in the context of a market that has pressured margins throughout the year, maintaining that level in Q4 reflects underlying operational improvements. It also marks a clear break in the pattern of year-on-year margin decline we have seen in recent quarters. The focus on margin improvement remains a key priority for the entire group. To break it down into more detail, over to a slide that summarizes segment Sweden in Q4.

Overall, net sales grew to SEK 2.6 billion with an organic growth of 6.6%. Acquired growth contributed with 1.3%. The order backlog was down by 3% compared to a year ago to SEK 6.6 billion. This, however, represent a sequential growth of SEK 300 million compared to the end of Q3. The EBITA amounted to SEK 180 million, corresponding to a margin of 6.8% compared to 5.5% last year. The stronger margin is the result of the segment no longer being burdened by last year's one-off costs combined with operational improvements.

Improved margins and earnings are evident across the majority of geographical areas. At the same time, performance continues to be weighed down by a persistently challenging market. When adjusting for the one-off costs of SEK 54 million, adjusted margin for the same quarter last year would have been 7.7%. The Swedish market is showing early cautious sign of recovery. particularly in the major cities where new projects are starting to move forward. At the same time, decision-making remains slow and conditions are still challenging in parts of the country with pressure on pricing in some regions.

Demand within technical consulting, automation and digitalization continues to strengthen providing early signals of gradual improvement despite a mixed industrial backdrop. But as always, it is important to keep in mind that installations is late cyclical. And now for a summary of the rest of Nordics segment. Overall, net sales were down slightly to SEK 1.1 billion due to FX effects. Organic growth amounted to 1.2%. The EBITA margin amounted to 7.8% compared to 5% last year or 6% last year, if adjusting for the one-off costs. The improvement was driven by both countries but primarily by Finland and in particular, by projects for industrial customers. The segment showed very strong development of the order backlog, which increased by 33%.

As I mentioned a few slides ago, this was primarily driven by Norway, which saw some for us larger orders come in during the year, but also in the quarter. In Norway, the market has stabilized following a weaker period with early signs of recovery, particularly in Oslo and the South regions supported by public investments in infrastructure, defense, health care and education. Competition remains intense, and the macro environment is still somewhat uncertain, with inflation and interest rate expectations affecting investment decisions.

Overall, the market is gradually stabilizing, but any recovery is likely to be gradual rather than fast.

In Finland, activity remains subdued, with the residential construction and larger private investments still on hold. Demand is mainly driven by renovation work, industrial projects and longer-term investments linked to the energy transition, defense and digital infrastructure, while a broader recovery is not expected in the near term.

And finally, a reminder that this segment will be split up in our external reporting starting from January 1, 2026. We will publish historical numbers according to the new segment reporting before our Q1 report.

Then on to the cash generation in the quarter. In Q4, cash flow from operations amounted to SEK 451 million. The slight decrease is attributable to last year's much higher adjustments for noncash items related to the one-off costs taken in Q4 2025. Q4 tends to be a period where we build up working capital due to the typically increased invoicing at the end of the year. So was the case also this year but I'm happy to report that we did so to a lesser extent than a year ago despite our increased top line and earnings. Taken together with a strong development throughout the previous quarter, this means we ended the year with a cash conversion of 108%, which is above our target.

This is the result of improved earnings and improved POC ratio and a clear focus on cash management within the full group. In total, the cash flow performance give us confidence in the direction and the quality of our execution. This cash flow profile strengthens our financial foundation and increases our flexibility going forward.

Then let's have a look at our performance on a rolling 12-month basis in relation to our financial targets. Our targets are defined over a business cycle. And in the current market, we continue to prioritize profitability and disciplined project selection over pure volume growth. Despite this, we ended the full year 2025 with a negative net sales development of only minus 0.7%. And an organic development of only minus 0.3%. The EBITA margin came in at 5.9% or if adjusted at 6.4%. It remains below our long-term ambition. We are not satisfied and are taking actions. These actions are making an impact as can be seen in the quarter.

Operational cash flow was again strong with a conversion rate of 108% above our target, supported by ongoing improvements in working capital efficiency. Our leverage remains somewhat over our own long-term target of 2.5x net debt to EBITDA as it currency sits now at 2.8x. This represents a significant deleveraging compared to 3.3x at the end of Q3. The Board proposes a dividend of SEK 0.5 per share based on the current numbers of shares, which amounts to SEK 133 million. And of course, we remain firmly focused on delivering on our climate commitments as part of our long-term targets.

By that, over to you, Per.

Thank you, Christina. Let's talk about Fabri for 1 slide here. And first of all, I want to point out, momentum in Germany remains strong. Our German platform, Fabri continues to develop well and has made 2 further acquisitions during the quarter. This means Fabri has now reached 22 companies in total, underscoring the steady progress of the platform. As with previous additions, these companies are a strong fit with the Fabri model. They are entrepreneurial led, technical skilled and firmly rooted in their local markets. Together, they strengthen both the platform's technical capabilities and also its geographic reach.

The collaboration between Instalco and Fabri is built on a long-term agreement and the next step in ownership under our multiphase model is gradually approaching. At the same time, execution is very much about timing and preparation. And based on our current assessment, Step 2 is expected to become relevant in the second half of 2026. Overall, the development in Germany continues to confirm that our platform strategy is working and that the market offers attractive opportunities for long-term profitable growth.

And then I have a theme here on next slide, I think. I wanted to do a brief look back at the year we have just added to the books. As I said in the beginning on this presentation, the fourth quarter concludes a challenging year, but also marks an important shift driven by our own actions. 2025 was a challenging year in the market. We all know that with uneven demand and limited visibility at times. We also started the year with setbacks, including Northvolt. But what really defines this year is not the market we were given, but the choices we made within it. We deliberately reset the fundamentals of the business.

A lot of focus went into Instalco 2.0, which we introduced to you during our Q3 call. This includes better follow-up planning and execution and more structured way of driving improvements across the group. Getting the basic right matters, especially in a decentralized project business like ours.

We also choose discipline over volume. We are not chasing growth at any price, but focusing on margins, risk and the right projects with the right customers. That is both a profitability choice and a risk management choice. And this focus on discipline has also shaped our approach to expansion. Execution comes before expansion. That applies to organic growth, but also to M&A. We completed the 1 acquisition during the year, Alf Naslunds Eltjans in Ornskoldsvik. This was a very deliberate choice. The region is seeing positive momentum with several major upcoming investments and Alf Naslunds Eltjans gives us a strong local platform. It strengthens our position in the region and our multi-disciplinary offering, allowing us to deliver more complete solutions to customers locally.

At the same time, we have remained selective and patient elsewhere. On the strategic side, we took several important steps during the year. In March, we took possession of our minority stake in Fabri, giving us exposure to a new market while keeping risk balanced. Over the summer, we extended our credit facility to a total of SEK 3.4 billion, securing financial strength and flexibility in a time when that really matters. Taken together, this has been a year of deliberate choices. Choices to focus, to be disciplined and to make sure we execute well before we move on to the next step. And those choices are now starting to shape where Instalco is heading next.

While we have made a lot of changes during the year, our focus has, of course, remained on our core business. Day in and day out, our subsidiaries are out in the market competing for and delivering complex installation projects. These slides show a small selection of 4 important orders secured during the year in a market that has been anything but easy. What they have in common is not size, but quality. They are technically demanding projects, often multidisciplinary with long-term customers and higher requirements of execution, planning and collaboration. They also reflect the parts of the market where activity continues even in a downturn, such as health care, public infrastructure, retail with scale and secure or specified facilities.

And for us, these orders are a clear confirmation that our model works. When the market is challenging, it is the subsidiaries with strong local positions, technical competence and discipline that continue to win the right kind of business. I'm assuming most of you have seen this slide before, so I won't go through it in detail again. But Instalco 2.0 is the core of where our efforts have gone during the past few months. So it's worth a short recap. At its heart, Instalco 2.0 is about protecting what has always worked for us. And that means local entrepreneurship, closeness to the customer and fast decision-making, while being more deliberate in how we run and support the business. We are raising the bar on one day-to-day execution, building stronger capabilities across the organization and taking a clear, more hands-on approach where performance is not where it should be.

The goal is, of course, stronger execution more predictable outcomes and a more resilient group over time without moving decision-making away from the subsidiaries. It's very important.

Slide 16. The slide illustrates how Instalco 2.0 has progressed over the past 2 quarters. During Q3, the focus was on setting the direction of defining the framework, aligning the operational model and establishing common principles. That work was about creating the conditions to execute in a more disciplined and consistent way. In Q4, the focus shifted to implementation. Parts of the framework are now being applied in daily operations, and we are working systematically on rolling across the group. This is not about launching a new process or sending out material but about gradually changing ways of working and how performance is follow up. We are seeing tangible efforts and better visibility across all levels of the organization, earlier identification of deviations in results and projects forecast and a more disciplined approach to risk and working capital.

Issues are surfaced challenging and addressed rather than postponed. While we are still early in the journey, we are starting to see these improvements reflected clearly in operation and to some extent also in the numbers. And importantly, Instalco 2.0 is not a one-off initiative. The ongoing phase is about maintaining momentum throughout or through continuous improvement, structured follow-up and capability building, including targeted training and leadership initiatives. This is about establishing a new way of working for the long term, not delivering a short-term project.

Okay. I think this is the last slide and a summary. So let's return to the quarter and look at the key takeaways. As we have mentioned, for the first time in 7 quarters, EBITA is growing, which marks an important shift after a prolonged period of pressure. At the same time, market conditions remain varied across geographies, which continues to require a disciplined and selective approach. Operationally, we delivered strong cash flow and further strengthen our financial positions, reflecting improved control and focus in the business. Instalco 2.0 continues to progress according to plan. The rollout is ongoing and we are starting to see clear effects in daily operations with sharper priorities, clear accountability and more consistent follow-up across the organization.

The focus is on doing the right things, together and with precision and reinforcing these ways of working over time. All in all, we are taking steps in the right direction from a stronger financial position.

So -- and with that, I would like to thank you for joining on this call -- joining in on this call and now open up for questions.

[Operator Instructions]

The next question comes from Oscar Ronnkvist from SEB.

So -- just my first question would be on the Swedish contract sales. I think they see an extraordinarily strong here in Q4. So I just wondered if there are any temporary effects or if we should extrapolate the strength here, I mean the market is still pretty cautious and this is a late cyclical business. And also considering that you highlight the seasonality going into Q1 then. So just wanted to hear if I'm reading too much into that or not.

The organic growth in Q4 was encouraging, particularly given the, I would say, the market environment we have discussed and we all are aware of. It reflects a combination of good order intake earlier in the year, but also solid execution in the quarter. And I would say also the fact that we continue to see demand in parts of the market that are less exposed to new build activity.

Maybe adding to that, that our selling process has also developed. So I think we're on the right track.

All right. So underlying strength sort of or temporary positivity effect?

We don't believe that. We think it's slightly better market, better off -- more offensive selling process and a combination of that.

Got it. Next one just more on the working capital release here. So I think there was almost SEK 200 million now in 2025 despite having a pretty flattish organic growth. Do you expect any setback on the working capital levels? Or should we see this as a new normal?

As you are aware of, when it comes to leverage, for example, if you look at that it's a combination when it comes to how we go forward on both net debt and the EBITDA components. But through cash flow forecast, we have worked hard with it during the quarter and the full year, we have given out measures, and we have really focused on it, and we will continue to do that. Cash flow and working capital improvements, it's hard work, and we continue, and we are happy that we have made a positive conclusion like this for the end of the year, 108% in cash conversion.

Yes. And if I can just add on to that as well. I think we can definitely see several components of this really improving. We have an improved percentage of completion ratio, which is very positive as well as several different components of the working capital so this has been a focus area from the entire group throughout the year, and we're happy to see it pay off.

All right. Last question just on the market outlook. You had some mixed confidence or some comments about the sort of cautious confidence that you say in the report and implied order intake, as we have spoken about, seems pretty strong. And I believe also that you mentioned in earlier calls that you don't want to fill up the order book with low-margin projects naturally. But should we expect that when the orders are accelerating a bit here that the project margins on new orders have improved regarding competition?

It's hard to say, of course, but it's in the right direction, I think. And we are talking also a lot about partnering projects. We are talking about the service sector. But I will say that market conditions remain mixed and of course, we try to address our efforts towards the market where we think we can have gain most, of course. So it's still weak in certain new build segments, but there is a demand in infrastructure service, as I mentioned, more complex installation that is also something we look into. And I think we sit very well in that. We are -- it's more stable with those more complex installations, and we see signs of gradual improvement.

But the recovery is uneven and varies by geographies and customer segments, of course. So we have to be on the right place and take the right projects and the right customers, as we mentioned.

The next question comes from Carl Ragnerstam from Nordea.

It's Carl here from Nordea. A few questions from my side as well. Firstly, in Rest of Nordics, you mentioned that the margin was partly at least driven by industrial clients in Finland. So I wonder if you could give more flavors around whether these are several projects? Was it completion now during Q4, meaning that you released some POC boosting the margins? Or do you think that the project will continue at the current level for 1, 2, 3 more quarters.

I think we see a rather stable market within the industrial part of our business. I mean, there is still several investments that we are looking forward to, and there are signs, as we mentioned, of new -- also new projects coming up. So I think we can say that -- and we will have a major part or a large part of our businesses are in the industrial, what we call industrial sector right now. And I think we will see continuously improvements but also new projects coming out there. So several projects, good order intake that is something we are looking forward to.

Yes, I think you can see that also written in the report on the Rest of Nordics segment that Norway, of course, was the majority of the strong order intake, but also some industrial leading companies in Finland saw good growth as well.

I was referring to the margin though, not order intake in Rest of Nordics.

I mean, in general, the industrial projects have slightly at least a higher margin maybe other parts, but also I think there are -- I think they did good in quarter 3 as well. So I think it's a rather stable margin. Those companies have a rather stable margin. And I think -- or I know that also the business area has a little bit higher margins. So that's also -- and we -- I mean, there's no reason for changing the opinion about that. And I think that will continue to leverage a little bit higher margin.

That is good. In terms of the...

Sorry, Carl. We have to mention the seasonality in Q1, of course. That's also something to addressing the industry or the more heavy industry of this sector. They have a slower pace in quarter 1. I want just to mention that. So -- but they are catching up in Q2 and Q3 and Q4.

That's very clear. In terms of cash conversion and you referred a little bit about it. Of course, you were referring to a very positive number coming down by quarter-over-quarter, year-over-year as well. So first, do you see that you are where you want to be on the POC right now? Because you've obviously done a lot of measures over the past years. And also secondly, in the cash conversion in the quarter, you've taken some big or large contracts over the past year. Start-up of these tends to come with an upfront payment. So is cash conversion boosted by upfront payments to any extent in the quarter versus sort of the Instalco 2.0 effect or any other?

It's a mix of everything, I would say, Carl. First of all, the cash flow and the cash conversion and the working capital in the quarter was strong. And as you mentioned, variation in work in progress or the POC ratio is very, very important here. But then we -- you also -- as you know, we tend to tie up more accounts receivable at the end of the year. We have good invoicing and that ties up accounts receivable. But in less extent, I would -- let's say compared to previous quarter.

But in the end, what we have done and what we are working with is more effective, I would say, use of payment terms, in Instalco, 2.0 and our measures around this, this is an important theme and a lot of best practice in contractual payments and ensuring compliance across all units. So measures on Instalco's 2.0 and a good work in the entire organization.

That is very clear here. And also looking at service sales in Sweden, particularly, seems to be down a bit year-over-year. Of course, you have done some measures with discontinuing sales. It's hard to see the underlying data. But do you still see a sort of stable/sluggish market in services? Or what should we read into that number?

Service, we ended up for the group, 38% in the quarter and approximately the same numbers in the quarter -- in quarter and the full year, a little less in the group smaller numbers in Sweden than in the Rest of the Nordics. This is a measure we have worked around for many years to stabilizing and have this strengthening part with service in our businesses. And we will continue that. And it's exactly -- we can't say exactly the numbers for the coming year, and we are not giving forecast. But it is a priority to have a stabilized and service business.

Yes, exactly. And I think also we can say that, that was a strategy that when we saw the market downturn a couple of years ago, it was a strategy to strengthen up the service sector. Of course, when and if, of course, but I think so. When more projects is coming out, it can be so that we are now focusing more on projects and the service part is going down slightly. But that depends on how much -- how many projects that will come out there and the price level, of course, of them because the best is a mix, a healthy mix, but also the possibility to change almost from day to day between projects and service, so...

The next question comes from Karl Bokvist from ABG Sundal Collier.

First one on Fabri. Is it possible to give an update on kind of a run rate revenue level for the entire Fabri group?

I mean, I can say so much that they have performed well. And of course, they now have 22 companies, as we said, they have a turnover of EUR 150 million. I mean they are growing. And as I think we have mentioned before, they had at least the margin that we have in the Nordics, and I will say at least because they are performing well. So yes. So yes, that's what I can say. We are satisfied, so to speak.

Understood. And also, I noticed in the report also on Fabri, you now say you expect to close it by second -- or during second half? Any particular reason or decision, why in the second half compared to perhaps first half before?

I say it's just a little administrative work. So it's nothing that has changed. So it's just that we think that we have to go through the figures, of course. We have to see that everything is okay. They are a little bit, not slower, but they have more administrative work down -- to do down there. So it's just -- yes, almost a coincidence, but the figures are fixed and we have to just look into them.

Understood. And my second question is on -- it's a bit of a follow-up to Oscar's regarding contract sales. So in the past, if we look back a few years, you have been a project execution installation group, and this is a part of a market where you have historically also had good margins. So contract sales now growing, good to see. I'm just curious to hear about your view on kind of pricing environment right now compared to what you can do by just well as you said, doing better things internally from the Instalco 2.0 model, et cetera?

Good question. One of the main targets and one of the pillars, I would say, Instalco 2.0 is also to improve our selling capacity, as I mentioned, and pricing goes with that. So it's one thing that you calculate projects, but the pricing is another expertise, I will say. And that is also -- that's something we have added to our Instalco 2.0 and what we are doing now.

So hopefully, of course, and that's also our -- both our view of it and our wish, of course, but still, we will work a lot with what we call pricing and value-added pricing, and that is something we have picked up now and looking forward to. So with that said, you can just -- maybe you can imagine that this is on the highest on our agenda.

[Operator Instructions]

The next question comes from Johan Lonnqvist Sunden from DNB Carnegie.

Few questions from my side as well. Just curious to hear a little bit of your thoughts on FTE count. I note that the year-end FTE numbers was down some 60% versus end of Q3. Have you planned any further FTE reductions going into the beginning of '26 and potentially some kind of restructuring charges related to that?

I mean, we have not planned. There's no FTE savings or what you call it as a program going on. We have our -- we launched a couple of cost savings programs during 2024 and maybe 2025 in the beginning. It's more like cost control right now around every subsidiary. And we are doing our business plans with these head counting as well. But we have no specific plans to reduce FTEs or so. But of course, it depends on the market. And one of our main points here is to -- and we have talked about it during this call as well, to act very quick and quickly respond on if we see ups or downs in the product intake.

And I can also add that, of course, we have a very -- we have a big mix of companies in our portfolio. And we have strong companies with a high profitability, and we have companies that are struggling. So we work individual with a company as a company where they are and where we need to make reductions, if that is the case, we work with cost control and et cetera. But we have a mixed portfolio and the geographies is different and the market difference in the different countries and regions, so...

It's a day-to-day business, yes.

Make sense. And another margin drag that you have been fighting with for quite some time is the building automation startup. Possible to give any color on where you are with regards to margins in that area?

Did you ask about -- I didn't hear clearly, about Intec or in Norrtech or?

In Norrtech.

In Norrtech. Okay. So I mean we know that the demand for their services are high. And I think also that what we can see now is they are not catching up. This is start up. And start-ups also start with empty hands. But what they are doing now is -- and we can see that they are less dragging now than in Q3. So I think we see signs of really, really recovering in that company and in that segment. And they now are more stabilized in the market. I think they are well known now, and that means that they have more tenders or offering to do and customers start to understand that we have this in-house.

So we are looking forward to the development of in Norrtech and of course, Intec as well during 2026.

Okay, is it breakeven yet?

Let's phrase it like this. Today, they are approximately 90 consultants in our automation start-up businesses. They are still negative, but they are dragging less than in Q3. They are making better in Q4, but they are still negative. But what we are saying is that the margin is improving step-wise, as we expect.

Can you give something on the balance sheet of what it looks like?

I mean I think when we acquire -- in part 2, we will acquire 27%. I mean, then we will have a more better view and also it's more important for us. But of course, they have taken up a loan, but it's not -- it is very, very -- it's small figures today. So I think we will come back after Q2 here and explaining the situation in Fabri. But it's nothing to worry about.

They are very well capitalized.

Yes, exactly.

And they have a strong balance sheet.

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

We have no written questions at this time. So Per, if you want to wrap up?

Yes. With that, I want to thank you for dialing in and for your questions. And of course, before we close this call, I want to take the opportunity to truly thank the people that make up Instalco for their work, responsibility and commitment demonstrating throughout the year, especially in what we call Instalco 2.0. So give credit where credit is due. We have seen good progress, and there is more to do and more to come. So thank you very much.

Welcome to the Instalco Q3 Presentation 2025. [Operator Instructions]

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

Hi, everyone, and welcome to this presentation of Instalco's report for the third quarter of 2025. My name is Per Sjostrand, CEO at Instalco, and with me today is also our CFO, Christina Kassberg. And in fact this is my first time fully presenting a quarterly report since 2021 and I'm glad to be back. As usually, let's start with a brief overview of Instalco today.

Instalco is one of the leading installation groups in Sweden, Norway and Finland and also with a presence in Germany. Our decentralized model is a core strength empowering our more than 150 local companies to act independently while benefiting from strong governance and shared tools. And with more than 6,000 employees across the group, we support the green transition every day. The demand for our services continues to be underpinned by powerful long-term market trends.

And then we can switch slide. First, for a quick glance at our LTM numbers. Net sales amounted to SEK 13.4 billion and we ended the quarter with a backlog of SEK 9 billion, which represents a steady book-to-bill of close to 70% and that's exactly where I want to be. Our order backlog, as I mentioned, is about 70% of our revenue and I think that's very good. The reason why I think so is that you should not be, so to speak, fully booked when there are early signs of a market return.

When adjusting for one-off costs taken in the past 3 quarters, our EBITA amount to SEK 863 million corresponding to a margin of 6.4%. As you might know, we are aiming for 8% margin and we are driving the business in that direction. In Q3, service remained strong and accounted for 37% of our net sales. And the strong cash flow in Q3 kept our LTM cash flow from operations above SEK 1 billion even despite the decrease in earnings showcasing our strong focus on improving working capital.

So the next slide, please. Then let's move on to a quick summary from the third quarter. In summary, we are reporting numbers below last year's. On the positive side, we report strong operational cash flow and order intake is stable despite our cautious approach. But to speak frankly, it's not good enough. Internally, I have been very clear that I have 3 priorities right now and that is margin, margin and margin. Margin is, as you know, the basis for high cash flow, low net debt/EBITA; but is also a good sign of high quality, efficiency, stability and last, but not least, it gives pride among our team members.

Margin improvement is our highest priority, as I said, in the short term as well as in the long term. In the quarter, we also introduced a new country-based organization and we are working on an update operational model, I will come back to that, by which we are creating a clear management structure, governance and follow-up. And as I said, this I will come back to later in the presentation.

But for now, I will hand over to Christina, who will take you through our financial development in more detail.

Thank you, Per. Let's start off with looking at how our net sales and order backlog has developed during Q3. Net sales was down by 3.7% to SEK 3 billion with an organic decline of 3.3%. Organic growth was down in both reporting segments, but more in Sweden. Currency had a negative impact of 1% primarily due to the weakening of the Norwegian kroner and the euro. On the other hand, our order backlog grew by 6.4% organically with the biggest contribution coming from the Rest of Nordics segment and there primarily Norway with several, for us, larger projects coming in. Several of these are planned to run for years.

The market is fragmented and still characterized by clear regional differences. Activity increased somewhat during the quarter, particularly in metropolitan areas. This is important as these regions tend to be the engines for demand in the other areas of the countries. Price pressure remains in several segments, but the increased supply of project provides better opportunities for selection and a focus on profitability. In addition to the backlog, we have our service business, which remains an important stabilizing factor. In our service business, we saw growth of 2% in absolute numbers in the quarter. This resulted in service making up 37% of sales.

Then on to our earnings, EBITA in both millions and margin. Q3 tends to be seasonally weak due to the summer holiday period and this was the case also this year. We saw a weak July and August, but a stronger September. In total, EBITA amounted to SEK 180 million corresponding to a flat margin of 6%. No one-offs were taken in the quarter. The earnings were up in segment Rest of Nordics, but down in Sweden. In the former, we saw increasing sales and result in Finland, primarily due to the projects for industrial clients.

Norway, however, reported somewhat lower sales, but a strengthening margin. In Sweden, we saw improvements from low levels in areas such as, for example, West, South and Stockholm; but a decrease in the middle of Sweden and the industrial discipline. As Per has made very clear, we are not satisfied with this margin level and getting our margin back up is a key priority for the entire Instalco Group at the moment.

To break it down into more detail, over to a slide that summarizes segment Sweden in Q3. Overall, net sales were down somewhat to SEK 2.1 billion with an organic development of minus 5.7%. The order backlog was down by 2% to SEK 6.3 billion. The EBITA margin amounted to 5.1% compared to 5.5% last year. The Swedish market shows early signs of recovery especially in major cities with several large projects starting up. Technical consulting is strengthening with more automation and digitalization projects emerging. Conditions remain weak in parts of Central and Northern Sweden with low pricing and some overcapacity. Industrial activity is mixed. Power and defense projects are stable with larger investments remain delayed.

And now for a summary of the Rest of Nordics segment. Overall, net sales were down slightly to SEK 968 million with an organic decrease of 2.2% Acquisitions contributed with a growth of 0.1%. The EBITA margin amounted to 7.7% compared to 6.9% last year. The segment showed very strong development of the order backlog, which increased by 29.9%. As I mentioned a few slides ago, this was primarily driven by Norway. We saw some, for us, larger orders come in.

In Norway, the market has stabilized with early signs of recovery especially in Oslo and the South. Public investments continue to drive demand while housing shows cautious improvement ahead of next year. In Finland, activity remains weak but is stabilizing slightly in Helsinki with energy and defense projects expected to support demand over the medium term. As announced end of August, this segment will be split up in our external reporting starting from January 1, 2026.

Then on to the cash generation in the quarter. In Q3, cash flow from operations increased by 12% and amounted to SEK 133 million despite the lower earnings. Almost all components of working capital improved in Q3 compared to the same quarter last year primarily driven by accounts receivables and contract assets. Further down the cash flow analysis, we find the major expected outflows during the quarter; SEK 160 million in payments related to buyback of minority shares in a few subsidiaries, in line with previously agreed option structures and SEK 67 million in payment related to Fabri, which is a performance-related payment fulfilled for step 1 where we acquired 24%.

Once again, we are showing that disciplined execution pays off. The strong operational cash flow in the quarter reflects our continued focus on efficiency and working capital management. Then let's go over to our performance on a rolling 12-month basis in relation to our financial targets. Our targets are defined over a business cycle and in the current market, we continue to prioritize profitability and disciplined project selection over pure volume growth. The adjusted EBITA margin came in at 6.4%. It remains below our long-term ambition. We are not satisfied and are taking actions.

Operational cash flow was again strong with a conversion rate of 112% supported by ongoing improvements in working capital efficiency. Our leverage remains above our own long-term target of 2.5x net debt to EBITDA as expected following the payments in the quarter and typical seasonality fluctuations. The new credit facility agreed last quarter demonstrates continued confidence from our banking partners and secures long-term financial flexibility. And of course we remain firmly focused on delivering on our climate commitments as part of our long-term targets.

By that, I hand over to you, Per, again.

Okay. Thank you, Christina. A special thanks for your hard work with the cash management very well. I'm very satisfied with that. Going over to our subsidiary in Germany, Fabri, and the momentum in Germany remains strong. Fabri has now reached 20 companies, adding 3 new members to the group since our last report and each of them fits the model perfectly; entrepreneur driven, technically skilled, regionally anchored. Together, they contribute close to EUR 19 million in annual sales and expand both Fabri's technical scope and geographic footprint. It's another clear sign that our platform strategy in Germany is working and that the market continues to offer compelling opportunities for profitable growth.

So please, next slide and we go on to the quarter's CEO theme. Instalco 2.0 is our vision of the next Instalco. It's about taking what has made us strong and refining it, sharpening how we work, how we lead and how we deliver results. And this is not a single change, but a broader concept that ties together everything we are doing to take Instalco to the next level. We are building on our strength, but with an updated approach, a clear structure and higher ambition.

So let's move to Slide #13. In recent years, performance has not fully met our ambitions and we are taking decisive actions to accelerate the business and realize our full potential. Since Instalco was founded, we built a reputation as a best-in-class company with strong operational discipline translating into solid margins. Of course the macroeconomic environment has been challenging, but our ambitions to be the best-in-class goes beyond external comparison. It's about continuously raising the bar for ourselves. And our goal is to become a world-class company in operational excellence driving ongoing improvements at every level of the organization.

So by delivering on this, we will increase margins, strengthen our balance sheet and ensure a sustainable profitable long-term growth. And then I think we can move over to next slide, right? Since I rejoined the company in an operational role in August, we have worked with focus and urgency to define the next phase of our journey. When I commented the Q2 report, I showed you this slide and it remains just as valid today. Our operational priorities are clear, firmly addressing underperforming business units, increase operational efficiency and strengthen our organizational capabilities.

We are in the process of launching a target program designed to sharpen execution and accelerate progress toward our strategic goals. And I will now outline some of the key initiatives underway. To address underperforming companies, we are introducing a new framework designed to provide more tailored support for our businesses. We evaluate each company both financially and operationally taking a hands-on approach that is mindful of their specific needs and maturity. We are also establishing an operational baseline in key areas such as costing and pricing ensuring robust processes while preserving local flexibility.

And this is not about central control. It's about reinforcing our decentralized model by setting clear standards that enable consistent high performance across the group. The goal is to reduce person dependence and create a shared language around performance and excellence. And the framework applies to all Instalco companies while allowing each to leverage its entrepreneurial strengths and local context. The strongest units may see little day-to-day change, but all will benefit from shared tools, benchmarks and insights. And over time, this will form a true gold mine of best practice or Instalco toolbox enabling every company within the group to learn, grow and perform at its best.

And I say the culture will sooner or later become a so-called change management culture meaning that the company will stay solid and firm through all kinds of market outlooks. Okay. Operational efficiency. A business model defines what we do and why, how we create value and make money. For Instalco, this is clear and established. Our operational model, on the other hand, is about how the processes, structures and capabilities we use to deliver that value every day. Every company has an operational model consciously or not.

What's new is that we are now taking a step back to review and define ours to see where it may need to evolve and to ensure we share a common understanding of how we do things across the group. Our value creation is ultimately done in each subsidiary, but it's through Instalco's operational model that we control the company's model which is why we must start there. There are some clear guidelines for us in this work. We will protect the entrepreneurial drive and local ownership that defines us, but also make sure roles and responsibilities are crystal clear.

Efficiency and financial performance come first and our way of working must be adaptable, clear and easy to apply across all markets. We have identified 4 boxes, which are all up for review. When it comes to developing the company portfolio, we are moving towards only doing acquisitions that create business value where 1 plus 1 is greater than 2. How we strengthen and develop our existing companies to their full potential is where we spend most of our time and resources at the moment. From the 1st of September, a new country-based organization is in place. We now have 3 main countries: Sweden, Norway and Finland alongside our fourth unit, Tech and Consulting.

The change gives us a clear structure and shorter decision path. It strengthens local collaboration and allows us to be more hands-on in following up on operations. Each country has a country manager with overall responsibility supported by a CEO, who drives operational excellence and supports the subsidiaries in improving performance. And I think this setup keeps the strength of our decentralized model while giving us a better control and alignment where it matters. It also gives our companies more opportunities to share experience and best practice within each country.

From the start of next year, our external reporting will also follow this new structure. In short, the country-based organization is a key step in making Instalco more focused, more coordinated and better equipped for profitable growth going forward. And to wrap up, this is a slide also from Q2, but still relevant and worth reminding of. Our entrepreneurial spirit remains the core of Instalco and, as you can see from the guidelines from our work on one of our previous slides, we are not abandoning the decentralization. That is a hallmark of Instalco.

So with that, let's return to Q3 and look at the key takeaways. We can clearly see a seasonal pattern or an ongoing market pressure in the numbers, but also that the activity has picked up especially towards the end of the quarter. Our absolutely top priority, as I have mentioned several times now, remains margin. That's where all our focus is right now, closely followed by continued discipline in working capital management. Cash flow once again was strong supported by solid operational performance and active working capital measures. Our service business and backlog keep growing, providing a good stability. In Germany, our platform Fabri continues to expand and now includes 20 local companies, a great example of the momentum we are seeing there. And finally, we are entering the next phase of our journey with a new country-based organization and a refined operational model that will strengthen execution across the group.

So with that, I would like to thank you for joining in on this call and now open up for your questions.

[Operator Instructions]

We do have some written questions we could start off with. The first one would be has the seasonal pattern in Q3 been more or less noticeable than in previous years?

I don't know. I wasn't so close to business last year, but what you say, Christina, is that maybe so?

I would say that the seasonal pattern this Q3 is very similar to Q3 previous year. Q3 is weak given the summer vacation period and that was the fact also this year. July and August was especially weak, but a stronger September.

September was very strong.

Another question. Your competitor, Bravida, is much more cautious in market outlook compared to Instalco. Where you are commenting improvement, they are more cautious. Is it due to different exposure of the companies?

I would say yes on that question because I think they are more into infrastructure maybe, but also maybe larger major projects than we are. We have also 37% now in -- I mentioned our backlog or order book, 70%. We can add to that also service of course. And I think they have a little different mix. So maybe they are a little bit more cautious about the market or the market outlook.

We have more written questions. Are you planning to increase capacity in order to meet the market's turnaround?

Increase capacity, I don't know. We are very cautious with overhead costs I will say. I think also we have been building up this tech side with Intec. Maybe you can call it that some kind of -- but it's a company-by-company decision I will say or country by country. So I think we are not addressing it from the headquarter in some way.

And then we have a final written question. Fabri seems to develop well as far as we can see. Are you confident in following your previously announced plan regarding ownership in Fabri? You state over time in your Q3 comments.

Absolutely 100%. We have an agreement and we will follow that agreement. So that's in our -- absolutely. We see a strong momentum, as I mentioned, in Germany and I think that's a very good investment.

Then I believe we have questions on the call.

The next question comes from Thomas Blikstad from Pareto Securities.

I was just wondering on sort of the margin and growth strategy here going forward. There was some deterioration when it comes to organic growth, but also we see some positive signs and stabilizing margin profile. I was wondering considering the outlook and what's your view on deteriorating organic growth going forward versus margin improvement expectations?

I can start. If you want to add something then, Christina. But we are -- as I mentioned several times, we are focusing fully on margin improvements. Organic growth, you can always have organic growth if you lower your price, but I don't want our staff out there lowering the price on projects. So we are focusing on margin and that is our main focus and of course it takes some time. But with that said, maybe the organic growth is not in some kind of focus areas for us now. So more focus on margin development, operational excellence and everything else that I have talked about. I don't know if you want to add something.

Yes, I can only add what you already said. We are still prioritizing margins over volume and the real organic growth will most probably come back as the market improves. And we are prioritizing the margin level in our strategy.

Perfect. And just a quick follow-up in terms of the strategy towards the margin target here long term. How much do you think -- I know it's difficult to quantify, but how much do you think you can gain from just internal improvements and how much are you dependent on then volumes returning back to sort of get some proper margin expansion here?

That's a good question and a million dollar question I would say as well. I think it's important to see it like of course we will focus on margin with a more efficient way of working, operational excellence, as I mentioned. Maybe, maybe, maybe this is the new normal market not as low as this. But I think coming back to 2015 or something when we had a really, really bull market. I'm not so sure about that that we will do that. So what we are doing, we are trying to see this as a new normal market and develop our margins from companies and everything else due to that fact. Of course we will and I think the market will recover in 2026 maybe Q2 or something and that would gain us.

But we are now sharpening up our capacity, our abilities, our skills and so on to meet that. So it's a mix so I can't say how much it is. But I think that improving margin is a mix between of course what we are doing. But also if we can I mean strengthen up our ability and everything else now; when the market comes back, I mean we have a double-sized possibility, I would say, to grow and also to increase margins. So it's so dependent on each other. But we have to think this is the way -- this is the new normal situation right now. What can we do? What do we have to change in our company to reach full potential and come back to 8%-plus margin.

Congratulations and good luck going forward.

Then we do have some more new written questions. The first seems to be in line with the previous one. Do you have a timeline for this new focus on margins?

I start right now, but the timeline goes forever. Hopefully, as I mentioned also, we can reach a culture in the company with what I call change management that we always, always will improve thinking about what can we do better. So that's the culture and the culture will slowly change, hopefully, and that takes a rather long time to reach a full potential. But I think it starts now.

Then another question regarding how you see margins near term. It says, in my opinion, the Q3 margin is weak especially in Sweden given the comparable from last year. In Q4, do you believe it's possible to improve the margin year-over-year for the group?

It's always possible, but I can't promise anything. But it's always possible and we are working very, very hard with it on a daily basis we are fully focused. If that gives a result in quarter 4, okay, fine. But it's a long-term work and incentive for us to work with this.

A question that says I believe this refers to the earn-outs. The SEK 10 million revaluation, does it impact Sweden or Rest of Nordics?

I can comment on that. The SEK 10 million in revaluation, the same level as previous quarter. So Q3 compared with Q3, the same level. It's a mix. We have made acquisitions in all countries in both segments so it's actually a mix. So we don't split it into details.

And then the final written question we have at the moment is how much cash is expected to go out in Q4 for earn-outs and minorities?

We don't comment on that specific number, but we continue our focus on strong operational efficiency when it comes to cash management. But as we look at it, we don't have any numbers there to calculate on and give flavor on that that will give effect in Q4.

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

Okay. Thank you very much, everyone. And looking forward to the next quarter 4 report. So thank you.