Lindab International Stock

Welcome to the Lindab Group Q3 presentation for 2026. [Operator Instructions] Now I will hand the conference over to the President and CEO, Ola Ringdahl; and CFO, Lars Ynner. Please go ahead.

Hello, and welcome to this presentation of Lindab Group's report for the third quarter. I'm Ola Ringdahl, President and CEO of Lindab Group. And next to me, I have our CFO, Lars Ynner. We will begin by presenting the results for the quarter and then move over to our focus areas and an outlook. Following the presentation, there will be a Q&A session.

Let's begin with some highlights from the third quarter. Both business areas delivered organic growth in the quarter. This was driven by the Nordic region primarily.

The operating margin continued to be affected by higher costs. However, compared to the second quarter of this year, we could see a clear margin improvements. Price adjustments to compensate for higher input costs are ongoing and contributed to strengthen the gross margins in the quarter.

Our acquisition journey continued, and we added the Irish ventilation distributor, CVS, and in October, the Italian smoke control company Aernova to the group. With this introduction, let's now take a closer look at our sales development.

Sales in comparable units increased by 2% for the group. For business area Ventilation Systems, net sales increased by 1%. The ventilation sales development continued to differ between geographies. In the Nordics, organic growth was 6%, mainly driven by Sweden, where organic growth was 13% in the quarter. In Western Europe, sales was down by 1%, which is a smaller decline than in previous quarters.

In Central Europe, sales increased by 8%, mainly driven by strong development in Poland and in the Czech Republic. Business area Profile Systems showed organic growth for the second quarter in a row. Sales in July, however, was quite weak, but we did see an increasing momentum in August and into September. Let's now move over to operating profit. After a profitability decline in the second quarter, primarily caused by the geopolitical situation and increasing energy prices, profitability recovered in the third quarter. The adjusted operating margin for the group reached 8.7%, up from 6.6% in the second quarter but below the 9.7% we delivered in the third quarter of 2025.

Both business areas delivered a margin uplift compared to the second quarter. Ventilation Systems showed a healthy operating margin of 9.9%. Profile Systems has stabilized and delivered an operating margin of 6.2%. Profitability for Profile Systems was poor in July due to the low sales, but the profitability in both August and September was on a healthy level. Looking at the different markets, we saw a positive development in the Nordics, while profitability was lower in Western European countries like Germany, France and the Netherlands.

Price increases have, to a large extent, compensated for higher raw material costs and contributed to a stronger gross margin during the quarter. Now I hand over to our CFO, Lars Ynner, who will go through the cash flow situation.

Thank you, Ola. Lindab Group delivered cash flow from operating activities of SEK 235 million in the third quarter compared with SEK 335 million last year. The decrease reflected lower operating profit and a higher negative impact from changes in working capital. Net debt remained broadly stable at SEK 4,459 million. Our target for net debt to EBITDA to remain below 3x; at the end of the third quarter, the ratio was 2.8x compared with 2.7x last year. The financial net debt-to-EBITDA ratio was 2.4 compared with 2.1 last year. The increase was mainly due to lower EBITDA. Ola, back to you.

Thank you, Lars. Let's now look at some recent developments in Lindab Group and some examples of how we are developing our business with a focus on profitable growth. The geopolitical situation has substantially increased the cost of energy, transportation and raw materials since March of 2026. Our ambition has been to fully offset the higher costs through price increases. And during the third quarter, we have, to a large extent, managed to compensate for these higher costs and improved our gross margin.

To further strengthen the operating margin, we need both continued price adjustments and also a reduction of our cost base. We are, therefore, taking measures to improve efficiency across the group and reduce our fixed costs. Now let's have a look at the gradual improvements we are seeing in Profile Systems.

For Profile Systems, organic growth in the business area was up by 4% in the third quarter after a positive 5% increase in the second quarter. The focus on the Scandinavian markets support the growth, and we see positive macroeconomic indicators ahead. Project sales have started to increase but from a low level. This is partly a result of active pricing in the Swedish market. We have achieved good operational stability. One important example is that the sandwich panel factory in Sweden now is back at normal production capacity after the challenging factory relocation initiated 2 years ago. Altogether, Profile Systems is in a stronger position today than 6 months ago and the increasing profitability is a clear top priority for us.

We move on to acquisitions. Since 2020, we have made more than 30 acquisitions, and we have strengthened our position in the European ventilation markets. In July, we completed a bolt-on acquisition of the ventilation distributor, CVS, in Ireland, where we have a very successful team and a good market position. And last week, we completed the acquisition of Aernova in Italy. Aernova specializes in smoke control solutions for ventilation systems. The Fire & Smoke segment is showing good growth, and our plan is to expand the Aernova business beyond Italy, together with a former owner who remains Managing Director of the business.

Looking ahead, we see several interesting growth opportunities for Lindab, and I would like to mention some of them. A stronger focus on energy efficiency is supporting the Lindab Group going forward. Billings account for up to 40% of the energy consumption in Europe and energy prices are high and very high at the moment. Improving the energy efficiency of buildings will be an increasing priority in Europe and Lindab is very well positioned to benefit from this trend in the coming years.

Another growth area is advanced technical ventilation where we are seeing solid growth in, for example, intelligent room ventilation solutions as well as fire safety systems. An increased focus on technical sales will make our business less cyclical with a greater share coming from renovation and upgrades rather than from new construction. We also see good growth opportunities in certain customer segments such as data centers, but also in defense-related projects and other areas.

Going forward, we will continue to also make further bolt-on acquisitions of well-run ventilation companies while maintaining good financial discipline.

Now let's move to the market outlook. After a challenging period in the European construction market, we expect a gradual recovery. We see positive signs in the Nordic countries with the improvement most visible in Sweden. In Western Europe, the market situation in some countries is less positive and Germany, in particular, continues to show weak development, and we expect this to continue into 2027.

For the European ventilation market, in total, our assessment is that there will be modest growth in 2027. For Profile Systems, which is now fully focused on the Scandinavian markets, we expect a moderate improvement in the underlying market in 2027. In the medium to long term, we have a positive market outlook. Our ventilation systems provide energy savings for buildings and help to create a healthy indoor climate. When construction activity recovers, Lindab Group is well invested to handle higher production volumes. With that, I conclude this presentation. Lars and I are now ready to take your questions.

[Operator Instructions]

The next question comes from Anna Lagerlof from DNB Carnegie.

So my first question is on the price increases. Have they been received difference in the different markets, for example, has it been easier to balance margins and volumes in Nordics that are performing a bit better?

Anna, thank you for the question. Yes, Europe consists of many countries, many markets with their particular traits. And it is -- it's different how long it takes to get the price increases through. the contract in the Middle East, when that started late February, we urgently announced price increases we saw what was coming.

Typically, it takes a few months to get full impact. And we have struggled in some countries where price competition is really fierce, Typically, price competition is really strong when demand and say, market activity is low. One example is Germany, as we have pointed out a few times where price competition is pretty fierce.

But all in all, I think we did -- we made small progress in the second quarter to get an impact from the price increases. But in the third quarter, I think we have seen that we have managed to lift prices, not completely the same in every country, but in total, I would say, on an acceptable level. We are not done, though. We still need to get the average prices up a bit further to be able to continue to strengthen the margins.

Okay. Very clear. And -- just how should we think about the price effect year-over-year in sales in the quarter? Is this like 1%? Or is it a bit more?

We don't -- we are not that specific in talking about that. But of course, we indicate in the material here and what we have presented that cost inflation on, say, raw materials and transport is between 5% and 15%. So in order to protect margins and protect the gross margins, we need to increase prices by a few percentage point, 1% is not enough. And that is what we are aiming for.

Okay. And on the improving Project business, that you noted in the quarter. Are there any like specific segments that have been doing a bit better? Or is it more broad based?

Particularly the project business that we refer to is that we mentioned when we described the sales development primarily in Profile Systems, and there, it is quite a variety of types of buildings. But I would say public investments in Sweden is one driver. Also some good project developments in the Norwegian market.

So both in Sweden and Norway, we have seen the average -- say the average order size has increased quite a lot during the past 6 to 12 months gradually. Then we have a specific thing that is also influencing the number of projects that -- or the size of the projects. And that is the fact that the sandwich panel factory is now fully up to speed, and those products often go into rather large projects. So it means that the share of sales that comes from larger projects is increasing.

It should be said that, that part typically has slightly lower gross margins as well. So that is part of the reason why the profitability in Profile Systems is not, say, lifting or taking off when we have organic growth. The 2 reasons. One is a higher content of projects. The other reason is what I referred to in my presentation, the fact that the month of July was a pretty tough month with low construction activity. August and September looking clearly better though.

And that sort of acceleration in activity, has that -- did that continue into the beginning of Q4?

We have nothing indicating that the good momentum that we saw in August and September from Profile Systems that, that would suddenly end in October, we should remember that it is -- Profile Systems is a rather seasonal business. So up until early November, it's typically high season, but then from mid-November until March, they go into low season due to weather but I don't have any information that there would be any sudden setback from the first of October, particularly. I think we had good sales momentum in August throughout until the end of September. So I would suppose that, that there's a good chance that, that can continue.

[Operator Instructions]

The next question comes from Anna Lagerlof from DNB Carnegie.

You have come back?

Yes, so maybe if we can get into a bit more detail on the cost savings that you are talking about because you have been, as you said, you have been focusing quite a lot for some time now on -- with the cost base. In what way are you maybe accelerating that thinking? And is it more related to ventilation than it has been previously? Just if you can elaborate a bit.

I think we -- after a long period with low growth or even negative growth, we have had to work on our cost base pretty constantly during the past 4 years. .

And 1 important factor to be able to generate a healthy operating margin is that we are able to strengthen our gross margins. through efficiency, through smart pricing, et cetera, et cetera.

Now when we have -- now we have had to, say, devote the effect of the price increases to cover transportation and raw material costs and not to cover the general cost inflation in our fixed cost base then we need to more specifically, at the moment, address our fixed cost base so that the money generated as gross profits can cover the costs and leave a good profit a good operating or healthy operating profit after all these effects.

So we see that the costs have grown faster, I would say, our fixed cost base has grown faster than our top line sales during 2026. And this needs to be corrected. So that is why we are having some extra focus on cost reduction activities at the moment.

We don't foresee that, that will lead to any onetime effects or any structural cost that we will take, but we do it as a part of the running business.

Okay. And is that maybe going to be more related to the markets that are more challenging, like the European ones in comparison to the Nordics? Or is it very broad-based across the group?

Yes. here, you, of course, come into a rather complicated situation because you have some markets with good momentum where you want to ride on that wave and not say, cut the wrong costs. We want to continue growing in the Nordics, for example, or in Poland or in Ireland or the other markets where we have a good sales momentum. They have to be prudent with costs, but we don't want to do anything to harm the growth momentum. So naturally, it is in the units where we see slow or no growth where we will have the main objective. Then I believe that in a situation like this, when you belong to a group, everybody has to do their part.

The next question comes from Anders Akerblom from Nordea.

I wanted to ask a bit firstly on Ventilation. I mean, obviously, you reported quite healthy growth in Sweden, 13% organically. I mean margins obviously is still down year-over-year, but it would be interesting to hear you elaborate a bit more on sort of the dilution from -- you alluded to Germany, but if you could maybe split out Germany, France and the Netherlands.

I mean in a sort of relative sense. I know you don't want to go in on sort of the organic rate and margin development in the 3, but sort of should we interpret Germany still as clearly the weakest of the 3 or anything that's changing there as you see it?

Germany is still a headache for us. They had a poor profitability in '25 and that unfortunately continues in '26, not at any accelerating pace, but it's still a drag on our average profitability. .

The situation for us in the Netherlands, in 2026, profitability is clearly worse than in '25. So that is worse than before. And parts of France, we have seen a weaker profitability development in '26. So I would say all 3 of those countries are weighing on our average profitability development in '26. And then some other markets are -- have improved and are improving. So it is -- it is a mixed picture. We, of course, have a very focused activities to improve the situation in all of these 3 countries including changing managing directors in a couple of the companies.

So I'm confident that we will start to see a gradual improvement, but from low levels in the profitability in 2027.

Yes. Okay. And sort of on just in a sort of split between the 2. I mean is it mainly still pricing? Or are you still seeing some sort of volume deleveraging, sort of how's -- how are those 2 developing, respectively?

You mean in terms of geography?

Yes. for -- since we were talking about sort of Germany, France and the Netherlands, it would be interesting to hear sort of the volume aspect relative to how price is developing?

Volume development for us in Germany is rather flat in '26 versus '25, but it's too low. In France, we have seen sales related to new construction is down, but sales related to upgrading and renovation is actually up.

Netherlands, sales slightly down a few percentage points versus last year. So nothing too dramatic, but still leading to a situation where the profitability has declined. So we need to break that momentum. It involves both price adjustments naturally to the extent that we can, but it definitely also involves reducing the fixed cost base and looking at structure.

Yes. And speaking of the fixed cost base, I mean, just looking through sort of in a general sense, I mean we saw the admin costs you know up 10% year-over-year, almost 70 bps relative to sales increase year-over-year. I mean, should one interpret that as sort of one of the key sort of focus areas for you going forward?

It is a focus area. The most important focus area is to improve sales and have the right pricing for sure. But the costs, as you correctly note, have increased too fast. Some costs are increasing for say, necessary reasons. Reading the papers yesterday and today, we are happy that we have built up a very skilled cybersecurity team at Lindab. So that is, of course, a cost we didn't have 5 years ago, but we are happy that we have that type of competence today.

So there are certain things that are steadily increasing in terms of compliance and digitalization costs and so on. So that is a heavier part of our cost today than it used to be. But it is, of course, not sustainable that our SG&A costs are increasing faster than our revenues. So that is why we are taking yet another stab at correcting that. We have done so several times in the past few years, and we are at it again.

Yes. No, makes sense. And final question, if I may, maybe more to Lars. But I mean, obviously, cash conversion in the quarter was quite weak and leverage still at suboptimal levels. So do you have any comment on some sort of normalization here in terms of cash conversion and how we should think about that?

Yes. I would say that Q3, we have some seasonal impact in the third quarter and both when it comes to inventory, but also to accounts receivable. So there, I would say there's no underlying changes versus what we have been able to produce cash conversion-wise in the past, as many other things covered in this call, our cash conversion and focus on working capital is of high importance. And we're also getting into the fourth quarter, which is normally from a cash flow perspective, the strongest quarter for us.

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

Then from my side and from Lars' side, we would like to thank everybody who listened in, and we end the call here. Wish you a wonderful weekend. Thanks.

Welcome to the Lindab Group Q2 Presentation for 2026. [Operator Instructions] Now I will hand the conference over to the President and CEO, Ola Ringdahl; and CFO, Lars Ynner. Please go ahead.

Hello, and welcome to this presentation of Lindab Group's report for the second quarter. I'm Ola Ringdahl, President and CEO of Lindab Group. And next to me, I have our CFO, Lars Ynner. We will begin by presenting the results for the quarter and then move over to our focus on profitable growth and an outlook. Following the presentation, there will be a Q&A session.

Let's begin with some highlights. For the group in total, sales increased, and we returned to organic growth. Margins came under pressure during the quarter, and I will come back to that later in the presentation. After a weak start of the year for Profile Systems, we can see an improvement in the second quarter with increased sales in comparable units.

Let's take a closer look at our sales development. Sales in April and May was slower than anticipated, but sales in June was strong. The group increased net sales by 2% in the quarter. For business area Ventilation Systems, net sales increased by 2%, and the organic growth was flat.

Sales development differed between geographies. In the Nordics, sales development was strong, primarily thanks to solid performance in the Swedish market with a double-digit sales increase in the quarter. Sales in Western Europe was disappointing with a 4% decline in comparable units. Profile Systems reached 5% organic growth in the quarter, a very welcome positive sign after many tough quarters.

After the divestment of our operations in Romania, Profile Systems is now focused on the Scandinavian markets. In previous updates, we have mentioned that the sandwich panel business has struggled to reach satisfactory production output after the factory relocation in the beginning of 2025. I'm pleased to say that we are getting back on track. We have operational stability and sales levels are now approaching those seen before the factory relocation.

Now let's move over to operating profit. Lindab's profitability came under pressure during the quarter. Adjusted operating margin for the group was 6.6% compared to 8.6% for the second quarter last year. An important reason was that the costs for transportation and input materials increased because of disruptions caused by the geopolitical situation. This affected both business areas.

Also, profitability declined in our ventilation businesses in Germany, France and the Netherlands, where we see weak demand and strong price competition. To strengthen profitability, price increases and action plans for both business areas are being implemented.

Now I hand over to our CFO, Lars Ynner, who will present the cash flow development.

Thank you, Ola. Lindab Group delivered a cash flow from operating activities of SEK 275 million in the second quarter, corresponding to a cash conversion of 97%. Net debt increased to SEK 4.497 billion, which is in line with last year. Our target for net debt to EBITDA is that it should be below 3x. In Q2, the ratio remained stable versus last year at 2.7. The financial net debt-to-EBITDA ratio increased to 2.3 versus 2.1 last year.

Ola, now back to you.

Thank you, Lars. As mentioned earlier, profitability has been affected by disruptions caused by the geopolitical situation. This has led to significantly higher costs for transportation and for input materials during the second quarter. Price adjustments have been implemented to mitigate these cost increases. However, we have not yet been able to fully compensate during this quarter, which has put pressure on the gross margin. Our ambition is to fully offset the higher costs in the coming months.

Let's continue to the next section. Let me now share some examples of how we are developing our business with a focus on profitable growth. Since 2020, Lindab has made a large number of acquisitions of well-run companies that can grow our business and strengthen our position in the market. Earlier this week, we announced a bolt-on acquisition in Ireland.

CVS is a small ventilation distributor in the Western part of Ireland, where we aim to double our sales over the next 3 years in that part of the country. Our current business in Ireland is very successful and with the acquisition of CVS, we have the opportunity to benefit from the high construction activity in the western part of the country.

In June, we divested our operations in Romania. This completes the exit from Eastern Europe for business area Profile Systems, who can now fully focus on the Scandinavian markets.

In the near-term, we see many interesting growth opportunities, and I would like to mention some of them. We still see a capacity for bolt-on acquisitions of well-run ventilation companies, and we are in several interesting dialogues at the moment. Our market-leading position in ventilation ducts in Europe is gradually supplemented by a stronger position in technical ventilation, where specifiers such as technical consultants, property owners and architects are important decision-makers.

Fire and smoke protection systems is a good example of a ventilation product category with very specific technical demands and certifications. We have seen double-digit growth for this product category during the past 12 months.

With the acquisition of Airmaster, we have established a strong position in decentralized ventilation. Step by step, we are expanding the sales channels for Airmaster to more geographies supported by the Lindab Group network, creating clear synergies. Finally, there are interesting pockets of growth in, for example, data centers and the defense sector, where Lindab aims to be an important supplier.

Now let's move to the market outlook. We continue to see significant geopolitical uncertainty, so making a market outlook is pretty hard at the moment. The forecast for the European construction market from Euroconstruct has been revised down slightly for 2026 and '27. We believe that the geopolitical situation and the conflict in the Middle East are delaying the market recovery.

For the European ventilation market, our assessment is that it will be relatively flat during the rest of '26 with prospects for some growth in 2027. The markets in Northern and Eastern Europe are projected to recover faster. However, Western Europe is lagging behind when it comes to new construction projects.

For Profile Systems, which primarily now operates in Scandinavia, there are some positive signs, and we assess that the market is stabilizing during this year with prospects for growth in 2027.

In the medium- and long-term, we have a positive market outlook. Our ventilation systems provide energy savings for buildings and help to create a healthy indoor climate. Thanks to efficiency measures and our implemented investment program, we have a solid platform for profitability when market demand starts to increase.

That concludes this presentation. And Lars and I are now ready to take your questions.

[Operator Instructions] The next question comes from Lara Mohtadi from ABG Sundal Collier.

Just a couple of questions from me. You said that the ambition is to fully offset the higher costs in -- from transportation, et cetera, in the coming months. Should we read that as the gross margin gap still being visible in Q3 and maybe largely closing in Q4? That's my first question.

Thank you, Lara. We see that the cost increases, they came pretty fast because of this external shock related to the conflict in the Middle East. So energy cost, fuel prices, et cetera, they were rising quickly, and it did not give us enough time to react and get full impact of price increases. Will we be able to fully compensate during the third quarter? It's a question mark for me. We aim to do it, but there are risks that we will not be able to fully close that gap in the third quarter.

I have to admit that there is uncertainty, especially in the countries where the demand is weak, primarily in, say, Western Europe, getting full impact of the price increases in a tough market with strong price competition is hard at the moment. We need to balance volume versus gross margin. It's a tricky act.

We, of course, need to make sure we protect market share and keep good levels of productivity in our factories, while at the same time, try to protect and gradually increase our gross margins. Rather difficult at the moment. But as I said, we aim to fully compensate for it, but it can take a few more months.

Very clear. You briefly touched on this now when you answered your question, but in weaker markets such as Germany, France and the Netherlands, how are you thinking about the trade-off between sort of defending volumes versus protecting price while the market stays weak?

We need to be, say, long-term in our -- in how we act. We cannot say goodbye to customers who we have served for a long time because we are too rigid on pricing. That is one important thing. But of course, we still need to do everything we can to compensate for these cost increases that we have. It is a difficult situation for our sales organizations to find that balance.

We want to keep our customers. We want to protect our market shares, and we want to compensate and protect our gross margin. That is especially difficult in the countries mentioned where the markets are clearly lacking volume and where the suppliers want to, let's say, fight to catch the volume that exists. That is one reason why we have a gross margin pressure in those countries.

Just on the ventilation margin, it came down to 7.8%. Can you maybe just help us understand -- obviously, you mentioned the higher transport costs, et cetera. But could you just make us -- help us understand the main moving parts, maybe mix price versus transport costs?

I think if we look at the group's gross margin, we lose roughly 1 percentage point on gross margin, and that is approximately true also for business area Ventilation Systems. That is where one key reason sits. The second one, as we point out in the report, is that our performance in Germany, Netherlands and France is not good enough, not strong enough.

We are losing operating profit in those 3 countries specifically, and that's the other half of the impact for Ventilation Systems. So 2 different parts. One is, say, cost inflation and the second one is lack of the desired performance in those 3 countries.

Just a final one from my end. You did a small acquisition you announced it this quarter. I mean, your net debt-to-EBITDA is moving towards the 3x ceiling. How much headroom do you sort of see for bolt-ons this year? Or do you think that the leverage level maybe constrains the size of what you consider? What should we sort of expect in terms of acquisitions going into this year -- for the rest of the year?

We depend -- I mean, as you point out, we have a net debt-to-EBITDA situation. Priority one for us is to strengthen EBITDA so that we create space for more acquisitions. Then we, of course, depend on continued generation of strong cash flows. I think our cash conversion in Q2 was strong after a less strong Q1. It is a top priority for us to strengthen EBITDA and ensure a good cash conversion and cash flow. We can finance additional bolt-on acquisitions.

The next question comes from Jakob Marken from SEB.

Thank you for taking my questions. Some of them already answered here. But if we look to Profile instead, I mean, quite a good quarter here with organic growth and solid margins. I mean, how much of that do you think is sort of catch-up from the seasonally -- or the weak Q1 from weather? And how much of that is sort of underlying trends?

Thank you, Jakob. Well, good question. It is difficult to estimate how much is, say, a spillover from project delays in Q1. I can't really answer that. I don't have any good data. It could have contributed a bit. We have also a contribution from our sandwich panel business, where we have clearly better operational stability now and sales is starting to look relatively good.

But we also see a strong momentum primarily in Norway and in the builder merchants segment in the Swedish market. It is not to say, just one factor. There are several factors moving us from, say, clearly negative organic growth to positive. I'm -- I dare to be a bit optimistic that we will -- that we can continue to see improvements in the Profile System sales and profitability going forward.

Okay. That's very helpful. Then just my final question here. I mean you talked about some of the growth verticals that you see and that you hopefully can profit from in the coming quarters or year. I mean, can you help us a bit with the size of the revenues here from data centers, defense, fire and smoke, et cetera, et cetera? Could you -- if you take that as a group, I mean, those growth verticals, how big is that of the group currently?

We are talking single-digit percentages of our ventilation sales in each of those categories. But if we say, combine fire and smoke and defense and data centers, maybe we talk 10% of group sales approximately. I will not go into the details on how much in each of those buckets, but the portion of sales we have to say, what we call more technical ventilation that goes through specifiers and these type of demanding applications. It has been growing for the last years, partly organic, partly because of our acquisitions.

I think it's creating a better balance within our ventilation segment, where we have been a bit too dependent on products that are, to a large extent, sold to new construction projects and where we are now gradually increasing the portion that is going into renovation, upgrading. I view that very positively that we find a better balance. It will make us less vulnerable in times of a downturn -- longer downturn period for new construction activity in Europe.

The next question comes from August Flyning from Handelsbanken.

One question from my side, especially in the Ventilation segment. You now expect the broader European ventilation market to be pushed into 2027. Should we expect market conditions in H2 now to be -- to remain broadly similar to H1? Or are you still seeing signs of a different market compared to H1?

We believe that sales will be, say, more or less on par with H2 2025. That is our projection.

And could you say anything about -- I mean -- and the pushed recovery then into 2027, would you say that the -- this is entirely driven by the geopolitical uncertainty? Or are there any other things you see in the market?

The reason why we have, say, revised our view on when we will start to see recovery is exactly because of the conflict in the Middle East. It is creating uncertainty, projects are postponed. Risk appetite is low at the moment. I think that -- and the inflationary pressure means that it's more expensive to build and to start projects. Also uncertainties about inflation, interest rates and so on.

We don't know how long that conflict will continue, of course. But when it -- when that conflict ends, that can be a trigger that projects are starting up again. As I said, it is uncertain, and it is very difficult to do market projections at the moment. We try to do everything we can internally to manage the situation as well as we can. Lets see.

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

Thank you very much. Lars and I, are wishing everybody a nice summer and talk to you after that. Thank you. Bye.

Thank you. Bye.

Welcome to the Lindab Q1 Presentation for 2026. [Operator Instructions] Now I will hand the conference over to the President and CEO, Ola Ringdahl; and CFO, Lars Ynner. Please go ahead.

Hello, and welcome to this presentation of Lindab Group's report for the first quarter. I'm Ola Ringdahl, President and CEO of Lindab Group. And next to me, I have our CFO, Lars Ynner. We will begin by presenting the results for the quarter and then move over to our focus on profitable growth and an outlook. Following the presentation, there will be a Q&A session. Let's begin with some highlights. We can see a mixed picture for our two business areas, where Ventilation Systems showed stability in the quarter and Profile Systems had a very challenging quarter.

Sales and operating profit for Profile Systems were affected by a combination of external and internal factors, which weighed on the group's results. For our largest business area, Ventilation Systems, I'm pleased to see an improved operating margin for the third consecutive quarter. That's a sign of strength in a challenging time. Now let's take a look at our sales development.

Overall, group sales values decreased compared to the first quarter last year, and this was mainly due to currency effects and low sales numbers in Profile Systems. For Ventilation Systems, organic sales growth was negative by 1%, and we noticed delayed construction projects during January and February due to the tough winter, but the pace was clearly better in March. Acquisitions contributed with 2% and currency effects continue to be on high levels with an impact of minus 5%.

In the Nordics, an important market for Lindab Group, the good sales trend continued, and we reached organic growth for the Ventilation segment in the quarter. We also saw a continued good sales trend in important markets like the U.K. and Italy. In Germany, however, the market is still slow. Sales for Business area Profile Systems was low in the quarter. Divestments reduced the sales value by 7% and currency reduced by 2%.

Organic sales growth was minus 10% due to a weak project market and low sales volumes in January to February due to a harsh winter. We saw clearly better sales in March with organic growth for the business area in the month.

Now let's move over to operating profit. Group operating profit was negatively affected by the weak quarter for Profile Systems. Adjusted operating margin was 6.3% for the quarter compared to 7.1% in the previous year.

Development in Ventilation Systems showed stability and resilience despite the tough market conditions and negative currency effects. Operating profit for the quarter was on a similar level as last year for Ventilation and the operating margin increased to 9.2% from 9.0% last year.

I'm pleased to report an increased operating margin for the third consecutive quarter, thanks to proactive efficiency measures and good pricing discipline. For Profile Systems, I am far from pleased to report a negative operating profit in the quarter. There are several factors affecting the results for the business area.

First of all, the low sales volume in January and February are the main explanations to the poor result. Secondly, the ramp-up of sales and production volume in the sandwich panel factory in the north of Sweden has been slower than anticipated after the relocation of the factory last year. And the third factor is a poor result in our one remaining Profile business in Eastern Europe. The divestment of Lindab Romania should have been completed in March, but the authorities are delayed in their administrative approval of the transaction.

Now I hand over to our CFO, Lars Ynner, who will present the cash flow development.

Thank you, Ola. Cash flow in Q1 was impacted by timing effects in working capital, amounting to SEK 45 million compared to SEK 160 million last year. Net debt was SEK 4.410 billion, broadly in line with previous levels with SEK 1.474 billion related to leasing.

Our target for net debt to EBITDA is that it should be below 3x. In Q1, the ratio was stable at 2.6 in line with the previous quarter. Financial net debt to EBITDA increased slightly to 2.2 from 2.1 at year-end. Ola, back to you.

Thank you, Lars. Let me share some more information on how we continue to develop our two business areas. We start with Ventilation Systems. In our largest business area, there are some encouraging developments. Operating margin has increased for three consecutive quarters, and we see good opportunities to continue this positive trend and to reach an operating margin in line with our financial goals.

Within our strategic focus areas, we see good progress. Let's look into some of them. In technical ventilation, we are taking important steps within the distribution of air handling units, fans and room ventilation equipment. Likewise, we see good development within the growth area of decentralized ventilation.

Our acquired companies like Airmaster, Atib and Ventia are all good examples of successful acquisitions that already contribute a lot to Lindab Group's results. For Fire & Smoke solutions, we see double-digit growth over the past 12 months. This product area is becoming an important business for the Lindab Group. Here, our different companies in the group have started a close cooperation, and we can target the market with a broad and strong product range from Lindab Group.

During the last years, implemented structural measures have reduced our cost base within the Ventilation business and gross margins have been strengthened, thanks to investments in automation. This work will continue and an additional important area is synergies between the different companies in the group in areas like sales, purchasing and production.

We move to some comments about business area Profile Systems. I'm clearly disappointed with the sales and profitability development for Profile Systems. The exit from Eastern Europe helps our results, but it is not enough. We must take more actions to get Profile Systems into shape. Therefore, at the beginning of May, we have reorganized the entire business area with the objective to improve business focus and strengthen the results as quickly as possible.

We are also evaluating further structural measures. I'm determined to bring back Profile Systems to a profitability in line with the group's financial targets. Now some words about how the conflict in the Middle East can affect Lindab Group.

First of all, I should clarify that Lindab Group has no operations in the Middle East or any significant sales to that region. So the direct consequences of the conflict are minimal for us. However, the conflict in the Middle East is causing, among other things, higher transportation costs due to increased diesel costs, et cetera, and increased raw material costs.

In April, Lindab announced price increases to fully offset the higher costs and protect our margins. If necessary, another round of price increases will be implemented during the third quarter.

Now let's move to the market outlook. In these turbulent geopolitical times, it is definitely not easy to make any market predictions. We work with different scenarios and try to adjust as best we can. And we are focusing on measures within our own control to influence sales and profitability. Looking at the latest available forecast, the European construction market is still expected to return to growth during 2026. We expect that this recovery will be slow and it will take some time.

For the European ventilation market, there are indications that this market will grow slightly from today's low levels. The Nordic region has started to grow, which is encouraging, but Germany is still a slow development and the question mark for the rest of 2026.

For Profile Systems, a gradual market stabilization is expected during 2026, although it will probably remain on low levels. In the medium and long term, we have a positive market outlook. Our ventilation systems provide energy savings for buildings and help to create a healthy indoor climate and Lindab's position in this industry is at the very top. Thanks to efficiency measures and our implemented investment program, we have a solid platform for profitability when market demand increases.

With that, I conclude this presentation, and Lars and I are now ready to take your questions.

[Operator Instructions] The next question comes from Anders Ackerblom from Nordea.

Firstly, I wanted to ask a bit about -- you said you're evaluating further potential structural measures in Profile. Could you elaborate a bit on this?

We will do what is necessary to return to profitability in line with the group's targets. And I'd rather see a smaller Profile Systems delivering consistent and good results than a large and wobbly Profile Systems. So now it's really up to the business units within our group to prove that they can return quickly to an acceptable profitability level. And that is very clear to our organization. And if there are business units within Profile Systems where we conclude that we are unlikely to return to acceptable profitability, then we will have to make tough decisions. It can be closing down certain activities or it can be a divestment process.

We have shown that we are not afraid to make such actions when we have now made an exit from Eastern Europe. And I think the same logic applies when we now scrutinize the units in Scandinavia.

Okay. And I understand it's a sensitive question, but sort of in a general sense, I mean, how long will your patience be for that sort of turnaround? I mean, are we looking at sort of next quarter that it has to be a significant improvement across some of these business units or else you'll be evaluating this? Or sort of do you have a bit longer time horizon? Just help us understand maybe sort of the potential time horizon for that beyond sort of Romania then, of course?

It is -- it would be fair to say that we didn't suddenly discover this sales and profitability challenge just now after the first quarter of '26. We have seen a deteriorating trend during the past 2.5 years. So it is no news to our organization that the clock is ticking.

On the other hand, making big decisions based on 1-month or 2 months or 3 months, that would not be so responsible of me to do so. So timing-wise, I'm expecting year-on-year improvements during the course of 2026. But there are, of course, external factors that we cannot completely control as we now see with the conflict in the Middle East, et cetera. So I need to be tough, but I also need to be fair.

Yes. No, I appreciate that. Ola, and finally, just on Profile, then I'll let others ask questions. But could you help us understand the margin bridge a bit more here? I mean you spoke about a gradual improvement, but sort of just representative for 2026 and how we maybe should view the near-term effect with the Romania divestment. Could you help us understand that a bit more?

Do you mean where the...

Of course, salary-wise, profitability-wise and Profile-wise then pass it on.

Say, the remainder of what we have in Eastern Europe is weighing on the results. And in our report, there is a comment about that in the -- where is that? It is on page -- let me just double check. So a second.

You have it on Page 19.

Page 19.

On the Note 4.

Page 19, Note 4. So there it is the official effect from the remaining Romanian operation. That is a direct effect. Then there are some cleanups related to the rest of the Eastern European businesses that we have left behind. But the main reason why we see this drop in profitability is not Eastern Europe or Romania. It is the low volume that we see in the Scandinavian markets. And in low season when the base volumes are already low and with additional pretty tough winter, the revenues are not enough to cover the fixed cost base, which, of course, makes you think why do you have such a high fixed cost base, obviously. And that is one of the areas that we need to address with this reorganization.

[Operator Instructions] The next question comes from Sofia Sörling from DNB Carnegie.

A couple of questions from my side. First, you mentioned a quite soft market in Germany for ventilation division. Do you see that you're developing in line with the current market? Or do you expect any losses in market share or increases in market share?

Sofia, yes, I think we are developing in line with the market in Germany, in line with or slightly worse. And why do we perform slightly worse? We don't accept to take projects where the costs -- where the margins are too low. So of course, when the volumes in Germany have come down, price competition, price fighting is intense. So there are some business that we have to step away from. But I would say the main explanation why we are suffering from low sales in Germany is market. But we are not, at this point, taking market share in Germany. That would be too expensive at the current prices that are in the market in Germany.

Okay. So you experienced currently more fierce competition in Germany than other regions?

The same amount of suppliers are fighting to get their share of a clearly lower volume in Germany. So I think Germany is an extremely competitive market where it's always tough pricing. But now it's very much so. So we are suffering sales-wise and also margin-wise in the German market in these conditions.

Okay. And the final question, the organic development within the ventilation division, could you give a high-level split on volumes and price effect?

For the first quarter, there is no significant price effect. I think we will start to see some price effects now in the second quarter as the price increases that we have announced in April will gradually start to have effect. But in first quarter, I would say that the price effect is neutral. So we are approximately at a 0% price effect and approximately 0% volume effect.

Okay. Okay. Sorry, I have one more question. Could you give some more details on the -- or an update around the sandwich panel production when it's expected to return to normal levels?

Yes. And then the question is what is the new normal level? Because obviously, these products from that factory, they go to larger projects, mainly in the Swedish market, some to the Norwegian market and some to the Danish market. We have a good, say, quotation activity. We are building the order book. Production ramp-up is moving in the right direction. It looks clearly better now in the past 2 months than it did before Christmas.

So we are confident that we are gradually improving both production output and consequently also the ability to turn quotations into sales. But it has taken at least half a year longer with this ramp-up than we had anticipated. We clearly have the ambition to be -- to have a better performance, both sales-wise and profitability-wise from that business during the second quarter and onwards compared to a year previous.

The next question comes from Anders Jåfs from SB1 Markets.

I just thought to take a question on the M&A situation. Obviously, you've had a bit lower pace over the last year and maybe to ask a bit how you feel that the deal flow currently is going on the broader market currently or that it's still a bit of a standstill overall or that it's more so that you've been focusing more on your internal efforts as of late. I've taken a notice that you have previously mentioned that you still have an interesting pipeline, but maybe some broader paint on that outlook currently would be nice to get.

Anders, I'm glad that somebody is asking about acquisitions. say we had a record high activity in 2024. The pipeline was a bit less filled in '25. We only did one acquisition in '25. I am confident that we will make more acquisitions in '26 than we did in '25. We have, let's say, a growing pipeline again. I think in '25, we also noticed that in several discussions we had, price expectations were still pretty high. I think we're seeing gradually a more realistic view on valuations. So I feel a little bit optimistic that we will start to see some better acquisition activity going forward.

All right. Interesting. And yes, maybe to touch upon that. Obviously, you mentioned in your annual report that obviously, data center is a growing subsegment in the market. And I think it was, yes, on the previous report that you still saw that maybe it was a bit higher activity level on acquisitions within this subsegment. Is the pricing situation then -- I mean, naturally, it will be a bit higher for those types of acquisition multiple-wise. Is that something that you see currently also? Or -- and how do you weigh also growing in that subsegment, which is on everybody's lips currently as well?

Yes. It's, of course, so many investments, so big amounts going into data centers. So it's -- everybody is chasing after that. We are -- we have a good potential to take, say, the product range that we have and package that into quite potent solutions for the data center segment. But of course, there can be additional products and technologies that would fit very well if we could get our hands on those. We don't necessarily have to acquire everybody to make that happen.

We also have good partnerships and good supply agreements to package -- to create packages, including third-party products. But we are looking at a couple of companies that could really fit and where there is data center applications possible. If those companies already have, say, a data center valuation on them, maybe we are not able to buy them. But I think we will find our way to actually make a couple of acquisitions where part of that product portfolio of those companies can be applied in data centers.

But probably most of the work to be done, we can control internally with the current portfolio we have and the current resources we have.

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

Then we -- from Lars Ynner and myself, we say thank you. We know that the situation is tough for Profile Systems, but we're also happy to see the good development and stability in Ventilation Systems, currently at 80% of our revenue and moving towards 90% of our revenue. So don't forget that. Thank you, everybody. Have a good day.

Hello, and welcome to this presentation of Lindab Group's Q4 Report. I'm Ola Ringdahl, President and CEO of Lindab Group. And next to me, I have our CFO, Lars Ynner. We will begin by presenting the results for the quarter, and then we will move over to our focus areas for the year and then outlook. Following the presentation, there will be a Q&A session.

Let's begin with some highlights. Overall, I'm pleased to see a strengthening of the result compared to last year. Adjusted operating profit increased despite negative currency effects. Cash flow was strong, and the Board proposes a dividend of SEK 5.60, an increase from SEK 5.40 the previous year.

The positive development is driven by continued profitability improvements in our largest business area, Ventilation Systems. Our efficiency measures have delivered according to plan, contributing substantially to the stronger margins. After a longer period of weak market conditions, Ventilation Systems achieved some small but important organic growth in the quarter.

For business area, Profile Systems, the challenges remain. However, an important milestone in the transformation of the business is that the exit from Eastern Europe is under completion.

Now let's take a look at our sales development. In Ventilation Systems, growth in comparable units was positive for the first time since 2022 with 1%. That's a sign of strength in a challenging market. The important Nordic region showed strong sales performance with Sweden demonstrating the most significant improvement. France, Ireland and Italy also delivered solid sales numbers. However, Germany continues to decline due to a challenging market situation.

When we look at our smaller business area, Profile Systems, we saw a continued decline in sales. Sales decreased on the two most important markets, Denmark and Sweden, due to low construction activity for larger projects and for residential buildings. In the Swedish market, we have prioritized maintaining a stable gross margin, which in the short term has negatively affected sales and capacity utilization.

On the positive side, sales improved in Norway as well as the sales through the builders merchant sales channel in Sweden. The active decisions to close down or discontinue businesses in both Eastern Europe and in Sweden have had a notable impact on the sales numbers.

Now let's have a look at operating profit. For the group, both results and margins improved in the quarter. Adjusted operating margin increased to 6.5%. Operating profit has been adjusted for one-off items and restructuring costs of SEK 106 million. These costs primarily relate to structural measures aimed at aligning the fixed cost base with current market conditions by optimizing the branch network in the major ventilation markets. The actions are expected to generate a full year savings effect of SEK 40 million from the beginning of 2027.

In Ventilation Systems specifically, we saw a satisfying improvement in the result despite negative currency effects. Adjusted operating margin increased to 8.5% for the quarter compared to 7% the previous year. Continued efficiency actions and structural measures to reduce our cost base have contributed to the results. Profitability in Profile Systems decreased due to low sales volumes and low capacity utilization. The profitability development in Profile Systems is a clear disappointment.

I will now hand over to our CFO, Lars Ynner, who will take you through our cash flow and financial position.

Thank you, Ola. Lindab Group delivered a strong cash flow in the fourth quarter, generating SEK 521 million in cash flow from operating activities. Net debt decreased to SEK 4.262 billion, which is in line with previous levels. Our target for net debt-to-EBITDA is that it should be below 3x. In Q4, the ratio improved to 2.6 compared with 2.7 in the previous quarter. The financial net debt-to-EBITDA ratio remained stable at 2.1 at the end of December.

Ola, now back to you and look at our focus areas for the year.

Thank you, Lars. Let's now look at our focus areas for profitable growth.

First, some comments about business area, Ventilation Systems. As already mentioned, structural measures and cost reductions carried out during 2025 have had the intended effect, contributing to a more cost-efficient organization and improved profitability as a result.

We also see good effects from our in-sourcing initiatives, where we feed production volumes into our automated central factories, resulting in improved gross margins. In 2026, we will continue to streamline the footprint in Europe both in terms of production sites and branch network.

Let's move to the next slide, where we make some comments about Profile Systems. In 2024, Lindab took the decision to exit the Profile Systems business in Eastern Europe due to unsatisfactory development. The divestment of the Profile operations in Hungary was completed during the fourth quarter in '25. And in December, we also entered into an agreement to divest the operations in Romania which is expected to be finalized by the end of Q1 2026.

With this, the exit of Profile Systems in Eastern Europe is completed. And in that region, we will in the future focus on the Ventilation business.

Sales and profitability are still at unsatisfactory levels for Profile Systems in our home markets in Scandinavia. To increase volumes, we will strengthen our sales efforts, and we are also planning further efficiency measures in the business area to improve the results that are currently at an unsatisfactory level.

Now let's move over to a key focus area for Lindab Group going forward, and that is the acquisitions. Acquisitions will continue to be a cornerstone of our strategy. During 2024 to 2025, we acquired 7 well-run and successful ventilation companies that complement us in certain product areas or geographical markets. We did notice in 2025 that the acquisition processes took longer time than before, but we continue to have good dialogues. We have a good pipeline and we expect to increase our acquisition pace again in 2026.

Now let's go to our market outlook. Our market outlook is slightly brighter than before, but there are, of course, uncertainties in this world with geopolitical instability. According to forecast from Euroconstruct, the European construction market is expected to return to growth in 2026. If we zoom in on the European ventilation market, forecasts indicate that it will grow slightly from low levels but perhaps with Germany as a question mark.

For the market influencing Profile Systems, a gradual stabilization is expected during the first half of 2026 with some indications of growth for the second half of the year. A delay in the market recovery cannot be ruled out due to these geopolitical factors, and that is why we are focusing so hard on measures within our own control to influence both sales and profitability.

In the medium and long term, we have a positive market outlook. Our Ventilation Systems provide energy savings for buildings and help to create a healthy indoor climate. Thanks to efficiency measures and our implemented investment program, we have a solid platform for profitable growth when market demand increases.

That concludes this presentation. And Lars and I are now ready to take your questions.

[Operator Instructions] The next question comes from Lara Mohtadi from ABG Sundal Collier.

Lara here. Just a couple of questions from my end. It's obviously promising to hear that parts of the European markets are recovering. And you mentioned stabilization in many parts of Europe, but Germany is still weak. Are you seeing any signs of stabilization in this market maybe in the renovation sector? Also, should we just expect Germany to be a drag on organic growth throughout 2026?

Thank you, Lara, for this question about Germany. It is difficult to foresee how that market will develop. There are in recent months some positive indicators and confidence indicators for Germany, but there are also quite some worrying signs about the loss of jobs in the manufacturing sector in Germany and the consequences of rising energy bills in Germany.

So quite difficult for us to evaluate where that will end. We are expecting a flattish sales development in Germany for 2026. We don't dare to hope for an improvement. And we are aligning our actions with that scenario. If it should be a better outcome than we expect, then, of course, we are very pleased with that.

Our market shares in Germany are not at the same strong level as in certain other markets. So what we, of course, have the possibility to do is to fight for higher market share even in a flattish market. So we can do a lot through our own efforts.

Okay. Very clear. And then just sort of a follow-up on this. You reported positive organic growth in Ventilation Systems, and this was primarily driven by the Nordics. Could you maybe just unpack the drivers of the Nordic recovery? Is it maybe a result of improved demand in new project starts? Or is it just a temporary restocking among distributors?

Let's start from the end there. I don't believe it's a restocking effect. Our product assortment is so broad that it is difficult for our customers to really stock up in advance. So it is a consequence of an increased activity level. And we do see that there are some positive signs in terms of request for quotations, building permits, et cetera.

I also think that the comparison period in 2024, the Swedish market was really down, and we have seen during the last 6 months of 2025 that the Swedish market activity has started to pick up month by month. And that is an important market for Lindab because that is where it all started for us as a group. So Sweden is the main driver, but I would say that also in both Finland, Norway and Denmark, we saw a good sales development in the fourth quarter.

Sometimes the Nordic region is the first to start to decline but also the first to start to improve when the cycle turns up. So hopefully, we will continue to see the signs that the Nordics are taking the lead. But honestly, it's probably too early to say. Just one quarter of a small organic growth, you should not make too big news out of that. But of course, for us, it's one positive sign. And hopefully, there will be more.

Great. And on the Profile Systems, you mentioned a stabilization in H1 and maybe some growth in H2. What gives you confidence in the H2 recovery? Is it the interest rate cuts stimulating maybe residential starts? Or is it more market share gains? I mean, what I'm trying to ask is how confident are you in the recovery in H2?

I think one part of that is all the activities that we are doing within the group in terms of sales organization, new products and the things that we can do through our own efforts. The second thing is, after a longer period of very low demand, there is this pent-up demand waiting to happen. And I think that, in combination with lower interest rates and some stimulus to parts of the construction sector, should lead to at least some improvements of the demand gradually during 2026.

The next question comes from Sofia Sorling from DNB Carnegie.

A couple of questions from my side. I'll start with Profile Systems. So would you say the organic decrease in sales of 15%, is that in line with underlying market development or less or more? That is my first question.

I think that we have declined more than the market has declined, and that has probably two or three explanations. One is that when we talk about organic growth, the businesses that we have closed down or discontinued without divesting them, in our numbers, that counts as negative organic growth. So we have made a decision to stop activities or to discontinue a business, and that is part of these numbers. So that is one reason.

Second reason is that the sandwich panel line that we moved in the north of Sweden has not come up to speed at that pace that we expected. So we have failed to come up to full production speed on that line, underestimating the challenges when moving that big operation. So that has also negatively impacted our sales. So it would be fair to say that we have done worse than the market.

The third reason is we have really tried to have price stability and protect gross margin. And it's a very delicate balance, how to balance volume versus gross margin. And maybe we have gone a little bit too far there, and we have to be a little bit more aggressive and proactive in our pricing to get the right volume into the factories. They have been underabsorbed in the past months, thereby negatively impacting also the profitability.

Yes. Okay. So two follow-up questions there. So regarding this move of sandwich panel production to Pitea, when do you expect this to be at full speed again?

I think we took good steps in terms of efficiency and output in the past 2 months, but we also have to remember that we are right now really in low season with the winter and snow and everything, a pretty hard winter in the Nordics. So we will probably start to see the effects of the improvements during Q2 and onwards.

Okay. Yes, and you also touched upon this capacity utilization that is very low. Could you quantify that, how high the capacity utilization is currently?

Let's just say that it is too low. I mean, after 3 years of declining volumes in Profile Systems, volumes are clearly below what they optimally should be. I would say, for us to be able to run those factories at healthy levels, we would need to see at least 20% higher volumes than we are able to be really efficient. So what we do right now in the meantime is, of course, to look at how can we adjust those fixed costs to a lower level of demand, both short term and also long term.

Okay. Yes. And just a final question and it's related to the Ventilation Systems division. So you mentioned different demand in each geographical region. Would you say it depends on a specific market segment or like type of products you're selling? Or is it mainly due to the different demand in each geographical region, would you say?

I think one main theme is that products that typically go into new construction or products that go into construction of new residential buildings, they have been hit the worst. And products that are more, how do I say, dual use, both new construction and renovation, there the development is better. So everything having to do with energy renovation performed relatively well.

The segment that we have that is also addressing fire safety in Ventilation Systems has developed really well. I think both legislation and what we read in the news about terrible fires spreading too quickly have increased the focus on the importance of fire protection and smoke protection in buildings. So there we have -- we can also mention our sales to data centers is, of course, growing at a healthy pace.

So we have definitely growth segments both, say, product-wise and geographically. But the level of new construction in Europe is affecting us negatively.

[Operator Instructions] The next question comes from Anders Jafs from SB1 Markets.

Just a quick question from my side relating M&A dialogues going forward. You mentioned that they have been a bit slower during 2025. I was just wondering if you could give some more color on that and how you think the M&A market should progress going into 2026, and if you see the same tendencies in the beginning of this year.

Thank you, Anders. Well, I think if you are contemplating selling your company or divesting a company, you're, of course, interested in the fair valuation of that company. And during a period where not only Lindab has been affected by a pretty tough market, also many of the companies we are looking at have experienced a tough market and probably a little bit lower sales than they had planned and also a lower profitability than they had planned.

And they are more in a wait-and-see mood right now to come back to higher profit numbers so that they can get a better valuation of their assets. And if they should sell now, they are interested in a valuation that is maybe too aggressive for our taste. So that means that the discussions around pricing and multiples and valuation, they tend to drag on. And sometimes you put them on hold and come back a little bit later.

I think it's too early to say if 2026 is going to be any different. So it can go two ways. Either profits start to improve or the sellers are realizing that maybe this is the new normal when we don't have 0 interest rates, et cetera. So we will have to see. But we have good dialogues and I'm quite optimistic.

Yes, of course. Of course. Just a follow-up on that. Have you noticed any particular deals in any particular regions of late where that maybe stands out? Or is it the same across the board in Europe currently?

I think with the exception of certain companies that have a high exposure to data centers, where we have seen some deals that have been at very, very interesting valuations, then except for that, I think in the past 6 months at least, there has been a much slower rate of acquisitions in the ventilation space.

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

Then we would like to thank everybody who listened in. We, Lars and me, we say thanks for 2025, and full focus on continued improvements in '26. Thank you.

Thank you.

Good morning, and welcome to this presentation of Lindab's Q3 report. I'm Ola Ringdahl, President and CEO of Lindab Group. And next to me, I have our CFO, Lars Ynner. We will begin by presenting the results for the quarter, and after that, we will take a closer look at our key focus areas and end with the market outlook. Following the presentation, there will be a Q&A session.

Now let's start with some highlights. Our largest business area, Ventilation Systems, showed strength and achieved the highest sales and results ever for a third quarter. The adjusted operating margin reached 10.6% for Ventilation Systems and 9.7% for the group overall. Thanks to efficiency improvement and structural measures, both our gross margin and operating margin have strengthened. In many markets, we could see good sales growth, but in Germany and Sweden, we are still affected by low market activity. Our smaller business area, Profile Systems, continues to be negatively impacted by low activity for larger building projects, and this is particularly evident in Sweden. Since it is still hard to predict, we focused on measures within our own control to improve profitability.

Now let's take a closer look at our sales development. In Ventilation Systems, sales increased by 2% compared to the same period in '24. Sales in comparable units was down by 1%, a smaller decline than we have seen in over 2 years. Many important markets for Lindab such as France, the U.K. and the Netherlands experienced positive organic sales growth. In Germany and Sweden, however, market activity remained low, influencing sales negatively. Acquisitions contributed positively with 6%, and currency affected sales negatively by 3% within Ventilation Systems.

For the business area Profile Systems, with its higher exposure to the struggling Swedish construction market, there was a decline in sales. Activity for larger building projects has not yet gained momentum. What is positive, though, is that sales through builders' merchants is continuing to increase and actually showed double-digit growth in the quarter. The negative organic growth was significant, but it should be mentioned that around half of that effect comes from active decisions by Lindab to close businesses or discontinue businesses in both Eastern Europe and in Sweden.

Now let's have a look at the operating profit. Ventilation Systems delivered the highest results for the third quarter ever with an adjusted operating margin of 10.6%. If we adjust for negative currency effects, the adjusted operating profit increased by 17%, a significant achievement, and I thank my colleagues for a very good job. Continued efficiency actions and structural measures to reduce our cost base have contributed to the strong results. Our cost reduction program, which we announced at the end of '24, reached full effect in July. Further structural measures are underway to optimize operations even more.

In Profile Systems, the adjusted operating margin of 7% was negatively influenced by low sales volumes and continued low capacity utilization. This has been partly compensated by lower costs, thanks to structural measures. I am not satisfied with the results in Profile Systems, and we plan additional efficiency actions and structural measures to improve profitability in the business area.

The group improved results as well as operating margin. And when you read the report, you will notice some onetime effects that we adjust for, and let me make a few comments on that. One-off items in the quarter have a positive net effect of SEK 176 million. This is primarily due to a reduction of the earn-out consideration for Airmaster that was acquired at the beginning of '24. Airmaster continues to deliver high profitability according to our expectations. However, the company has not met the ambitious sales targets that were part of the earn-out mechanism. The one-off items have no impact on our cash flow.

Now I hand over to Lars Ynner for a look at our cash flow and the financial position.

Thank you, Ola. Lindab delivered a strong cash flow in the third quarter with cash flow from operating activities increasing to SEK 335 million. Net debt remained stable at SEK 4.411 billion, which is in line with previous levels. Lindab's target for net debt-to-EBITDA is that it should be below 3x. In Q3, this ratio stood at 2.7x, unchanged from the previous quarter. The financial net debt-to-EBITDA ratio was 2.1x at the end of September, also unchanged compared to the previous quarter.

Ola, now back to you and a look at our focus areas for the year.

Thank you, Lars. Let's take a look at our focus areas for 2025. In Ventilation Systems, we have implemented structural measures and cost reductions to improve profitability. Our most recent program was announced in Q4 of last year, and it included the closure of 10 sites and the reduction of 180 full-time positions, of which 160 are in Ventilation Systems. These measures have been successfully implemented, and we have full effect from these savings from July of this year. To capture the full benefits from the 29 acquisitions made since 2020, we are also accelerating the work to capture efficiency synergies across the group. During the autumn, we are now conducting a review of our production footprint and also our branch network. Further structural measures can be expected as Lindab continues to optimize operations and our cost base.

Now let's take a look at our progress with the divestment of Profile Systems in Eastern Europe. As previously communicated, Profile Systems is making an exit from Eastern Europe due to poor profitability development. The strategic focus will be on the home markets for Profile Systems in Scandinavia, where Lindab's market position is strong and where there are significant synergies with the Ventilation business. In July, an agreement was made to divest the Profile Systems operations in Hungary, and this is expected to be finalized around the turn of the year. We are also in ongoing negotiations regarding the divestment of our business in Romania. Following the transactions in Hungary and Romania, our operations in Eastern Europe will focus completely on the ventilation part of our business.

Now let's move on to our third focus area, acquisitions. Acquisitions will continue to form a cornerstone of our strategy. In July, the acquisition of the Polish ventilation specialist Ventia was completed, bringing additional competencies in sales of technical products, including air handling units. The group management team visited Ventia in Poland in September, and I must say I'm impressed by how they work, and they seem to be in a strong growth phase at the moment. We continue to develop our acquisition pipeline. The ventilation market in Europe is still fragmented, and there are many interesting opportunities.

Now let me move on to the outlook. In the medium and long term, we have a positive market outlook. Our ventilation systems provide energy savings for buildings and promote a healthy indoor climate. In the short term, we expect sales to stabilize at current levels during the rest of '25 with a gradual market recovery anticipated for 2026 for both Ventilation Systems and Profile Systems.

Specifically for Ventilation Systems, we are pleased to see organic growth in several markets, which could indicate that the construction market is starting to recover. We're also seeing an increasing number of requests from customers as well as forecasts of increasing building activity. The tricky question is when our sales trend can turn into positive territory in Germany and Sweden, 2 important markets for Lindab. For Profile Systems, larger projects remain at a low level, especially in the Swedish market. However, since the beginning of the year, we have seen increased sales to small projects and in the sales that goes through builders' merchants. Interest rates are down significantly in Sweden and construction forecasts indicate growth for 2026. So there are some chances at least of improvements, although from a low level.

To counteract the market decline and to protect profitability, Lindab has implemented strong efficiency measures over the past 2 years, and there is more to do. We will continue to implement further structural measures to profitability. We are focusing on what we can influence, so we are not too dependent on how the market develops. When the market starts to pick up again and we see organic growth, Lindab is very well positioned for profitable growth, thanks to all efficiency measures and thanks to the finalized investment program.

And with that, we are ready for your questions.

[Operator Instructions] The next question comes from Sofia Sörling from DNB Carnegie.

Yes. Ola and Lars, I have a first question on ventilation market and especially on the ones that you mentioned in your report that are going quite okay. So about France, U.K., Netherlands, Italy and Ireland. And you mentioned that you have good organic growth here. What is your -- or how should we interpret that type of comment? Do you see that actually the market has changed on these regions? Or is it more like stabilized and that you have more of easy comparison numbers? What is your view here?

I think comparison numbers are never easy. Thank you, Sofia, for the question. And I think we are not only dependent on market, of course. I mean, what we do in every country plays a very important role. I think in the countries mentioned, these 5 countries, we have very strong sales force, high dedication. And it's not so easy to say how much the market is helping us and how much we do from our own efforts. But we can probably say that the markets in those countries, at least they are not shrinking. Maybe they are on a stable level, but we are doing a good job in our sales and operations in those countries. So we are increasing our sales.

Okay. And a follow-up question on market outlook. You mentioned the challenges in Sweden and Germany that you see a negative development. Would you say that this is -- that it's more at the same level with the demand within ventilation? Or do you see any other more of the -- more negative trend during the quarter? Or is it more stabilizing here?

No, the trend has not worsened. It has been difficult in Germany and Sweden for the past 1 or even 2 years. And we are probably at some kind of bottom of the cycle. So it's not that we saw any worse trend in Q3 than we did in the second or first quarter of the year. So maybe stable, low level is maybe fair to say.

Okay. And about Airmaster, you mentioned that you could -- you expect that you will keep the high profitability level here but sales expectation perhaps will be lower. Can you give us any details on your expectations on perhaps sales development within decentralized ventilation? And also if you could give us roughly how big this part is within your Ventilation segment.

So Airmaster are performing well in terms of profitability and around the same levels as when we acquired the company, which I think is very strong given the market development. In terms of sales, they are performing approximately on the level that I expected when we negotiated the acquisition. But the sellers of the business had higher expectations on the sales level for Airmaster in the next years. So I think I'm -- there are no major surprises for me. We follow the plan and the expectations. The fact that we say, dissolved earn-out money in the report is more related to the -- how the targets were set in the earn-out mechanism. So I would say I'm very comfortable with how Airmaster is performing. There is a future upside, of course. But given how the market is, I'm quite pleased with their performance.

Okay. And you mentioned -- or you strengthened the adjusted EBIT margin for Ventilation during the quarter. And you mentioned that you have fully succeeded to implement this cost measurement since July. But if you need to do further measures that you also mentioned in the report, what more can you do, if you can give us some more explicit examples?

We are always reviewing where is it optimal to produce certain products, how many branches do we need to serve our customers, how many warehouse points do we need to have a good logistics setup. And we gradually find more and more opportunities. So we have done a lot in the past 2, 3 years in terms of restructuring and improving efficiency. And the more we do, the more we find. So I'm indicating here that there is more to be done to optimize Lindab's footprint, both in terms of where we produce what and how we distribute it and how many distribution points we need in the organization. And of course, with the acquisitions that we have made, our footprint is developing, and we are getting more and more sites. We have in total close to 200 sites where we have activities in Europe. And obviously, there are [ opportunities ] to streamline that footprint gradually over time.

Okay. And my last question, you did quite significant write-downs of intangibles within the Ventilation segment. What was that related to?

I move the microphone over to Lars Ynner so that I'm not saying anything wrong.

Sofia, it's mainly related to Airmaster, the intangible assets, yes. So...

The next question comes from Joen Sundmark from SEB.

So firstly, I was curious about sort of the trend throughout the quarter. It seems like the start of the summer was quite weak, listening to some of your peers. Would you say that, that's sort of the case for you as well? Or have you noticed any specific trend throughout the quarter? Sort of was September better than July trend-wise?

Thank you, Joen. Yes, I've also heard some other companies commenting on that pattern. And typically, when we have -- when we are say in the business cycle where we -- the business is a bit slow, people or companies tend to close down a bit longer during the summer break and also over Christmas. And I think we did see that also this year. So the sales and order intake during July, August was a bit soft. September, we came back quite strongly. So we have a positive momentum, and we were quite pleased with the sales levels for September isolated.

Sounds promising. And would you say that sort of the uptick in September is driven by pent-up demand from lower volumes in July and August? Or sort of is this something that we should extrapolate? Or is it rather just pent-up demand that's coming out of September, do you reckon?

Yes. That is, of course, difficult to speculate about. But we see signs of, say, a little bit stronger momentum in the sales and in the markets for Ventilation Systems coming out from that summer holiday period. So I would not say that the strong September is only a result from pent-up demand, but probably indicating a little bit stronger momentum in the demand.

Okay. Makes sense. And then on the M&A side, it's slowed down a bit recently, and you are relatively close to your sort of leverage target. But could you talk a bit about the pipeline there? And when you expect to start acquiring businesses again, sort of your reasoning around those topics?

We had really a lot of M&A activity in 2024. And of course, that had some consequences on the pipeline, how many companies we have moved to final stages of the acquisition pipeline. It takes a little bit of time to fill up the pipeline again. I'm very pleased with the acquisition of Ventia in Poland. We are filling up our pipeline, and we have several good interesting discussions.

As long as we talk about small- to medium-sized acquisitions, I'm not worried about the financial leverage. We are generating really strong cash flows and continuing to do so, and we could see it in the Q3 report as well. So we have good capacity to continue to make add-on acquisitions. Then, of course, if we speak larger acquisitions, it's a different matter. But the typical acquisitions we have made for the past 5, 6 years, and we can definitely continue to do that. And I would say sales equivalent to between SEK 500 million and SEK 1 billion annually, we can cope with that with our current cash flow and profitability.

Okay. Very good. And then as a final question, sort of in terms of market share and sort of on the back of the fact that it's been a rather tough market for the past almost 3 years now. Have you seen areas where competition is easing, maybe some of your smaller peers are going out of business? Or would you say that your market share in general is rather flat overall?

Unfortunately, we don't see enough companies going bankrupt. But the profitability demands for, say, smaller companies or privately held companies, they are fine to earn 0 for some period. And we have other demands on Lindab Group, of course. We are -- it's a balancing act. [ Market versus ] price management, and then we also have to take into account the capacity utilization in our factories. I think we have managed that balance well. We see gross margin development is good. Efficiency improvements are helping. We try to have price stability. We are selectively taking market share, but we are not, let's say, sacrificing our gross margins just to take market share. So this is a balancing act.

But I do feel now that we are well invested. We have highly efficient production units. We have made several cost reduction programs, et cetera. I think we are in a position where we can be a bit more aggressive on taking additional market share. I feel that we have that strength. So I'm looking forward to be a little bit more -- playing a little bit more offense in the next quarters.

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

We know that there are many reports today and a busy schedule for all of you. We want to thank you for listening in on Lindab's Q3 report. And I want to extend my gratitude to all fantastic colleagues in Lindab Group who made this possible. Thank you all. Have a good weekend.