Sdiptech Stock

[Operator Instructions] Now I will hand the conference over to CEO, Anders Mattson; and CFO, Bengt Lejdstrom. Please go ahead.

Yes. Hello, everybody, and welcome to our quarter 3 report 2026. I'm Anders Mattson, CEO of Sdiptech, and I will present today together with our CFO, Bengt Lejdstrom. I start with a short introduction to Sdiptech for any new listeners. Sdiptech acquire, develop and create a long-term home for niche companies within attractive infrastructure segments. Today, we consist of 35 companies, that's 2 more than last quarter, and we operate in a decentralized structure and each company is responsible for the day-to-day operation.

We divide the group in our 4 business areas and the 4 -- each business area has clear underlying growth trends for the future. On the rolling 12, Sdiptech, as a group, has SEK 4.9 billion in revenues, roughly SEK 1 billion in adjusted EBITA and an adjusted EBITA margin of close to 21%. And these are numbers excluding all companies being divested during the last 12 months. Coming into the third quarter, I start with some highlights. On a strategic level, we experienced a continued solid demand from our diversified portfolio. Our focus on the Infrastructure segment is truly a strong driver for us as a group.

We work actively with our businesses to balance the growth opportunities with the working capital requirements and also the CapEx requirements when we are growing at this pace. We have a continued good M&A pace, 2 acquisitions in quarter 3 and last 12 months, we have acquired 5 companies. Summary, we had a strong -- the strong demand resulted in an organic net sales growth of 13% and a total net sales growth of 19%. We also see a positive momentum for the profit development with an adjusted EBITA growth of 11% and organic adjusted EBITA growth of 6%.

Cash conversion of 62% in the quarter and last 12 months at 81%. We have fluctuating cash conversions over the quarters, but it's important for us to stay between 70% to 90% for the rolling trend. And we had a lower -- a little bit lower cash conversion in the quarter. It's primarily due to inventory buildup for a good order position, and we will come back to that later as well. On a final note, it's positive that all our 4 business areas are growing organically in Q3. So looking specifically at our net sales development in the quarter.

Net sales came in just above SEK 1.3 billion, which is 19% growth in the quarter. We had a strong organic sales growth of 13%. In the quarter, we had a positive currency effect for the first time in a while with 1%. And then approximately 5% of the growth is coming from our M&As. In the quarter, all our 4 business areas showed a good sales growth and a strong demand, especially from Supply Chain & Transportation and Energy & Electrification. Supply Chain & Transportation had some specific large orders in the quarter that boosted the sales figures, and I will talk more about that under the Supply Chain business area.

And if looking at a company level, the majority of our companies showed organic net sales growth, which is a positive indication of the good demand overall in the portfolio. If we're looking at our geographic distribution of the sales, it's no significant change there. It's U.K., our largest market with around 49% of the sales. Proprietary products is 68% of the total sales and the service and installation are then, as we always say, primarily on our own proprietary products. Continue to our profit development in the quarter. Adjusted EBITA amounted to SEK 261 million which is 11% growth in the quarter.

It was a solid organic growth of 6% and the currency effect was flat, so approximately 5% is coming from the M&A growth. In the quarter, all business areas showed adjusted EBITA growth and especially strong development in Supply Chain & Transportation and Safety & Security. The growth in Supply Chain is mainly driven by the acquisitions. Water & Bioeconomy reported a minor growth and it's positive with an improved performance from this business area as well. Coming down to the margin. Adjusted EBITA margin amounted to 20.0%. That's down from 21.3% last year.

And there are primarily 2 reasons for the decline in the margin. The first one is our sales mix with a high net sales growth. The mix has changed quite a lot in this specific quarter. The second reason is specifically in Supply Chain & Transportation, where we had the largest decline of roughly 2.5 percentage points. And the main reason is a large drop in margin from a specific company in the business area, and I will talk more about that as well later when I come into the supply chain part of it. And by that, I hand over to you, Bengt.

Thank you, Anders. And I will continue with some more details on the cash flow to start with. Sorry. Where is -- the slides are jumping. Cash flow generation. And we have, as Anders said, then we are in the middle of our preferred span of 70% to [ 90% ] on the last 12-month basis. However, it was weaker in the quarter, 62%. And the main effect are 2, you could say. We paid in comparable terms, more taxes in Q3 than we typically do. So we paid less earlier in the year, but looking at year-to-date or the last 12 months, we were actually lower than last year, but in the quarter, we are much higher.

So that affects the cash flow on that line item. And then the major contributor to the weaker cash flow is the buildup of working capital. And we have some strong seasonal companies in the group, our Finnish HillTip with their snowplows and salt spreaders. And they are, of course, building inventory in order to sell as much as possible now when they are in season, and they also had some big orders coming in, building up, both working capital and accounts receivables. And all in all, we have a good momentum in the sales, especially in the later part of the quarter in September, and that built accounts receivables as well.

So that's really the main contributor to this weaker cash flow. But the good thing about that is that it's because of increased sales in the group. Looking then at the free cash flow and the difference is that then we also consider the CapEx spending and the leasing amortizations. So that was a little bit lower than last year, and that's because of what we saw on the previous slide, lower cash flow from operations, but also slightly higher CapEx. But we have said previously this year, and we repeat that, that we are invested in some -- investing in a number of companies, not the least in the Water and Bio, but also in other companies in other business areas for operational efficiency and to meet a higher demand.

And also, like many others, I guess, we invest in IT systems to keep up with that as well. So that has been driving CapEx. So we are slightly above our ambition level of roughly 3% of sales in CapEx. So far this year, we are up 3.8%. So a little bit high, but still it has its reasons. Looking at the earnings per share, that improved compared to last year, but it could also -- one, driver of that which is obvious in the chart, as you see, is that quarter 4 last year was pretty high, and we still benefit from that. So you could expect that last 12-month earnings per share perhaps will not increase as much in the next quarter, looking on a last 12 months basis.

But still, we think that's a good development, and it's the profit generating, of course, which is the backbone of that. And could perhaps also say lower interest rates. And then that all in all, affects then, of course, the leverage ratio, which increased a little bit to 2.95 in this quarter, and that's because, again, of the weaker cash flow and the buildup of working capital, but also that we made 2 acquisitions in the quarter, which we will come back to and present. And they represent roughly SEK 40 million in a run rate profit, which is roughly some 40% of what we have expected for this year, but it's all in 1 quarter.

So of course, that makes a little bit of a hike in these numbers since we only count the profit since they joined us in August and September, respectively, but we put the full debt in this equation. So -- but we have said that as well that it may jump a little bit up and down through the quarters but we have our ceiling of 3 and a long-term slowly but steady decrease of this leverage. Looking on the right-hand side of the chart, you see some return KPIs. We can start from the top, we have the classic profit over working capital, and that has been going down slightly since last year. And again, because of the buildup of capital employed through working capital, but still at a high decent level.

Our operational ROCE, which is the return on capital employed in the companies, so that's excluding any goodwill or other immaterial assets at the acquisitions, it's 60%. Same reason there, why that's a little bit lower. And then finally, at the bottom, you have the total capital employed and the return on that one, and that's increasing. And we said already a year ago when we announced that we should divest a number of companies that the return on capital employed will increase because of that, but also to have a stronger, more stable portfolio. So that's slightly improving and will continue to improve slowly but steadily.

And as an extra note, you could say on the balance sheet debt items since we have done some activities on the debt portfolio during this year, how that has changed in this chart since 2021 then that first of all, you could say that as it feels in this chart that the earn-out debts, the provisions for future earn-out payments have lowered both because we were a little bit low on acquisitions a few years ago, but also that we reduced the use of earn-outs in the acquisitions and being paid out in a shorter term than 5 years, which we typically have had, but now perhaps more 3 or 4, but also to a lower amount.

So that's good, but it has been a very good tool for us to fund our acquisitions through the years. But now we have the capabilities of our more traditional financing, so that becomes a bigger part of it and pay them upfront instead. And so we have reduced that. And then as you remember, in March this year, we redeemed the preference shares, SEK 175 million in nominal value, which, of course, means that the earnings dilution becomes less, so more earnings per share. And we also repurchased some of the outstanding bonds at that time, SEK 250 million of the SEK 800 million in total.

In September this year, we redeemed or bought back the remaining part of the bond, SEK 550 million, and that has affected our profit after interest rates paid in this quarter since we had to pay a penalty fee of doing this early redemption. But pure mathematics said that, that was rational to do since the interest rates are much lower on the new bond that we issued and we also issued a lower volume, only SEK 400 million, but we could reduce the margin on that bond from 490 basis points on the old bond to 200 basis points on the new bonds or less than half. So that was easy math to make it of value for everyone to make an early redemption and then come up with a new one instead. So all in all, that means lower interest rates for the group going forward.

All right. Then I hand back to Anders.

Yes. Thank you, Bengt. I will go through then our business areas. Start with Supply Chain. It's been a lot of happening in the business area with a good momentum with 27% growth and 12% growth in adjusted EBITA. And several of our largest companies in the BA, including [ GAH, ] who's making the refrigeration, the transport refrigeration units, [ e-l-m, ] making the specific attachments for forklift, CERTUS, our port automation company; and HillTip winter snow maintenance products. All of these 4 had a very good development in the quarter. From a sales perspective, the growth of 27% is, of course, high, and we have 2 main reasons for this.

The first one is 4 new acquisitions coming into the business area and adding top line growth. Then we have -- another reason is in HillTip. HillTip has, during the year, entered into a new product segment for highway salt spreading equipment. Primarily, they've been working a little bit more on the smaller roads, parking lots, et cetera, and now entering the higher or the bigger products for the highway segment. And that segment is growing quite a lot. And HillTip partly delivered a large order, including salt spreading equipment and the truck itself. And that, of course, boosted the sales number in the quarter.

This big order will continue to be delivered in quarter 4. But long term, we don't foresee to always include the truck as part of the equipment sale for these kind of highway salt spreading equipment. The margin, if we look at that, it declined from relatively high 21% to 18.5%. One reason is the larger order in HillTip is affecting margin down slightly. But the main reason is Mecno, our Italian company. And one part of the business model is to sell fully equipped train, including specific unique solution for rail and tramways. And these trains, they are big and complex, so it takes usually one year to build and the cost for these key components has increased significantly during the year.

And unfortunately, we have not been able to charge that to the customer. So it's been affecting the margin a lot. But the company is, of course, learning from this, taking action to improve the situation for the future, but that's affecting the margin in the quarter. And as Bengt also mentioned, we have had an inventory buildup, and this is specifically in this business area. HillTip has been building inventory, and that is not only for the new segment, but it's also for a strong order book in general for Q4. And CERTUS, our company within the port automation, they have also increased inventory for future deliveries, and that is a specific reason for that because it's a risk of a component shortage of a specific camera. So they needed to buy that for stock in quarter 3.

I'm also glad to present that we have welcomed 2 new companies in the business area, A.U.T. and VALE Engineering during quarter 3. A.U.T is a company based in the U.K., annual revenue of approximately GBP 7 million and a stable profitability. The company design and offer customized wheel and caster solutions for many different specific logistic applications. An example in cold storage, you need a specific solution due to the temperature or a specific material for frictions on the floor, for example. And they do all these kind of customized specification and solutions. They have a strong position in the U.K., and they are primarily selling domestic. Another good thing about the company is that they have a pretty stable revenue and profitability pattern over the year, and that is good for us as a group.

Another company then was VALE Engineering that we welcome into the group, also based in the U.K., annual revenue of approximately GBP 5 million and a good profitability. They develop and manufacture equipment for road and infrastructure maintenance. The good thing here is both for the winter maintenance, but also for summer needs. They also have a strong position in the U.K. and primarily, they are servicing municipalities all around the U.K. And we got to know VALE, thanks to our ownership of HillTip. They offer more summer products, and they also have primarily a trailer-mounted solution, as you could see on the picture, and that is different. It's a different application what HillTip sells today. So that's a good thing as well.

Then we're leaving Supply Chain coming into Energy & Electrification. And they had a very strong development or they have had a very strong development over the year, and they continue to perform good in the quarter, 17% growth in sales and 9% growth in adjusted EBITA. And we experienced continued strong market drivers, which creates this good momentum for growth. For example, Phase 3 continues to perform very strongly, and they are benefiting from increasing demand for reliable power distribution. They also, of course, have a little bit of a positive effect from the data center growth, but overall, steady growing in other applications areas as well.

And Rolec is also performing good. They are supported by the ongoing electrification of the infrastructure and the vehicles and primarily selling their business-to-business solutions, the product, the service, the software attached as more of a to the business customers. The decreased margin in the business area in quarter 3 compared to last year is mainly due to one company. Our Swedish company, Unipower, had a one-off project last year with a very high margin in that specific quarter. Then we're moving into Water & Bioeconomy. And that was a positive quarter with a net sales growth of 6% and adjusted EBITA growth of 2%. We have had a number of quarters with declining profit. So it's positive to see that we now return to profit growth in the quarter.

A company that is performing well is our largest company in the business area, Auger. Auger is a specialist provider of drainage, water mains services, primarily towards insurance customers in the U.K. And that as we're reading and we see a lot the challenges with the water and drainage systems in the infrastructure today continue to raise, and we also see that. So we have a 12% growth in profits for this company in the quarter, which is very strong. As we have said previously as well, we have invested in several companies in the business area to strengthen the foundation for the long-term growth. It's too early to say that we now from this quarter 3 and onwards, only will see growth, but we are in a much better situation now compared to one year ago, and the companies are much more healthy to explore and take advantage of growth potentials in the market.

Then we're moving into the last business area, Safety & Security. They continue to deliver very strong results even in quarter 3. They have done that for the full year. And in quarter 3, we have a 9% sales growth and a 31% growth in adjusted EBITA. And we experienced a strong demand in pretty much all safety verticals. Our products within clean air applications in hospital is doing good. So that's medicvent. Our perimeter security for data center, but also for airports and other government building, it's doing very good. That's Eagle performing strong. And Secure Communication is also developing strong for Cryptify.

And the strong margin at high 36% and improved profitability versus last year is due to a number of reasons. One is that we actually see scaling effect here in the business area. So when volume grows, we actually see that the margin is growing as well. A favorable sales mix -- between the companies. We have companies with more recurring revenue as part of the sale, and that has been increasing in the sales mix. And another reason is actually that all companies in the business area is performing at a good level. So we have no poor performer at the moment. That, of course, is also important. But having that said, it's important to mention that these high margins will not be sustainable in the long term. But for the full year now, it's looking strong.

If we're looking at the return on capital employed in the business area, it continued to be high as margin -- both margin and capital efficiency are managed in a very good way in the business area. Then we're coming into M&A. From an M&A perspective, we are on track, and we are clearly increasing our M&A activity in the year. We have now made 5 acquisitions. One thing that is very important is, of course, the strengthening and working with the pipeline, and that has definitely been strengthening over the last 12 months and are now in a position that we want to be to be able to reach the growth numbers we would like, both for this year and then, of course, going forward for next year.

But we respect our leverage target. We want that to be below 3 in total net debt divided by EBITDA. And therefore, we need to be disciplined in how hard we push for new acquisitions. We have to make sure that profit continue to develop. And of course, that we needed to fund the coming acquisitions, not only for this year, but also for next year, of course. And then moving into the final slide in the presentation. I would like to summarize the quarter. We achieved a solid growth of 19% and also in net sales and 11% adjusted EBITA growth, including organic growth in the business areas. We are slowly increasing our return on capital employed, which is a very important long-term target for us.

And our ambition to increase M&A activity for the full year 2026, we are on track on. I also added this last quarter, and I do it this time as well to repeat our current strategic road map that we are working on and we are very much committed to deliver on. We said in 2025 was a year when we put new priorities in for us as a group, and we decided to streamline our portfolio. This year, 2026, we wanted to come back on the growth track, and we wanted to improve the balance sheet and put in new priorities around our growth targets and also our leverage target.

And from next year in 2027, we should be performing according to our full potential to reach the 15% growth and also, at the same time, increasing the return on capital employed. And looking now at our first 9 months in 2026, we definitely look forward to continue on this road map that we have a good performance at the moment in. And by that, the presentation from me and Bengt is done, and we would like to open up for questions from the audience.

The next question comes from Simon Jonsson from ABG Sundal Collier.

First of all, on Supply Chain & Transportation on the margins, when do you expect to be able to offset the higher material costs you think? And in general, get back the margin, align the EBITDA growth with the sales growth?

Yes. It's -- the 2 specific reasons for the margin, as I described a little bit, the Mecno, it will be continued for the year. They are actually performing at a decent level year-to-date, but still the margin will be -- continue to be affected in Q4 for Mecno specifically. And HillTip, they will continue to deliver on those larger orders, which is including the truck itself, which is driving down the margin. So we foresee that for Q4 in Supply Chain to be affected. And then coming into next year, our aim is definitely to increase the margin again. But again, we are also -- we need to mention that, that companies that we are adding to the business area, we acquired companies between 15% upwards in margin, so we need to think of that as well that potentially new acquisition might not be above 20% in margin coming into the business area.

All right. And those acquired companies, are they contributing negative right now as well to margins? Or do you more talk about future acquisitions having lower margins?

I think if we look at the companies we acquired during the year, they are a little bit lower compared to the average margin in the business area. So they are affecting in that perspective right now.

Right. Then just on the cash flow effect here, can you maybe elaborate a bit more on the specifics holding back the free cash flow in this quarter? I mean last year, maybe you had some low-hanging fruit and now it sounds like you are investing a bit more, building a bit more inventory and so on to drive growth. Is that fair? And what does that mean for Q4? Do you think that you will still like offset the declines here with stronger Q4?

Yes. We definitely foresee that the cash flow will be better in Q4 is typically very strong because of these seasonal companies then selling and getting paid, not the least for their product. So that's the main reason. Exactly how much of that will be released in cash during the quarter is hard to specify right now, but definitely, it will be stronger. As Anders mentioned, we have also done some preemptive type of procurement to avoid shortages in some components. But the major effect is the inventory buildup for sure and the accounts receivables buildup. So that should go back the numbers of the working capital.

And let's see. Again, on a rolling 12-month basis, we aim to be somewhere around the 80-ish percent, a little bit up or down, and we are 81% right now. So that's really our goal, our aim to stay in that level. And I could perhaps also mention that when you read our cash flow statements, it's always difficult on which line item, different activities and costs or incomes are eventually showing up. So the best is to look at the cash flow from operating activities after working capital really, and that has decreased, of course, since last year, but because of the things I just mentioned.

All right. And if we just look into maybe next year then and think about overall cash generation and how you prioritize investments and so on, do you think it will look fairly similar? Or are there plans to maybe hold back investment in growth a bit and prioritize higher conversion? Or how do you think right now about prioritizing volume growth and cash flow for next year?

Yes, I think it's a relevant question. As Bengt said, that we are a little bit high on the CapEx. And I think it's working quite good with our model when we are looking at or the -- how we look at the portfolio where we have companies that accelerate where we need to invest for future growth, but we have companies in strengthen, for example, we need to fix something before we really see that we need to invest in them and then we have our harvest company, so to say. And that model, that framework, we are applying to the companies. So definitely, we are more careful about how to invest and where to put the CapEx in which companies for the next year.

We are in that budget strategic planning process right now. But yes, again, it's a balance, of course, with potentially very strong growth opportunities, but we would like to come down closer to 3. That's the aim in CapEx. And working capital is a continuously discussion with the companies, how can we improve? Can we use consignment stock? Can we buy in smaller batches, everything. And yes, we can be better there, and we are working with the companies in regards to that. And that's something we definitely see we can improve for the next year. But we would not like to holding back too much on growth potential at the same time.

[Operator Instructions] The next question comes from Stefan Knutsson from Redeye.

Just a follow-up on the cost inflation that we saw in Mecno, as we have seen quite a hot print on inflation of late, do you foresee like risks in other companies that -- yes, it happened now in Mecno, but do you foresee risks in other companies as well where you're not able to offset price increases -- or cost increases with price adjustments?

It's a good question. We talk a lot about that, that we have -- we foresee a second wave of inflation coming in now into the raw material situation. But the majority of our companies foresee that and they are on their toes, so to say, to price that into the project. The company -- we have a few companies where we have those bigger projects and Mecno for this, setting the price last year, working 1 year without a good indexation of cost in a specific project, that's not best-in-class. So of course, we make sure that our companies, when we have the longer project, the bigger projects, we need to have indexations in the raw material, let's say, bill of material for the bigger projects. So yes, we definitely learn from this as well and make sure that it's not going to happen in other companies. And I would say the risk is quite small that we will experience this kind of situation going forward.

Okay. Very good. And secondly, on the working capital, I mean, it's very positive to see that you post solid organic growth, and it's natural that you have some working capital buildup because of that. But in order for you to reach the return on capital employed of 15%, how much do you think you will need to decrease your working capital in order to close in on that target?

Yes. That's, of course, a million-dollar question. But on one of the slides, you could see the working capital in relationship to the sales, and it has been varying between 19% and 22% and now it has been going up. Our aim is to push that down to probably around 20%. So we think we need -- absolutely, we need to work on that and lower it to a lower level compared to sales for sure. And then -- so that's one component in reducing the capital employed. And then, of course, also to be disciplined with the acquisitions. So we don't add too much goodwill and other items when we acquire companies and of course, then to increase profit. So all of these 3 together then, the capital -- the working capital, what we pay for companies and the profit growth will all together work for an increased return on capital over the years.

Do you have any internal targets for the working capital in relation to sales?

As I said, around 20% is an aim, but we work individually with every company because they have different situations, of course, with the working capital depending on if it's manufacturing or not, et cetera. But on a group level, that's a decent level to be at. So that's our long-term vision for that.

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

Okay. Thank you for the questions here. And if it's no more questions, then we thank you for listening, and we're looking forward to see you after our Q4 report again then, and we continue to work on our side on strengthening Sdiptech further. So thank you, everybody.

Welcome to Estiptech Q2 2026 Report Presentation. Now I will hand the conference over to CEO, Anders Madsen; and CFO, Bengt Lestrom. Please go ahead.

Hello, and welcome to our quarterly report, the second quarter. My name is Anders Mattsson, CEO ofZiptech, and I will be presenting here today together with our CFO, Bain L. Before we start with the quarter, just a short intro to SZiptech for any new listener. We acquire, we develop and we create a long-term home for niche companies within attractive infrastructure segments. Today, we consist of 33 companies. during the quarter, and we operate in a decentralized structure and each company is responsible for the day-to-day operation. We divide the group into 4 business areas and each segment has a clear and structural underlying growth trends for the future. On the rolling 12, Sdiptech as a group has SEK 4.7 billion in revenues, SEK 988 million in adjusted EBITA and an adjusted EBITA margin of 21.2%. And these are numbers for our core operations, excluding the companies that have been divested over the last 12 months. For today's presentation, some highlights of the quarter. On a strategic level, we are happy that we have completed the divestment program that we initiated last year in August. 11 companies plus our remaining elevator business have been sold. We have achieved a multiple around 2025 EBIT for the entire divestment program. And it's important to mention that the logic will be that the proceeds from the divestments will be allocated towards new acquisitions going forward. And that means for us that we are allocating capital where we find it more attractive for the future. From an M&A side, healthy M&A pace, 2 acquisitions in the quarter, and our pipeline has improved over the last 12 months and is now in a good shape for the future. We also experienced a continued solid demand from our diversified portfolio within our attractive infrastructure segment. From a financial perspective, it's a positive momentum with a total adjusted EBITA growth of 11%, organic adjusted EBITA growth of 5% Cash conversion in the quarter, 70%. And if we're looking at the last 12 months, it is at 90%. And this is, of course, is important that because we would like our own cash flow to be the primary funding for our continued M&A activity. And it's good to see improved momentum in Supply Chain & Transportation. Energy & Electrification is having a continued strong demand. Water and bioeconomy is improving, but still negative development compared to last year. Coming into the financial development in the quarter. I should also mention here that the numbers we present here are excluding then the divested companies for comparison reasons. Net sales in the quarter came in at SEK 1.269 billion, which is a plus 14% growth in the quarter. We had a strong organic sales growth of 11% currency effect of minus 2% and approximately 4.5% is coming from M&A growth. In the quarter, all our 4 business areas showed sales growth and especially strong development from Supply Chain & Transportation, Energy Electrification and Safety Security. The main reason for the solid sales development is not a specific business area or a specific company. It's more the continued structural trends that we see from our main segments, like electrification in general in society and also improved safety elements in many different areas. If you look into the right side on the slide there, no significant change in our geographical distribution of sales with U.K. as our largest market. Proprietary Products is increasing to 68% of total sales compared to 67% last quarter. Then coming into our adjusted EBITA, we came in at SEK 258 million, which is a plus 11% growth in the quarter. We had a solid organic growth of 5%. In the quarter, we also had a minus 1% currency effect and then roughly approximately or 6.5% is coming from M&A growth. In the quarter, 3 out of the 4 business areas showed growth in EBIT. Again, the same business areas had a solid development, Supply chain Transportation and in Electrification and Safety Security. We still have a negative development in Water and Bioocconomy, but improved performance compared to quarter 1, and I will come back to that later in the presentation as well. Looking at the margin, adjusted EBITA margin decreased to 20.3% compared to 20.9% last year, and that is primarily due to a growth in Supply Chain and Transportation, which is our largest business area, but also in relative terms, the -- and with that, I would like to hand over to Ben.

Thank you, Anders. And let's have a look a little bit more in detail on our cash conversion. On the top chart there, you see our free cash flow per share compared with our earnings per share. And compared to last quarter, we improved the cash flow, and that's not the least from the business and operational side itself. However, we have the CapEx spending, which is also included in this KPI, the free cash flow has been a little bit higher during the first half of the year compared to our target. We have an internal ceiling or ambition of 3% of sales. We're at 4% so far, but some of the investments are done in the beginning of the year. So we're still aiming for the yearly basis for the CapEx spending, but still an improvement from last quarter, which is good. The earnings per share improved compared to last year. But quarter-by-quarter, it's still a bit affected by some capital losses from the divestments. All in all, we had roughly about SEK 20 million in net negative effect from these transactions and including adjustments of the earn-outs. Looking then at the lower chart, you see the cash flow generation and the cash conversion. We want to be in that yellow marked area between 70% and 90%, and we were exactly at the limits of that to the quarter, we were at 70%. But on the last 12 months, we are at 90% -- and as typically it is during the quarter 2, it's a little bit weaker than we often see a seasonal buildup on inventories, even though that this year, it was lower than last year, but still the buildup was roughly about SEK 30 million to be prepared for deliveries to customers during the second half of the year. We also saw increased accounts receivables from the increased sales. All in all, that part of the working capital increased with SEK 80 million roughly, but the sales again were up SEK 150 million compared to last year. So that number is pretty much what you could expect with that increased -- so pretty good. And we typically see then an improvement on the quarterly cash conversions during the second half. Looking then on balance sheet debt. The leverage ratio was more or less the same as the previous 2 quarters, still at 2.8. That's all in. So that's all debt, including the provisions for future earn-out payments. We have as a ceiling there to be at or below 3, as you can see on the left-hand side of this picture. And even though we made 2 acquisitions in the quarter, we're still at the same level as before those acquisitions because of a strong cash flow coming in from operations and the increased profit EBITDA all in all. So solid development there. And looking at the right-hand side, we see some return KPIs, 3 different ones. If we start at the top, we have the return on the working capital, which as you see during a number of years have been very steady around 80%. That's a measurement of how efficient we manage our working capital, the inventory and the accounts receivables, et cetera. And then the next line is the return on the capital employed in the companies. So that's excluding any goodwill and other intangible assets in connection with acquisitions that we have on the group level. So this is from pure operations. And also there, very stable around a little bit above the 60% which is, of course, very good, and you will see soon how it is split between the different business areas. And then the third and the lowest number then is the total return on the capital employed, including all the goodwill and other things on the group level. And that's pretty slow moving object. We have as a target to come up to 15%. We still hurt a bit of having the capital losses from write-downs of goodwill and also from the sales that affects this number. But once that has been rolled out, these numbers will improve. And even though we will not reach the 15% this year, it's clearly our ambition, even though, as I said, it could take some time, but the direction is clear. So all in all, that looks very good as well. And then I hand back to Anders for the business areas.

Yes. Thank you, Bengt. So coming into the business areas, we start with. We had a good momentum with plus 16% in sales and plus 14% in adjusted EBITA. We experienced an improvement from Q1, and it's good to see that we continue on this positive development in the business area. We had a strong performance from our company, JR Industries, GH and ELM -- and JR Industries, as you might know, they are designing and offering roller shut the door for the commercial vehicle markets, primarily in the U.K. They have a very good market position, and we've been working with the spare parts, improving availability, but also with the pricing of that. So that's part of the good development for JR Industries. GH used to be one of our top 3 largest or they are still or one of the largest companies in refrigeration units for primarily delivery vans in the U.K. We had a slower last year for them, but we saw the orders coming in, and we were building up a good order backlog. And now we can see that we are delivering on that order backlog. So that's a stable business for us. It's continuously you need to replace and you need to update your fleet and you can work with the service element and the spare parts between those replacement cycles as well. So that's good to see for GH. And ELM, just to mention that ELA company producing specific attachment to the forklift industries. They've been having a very good half year 2026, and they have seen a bigger and larger demand for even more customized attachment. -- have been quite bold in pricing those quite large customized solutions. And that's also what we see here. We see good development both in EBIT margin and also in revenue for ELA. So that's positive. On an adjusted EBITA margin for the total business area, we see a slight decrease, and that's primarily as a result of product mix, GH having lower margins in the business area, and they've been growing in the quarter. You can also see return on capital employed is below the target of 50% units here, and that's mainly due to the acquisition in quarter 2. When we calculate that KPI, we use the full balance sheet effect, but only 1 quarter of the profit. That's how we did it. So that's affecting in quarter 2. Then coming into the new acquisitions, and they belong into the Supply Chain and Transportation business area, RSS or rail safety system. We mentioned it already in the Q1 report, but since April, they are now part of the group. They are based in the Netherlands and revenue EUR 6.6 million. The company develops and supplies specific patent magnetic safety barriers, as you can see on the picture, instead of digging or interfering with the ground, they have a magnetic system that we put on the rail itself. They have a strong position in the European market and sell primarily to different kind of rail operators. We own a company already Meko in Italy. They are making grinding solutions. And we see here potential opportunities that actually open door for each other because they have different customers around the world, which could be something to work on for the future. Another new company is GLM. GLM design and produces specific industrial lifting equipment, and they are especially targeting vacuum mixers and smaller cranes. The company is based, as I said, in Denmark and annual turnover of roughly DKK 50 million. And GLM is strengthening our offering within efficient material solutions. We've been looking into that, thanks to a lot to ELM, making the attachments that I described and all kind of material handling equipment could be interesting for the future to look more into as well. Then we are moving on to Energy Electrification. Energy Electrification had a solid quarter with plus 16% in sales and plus 14% in adjusted EBITA. We see a continued strong underlying market drivers, which create good momentum or growth drivers for the majority of the businesses in this business area, especially around electrification in general in the society and also energy efficiency is driving many of the companies in the business area. Phase 3, which are producing specific connectors to all kinds of applications and also Rolec. Rolec who is our EV charging company, even charging primarily towards business-to-business customers. So a fleet manager changing or EV charging, that's where Rolle comes in, especially in the U.K. Both of these 2 companies have performed well in quarter 2 with both sales and profit growth. We also see a slight margin decrease year-over-year, but that's primarily due to the product mix. But it's at a solid level around margin in the business area. Now coming into Water & Bioocconomy. We achieved an improved net sales development in the second quarter with plus 5% sales growth. On the positive side, we see good demand from purified water solutions, especially for cooling applications, and we have 3 companies somehow attached to these kind of strong trends. business area, as we also said last quarter, continues to undergo operational investments to improve the business, and that has a negative effect on the adjusted EBITA of minus 9% compared to the second quarter last year. And some of these investments are not just temporary. Instead, we see these improvements that are needed to secure a long-term development. One example is that your facility in the U.K. to meet the increased regulatory demand for how to treat chemicals, for example. And that's nothing that's going to be a quick fix. That's more improving for the future, which will drive some cost into that specific business. Then we're coming into Safety and Security. The business area showed again a strong momentum with plus 15% in sales and plus 20% in adjusted EBITDA. We experienced a strong demand in all safety verticals, as we call it. Clean Air in hospitals, we have our Swedish company, Medical performing strongly. They've been successfully moving into new geographies in Europe as well, which is good to see. We have security around data center with our company, Eagle that has been -- or continue to developing very good. And we have secure communication from our Swedish company, Cryptify, which is also having a good quarter. Margin, as you can see, is at high 30% and improved profitability versus last year. And the primarily reason for that is a favorable product mix, but also a higher proportion of service and software compared to the previous year. And I think it's also worth to mention the high return on capital employed in the business area and that high in the group. And it's, of course, one reason is that we have some software sales, but many of the companies here are quite disciplined in capital efficiency. And of course, that we can learn from these companies within this business area to other companies in the group as well. Then we're coming into M&A. And from an M&A perspective, we are on track to increase our M&A activity for the year. As already described, we had 2 acquisitions that we closed in quarter 2, total EBITA of around SEK 35 million. Our current cash position and also our credit facilities are strong. But of course, it's important for us to continue to be selective and very disciplined in the valuation going forward. And I also mentioned that, that we have been working hard on strengthening our pipeline over the last 12 months, and we see now we are in a good position that we need to be to accelerate M&A for the full year. And to end this presentation, I would like to summarize the quarter. We achieved a solid growth of 14% in net sales and 11% adjusted EBITA, and that's including the organic growth as we described. We have completed our divestments, and we can now fully focus on creating value for the businesses going forward. We also have an ambition to increase our M&A full year 2026, and we feel we are on track on that. And if you can see to the right here, I also would like to make a final remark on our strategic road map that we presented at our Capital Markets Day last year. What we said was that in 2025, we wanted to define new priorities and decided also to streamline our current portfolio. Now in 2026, we wanted to come back on the growth track with an improved balance sheet and new priorities for the group. And with new priorities that was more focused on return on capital employed as a key metric in all decisions going forward. And then we also said that in 2027, we as a group should be performing according to our full potential and coming up to the plus 15% growth and slowly then also start to increase our return on capital employed. This is to change, but definitely starting to improve that one going forward. And looking then based on the first 6 months in 2026, we still find this road map valid for us, and we look forward to continue this journey that I just described. And with that, we are done with the presentation, and we would like to open up for questions from the audience here today.

The next question comes from Max Bacco from...

Done in the quarter. Perhaps starting with the Water and Bioeconomy segment. You said here during the call that it's not a quick fix. But still, we saw this slight improvement in profitability versus Q1, which was also what you communicated in Q1. Do you still see despite everything going on that the profitability should gradually increase throughout the quarter. Is that still the expectation from your side?

Thank you for the question. Yes, I think it's not that we're going to see now a gradual improvement of the margin. We foresee it's going to be around 21%, 22% now as a level going forward. We, of course, then have potential to grow in this segment and some companies are having a great potential to continue to grow and increase margin. But no, we foresee this more as the level going forward for the business area.

Okay. Understood. And then turning to the Safety & Security segment, which saw a nice improvement here in terms of profitability in the quarter. And you mentioned it was driven by better product mix with a higher proportion of service and software. That mix change, would you describe it as temporary? Or is it more of a structural change within the segment?

No, we -- in this business area, we foresee that we continue at a higher level. We have done not only improvement in the, let's say, software and service sales, but in general, some of the companies have been coming up to, let's say, a higher level, and that's the aim to continue for this high level.

Yes. And then the final question from my side. you touched upon this partly within supply chain and transportation that mix is explaining the slight decrease in margins here in the quarter. But for the group as a whole, have you seen any impact from cost increases on input material, freight costs and so on? And has that impacted anything so far? And on that topic, how do you intend to potentially adjust with price increases and so on towards customers? I know you have spoken before about a bit more proactive approach to pricing and so on throughout the group.

Yes. In supply chain, I think it's -- we haven't seen any specific price increases on, let's say, raw material side, not substantial at least. Of course, freight cost, depending on the oil prices has been fluctuating a bit. But in general, this business area quite large. It's important to continuously work with the pricing and the purchasing activities, which I think many of the companies now do in the business area. But as you also said, that we have been working on pricing initiatives, how to price spare, how to price our service offering better. And with these kind of effects or achievements, let's say, we will try to continue to have a stable margin around this level for the business. But it's -- again, it's -- of course, it's a lot of work that needs to go in to protect and to try then to improve the margin. So it's not an easy pick work here, definitely not.

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

First on the segments here and then maybe on Supply Chain and Transport specifically. Just a follow-up on JR, the strength that you're seeing right now, should we view that as a new stronger base with orders continuing to develop well? Or were deliveries here maybe a bit unusually high to sort of catch up with the backlog, if you understand me.

I think the most stable companies in the group. They have a strong position in the commercial vehicle market in the U.K. and it's all the replacements, they're getting the orders and when new fleet is coming in and being replaced. So JR should not be our star growth company. stable growing more with inflation and then potentially if we take more market share outside U.K., which we then are trying to do together with our company, Store, who we acquired earlier this year. They have a strong footprint in Netherlands and Germany, for example. So no, and I think what they have done now on looking at the spare part, improving the margin, that's not likely to continue. So they have been, let's say, raising the bar. And now it's more about to continue at this little bit higher level than from a margin perspective.

All right. That's clear. And then moving to some more financial questions on the cash flow. And I think you answered part of my question, Bengt already on the free cash flow. You had some higher CapEx here in the first half. And was that the main reason we say, for the lower generation compared to last year? And -- or were there some impact from you having now a higher organic growth, you will say. Inventory did not -- was not a big problem here, though. But yes, what do you see there?

I think, was a quite normal quarter as you said, perhaps slightly -- I think it was -- the quarter was better than last year, the quarter in itself and also on a 12-month basis when it comes to the cash conversion, excluding the CapEx and amortizations, including that then affecting and becoming a little bit lower than compared to at least half year ago, but still better free cash flow per share than last year. So I wouldn't say it's any specials. It's more variations within the normal business buildup of inventory, as I said, it's quite typical this time of year. Our most seasonal companies, the hill with the road maintenance equipment for winter roads, so spreaders and snowpows and so, they need to manufacture their equipment before the season because they cannot catch up with the orders then, which will kick in if they don't. So they build up inventories and also heat work in Norway, which provides heating solutions to reduce frozen when you need to do some groundwork with roads or buildings or so. So they are also very seasonal. So that has an impact on the whole group level still. But I wouldn't say it's any unusual things...

All right. That's clear. And if we instead look a bit ahead here to the second half, of course, you had very strong cash flow last year. And as you also said earlier, it's better season, of course. But what do you feel now looking into the second half of this year compared to last year for the cash flow generation and also given that the CapEx levels where they were here in the first half?

Yes, the CapEx should be a little bit more modest second half. And when it comes to cash flow from operations, we had a very strong Q4 last year. And that was perhaps not what you expect, of course, that's still to be seen, but that was unusually high. So it will be hard to beat that one. But still, it will be better during the second half than first half.

Okay. Clear. Just lastly on M&A, very well done with the divestments and good to hear about the pipeline and recent activity. I also note slightly lower multiples paid here for recent acquisitions compared to history. Do you think that multiples will generally be a bit lower going forward? Or were those deals a bit temporary?

No, I think it's fluctuating a little bit, but we -- when we increase the pipeline and we work, I would say, closer together with the business areas, we create a bigger potential to have better, let's say, valuation, better deals than it's increasing the possibility to be around the 6 and not coming up to the 7 and around there. So in multiples. So I think it is -- yes, we prefer to continue down, but it's nothing that we can guarantee because some of the companies we also see bigger potential to grow with. And then we also are willing to pay a little bit more. But that's -- again, it's about discipline and increasing the number of companies you talk to, so you have the possibility to be selective in the valuation as well.

The next question comes from Anton Enbus from Nordea.

And congrats on a strong quarter here. Good questions already, but a bit of a follow-up. On the strong organic growth, can you elaborate a bit on how much was volume and how much was price? Because you -- for example, you alluded to ELM being quite aggressive in pricing in certain products.

I cannot say more specific about how much volume and how much price there. But I think some of the companies have also had, as we also described it, a tougher quarter from pressure on the cost side. There's nothing unusual in this quarter. We -- I think it's important that we work or that we have the demand, increasing demand. We have seen, I think, some previous years that when we have taken out costs, we've been growing the EBIT, but maybe not so much. So I think the focus now definitely is to make sure that we have -- that we push hard, that we get the momentum in some of the good trends that we see to continue to sell and to get that revenue growth, that's very healthy for us. And then I think also what the pricing initiative we did, we did it with 4 companies in the group only, so to say, was larger companies that we did that initiative with was well performed. So I think we have learned a lot from that. And again, it's not really rocket science. It's about looking at different segments, different customers and see where you there to increase your prices to be more bold. And I think that's where ELM has been very successful. I mean they are -- they have a unique offering. They are quite fast, designing exactly what the customer wants, putting that in production and deliver that quite fast. And you can charge for that. It's some very specific attachments, for example, that they are selling. So it's nothing unusual is being more bold in what the value actually is for what you can deliver for ELM, for example. Hope that answers the question.

Yes, for sure. It sounds promising as well. And so just on the momentum here during the quarter, do you see any change within the quarter and sort of the momentum here heading into H2?

I think the general momentum is good, but we have been -- some companies wanted to reduce the backlog a little bit. So they pushed quite hard in Q2 to be able to improve lead time to get the backlog. And that, of course, we're not going to see in in the same -- for the same companies in Q3, for example. But I mean, then we have other companies that have a good potential. So the good thing here is with the portfolio that some are pushing out because they wanted to reduce the backlog, but other companies have now perhaps a better be done. So again, it's -- I think it's the portfolio thinking here that is proven to be good for us as well.

The next question comes from Stefan Matson from Redeye.

And good progress here in the quarter. Just a follow-up on Supply Chain and Transportation. What was the organic development in the quarter? Maybe I missed it or you didn't mention it.

No, we don't talk about the specific organic development in the different business area. We talk about the organic development on the group, but then on total sales and EBIT growth for the business area. But it's if you're looking at the numbers there, it is a solid organic development in the business area. We had, of course, some M&A coming as well, but it was also a solid organic performance for Supply Chain, especially for, as we said, the GH, the ELM and the JR, they were driving the organic part in Supply Chain.

Very good. And can you also talk a bit more about the integration process of your 2 new business units? Has it been successful? What have you seen so far? -- you hear me?

Yes, I can hear now, Stefan again.

Okay. Just a little bit on the integration process of your 2 new acquired units in supply chain and transportation.

Definitely. So I think GLM, the Danish company coming in, we have had a discussion in the group as well that it can be good that you have other companies in the group supporting. Sometimes it's quite new to coming into the group or in a new group from foreign entrepreneur smaller businesses. And then GLM has been a support for them. So they also have a bearing or somebody to talk to as well regarding reporting and how they have done stuff, et cetera. So from that perspective, it's good. And then also, I think coming into the -- and starting the discussion about potential growth areas. We're looking for GLM, for example, we're coming closer into the Polish market. So that's definitely interesting areas to grow with GLM. From -- if we look at RSS, the rail company, rail protection company, I think it's very interesting to see the opportunities with Mekno. Meko has not completely but quite a lot of different customer base around Europe, but also more international. But I think just mentioning that what kind of solutions do you have when you're securing the rail maintenance programs, we can open up doors for that -- for RSS as a smaller company and not that well known in other markets. So all in all, good start for these 2 companies coming into the group.

Very good. And lastly from me, you mentioned a healthy pipeline yet you acquired 2 companies now in supply chain and transportation. Is that where you see the biggest opportunities? Or is that just a coincidence that it happened to be in the same business area?

I think we've been within the supply chain, and it's not -- it's one reason is because it's quite broad. So it's easy to find different areas that we could find interesting companies. So that's one reason, but it's definitely a push from all business areas. from a pipeline perspective, it's not that supply chain is standing out as more than others. It's quite evenly spread actually, but about finding the right one to the right valuation and also that what we talk a lot about is for the entrepreneurs for the companies to feel that if they know something about this industry, they know something about how to develop and support in discussions. And I think we are becoming more and more attractive in that sense. And that's, I think, also showing from supply chain that we are having some knowledge around the areas as well.

The next question comes from Carl Korscheden from DNB Carnegie.

Just thought I would circle back a little bit more to the supply chain and Transportation segment. Would it be possible to give any sort of numbers on the current, I guess, order backlog? I think you mentioned on a question a little bit earlier there that some companies might have been, yes, quite good in getting deliveries out this quarter and sort of a bit of the order backlog. Is that how we should interpret it that the book-to-bill was maybe yes, below 1 this quarter for that segment overall and potentially also on the group level, if you have any comment on that?

I think it's not a big risk there that it's primarily and JR that wanted to perhaps reduce the backlog more from a perspective that customers are not happy with the lead times becoming too big. But we don't give any exact numbers for that, but GH had a very strong backlog or order backlog for the full year. us, our company within Container terminal automization have also received some nice orders that will be delivered over the year. And also Hilltip. We didn't mention Hilltip so much in this call. It's been -- as we talked about, they have problems in the U.S. to be able to deliver efficiently from the new factory with higher costs and investments going in there. They also have a quite strong order backlog, and that's also where it's more and more about how to deliver that in an efficient way going forward in the second half of the year. So no, I -- we don't foresee that we'll be eating too much and now we have more, let's say, less ammunition for the second year. That's not the feeling in Supply Chain business area.

Got it. That's clear. And could you say anything about the development of your data center businesses in the quarter? Do you expect to also, I guess, take part in data center projects in the Nordics? Or are you predominantly exposed to more of the Irish and the U.K. markets? I'm referring to Eagle in particular there.

So Eagle is Nordic market. I think we talked about it the last quarter that is interesting with the data center market and many of the contractors and installers. They are based in Ireland and then they are expanding with the customers globally for the different sites. And Eagle is then following along with those contractors that they work closely with. So they are in Asia, quite a lot of work at the moment. And that's actually where we see the biggest growth with the data center right now. But again, it's -- they are tendering all kind of projects globally where they need a specific solutions for the gate.

That's clear. And on M&A, I think you added roughly SEK 50 million in EBITDA during '25, and you mentioned that you want to do more in '26 and you are now at roughly SEK 35 million, I think your slide showed earlier. How large do you realistically believe that the 2026 number might be when also taking your, I guess, leverage situation into consideration?

Yes, I can step in there. No, I think we have guided somewhat before that since our total target is a 15% profit growth on a 12-month basis and yes, 5% as we have now as organic profit growth is perhaps something you could use as a guess, then we need to acquire another 10%. And that would mean roughly SEK 100 million for this year. And as you mentioned, so far, SEK 35 million, but we are optimistic that we will be able to complete transactions during this year that will end up in SEK 100 million run rate basis. And we can manage that still having the balance sheet in good order and not go above the 3x leverage. So even though as I said, only 2 acquisitions first half, we're still aiming for reaching that before year-end.

That's clear. And just finally from my side. I'm not sure if I missed that somewhere in the report, but as for the extraordinary items of the SEK 21 million this quarter, did you provide any breakdown of that? Or is it possible to disclose that?

I think we mentioned in the text that, firstly, it was some capital losses with the divestment when we do summing up everything on the group level with how holding companies, et cetera, has been affected. And then we had some -- on the positive side, we reduced some of the expected earn-outs for the future and then some other smaller items. So all in all, it was minus SEK 20 million, but that should be the last extraordinary items for this year. So going forward, it shouldn't be any...

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

Yes, and I can continue there. I see we have 3 questions in the chat so far. And we have touched slightly upon them already, but I can perhaps just add a few things. First, talking about demand from data centers and Anders mentioned how it is in the safety security with Eagle, should also mention that in the energy and electrification, we have good demand also for companies like Phase 3 and IDE Systems, which provide temporary electricity solutions or connectors, not the least for backup electricity, for example, data centers. So there are a number of companies within the group that benefit from that demand, but it's not that it would be a strong negative game changer if it wouldn't be there. But so far, it looks good. And also as an additional effect that we're quite late in the processes. So if someone announces that we're going to build a big data center in the Nordics, we are not the first one on site taking the revenues from that. We are quite late during those projects. So that is still to be seen when those data centers are being built and constructed. So hopefully, we will get some more business in the Nordics on those as well. Then we have some questions water and bio economy, I think Anders mentioned that, that you could expect roughly 21%, 22% going forward, some ups and downs. But -- and we said that already last quarter that the highs that business areas have had in the past or up to 26% or so, that's not the normal level more or less where it is now. Then we had also another question talking about M&A and if we could expect continued M&A activities during the second half or if we need to improve the balance sheet. But as mentioned, just recently that the balance sheet is in good shape. pipeline. So we will most probably achieve the SEK 100 million on a run rate basis in acquired EBITA for the year. And then also a fourth question here regarding pro forma net debt to EBITDA level. As Anders also mentioned that the numbers we report are not pro forma. We take the full effect on the balance sheet when we acquire something, but then slowly bit by bit, the profit is rolling in and improves that. So the pro forma should be a little bit stronger than the reported since we would have more profit than compared to the net debt at that moment. But we have chosen not to use the pro forma that could be discussed and we can evaluate, but it's becauseperarma, you never know what will happen in the future. But yes, you can also, if you want to do that calculations yourselves even since we disclose how much the run rate of the companies we have acquired, what they are, so you could increase profits with quarter-by-quarter, what has not yet been rolling in from that run rate number. I hope that was an answer on that question.

Yes. Thank you, Bengt. Any more questions out there?

No more in the feed.

Okay. Then I think I would like to thank you all. Very good questions and good discussions. And I wish all of you a good summer and see you in Q3 then for a new report. And hopefully, further good discussions going on for us as a group. Okay. Thank you all.

Welcome to Sdiptech's Q1 Report for 2026. [Operator Instructions]

Now I will hand the conference over to CEO, Anders Mattson; and CFO, Bengt Lejdstrom. Please go ahead.

Hello, everybody, and welcome to Sdiptech's presentation for the first quarter. I am Anders Mattson, CEO of Sdiptech, and I will be presenting here together with our CFO, Bengt Lejdstrom, today.

A short intro to the group as usual. Sdiptech acquire, develop and create a long-term home for niche companies within attractive infrastructure segments. Today, we consist of 32 companies in the group, and we operate in a decentralized structure, and each company is responsible for the day-to-day operation. But from last year, we have also added more guidance and support in what we would like to prioritize strategically from the group level.

We divide the group into 4 business areas. Each segment has a clear and structured underlying growth trends for the future. On a rolling 12, Sdiptech as a group has SEK 4.5 billion in revenues, SEK 964 million in adjusted EBITA and an adjusted EBITA margin of 21.3%. And these are the numbers for the core operation, excluding the companies that are being divested.

A short intro -- sorry. To start with, I would like to give you some highlights to the quarter as well. On a strategic level, we have had a good progress. We've been able to divest 9 companies in the quarter, and now we have only one more to go. This one is targeted to be done during quarter 2. Thanks to good cash flow position, we decided to repurchase our preference share in the quarter for a total value of SEK 184 million.

Financially, we are satisfied with a stable organic sales growth of 7% and an organic profit growth of 4% in the quarter, showing a good demand for our products and services. We still experienced a strong currency headwinds of minus 7%. Both in Energy & Electrification and in Safety & Security, the demands have been strong with plus 15% sales growth, excluding currency. The cash conversion in the quarter was poor, primarily due to timing effects. We had high sales in March, which has increased accounts payable quite a lot. But rolling 12, we are still at a good level above 80%.

Our priorities going forward, to support our companies in growing smart and sustainable, we need from the past that we need to be careful with our working capital and CapEx requirements when we are growing with the companies. We have a good pipeline in place, and the focus is to convert the opportunities into signed deals. And we have a good cash position, but we will continue to be selective and disciplined with the coming M&As.

I would like to follow-up as well a little bit more on our strategic work we initiated last year. The first one is around portfolio management. I already mentioned the progress with our divestment, 9 companies sold in the quarter. We achieved an enterprise value of full year EBIT 6x for these companies, which is in line with our expectations. These companies were sold to different takers.

We sold 4 companies to an industrial group similar to us. We sold 3 companies to -- in a cluster to a private equity owner, and we supported 2 MBOs. The 9 companies resulted in a one-off cash contribution of SEK 258 million. We also had a capital loss of SEK 84 million due to higher book values compared to what was realized. And it's important to remember that we had an opposite situation in Q4, where we actually had a capital gain of roughly SEK 60 million. The last company that we are divesting is planned to be divested in quarter 2.

We also continue to be more prudent on which companies to allocate CapEx to, based on our updated framework, which we divide the companies into different group based on the CapEx need. We have a segment that we call the strengthen bucket and CapEx should be allocated to fix a specific problem before we do anything else. We have the harvest companies, we should be restricted with CapEx here and it should mainly be for maintenance purposes. And we have the accelerate one, where we invest to reach growth opportunities. And this is working good in practice for us now as a group. And we are at a run rate of 3% of revenue in CapEx, which is in line where we should be.

We have another important strategic pillar as well, and that is what we call proactive ownership. We decided last year to increase focus on return on capital employed and all our companies in the group have a target that they should reach. This is a long-term shift for us in focus and it's something we are implementing carefully. Our financial target is to reach about 15% in return on capital employed. In this quarter, we reached 12.8%, which is an increase from last year in the same quarter of 12.5%. But in this quarter, we know it was negatively affected by the capital loss of SEK 84 million from the divestment. If we look at return on capital employed for our operational unit itself, it's stable level around 63%, and the majority of the companies are performing well.

Then, we're coming into the financial development. When I'm presenting the numbers, we focus on the core portfolio, which is our remaining portfolio. The companies we have sold in the quarter contributed roughly with SEK 100 million in revenues and SEK 5 million in adjusted EBITA, and they will not be part of the group from quarter 2, as we know. So the core portfolio, good net sales development in the quarter as a result of strong demand overall for the group, 7% organic net sales growth, only 1% growth from acquisition as we didn't acquire that much last year. The currency effect, negative 7% is still substantial in the quarter. From next quarter, we foresee the currency headwinds to ease in the comparable numbers.

In the quarter, we had a strong development in Energy & Electrification and Safety & Security specifically with about 15% net sales growth, excluding currency. And there was a strong demand from several companies in these business areas. It's also positive to see a 4% net sales growth in Supply Chain & Transportation, excluding currency, which is indicating that our largest business area is also back to growth. We don't have any significant changes in our geographical distribution of sales. U.K., still our largest market. Proprietary products is at the same amount as previously with 67% of the total sales.

Coming into adjusted EBITA numbers. In the quarter, adjusted EBITA came in at SEK 241 million. Organic growth was solid at plus 4%, excluding currency. Here again, of course, we had a large negative effect of the currency minus 7% on the profit as well. Strong adjusted EBITA development from Energy & Electrification and Safety & Security, driven by volume growth, but also a favorable mix between the companies. The margin of 20.8% in the quarter is a slightly decrease from last year, but that's primarily the reason is the weaker margin in Water & Bioeconomy in the quarter.

If we look to the right, adjusted EBITA margin development per business area. Supply Chain & Transportation had a flat margin development around 17%. We still have some delays in the factory expansion in the U.S. from our Finnish company, Hilltip. We have also initiated pricing projects in 2 larger units as we see big potential for the future.

In Energy & Electrification, EBITA was up to 29% in margin. Our company Phase 3 have had a strong momentum and the high margins are affecting the business area positively. Water & Bioeconomy, EBITA was down to 21%. We have a number of companies that have been too lean operationally and organizationally, and we've been needed to take some actions to that. Safety & Security, EBITA up to 34%, strong momentum from several companies and high proportion of software sales is affecting those margin as well.

So with that said, I'm handing over to Bengt.

Thank you, Anders. And then let's look a little bit closer on our cash flow and cash conversion.

Looking at the upper graph there, you see the free cash flow. That is all the cash flow from operations and the CapEx spending and amortization on leasing that has developed on a 12-month basis per share, the orange line. And then the black one is the earnings per share also on a 12-month basis. And as you can see, both of these KPIs, they decreased a bit from year-end in Q4, but still higher than last year. And the decline was -- comes to the free cash flow because of the buildup of working capital. And the earnings per share was affected then by the capital losses for these divestments. But that was, of course, a temporary one-off effect on the earnings.

Looking on the cash flow in more detail, you see the chart on the bottom there, where it's quarter-by-quarter how the cash conversion has developed. And in the middle, the dotted line is then on the last 12-month basis, which has been pretty stable within the range that we aim to be between the 70% and 90% on a 12-month basis, but going up and down because of the season or -- and other things.

In this quarter, we saw a buildup of working capital on a few different items. We saw an inventory buildup, both for the season itself. Some companies that have their main sales during summer and autumn, they build capacity in their inventories now with finished goods, but also we invested in some raw materials in some companies to avoid future price increases or the risk of increased prices at least because of the situation around the world. So that was a decision.

We also saw an increase in accounts receivables and short-term -- other type of short-term claims. And that's mainly because of a lot of the sales were taking place in the later part of the quarter, orders coming in at the beginning of the quarter, orders that were a bit delayed from last year, but coming in this quarter being delivered later part of this quarter. That meant a buildup of accounts receivables. And then we also had some revenue recognition in larger projects that took place during the quarter, which also then is a buildup of the working capital. For example, deliveries of trains in our Italian company who deals with grinding of rails and trains for grinding. So that was more temporary, you could say, effect during this quarter. But all in all, looking at the 12-month basis for the cash flow, it's very stable, as you can see from the chart.

If we then look at another KPI, the leverage, and the leverage has continued to decrease. As you can see in the chart on the left-hand side, we were up about 3, 3.3, almost 3.4 last year, but took a decision really to get it down under 3 here during the autumn, and we have succeeded in that. And we stayed well below although we did the redemption of our preference shares here in March. So 2.8 then as a leverage, all in all debt, earn-out provisions and leasing and everything. If we exclude the provisions for our future earn-out payments, the leverage, what we call the financial net debt leverage is 2.09, also a good stable development downwards.

The capital -- return on capital employed, Anders touched upon already. It was a decline from last year Q4 due to the capital losses, also it's a one-off effect. So that one will bounce back. And looking at the operations themselves, as you can see in the curve in the middle there, going from 61% '23 up to almost 64% now. It's very stable across the operations, very good return on the capital employed out in the units. The difference between these 2 KPIs is, of course, all the goodwill and other acquired material assets. And the top line there at 82% on a 12-month basis in the quarter is the return on our working capital, which is also a measurement of the efficiency in the companies, which we think develops very good.

So that was just a brief dive into some of the KPIs. And then back to Anders again with the business areas.

Yes. Thank you, Bengt. So starting with Supply Chain & Transportation, our largest business area, had a stable performance in the quarter. Net sales growth of 4% and adjusted EBITA growth of 1%, excluding the currency effects. It was a strong performance from our Danish company within truck attachments after a much slower last year from this company.

The result is negatively affected by 2 businesses primarily. Our company Winter Road Maintenance, Hilltip. As we have said in last quarter as well, we have invested in an improved factory and organization in the U.S. to be able to serve the North American market locally. The cost for this action is still high relative to the sales we achieved, but the situation will be improved during the year as the order book looks stronger, and we now have a stronger momentum in getting the product out from the factory.

Our company within Port Automation, CERTUS, still have challenges with turning orders into sales, which is affecting the business area in quarter 1 as well. But overall, we are optimistic for the full year as orders are good and several companies in the business area are performing strong.

In the business area, we are also glad to add a new acquisition, Rail Safety Systems. It was actually in last week, they came into the group. It's a company based in the Netherlands, revenue around EUR 6.6 million with a good profitability. The company develops and supplies patented magnetic safety barrier systems used when around railroad maintenance work.

So instead, as you can see on the pictures there, so instead of digging and interfering with a foundation under the railway, this is a smart and efficient system that is based on the magnetic placing them on the sites, as you can see. The company has a strong position in the European market, serving railway infrastructure like Deutsche Bahn is a typical customer and can also be contractors around the maintenance work.

It has a strong link with our Italian company, Mecno, who is doing rail grinding equipment, and they serve the same customers. So we look forward to continue developing the company as part of the Sdiptech group.

Then we are coming into Energy & Electrification. Energy & Electrification had a very strong quarter, high growth numbers, both for sales and adjusted EBITA. It's a strong demand and development for several business areas or business units in general, and we prosper from strong competitive products and solutions. We had a specific strong development within following applications. It was a cold winter with strong sales for our company, HeatWork, offering heating solution for frozen ground for all kinds of work that is needed during those time periods.

Energy efficiency and upgrades in supermarket segment for cooling applications, our company RDM had strong and are in a strong momentum. Many upgrades improvement still drives -- driving from the energy efficiency perspective. And we also have electrification in the U.K. with Rolec performing at a good level. From a margin perspective, our latest acquisition in the business area Phase 3 is supporting the margin uplift and it's supposed to continue that way as well.

Then, coming into Water & Bioeconomy. The business area had financially a weak development. Net sales growth is minus 1%, currency adjusted, which is, of course, not good, but still indicating that the challenges are more on the cost side. On a positive side, returns are at a high level, above 100% return on capital employed within the business area. We have negative effects from a few business units that is undergoing a strategic update. In general, as I already mentioned, we have been quite lean operationally in some of the companies.

In the chemical cluster, for example, we have invested to adhere to updated environmental requirements in 3 of the business units. We have also 3 new MDs currently onboarding. That means double costs and also some efficiencies, at the moment. We have also our Italian company invested in additional production capacity in our sludge treatment company, and that will take off later in the year with improved volumes. So all in all, it's not a short-term fix, but with higher volumes, the margins will start to recover during the year.

Then, we're coming into Safety & Security. Safety & Security had a very strong quarter with high growth numbers, both for sales and adjusted EBITA. We see strong demand and development in several application areas. The security for data center, we have mentioned it now, the company Eagle have had strong development and continue so. Clean air in hospital for gas evacuation have had a very strong last 6 months and in a very good momentum. And secure communication, as we know, is on top of many agendas, and this company as well within our group is performing good.

The improved profitability is largely thanks to a better product mix, and it's also been a higher proportion of software sales compared to previous year.

Then, we are coming into M&A. From an M&A perspective, we are on track to increase our M&A activity for the year. We have a good pipeline, and we have good discussions ongoing. We didn't close any deal in Q1, but Dutch rail safety company, RSS, it was closed in April. Our current cash position is strong, but we are aware of it, and it's important to continue to be selective and disciplined, but we look forward to ramping up a number of deals in the year.

And then on a final note to summarize the quarter today. We had a stable development in quarter 1, although we have some companies that we are working on improving. Strong development from Energy & Electrification and Safety & Security that we foresee to continue. Overall, we have a continued positive outlook. We have a good order book for the coming months for several companies in the group.

Of course, the strategic initiatives, it has been a very good momentum, and they are almost completed, and we look forward to close the latest acquisition in Q2, if everything goes according to plan. And we are having good discussions ongoing, and we are looking forward to more activity within our M&A work.

So that was all from us, me and Bengt, in the presentation, and we open up for questions.

[Operator Instructions] The next question comes from Anton Ingves from Nordea.

Starting off here within the Energy & Electrification. You stated that some of the units here have performed very well. How large is the effect here on the margin improvement from this single unit, so to speak? And can you give any hint on the organic growth here in the segment for the quarter?

On, let's -- I can start with the organic growth. We know we haven't done much M&A, except for this one company in the business area. But usually, we don't guide on specific organic growth in the business areas. We look at the total when we talk about organic total growth. But it's a larger entity, and it's having a good development and margin, but more specifically on the organic, we don't go into actually.

Bengt, I don't know if you have anything on the contribution on the margin side.

No, it's only one -- well, I'm talking about the organic also. It's only 1 month that was not organic for this acquired company. And the Phase 3 that we acquired last year, so that was very little. So almost everything of the development is, of course, organic. And when it comes to the margin development, again, it's this new company that has a high margin that, of course, then improves the whole business area, but also some of the other units had a good development. So overall, a good quarter, very good quarter for the business area.

Okay. Perfect. And then on the ramp-up here of deliveries in supply chain towards the end of the quarter, is this effect expected to continue here into Q2 with a better momentum for the entire quarter? And also on the same topic, you said that you saw a stable order intake in the area. Can you give any more specific numbers to put that into perspective?

From the order intake side, it's been a strong order intake from last year, quarter 4 in the business area. So it was primarily GAH that came in and had a much higher order book coming into the year. And yes, the effect was that it was delivered quite a lot in March, not stable January, February, March, but it is still a very strong order book. So yes, that momentum, let's say, of delivering on a strong order book, it's for many companies in the business area. So yes, that's positive from that perspective. And we feel comfortable that it's -- the growth will continue then for the business area.

Perfect. And then one final here from me, if I may. You mentioned here that some price increases within supply chain. Have that -- are they sort of implemented now? And can you be a bit more specific on the effect from this?

It's actually -- no, it's not anything that is implemented. We have seen a big opportunity to work with prices more efficiently. So we're actually driving in a pricing project, not only within this business area, we are targeting 4 companies to start with and 2 companies are within Supply Chain & Transportation. So it's -- we're using external support as well for a framework for price increases and how to work with that long term. And this has been now starting up during Q1. So there's no effect from that right now, and that's more of a long-term effect that we will see working, let's say, more proficient with pricing going forward.

The next question comes from Max Bacco from SEB.

Perhaps starting with Water & Bioeconomy, that specific segment, which you mentioned here during the presentation, had a bit more challenging quarter. But you mentioned also that with volumes, you expect profitability to improve during the coming quarters. Do you expect to be able to match the profitability that we saw during 2025 for Q2 to Q4? Is that possible in your view?

So I think from a volume perspective, yes, it's our Italian company, they invested in a new production facility. They have 2 -- one. They are adding a third one. So they're building up small production facilities, let's say, closer to the customers. So we are taking the cost for the investment, but volumes need to come in to be able then to get the benefit from that investment. And that we foresee coming during the year, definitely.

On the margin side, in general, as I said, we have felt that we have been a little bit too lean in some of the companies, higher requirements coming into the chemical cluster as well. So these actions that we need to take is not that we are fixing something and then the margin is going to come back. This is going to be a little bit more that we are adding cost to be more proficient and long-term focused for these companies. So it will be challenging to come back to those quite high numbers part of last year in the business area.

Okay. Understood. And then the final one, basically, you also mentioned on the topic of cash flow and net working capital that you took some inventory buildup here during the quarter to mitigate potential supply chain disruptions. But I think, Bengt, you also mentioned that it was to hedge for potential increases in raw materials and so on and so forth. Have you seen any disruptions yet? Or is it more of a precautious measure?

Well, it's more to be precautious and take some opportunities to do an efficient procurement here. So, yes.

The next question comes from Stefan Knutsson from Redeye.

First up, a very impressive development within both Energy & Electrification and Safety & Security. Do you see this momentum as a structural long-term driver? Or was there any onetime effects that we should be careful to extrapolate?

I think from Energy & Electrification, we had a strong winter seasonal effect then from HeatWork, the company producing equipment and solutions for frozen ground. Yes, they had a very strong winter, let's say, January, February sales. But other than that, no, it's a general trend with electrification, with the energy savings that is taking place. So it's actually a broad momentum in these companies. We, of course, would like to add more companies to the business area as well because we see the trends there for these companies at the moment.

And Safety & Security, very much similar, I must say. It's a broad general good momentum. And we have niche products, niche services, strong products and solutions that we foresee definitely to continue.

Perfect. And secondly, given the current geopolitical situation, do you expect any meaningful impact in Q2 onwards? And if so, in what business area do you foresee elevated risk for any disruption?

We have had some companies with delays order from Middle East. We are not exposed too much, but definitely, we have seen some hesitance from that region, of course. But no, in general, I think what Bengt also mentioned that we have taken in some -- sorry, started to purchase a little bit more to hinder potential increases in oil prices and transportation costs, et cetera. But other than that, we are not that exposed at the moment to see any big obstacles due to that.

Very clear. And then finally, on the accounts receivable buildup, do you expect this to recover in the near term? Or will this persist for some time as you see it currently?

No. I mean it was more a, call it, a timing effect on where the quarter ends in relationship to invoicing and so on. So cash flow should be more normalized here going further. So -- but I think, it could be good to look at the more 12-month basis numbers because it can have quite some swing from one quarter to the other, depending on the invoicing happens or revenue recognition happens.

The next question comes from Carl Korsheden from DNB Carnegie.

Just a question from my side on the demand overall. We have seen now an upward trending organic trajectory here now for 3 consecutive quarters. I'm just curious to hear a little bit more when you talk about your or when you talk as to your current businesses and the orders that you are seeing, would you expect this upward trending, I guess, organic trajectory here to continue over the next couple of quarters? Or is there anything here in terms of comps or similar we should keep in mind?

No, I think it's a positive momentum in several of the business areas and the companies. It is -- I think, it's important for us to see this now the good momentum and to work disciplined with it, of course, the working capital and the CapEx and to make sure that we are doing the right thing to take, of course, the opportunity to grow with the market development. So in short, no, it's a good momentum that we foresee to continue.

But of course, looking then at Water & Bioeconomy, we are having some challenges with some of the companies there as well. So that's -- as we saw in quarter 1, it was affecting the total. But definitely that our mindset is that we will manage, we will work with these companies. And overall, it's a good momentum in the entire business.

Yes, that's clear. And is it fair to say that you have now, I guess, recouped all of these orders we have talked about over the last couple of quarters where you have been talking about postponements? I guess, you mentioned that not all of them have been converted to sales maybe in this quarter in particular, but do you feel like you have received all the orders at least by now?

Yes. I think, definitely, the situation primarily in Supply Chain & Transportation last year where they were wanting to place the order, but they were hesitant because of uncertainties. Yes, these orders are now placed with us. We have the orders, let's say. It's a little bit maybe, as I said, in CERTUS, the Port Automation company that the larger ports could be a little bit hesitant to, let's say, what's coming later in the year. But no, it's nothing that we really count on at the moment. So the delays in placing order is over, let's say, then from that perspective.

Yes, that's clear. And yes, it wouldn't be possible to, I guess, break out the sort of remaining order backlog from those larger projects and orders that we have been talking about that wasn't delivered now in Q1 going into Q2?

No, it's not really possible actually. It's still, let's say, the bigger retail companies in the U.K., that's where we talk about the big orders coming from. They are saying that now this year, we need -- we placed the order for the demand, exactly when it's going to come, when we're going to deliver the vans, et cetera, it's not clear, but the order is placed, so to say, with us at least.

Yes, that's clear. And on the cash flows, you already answered a little bit about the, I guess, the accounts receivables situation. But if we talk a little bit about the inventory buildup you mentioned here, could we expect also that to, I guess, convert into cash flows now already in Q2? Or do you see that as more, I guess, structural for a couple of quarters now given the situation with supply chains and so on?

We think that's more -- was more now. But yes, it's still also in Q2, some of the seasonal companies continue to build the finished goods or semi-finished goods for deliveries during second half, especially a company like Hilltip with their snow -- salt spreaders and snow removal equipment, they sell most of their equipment during late summer and autumn. So still some of that, but that's kind of a normal seasonality on our cash flow. So shouldn't be any unusual things.

[Operator Instructions] The next question comes from Simon Jonsson from ABG Sundal Collier.

Sorry, if this has been already covered here. I was a bit late into this call. But first, I see a lot of focus on data center sales here that seem to drive growth in several of your segments. And as a general theme, can you maybe share a bit more on that momentum here? And if this is something that you expect will continue to build and should have a sustained positive momentum, do you think? Or was it more isolated to good volumes for data centers here in this quarter? Because I don't remember you mentioned it last quarter, for example.

Yes. Okay. No, it's primarily within Safety & Security, a company producing security gates for the data center industry. They are based in the U.K., and they have good customer relationship with contractors in Ireland. Ireland is the hub for it. So when they expand with the data center activities, they are pre-written, so to say, in many of these projects building up globally actually with their strong product. So no, it's not in general for many companies. It's more specific this company within Safety & Security that is driving or having a good momentum, thanks for that. But we see that to continue.

But for us, it's not really a problem. We are having almost a full order book, what we can produce actually from this company. And we are looking into different options to expand or how to deal with it. But we are very cautious on will this trend continue. So we are careful in balancing that, of course, as well. But the demand from this company is good for many different applications, but definitely data center is driving at the moment, the growth.

All right. And on M&A, I think it's good to see that you are coming a bit more forward leaning here. And you also mentioned the strong M&A pipeline and that you expect a ramp-up. But if you can talk a little bit more about the timing of -- and the magnitude of the ramps up in acquisition pace. There's just one acquisition so far this year. And when you say ramp up, do you expect to be at a relatively good pace already sometime this year? Or is it more like a gradual ramp-up throughout this year and then into '27, that may be the year where you are at a good momentum pace? How should we think about that?

Yes, we have definitely plans for closing in Q2 then. That's what we prefer to do. One more. It's -- yes, it's already end of April. But then adding, let's say, definitely then Q3, Q4 more companies. We have the capacity, as we have said, for high volume M&A growth, of course, this year. But yes, as you said, the complete ramp-up will be 2027. But if we are coming in between 4 to 6 acquisitions this year, that will be something that I foresee good for us.

All right. And that would mean also that you balance the gearing below 3x or maybe upside from here? Or do you think that we should expect you to be at these levels? Or how does that pace translate into the gearing?

I think, it's definitely that we would like to be below 3. That's our long-term target in the leverage. So yes, we need to be careful about that, how we ramp up the M&A over the year. Definitely, we have that in mind for sure.

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

And we have one question in the chat, in the feed. But I think we have answered that one already. It was regarding orders in the supply chain area coming in, in Q1 and being delivered now or in Q2. But I think we have answered that already. So no other questions in the feed.

Okay. But if it's no more question, then thank you all for listening in and good questions. It was -- yes, good discussions here today, and I hope to see you next quarter as well, if not before. Bye-bye.

Welcome to Sdiptech Q4 2025 report presentation. [Operator Instructions] Now I will hand the conference over to CEO, Anders Mattson; and CFO, Bengt Lejdstrom. Please go ahead.

Hello, everybody. Welcome to Sdiptech's presentation for the fourth quarter. I'm Anders Mattson, CEO of Sdiptech, and I will be presenting here today together with our CFO, Bengt Lejdstrom.

A short intro to Sdiptech for any new listener on the call today. Sdiptech acquire, develop and create a long-term home in attractive infrastructure segments. Today, we consist of 31 companies in the group.

And we operate in a decentralized structure and each company is responsible for the day-to-day operations. We divide the group into 4 business areas. And each business area has a clear structural underlying growth trend that we see for the future.

For the full year 2025, Sdiptech as a group has SEK 4.5 billion in revenues and SEK 968 million in adjusted EBITA and an adjusted EBITA margin of 21.5%. And these are numbers for our core operation and excluding companies that are currently being divested.

To start with, I would like to give you some highlights to the quarter. On a strategic level, we have made clear progress during the quarter with our divestments.

Today, we have signed 8 out of the 11 companies for completion. The short- and long-term targets for return on capital employed is being implemented for each business unit. And we have done one acquisition in the quarter, which ties nicely into our growing cold-chain cluster.

Financially, we are satisfied at a sales growth of 6% in the quarter, showing a good demand for our products and services in the market.

I also would like to highlight the strong cash conversion of 134% in the quarter, primarily coming from reduction in working capital levels. Supply chain has [Technical Difficulty], but outlook for 2026 looks strong.

Priorities going forward. Many of our companies have a strong return on capital employed, but we have a number of companies we can improve going forward. To be able to reach our growth target, we need to acquire in a high pace, which is for 2026.

And we have several companies in the group with good momentum and we need to ensure that we are growing smart. And by smart, I mean being prudent with working capital and CapEx to facilitate that growth going forward.

I also would like to follow up on the implementation of our 4 key strategic pillars that we presented on our Capital Markets Day during Q4 last year. The first one is around portfolio management.

I already mentioned the progress of our divestment of the 11 companies have been signed for divestment with new owners. We have achieved an enterprise value of full year 2025 EBIT 6x for these companies, which then is in line with our expectations of the value.

We have also been more prudent on which companies to allocate CapEx to due to discussions for 2026 and that's also according to our updated framework on how to look at CapEx investment going forward.

Second pillar, as we call proactive ownership. We have defined a short- and a long-term target for each company according to the DuPont framework. We have some outliers in the group we need to focus on, but the majority of our companies have a great return on capital employed number as a base.

Think we'll go through that a little bit later, but on average, 62% for the year. We have also aligned incentives towards capital efficiency in bonus plan for 2026.

The third pillar is about disciplined and return-focused M&A. One example of an action here is that we have implemented a cash flow parameter in all earn-out discussions that we have in early stages for the LOIs with each and every potential acquisition.

We have also [ intensifying ] throughout our existing companies. This is not a short-term fix. And this is something that's going to be very important for us going forward to be able to increase hit rate and also efficiency in our sourcing.

The fourth pillar is our latest acquisition, STORR was linked to our cold-chain cluster, which is now 4 companies connected. And just for an example, the commercial due diligence was very efficient and straightforward as we already had a lot of information about the market and actually even the company in the group.

So in summary, glad to report a strong momentum in implementing our key strategic initiatives. However, we all know that it's not just a short fix. And we look forward to a long-term mindset shift as well for us as a group.

Then we are coming into the financial development in the quarter. We are satisfied with the net sales development in the quarter, plus 3% in total and 6% organic sales growth indicate a strong demand for our products and services in the market. The currency effect of negative 8% of course and is primarily due to our exposure to the sterling.

In the quarter, we had a stable development, sorry, for 3 out of 4 business areas. We were expecting more sales from Supply Chain & Transportation as we have in the year, we have invested in some of the business units.

For the full year, we achieved 6% sales growth and 3% organic growth. The year started weak, but improved during the second half of the year and reached a solid growth number for the year, a trend that we foresee continue in 2026 as well.

No significant change in our geographic distribution of sales with U.K. is our largest market. Proprietary Products is at the same amount as previously with 65% -- sorry, 67% of total sales.

If we then go to adjusted EBITA. In the quarter, adjusted EBITA came in at SEK 255 million. Organic growth was flat and a large negative effect from the currency of minus 7%.

The flat organic growth is primarily a result of a weak quarter in the business area of Supply Chain & Transportation with 3 large companies that have invested for future growth. I will come back to that.

I will give you some highlights per business area later as well. The margin of 22.4% in the quarter is strong, even lower compared to last year.

For the full year, adjusted EBITA increased by 3% to SEK 968 million. This is an organic decline of 1% and mainly due to the weak first half of the year. The full year margin of 21.5% is in line going forward as a group.

We expect our adjusted EBITA margin to be between 21% and 21.5%. We need to ensure sustainable growth and we need -- and also new acquisition with potentially lower margins coming in and being part of the mix.

So with that said, I will now hand over to Bengt and he will continue with a more financial update.

Thank you, Anders. And I will start then with some numbers for the full group. What you just described, Anders, was for our core operations.

But looking then on the profit levels for the full group, as you can see on the left-hand side, for the full year this year and a couple of years back, we have had a strong average growth of 24%, even though it was then slowing off in '25, where it only increased 1% compared to last year.

Of that 1% was an organic decline of 4% and another negative effect from the strong Swedish currency, especially against the British pound sterling with a minus 3% currency effect on the full year.

And then for noncomparable growth, that is the companies here or the ones effect from the one we divested was plus 8%. So all in all, quite good. But of course, as Anders also said, the first half of the year was a bit sluggish. And for the quarter, for the full group, the quarter EBITA was an organic plus/minus 0.

Looking then on the return on the capital employed. As you can see on the right-hand side, we have a chart showing on one hand, the actual capital employed, which has been reduced a little bit from last year. The improvement then from 12.6% to 13.5% is mainly because of an increased EBITA for the group.

Looking at -- and of course, the 13.5% is much lower than the return on capital employed in our operations, where the average for our core operations, that is excluding the goodwill and material assets that we book in connection with the acquisitions continue to be strong around the 60%.

We also showed the number from another popular KPI, the profit over working capital that some peers focus a lot on. We focus more on the return on capital employed. But anyhow, it has been quite steady around the 80% for a number of years, which is, of course, an important KPI as well and a sign of how we manage and get profit out of our working capital.

Looking then at the cash and cash conversion. You can look on -- to the left-hand bottom, you see the cash flow generation Anders mentioned as well. It's very strong for the last quarter, exceptionally strong, I would say, perhaps at 134%, but that was mainly due to reduced inventories and also getting the money in from our customers.

And we have had that focus for some time now. And of course, the activities continue to improve this even further going on, even though perhaps the cash flow generation will not be at that level consistently. And I see in the chart, a yellow marked area where we have our ambitions between 70% to 90% over the different quarters, stay there in the cash flow generation and conversion.

Another important KPI is then the free cash flow. That is then not only the cash flow from our operations, but also reducing with the leasing part and any CapEx that we do in the quarter. And for the last 12 months, that free cash flow per share have been almost SEK 17 per share, up from almost SEK 13 a year ago.

In that chart, you also see the earnings per share, which is somewhat lower. It's around SEK 12 per share if we exclude goodwill write-downs that we did during Q3 2025. And that is lower. And that is based on that we do some accounting when it comes to IFRS rules in connection with our acquisitions.

So for example, we need to book noncash interest rates, discount rates for our provisions for contingent considerations and that hurts with about SEK 1.50 per share. So that explains to some part the gap between the free cash flow and the actual net earnings per share. But all in all, we are satisfied with the quarter from a cash flow perspective and we'll continue to work on that.

Then looking at the balance sheet from a leverage perspective, one of our financial targets are now to have our total net debt leverage, the total net debt compared with the EBITDA to be below 3.

And for the quarter, measured then, of course, on a 12-month basis, it was then below. It was 2.84. And you see the trend on the left-hand side of this slide.

We also have another KPI for our debt and that's what we call the financial net debt, which is all debt but excluding the provisions for earnouts. And that one did also decrease to 2.12.

And the main reason for this is that the net debt was reduced because of cash flow coming in both from the operations and from, for example, the divestment of one of the companies that we closed them last year.

These earnout provisions is always tricky to understand fully the impact on the leverage and so on. But you see on the right-hand side that our provisions booked as a debt has decreased over the years as a share of the total net debt.

So coming from almost half or even more than half of all the debt is now 25% of the net debt. And that's a number we expect to decrease as each and every acquisition become a smaller part of the total picture.

And during this quarter, we did some write-downs of these provisions. And that means that the actual model works that if some companies under earnout are performing a little bit less than expected, then we don't expect to pay out the earnouts that we have booked.

So we released some of that debt and that makes an income. But that's not including in our adjusted EBITA numbers. It's one-offs. And we have detailed those in the reports towards the end, if you want to dig into that in more detail.

Right. So I hand over back to Anders for the business areas.

Yes. Thank you, Bengt. So we have updated the presentation and a little bit more in detail each business area now.

Starting with Supply Chain & Transportation, our largest business area. We had a poor performance, a relative poor performance in the quarter, an organic decline in adjusted EBITA of roughly 9%.

And the result is mainly in units. Our company within transport refrigeration, GAH, they actually came out of a 4-year earnout. And we have increased investment to ensure a stable operation going forward.

On top of this, 2 larger customers have throughout the year been being postponing the orders, unfortunately, postponed further into '26 as well.

The other company, our company within winter road maintenance, Hilltip, have invested in an improved factory and organization in the U.S. to be able to serve the North American market locally.

And the cost for this as is 2025. But we are convinced that this is the right thing to do as shipping in containers from Finland with finished goods is not a long-term solution for a market where we see great potential for our products for the future.

And our company within port automation [indiscernible] large port projects to be postponed during the year and we were awaiting that to happen in Q4. And those global bigger projects, we feel it's the global uncertainty that is affecting these kind of major decisions for the larger ports in this.

However, the challenges that we have in the business area are not long term as we see it. And we have a positive outlook for 2026 for the business area as a group.

Within the business area, we are also happy to announce the acquisition of STORR late in the quarter. That is a company based in the Netherlands and fits well, as I already said, into our cold-chain cluster. STORR provides partition walls for refrigerated transportation. They have a product with a very high precision, which is needed to be able to separate frozen food from chilled food, for example.

And the business model is interesting because the end customer, they usually don't know exactly how they would like to fit the lorry when they buy the bigger lorry. So STORR can actually come in and tailor flexible solutions depending on the needs, which also then can change over the lifetime for the lorry operator. So we look forward to continue to develop this company as part of the Sdiptech going forward.

Then we're coming into Energy and Electrification, which had a very strong quarter. Net sales, SEK 281 million and adjusted EBITA of SEK 73 million. That's an organic sales growth of 14% and roughly the same adjusted EBITA growth -- organic growth as well. And also on top of that, a strong acquisition coming in, in Q1 and delivering a very strong result for the year.

ForEx you can see of 49% is below the average in the group. And we have a few companies where we see improvement potential here, and that is primarily around inventory management.

The demand is strong for several business units in this business area. I just would like to highlight one company that has a very strong new power, Swedish-based company from [ Alingsor ].

They offer equipment for measuring and monitoring power quality in the networks. And as we know, when renewable energy sources grow and also the network is growing itself, power quality becomes even more important to protect critical applications in a production environment or it could actually be in a hospital, for example.

And even though we had a great 2025, we see the demand is still there and we see that's going to continue for the future.

On other notice for this business area, we have the new leader, the new Head of the Business Area started in January. And it feels great to have recruited somebody that is actually based in the U.K. for such an important segment for us where the majority of our companies is in the U.K.

If we then move to Water & Bioeconomy, they delivered a solid result in Q4, which is positive after a relative weak development in Q1 to Q3. Net sales at SEK 241 million and adjusted EBITA at SEK 56 million. Organic sales growth, 9% and adjusted EBITA growth of roughly 5%.

In the business area, we see that we have

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and in 2025, we decided to make a number of leadership changes to the local businesses. We have the right products. The market is there. So we have said that we need to focus on more or bringing in more commercial-oriented leadership in some of the units. And we believe this will have a positive impact for the long-term development of the portfolio.

Then, we go to the last business area, Safety & Security. They had a development in line with last year and kept up a high margin of 29%. Organic sales growth of 1% and organic adjusted EBITA growth of 2%.

For the full year, Eagle Automation had a very strong year. I mentioned it the last quarter as well, but Eagle, they provide high security gates, bolards and rockers. And Eagle's products are certified to withstand vehicle attacks, which is then a specific certification needed.

End customer segments are data center and airports, for example. And the strong development has led to further needs for expanding their assembly facility in the U.K. And just to tie back to our framework around where to allocate CapEx, this is a good example of where it makes sense to increase CapEx to expand the operations to get that market share that is out there for us to gain further.

Then, we're moving into M&A. In the quarter, as we said, we finalized the latest acquisition of STORR. And total acquired growth landed at SEK 50 million in 2025. For the full year, we have been more selective, which has helped us to decrease the leverage as a group as well. And this is something we have been able to achieve to steadily increasing our ambition in 2026 for M&A.

And as part of our updated strategic initiatives, we will be strict on our valuation principles and prioritize cash flow or IRR for each investment we're going into.

Then I already mentioned is that we would like to intensify the local sourcing throughout our existing companies as well. So with that said, we are looking forward to more acquisitions in 2026.

Yes. And just to give you a summary of the quarter, what we presented here today. We have had a solid financial result in fourth quarter with many KPIs in the right direction. Most of the business units developed a stable result in Q4, except from a few businesses in Supply Chain & Transportation, but improvement for 2026.

We have had a selective M&A agenda in 2025 with -- but that's going to be a strong focus now 2026 going forward. The strategic initiatives, we are happy that we have made good progress with those.

And I'm also

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a very strong management team in place now going into 2026 as well. And the outlook remains positive for us as a group. So that was all from the presentation here today.

I think we can open up then for Q&A part.

[Operator Instructions] The next question comes from Max Bacco from SEB.

Well done in the quarter. A couple of questions from my side, if that's all right. Perhaps starting then with the supply chain and -- Supply Chain segment. You mentioned, Anders, during the presentation that sales both in the quarter, but I guess, for 2025 as a whole has been impacted by some delays in project sales.

But you mentioned on the slide as well on the outlook that you have seen some early signs of improvement here in 2026. So basically curious to hear more if you have already seen customers returning to those kind of orders already by now.

Yes. It's -- we have had a lot of discussions with GAH. GAH is then, of course, one of our important companies in that segment. And exactly what you said there. They were pushing out orders and they wanted to place them in 2026 instead.

So order intake for early signals is looking good for the first half of the year. They are securing those orders.

It's a major decision for many of these customers as they're planning to renew a total fleet, a big, let's say, retail customer in the U.K. And yes, so from that perspective, we have received some good orders for GAH.

Certus is still a little bit of a hesitation of the customers. We have not lost the projects, but major ports see issues or, let's say, hesitant to place those orders. And -- but I can also say that we are not just sitting there, of course, waiting for those bigger orders.

We are having a lot of medium and smaller orders coming in all the time. So I think that's also a way of mitigating just sitting and waiting for big orders, try to be active and develop new potential customers as well then.

Okay, good. Sounds promising for 2026 or perhaps the latter parts. And then turning to the Energy and Electrification segment, very nice profitability here for the full year, some 26.4%, I think.

And I guess, to some extent, supported by the acquisitions that have been done as of lately. Do you see this, say, 26%, is that a sustainable level for that specific segment?

Maybe, Bengt, you can answer that one.

And we can perhaps look at that slide since we're talking about the different business areas so we know what we're talking about. Energy and Electrification, as you see, it has had a developmental margins going up and down together with the acquisitions.

We made a acquisition early '25 with Phase 3 coming in and doing these connectors for temporary connections with electricity, Phase 3 and IV working close together in many projects. But as you see, it has been quite steady around 25%, 26% EBIT margin, the different business units going a bit up and down. But I would say that it could be fair to expect around that level going forward, yes.

Okay. Perfect. And then a question on the opposite side for the Water & Bioeconomy segment, some 24% margin here 2025, which is, of course, a nice level, but a bit below historical levels. And I guess that has been the segment the most impacted by the salary inflation in the U.K. and so on and so forth.

Do you -- with the price increases and actions that have been taken in the segment and I guess some effect is still to be seen, do you see a potential to get back to those 25%, 26% profitability perhaps in 1 or 2 years?

I think from -- we have been trying to challenge a little bit in the past that we cannot change existing contracts there. We're trying to be a little bit more proactive with those kind of contracts. And there are some flexibility to step in and maybe make adjustments during the way we have seen some example of that. But still, it's hurting us, as you are saying.

But I think it's going to be a challenge to come back up there. We're trying. It's depending on a little bit also with inflation in salaries going into now 2026 with so many, let's say, people business [Technical Difficulty].

But we are working hard with all the different business units here to steadily increase. We're going to work with pricing as far as possible to mitigate staying down at, let's say, lower levels then.

Okay. Understood. And then 2 final ones, quite short ones. With the additional 7 divestments signed here after Q4, so 8 in total then including KSS, how much of other operations are remaining in terms of sales and EBITA? If you look at the 2025 level, I guess, is the best.

Yes. We reported for '25, I think, a little bit more than SEK 50 million for the company. Our run rate is rather around the SEK 65 million for all of these.

And that's at least what we base our negotiations on. And so the ones we have divested are the major ones. We have 3 more, but they are a bit smaller.

So I would say that perhaps they represent around 20% of that profit going further. So it's another SEK 10 million, SEK 15 million perhaps then that we looking at divesting.

Okay. Perfect. And then the final one. You mentioned it during the presentation, very nice cash flow here in the quarter, but also for the full year. Both supported by net working capital, but also CapEx levels coming down quite notably for the full year.

Do you see more to do on, I guess, both net working capital, but also, I mean, the CapEx level relative to sales that we saw 2025, is that a good indication of where you intend to be going ahead as well?

I think we have said that we will aim for not above 3% of sales in CapEx. And we will definitely if we can be below that in a specific year, that can be good.

But I think we -- as a example I gave you here with Eagle, we need to support with CapEx to be able to drive that further growth in some of the business areas as well. So yes, some years can be lower. But I think we need to be up there towards the 3% to be able to have a sustainable growth going forward.

On the working capital side, yes, I think we have more to do there. As I mentioned in the Energy and Electrification segment, the return on capital employed there around -- well, I think it was 49% is definitely more room to work on the inventory side there, just an example. So that's part of our incentive models as well for 2026 to try to bring that further down.

The next question comes from Simon Jonsson from ABG Sundal Collier.

So I guess I just have maybe a few follow-ups on the cash flow. I think you made it clear that what you're looking for into this year in terms of CapEx and improving the working capital further.

But maybe if you can just elaborate a bit more on what you have been doing more recently, specifically for the units to improve the working capital. I understand that it would be part of the incentive programs or bonus programs for units going forward here.

But what more specifically have you done recently because we can see in the last 2 quarters or so that there has been a clear improvement in the trend? So yes, just wondering more specifically what you have been successful with here in recent quarters.

I think from a CapEx perspective is definitely now coming into 2026 as well, we have been more prudent and selective where we would like to spend the money and for what reason. We mentioned on the Capital Markets Day, the framework with companies that are in a strengthened position.

We need to make sure that you fix whatever you need to fix before we can accelerate growing the companies and also that we are being selective saying that for us, this is a harvest position. Let's try to harvest as much as possible and investing more prudent. So that framework, I think, has been quite good implemented with the company now coming into 2026.

On the working capital perspective, we have started -- we have always talked about it. But we have intensified the discussion with the companies during the autumn that we need to improve working capital and showed an example of how other companies in the group have done or how they have performed. So I think that

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low-hanging fruit that we are seeing.

Now we need to stepping into a more structured work to -- as we do it, we're looking at the DuPont framework. We see you have these kind of inventory levels. We believe you can move further down 5%. That will take you here and making sure that we are aligned on what kind of actions specifically you can do.

So I would say, low-hanging fruit initially and now the real work starts to really go through each and every company to make sure we are optimizing it.

All right. Makes sense. Do you know already like how the bonus incentives will look like in terms of cash flow specifically? Will it be overall cash flow or focus on working capital? How much will that impact bonuses?

Will it be different metrics or more sort of cohesive metric like return on capital for units or something like that?

It's going to be, let's say, a mix. So we have some companies that we feel needs to grow more. So we have revenue targets for that. We have EBIT target as usually as our most important one or with, let's say

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we have, it could be then return on capital employed or it can be working capital as a percent of revenue.

That's depending on how we see what the focus should be for the companies. But we tailor that depending on how we see the need for it.

And we can also say that this company should then have 70% of the incentive based on the, let's say, the capital efficiency part and only 30% on EBIT part. So that's part of our, let's say, proactive model to see what we would like to incentivize from our perspective.

All right. Very good job here recently on the cash flow side, specifically.

The next question comes from Carl Korsheden from DNB Carnegie.

Just -- yes, a couple of questions from my side. If just start off with a follow-up question on one of the first questions then regarding the postponed sort of deliveries in the Supply Chain & Transportation area. Is it possible to quantify that anyhow in terms of magnitude?

How much do you feel you have been promised that has been postponed to the future? And how much of that could we expect will land in Q1 versus Q2?

No, we have actually not quantified that. It's more that some specific orders we were talking about for a long time over the year. And yes, so it's been more about we as an organization preparing to deliver those.

And we cannot actually say how much of that is actually now happening exactly in January and February. But as I said, I think 2026 looks positive. It's not only because we believe we're going to get those bigger orders. It's also in the general that we are in a good momentum with not only these 3 units in the Supply Chain & Transportation segment.

Yes. That's clear. And just -- I mean, on your Capital Markets Day, you talked a little bit about -- yes, you obviously had this new financial targets of growing 15%. And then you said that 2026 might be sort of call it slightly more of a transition year again that you will hopefully do some delevering and also complement with some additional M&A.

Now it seems like your financial position has come down a little bit quicker than expected and you have seen very strong cash flows here in the quarter. Would you [ reinitiate ] sort of that view still? Or are you expecting you can do a little bit more M&A now in 2026 compared to your previous assessment?

No, I would say it's important for us to work with, let's say, our plans that we have put in place. It's still quite -- as we said it as well, it's a lot that needs to be gained from the M&A perspective.

So no, we are not adjusting that based on the good cash flow right now. But organic needs to show now coming into Q1, Q2 to be able to continue with that M&A growth. So it's still a lot of things to do actually to be able to accelerate the M&A to be within our financial target metrics.

The next question comes from Linus Alentun from Nordea.

Congratulations on the report. Just some quick questions here from me. If we continue here on the ROCE from the past question here, it improved to 13.5% from 12.6%.

I mean with the divestments and your focus on disciplined M&A, what's the realistic time frame here to reach the 15% target here? Is this a '26 or '27 target? I guess when the divestments are not in the balance sheet, the ROCE will have some upside as well?

Yes, that's correct. We simulated that during the fall and said perhaps 1%, 1.5% of ROCE will improve after the divestments. Still, it's a pretty complex to make a very solid forecast.

But we have said that this will take perhaps a year or 2 to reach that 15%. It depends a bit also on how the M&As are lining up during the different quarters since we get the balance sheet first and the profits later.

But I still would say that it's not early this year, perhaps around early next year or late this year, depending on how our expectation is really to go into next year for this.

All right. All right. And just continued on the supply chain orders here. You said that they are in a good momentum. Is this something that has kicked in like now in January, like or at the end of last quarter? Can you see a significant improvement here? Or how should we see this?

Yes. But I'm not talking about only about those 3 business units we mentioned had those problems. It's -- overall, it's a good momentum. Our e-l-m, our company producing attachment as well coming into -- from a very good second half of the year coming into this year and we see the same activity.

JR producing different kind of doors as well to the transportation sector, having a great year and also continue to do that.

And Hilltip, we talked about the U.S. facility in Europe. They are having a good development. They are expanding their product assortment and making bigger salt spreading equipment, not only to the pickup trucks, also to the tractor and to the bigger segment, the van segment.

So -- and Certus is having -- they are growing their service level agreement base with every order they are taking. So I think from that perspective, those -- the mix of the companies and the good development there, that's what I -- when I see talking about the good momentum in this area.

Okay. That's clear. And just a question here when we look at Q1. How has the weather conditions been here so far for the winter-dependent companies like Hilltip and HeatWork? Are you seeing the weather here is more favorable compared to last year?

We've been talking a lot about that. And it's actually that what we see is that the season -- the winter season is getting shorter. So in the past, it could have been that they bought something and then they see early or December

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early January, they need an equipment to be able to go through the entire winter.

The trend is that they do not have that kind of second wave in the winter because what they bought should be enough for the winter. But now Hilltip actually said with the condition that we have had in full Europe, it's better than last year in that kind of salt spreading equipment.

And I think also HeatWork, another company dependent on the -- especially the temperature has also had a good start because of the cold climate, especially in the Nordic countries. So a little bit of positive effect because the winter is -- the feeling is it's going to be a longer period right now at least.

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

Yes. And we have one written question so far regarding share buybacks. And the question is if we have ever considered share buybacks instead of M&A as our stock is trading at the current low levels.

And as always, through all the years, we have always been prioritizing to acquire companies and believe that in the long run, that gives the shareholders a better return. So there is no discussions going on, on that theme. That's the simple answer on that.

Yes. And I think that was the only written question. So Anders --

Yes.

-- any final remarks?

Yes. No, I think it's good. The message we would like to send is that, yes, we are continue to do or work with our strategic priorities. We are not done, for sure not.

We are working on it. We're implementing it. And it's also going to be a long-term mindset shift with this everything we talked about, the capital efficiency and everything around that. That's important to have for us for the long term.

But again, we are happy with a solid quarter ending 2025 and now we are definitely looking forward to 2026. It's going to be exciting for the group to enter into this new year as well.

So with that, I think, thank you, everybody, for listening and good questions as well.

Thank you.

Welcome to Sdiptech Q4 2025 report presentation. [Operator Instructions] Now I will hand the conference over to CEO, Anders Mattson; and CFO, Bengt Lejdstrom. Please go ahead.

Hello, everybody. Welcome to Sdiptech's presentation for the fourth quarter. I'm Anders Mattson, CEO of Sdiptech, and I will be presenting here today together with our CFO, Bengt Lejdstrom.

A short intro to Sdiptech for any new listener on the call today. Sdiptech acquire, develop and create a long-term home in attractive infrastructure segments. Today, we consist of 31 companies in the group.

And we operate in a decentralized structure and each company is responsible for the day-to-day operations. We divide the group into 4 business areas. And each business area has a clear structural underlying growth trend that we see for the future.

For the full year 2025, Sdiptech as a group has SEK 4.5 billion in revenues and SEK 968 million in adjusted EBITA and an adjusted EBITA margin of 21.5%. And these are numbers for our core operation and excluding companies that are currently being divested.

To start with, I would like to give you some highlights to the quarter. On a strategic level, we have made clear progress during the quarter with our divestments.

Today, we have signed 8 out of the 11 companies for completion. The short- and long-term targets for return on capital employed is being implemented for each business unit. And we have done one acquisition in the quarter, which ties nicely into our growing cold-chain cluster.

Financially, we are satisfied at a sales growth of 6% in the quarter, showing a good demand for our products and services in the market.

I also would like to highlight the strong cash conversion of 134% in the quarter, primarily coming from reduction in working capital levels. Supply chain has [Technical Difficulty], but outlook for 2026 looks strong.

Priorities going forward. Many of our companies have a strong return on capital employed, but we have a number of companies we can improve going forward. To be able to reach our growth target, we need to acquire in a high pace, which is for 2026.

And we have several companies in the group with good momentum and we need to ensure that we are growing smart. And by smart, I mean being prudent with working capital and CapEx to facilitate that growth going forward.

I also would like to follow up on the implementation of our 4 key strategic pillars that we presented on our Capital Markets Day during Q4 last year. The first one is around portfolio management.

I already mentioned the progress of our divestment of the 11 companies have been signed for divestment with new owners. We have achieved an enterprise value of full year 2025 EBIT 6x for these companies, which then is in line with our expectations of the value.

We have also been more prudent on which companies to allocate CapEx to due to discussions for 2026 and that's also according to our updated framework on how to look at CapEx investment going forward.

Second pillar, as we call proactive ownership. We have defined a short- and a long-term target for each company according to the DuPont framework. We have some outliers in the group we need to focus on, but the majority of our companies have a great return on capital employed number as a base.

Think we'll go through that a little bit later, but on average, 62% for the year. We have also aligned incentives towards capital efficiency in bonus plan for 2026.

The third pillar is about disciplined and return-focused M&A. One example of an action here is that we have implemented a cash flow parameter in all earn-out discussions that we have in early stages for the LOIs with each and every potential acquisition.

We have also [ intensifying ] throughout our existing companies. This is not a short-term fix. And this is something that's going to be very important for us going forward to be able to increase hit rate and also efficiency in our sourcing.

The fourth pillar is our latest acquisition, STORR was linked to our cold-chain cluster, which is now 4 companies connected. And just for an example, the commercial due diligence was very efficient and straightforward as we already had a lot of information about the market and actually even the company in the group.

So in summary, glad to report a strong momentum in implementing our key strategic initiatives. However, we all know that it's not just a short fix. And we look forward to a long-term mindset shift as well for us as a group.

Then we are coming into the financial development in the quarter. We are satisfied with the net sales development in the quarter, plus 3% in total and 6% organic sales growth indicate a strong demand for our products and services in the market. The currency effect of negative 8% of course and is primarily due to our exposure to the sterling.

In the quarter, we had a stable development, sorry, for 3 out of 4 business areas. We were expecting more sales from Supply Chain & Transportation as we have in the year, we have invested in some of the business units.

For the full year, we achieved 6% sales growth and 3% organic growth. The year started weak, but improved during the second half of the year and reached a solid growth number for the year, a trend that we foresee continue in 2026 as well.

No significant change in our geographic distribution of sales with U.K. is our largest market. Proprietary Products is at the same amount as previously with 65% -- sorry, 67% of total sales.

If we then go to adjusted EBITA. In the quarter, adjusted EBITA came in at SEK 255 million. Organic growth was flat and a large negative effect from the currency of minus 7%.

The flat organic growth is primarily a result of a weak quarter in the business area of Supply Chain & Transportation with 3 large companies that have invested for future growth. I will come back to that.

I will give you some highlights per business area later as well. The margin of 22.4% in the quarter is strong, even lower compared to last year.

For the full year, adjusted EBITA increased by 3% to SEK 968 million. This is an organic decline of 1% and mainly due to the weak first half of the year. The full year margin of 21.5% is in line going forward as a group.

We expect our adjusted EBITA margin to be between 21% and 21.5%. We need to ensure sustainable growth and we need -- and also new acquisition with potentially lower margins coming in and being part of the mix.

So with that said, I will now hand over to Bengt and he will continue with a more financial update.

Thank you, Anders. And I will start then with some numbers for the full group. What you just described, Anders, was for our core operations.

But looking then on the profit levels for the full group, as you can see on the left-hand side, for the full year this year and a couple of years back, we have had a strong average growth of 24%, even though it was then slowing off in '25, where it only increased 1% compared to last year.

Of that 1% was an organic decline of 4% and another negative effect from the strong Swedish currency, especially against the British pound sterling with a minus 3% currency effect on the full year.

And then for noncomparable growth, that is the companies here or the ones effect from the one we divested was plus 8%. So all in all, quite good. But of course, as Anders also said, the first half of the year was a bit sluggish. And for the quarter, for the full group, the quarter EBITA was an organic plus/minus 0.

Looking then on the return on the capital employed. As you can see on the right-hand side, we have a chart showing on one hand, the actual capital employed, which has been reduced a little bit from last year. The improvement then from 12.6% to 13.5% is mainly because of an increased EBITA for the group.

Looking at -- and of course, the 13.5% is much lower than the return on capital employed in our operations, where the average for our core operations, that is excluding the goodwill and material assets that we book in connection with the acquisitions continue to be strong around the 60%.

We also showed the number from another popular KPI, the profit over working capital that some peers focus a lot on. We focus more on the return on capital employed. But anyhow, it has been quite steady around the 80% for a number of years, which is, of course, an important KPI as well and a sign of how we manage and get profit out of our working capital.

Looking then at the cash and cash conversion. You can look on -- to the left-hand bottom, you see the cash flow generation Anders mentioned as well. It's very strong for the last quarter, exceptionally strong, I would say, perhaps at 134%, but that was mainly due to reduced inventories and also getting the money in from our customers.

And we have had that focus for some time now. And of course, the activities continue to improve this even further going on, even though perhaps the cash flow generation will not be at that level consistently. And I see in the chart, a yellow marked area where we have our ambitions between 70% to 90% over the different quarters, stay there in the cash flow generation and conversion.

Another important KPI is then the free cash flow. That is then not only the cash flow from our operations, but also reducing with the leasing part and any CapEx that we do in the quarter. And for the last 12 months, that free cash flow per share have been almost SEK 17 per share, up from almost SEK 13 a year ago.

In that chart, you also see the earnings per share, which is somewhat lower. It's around SEK 12 per share if we exclude goodwill write-downs that we did during Q3 2025. And that is lower. And that is based on that we do some accounting when it comes to IFRS rules in connection with our acquisitions.

So for example, we need to book noncash interest rates, discount rates for our provisions for contingent considerations and that hurts with about SEK 1.50 per share. So that explains to some part the gap between the free cash flow and the actual net earnings per share. But all in all, we are satisfied with the quarter from a cash flow perspective and we'll continue to work on that.

Then looking at the balance sheet from a leverage perspective, one of our financial targets are now to have our total net debt leverage, the total net debt compared with the EBITDA to be below 3.

And for the quarter, measured then, of course, on a 12-month basis, it was then below. It was 2.84. And you see the trend on the left-hand side of this slide.

We also have another KPI for our debt and that's what we call the financial net debt, which is all debt but excluding the provisions for earnouts. And that one did also decrease to 2.12.

And the main reason for this is that the net debt was reduced because of cash flow coming in both from the operations and from, for example, the divestment of one of the companies that we closed them last year.

These earnout provisions is always tricky to understand fully the impact on the leverage and so on. But you see on the right-hand side that our provisions booked as a debt has decreased over the years as a share of the total net debt.

So coming from almost half or even more than half of all the debt is now 25% of the net debt. And that's a number we expect to decrease as each and every acquisition become a smaller part of the total picture.

And during this quarter, we did some write-downs of these provisions. And that means that the actual model works that if some companies under earnout are performing a little bit less than expected, then we don't expect to pay out the earnouts that we have booked.

So we released some of that debt and that makes an income. But that's not including in our adjusted EBITA numbers. It's one-offs. And we have detailed those in the reports towards the end, if you want to dig into that in more detail.

Right. So I hand over back to Anders for the business areas.

Yes. Thank you, Bengt. So we have updated the presentation and a little bit more in detail each business area now.

Starting with Supply Chain & Transportation, our largest business area. We had a poor performance, a relative poor performance in the quarter, an organic decline in adjusted EBITA of roughly 9%.

And the result is mainly in units. Our company within transport refrigeration, GAH, they actually came out of a 4-year earnout. And we have increased investment to ensure a stable operation going forward.

On top of this, 2 larger customers have throughout the year been being postponing the orders, unfortunately, postponed further into '26 as well.

The other company, our company within winter road maintenance, Hilltip, have invested in an improved factory and organization in the U.S. to be able to serve the North American market locally.

And the cost for this as is 2025. But we are convinced that this is the right thing to do as shipping in containers from Finland with finished goods is not a long-term solution for a market where we see great potential for our products for the future.

And our company within port automation [indiscernible] large port projects to be postponed during the year and we were awaiting that to happen in Q4. And those global bigger projects, we feel it's the global uncertainty that is affecting these kind of major decisions for the larger ports in this.

However, the challenges that we have in the business area are not long term as we see it. And we have a positive outlook for 2026 for the business area as a group.

Within the business area, we are also happy to announce the acquisition of STORR late in the quarter. That is a company based in the Netherlands and fits well, as I already said, into our cold-chain cluster. STORR provides partition walls for refrigerated transportation. They have a product with a very high precision, which is needed to be able to separate frozen food from chilled food, for example.

And the business model is interesting because the end customer, they usually don't know exactly how they would like to fit the lorry when they buy the bigger lorry. So STORR can actually come in and tailor flexible solutions depending on the needs, which also then can change over the lifetime for the lorry operator. So we look forward to continue to develop this company as part of the Sdiptech going forward.

Then we're coming into Energy and Electrification, which had a very strong quarter. Net sales, SEK 281 million and adjusted EBITA of SEK 73 million. That's an organic sales growth of 14% and roughly the same adjusted EBITA growth -- organic growth as well. And also on top of that, a strong acquisition coming in, in Q1 and delivering a very strong result for the year.

ForEx you can see of 49% is below the average in the group. And we have a few companies where we see improvement potential here, and that is primarily around inventory management.

The demand is strong for several business units in this business area. I just would like to highlight one company that has a very strong new power, Swedish-based company from [ Alingsor ].

They offer equipment for measuring and monitoring power quality in the networks. And as we know, when renewable energy sources grow and also the network is growing itself, power quality becomes even more important to protect critical applications in a production environment or it could actually be in a hospital, for example.

And even though we had a great 2025, we see the demand is still there and we see that's going to continue for the future.

On other notice for this business area, we have the new leader, the new Head of the Business Area started in January. And it feels great to have recruited somebody that is actually based in the U.K. for such an important segment for us where the majority of our companies is in the U.K.

If we then move to Water & Bioeconomy, they delivered a solid result in Q4, which is positive after a relative weak development in Q1 to Q3. Net sales at SEK 241 million and adjusted EBITA at SEK 56 million. Organic sales growth, 9% and adjusted EBITA growth of roughly 5%.

In the business area, we see that we have

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and in 2025, we decided to make a number of leadership changes to the local businesses. We have the right products. The market is there. So we have said that we need to focus on more or bringing in more commercial-oriented leadership in some of the units. And we believe this will have a positive impact for the long-term development of the portfolio.

Then, we go to the last business area, Safety & Security. They had a development in line with last year and kept up a high margin of 29%. Organic sales growth of 1% and organic adjusted EBITA growth of 2%.

For the full year, Eagle Automation had a very strong year. I mentioned it the last quarter as well, but Eagle, they provide high security gates, bolards and rockers. And Eagle's products are certified to withstand vehicle attacks, which is then a specific certification needed.

End customer segments are data center and airports, for example. And the strong development has led to further needs for expanding their assembly facility in the U.K. And just to tie back to our framework around where to allocate CapEx, this is a good example of where it makes sense to increase CapEx to expand the operations to get that market share that is out there for us to gain further.

Then, we're moving into M&A. In the quarter, as we said, we finalized the latest acquisition of STORR. And total acquired growth landed at SEK 50 million in 2025. For the full year, we have been more selective, which has helped us to decrease the leverage as a group as well. And this is something we have been able to achieve to steadily increasing our ambition in 2026 for M&A.

And as part of our updated strategic initiatives, we will be strict on our valuation principles and prioritize cash flow or IRR for each investment we're going into.

Then I already mentioned is that we would like to intensify the local sourcing throughout our existing companies as well. So with that said, we are looking forward to more acquisitions in 2026.

Yes. And just to give you a summary of the quarter, what we presented here today. We have had a solid financial result in fourth quarter with many KPIs in the right direction. Most of the business units developed a stable result in Q4, except from a few businesses in Supply Chain & Transportation, but improvement for 2026.

We have had a selective M&A agenda in 2025 with -- but that's going to be a strong focus now 2026 going forward. The strategic initiatives, we are happy that we have made good progress with those.

And I'm also

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a very strong management team in place now going into 2026 as well. And the outlook remains positive for us as a group. So that was all from the presentation here today.

I think we can open up then for Q&A part.

[Operator Instructions] The next question comes from Max Bacco from SEB.

Well done in the quarter. A couple of questions from my side, if that's all right. Perhaps starting then with the supply chain and -- Supply Chain segment. You mentioned, Anders, during the presentation that sales both in the quarter, but I guess, for 2025 as a whole has been impacted by some delays in project sales.

But you mentioned on the slide as well on the outlook that you have seen some early signs of improvement here in 2026. So basically curious to hear more if you have already seen customers returning to those kind of orders already by now.

Yes. It's -- we have had a lot of discussions with GAH. GAH is then, of course, one of our important companies in that segment. And exactly what you said there. They were pushing out orders and they wanted to place them in 2026 instead.

So order intake for early signals is looking good for the first half of the year. They are securing those orders.

It's a major decision for many of these customers as they're planning to renew a total fleet, a big, let's say, retail customer in the U.K. And yes, so from that perspective, we have received some good orders for GAH.

Certus is still a little bit of a hesitation of the customers. We have not lost the projects, but major ports see issues or, let's say, hesitant to place those orders. And -- but I can also say that we are not just sitting there, of course, waiting for those bigger orders.

We are having a lot of medium and smaller orders coming in all the time. So I think that's also a way of mitigating just sitting and waiting for big orders, try to be active and develop new potential customers as well then.

Okay, good. Sounds promising for 2026 or perhaps the latter parts. And then turning to the Energy and Electrification segment, very nice profitability here for the full year, some 26.4%, I think.

And I guess, to some extent, supported by the acquisitions that have been done as of lately. Do you see this, say, 26%, is that a sustainable level for that specific segment?

Maybe, Bengt, you can answer that one.

And we can perhaps look at that slide since we're talking about the different business areas so we know what we're talking about. Energy and Electrification, as you see, it has had a developmental margins going up and down together with the acquisitions.

We made a acquisition early '25 with Phase 3 coming in and doing these connectors for temporary connections with electricity, Phase 3 and IV working close together in many projects. But as you see, it has been quite steady around 25%, 26% EBIT margin, the different business units going a bit up and down. But I would say that it could be fair to expect around that level going forward, yes.

Okay. Perfect. And then a question on the opposite side for the Water & Bioeconomy segment, some 24% margin here 2025, which is, of course, a nice level, but a bit below historical levels. And I guess that has been the segment the most impacted by the salary inflation in the U.K. and so on and so forth.

Do you -- with the price increases and actions that have been taken in the segment and I guess some effect is still to be seen, do you see a potential to get back to those 25%, 26% profitability perhaps in 1 or 2 years?

I think from -- we have been trying to challenge a little bit in the past that we cannot change existing contracts there. We're trying to be a little bit more proactive with those kind of contracts. And there are some flexibility to step in and maybe make adjustments during the way we have seen some example of that. But still, it's hurting us, as you are saying.

But I think it's going to be a challenge to come back up there. We're trying. It's depending on a little bit also with inflation in salaries going into now 2026 with so many, let's say, people business [Technical Difficulty].

But we are working hard with all the different business units here to steadily increase. We're going to work with pricing as far as possible to mitigate staying down at, let's say, lower levels then.

Okay. Understood. And then 2 final ones, quite short ones. With the additional 7 divestments signed here after Q4, so 8 in total then including KSS, how much of other operations are remaining in terms of sales and EBITA? If you look at the 2025 level, I guess, is the best.

Yes. We reported for '25, I think, a little bit more than SEK 50 million for the company. Our run rate is rather around the SEK 65 million for all of these.

And that's at least what we base our negotiations on. And so the ones we have divested are the major ones. We have 3 more, but they are a bit smaller.

So I would say that perhaps they represent around 20% of that profit going further. So it's another SEK 10 million, SEK 15 million perhaps then that we looking at divesting.

Okay. Perfect. And then the final one. You mentioned it during the presentation, very nice cash flow here in the quarter, but also for the full year. Both supported by net working capital, but also CapEx levels coming down quite notably for the full year.

Do you see more to do on, I guess, both net working capital, but also, I mean, the CapEx level relative to sales that we saw 2025, is that a good indication of where you intend to be going ahead as well?

I think we have said that we will aim for not above 3% of sales in CapEx. And we will definitely if we can be below that in a specific year, that can be good.

But I think we -- as a example I gave you here with Eagle, we need to support with CapEx to be able to drive that further growth in some of the business areas as well. So yes, some years can be lower. But I think we need to be up there towards the 3% to be able to have a sustainable growth going forward.

On the working capital side, yes, I think we have more to do there. As I mentioned in the Energy and Electrification segment, the return on capital employed there around -- well, I think it was 49% is definitely more room to work on the inventory side there, just an example. So that's part of our incentive models as well for 2026 to try to bring that further down.

The next question comes from Simon Jonsson from ABG Sundal Collier.

So I guess I just have maybe a few follow-ups on the cash flow. I think you made it clear that what you're looking for into this year in terms of CapEx and improving the working capital further.

But maybe if you can just elaborate a bit more on what you have been doing more recently, specifically for the units to improve the working capital. I understand that it would be part of the incentive programs or bonus programs for units going forward here.

But what more specifically have you done recently because we can see in the last 2 quarters or so that there has been a clear improvement in the trend? So yes, just wondering more specifically what you have been successful with here in recent quarters.

I think from a CapEx perspective is definitely now coming into 2026 as well, we have been more prudent and selective where we would like to spend the money and for what reason. We mentioned on the Capital Markets Day, the framework with companies that are in a strengthened position.

We need to make sure that you fix whatever you need to fix before we can accelerate growing the companies and also that we are being selective saying that for us, this is a harvest position. Let's try to harvest as much as possible and investing more prudent. So that framework, I think, has been quite good implemented with the company now coming into 2026.

On the working capital perspective, we have started -- we have always talked about it. But we have intensified the discussion with the companies during the autumn that we need to improve working capital and showed an example of how other companies in the group have done or how they have performed. So I think that

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low-hanging fruit that we are seeing.

Now we need to stepping into a more structured work to -- as we do it, we're looking at the DuPont framework. We see you have these kind of inventory levels. We believe you can move further down 5%. That will take you here and making sure that we are aligned on what kind of actions specifically you can do.

So I would say, low-hanging fruit initially and now the real work starts to really go through each and every company to make sure we are optimizing it.

All right. Makes sense. Do you know already like how the bonus incentives will look like in terms of cash flow specifically? Will it be overall cash flow or focus on working capital? How much will that impact bonuses?

Will it be different metrics or more sort of cohesive metric like return on capital for units or something like that?

It's going to be, let's say, a mix. So we have some companies that we feel needs to grow more. So we have revenue targets for that. We have EBIT target as usually as our most important one or with, let's say

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we have, it could be then return on capital employed or it can be working capital as a percent of revenue.

That's depending on how we see what the focus should be for the companies. But we tailor that depending on how we see the need for it.

And we can also say that this company should then have 70% of the incentive based on the, let's say, the capital efficiency part and only 30% on EBIT part. So that's part of our, let's say, proactive model to see what we would like to incentivize from our perspective.

All right. Very good job here recently on the cash flow side, specifically.

The next question comes from Carl Korsheden from DNB Carnegie.

Just -- yes, a couple of questions from my side. If just start off with a follow-up question on one of the first questions then regarding the postponed sort of deliveries in the Supply Chain & Transportation area. Is it possible to quantify that anyhow in terms of magnitude?

How much do you feel you have been promised that has been postponed to the future? And how much of that could we expect will land in Q1 versus Q2?

No, we have actually not quantified that. It's more that some specific orders we were talking about for a long time over the year. And yes, so it's been more about we as an organization preparing to deliver those.

And we cannot actually say how much of that is actually now happening exactly in January and February. But as I said, I think 2026 looks positive. It's not only because we believe we're going to get those bigger orders. It's also in the general that we are in a good momentum with not only these 3 units in the Supply Chain & Transportation segment.

Yes. That's clear. And just -- I mean, on your Capital Markets Day, you talked a little bit about -- yes, you obviously had this new financial targets of growing 15%. And then you said that 2026 might be sort of call it slightly more of a transition year again that you will hopefully do some delevering and also complement with some additional M&A.

Now it seems like your financial position has come down a little bit quicker than expected and you have seen very strong cash flows here in the quarter. Would you [ reinitiate ] sort of that view still? Or are you expecting you can do a little bit more M&A now in 2026 compared to your previous assessment?

No, I would say it's important for us to work with, let's say, our plans that we have put in place. It's still quite -- as we said it as well, it's a lot that needs to be gained from the M&A perspective.

So no, we are not adjusting that based on the good cash flow right now. But organic needs to show now coming into Q1, Q2 to be able to continue with that M&A growth. So it's still a lot of things to do actually to be able to accelerate the M&A to be within our financial target metrics.

The next question comes from Linus Alentun from Nordea.

Congratulations on the report. Just some quick questions here from me. If we continue here on the ROCE from the past question here, it improved to 13.5% from 12.6%.

I mean with the divestments and your focus on disciplined M&A, what's the realistic time frame here to reach the 15% target here? Is this a '26 or '27 target? I guess when the divestments are not in the balance sheet, the ROCE will have some upside as well?

Yes, that's correct. We simulated that during the fall and said perhaps 1%, 1.5% of ROCE will improve after the divestments. Still, it's a pretty complex to make a very solid forecast.

But we have said that this will take perhaps a year or 2 to reach that 15%. It depends a bit also on how the M&As are lining up during the different quarters since we get the balance sheet first and the profits later.

But I still would say that it's not early this year, perhaps around early next year or late this year, depending on how our expectation is really to go into next year for this.

All right. All right. And just continued on the supply chain orders here. You said that they are in a good momentum. Is this something that has kicked in like now in January, like or at the end of last quarter? Can you see a significant improvement here? Or how should we see this?

Yes. But I'm not talking about only about those 3 business units we mentioned had those problems. It's -- overall, it's a good momentum. Our e-l-m, our company producing attachment as well coming into -- from a very good second half of the year coming into this year and we see the same activity.

JR producing different kind of doors as well to the transportation sector, having a great year and also continue to do that.

And Hilltip, we talked about the U.S. facility in Europe. They are having a good development. They are expanding their product assortment and making bigger salt spreading equipment, not only to the pickup trucks, also to the tractor and to the bigger segment, the van segment.

So -- and Certus is having -- they are growing their service level agreement base with every order they are taking. So I think from that perspective, those -- the mix of the companies and the good development there, that's what I -- when I see talking about the good momentum in this area.

Okay. That's clear. And just a question here when we look at Q1. How has the weather conditions been here so far for the winter-dependent companies like Hilltip and HeatWork? Are you seeing the weather here is more favorable compared to last year?

We've been talking a lot about that. And it's actually that what we see is that the season -- the winter season is getting shorter. So in the past, it could have been that they bought something and then they see early or December

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early January, they need an equipment to be able to go through the entire winter.

The trend is that they do not have that kind of second wave in the winter because what they bought should be enough for the winter. But now Hilltip actually said with the condition that we have had in full Europe, it's better than last year in that kind of salt spreading equipment.

And I think also HeatWork, another company dependent on the -- especially the temperature has also had a good start because of the cold climate, especially in the Nordic countries. So a little bit of positive effect because the winter is -- the feeling is it's going to be a longer period right now at least.

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

Yes. And we have one written question so far regarding share buybacks. And the question is if we have ever considered share buybacks instead of M&A as our stock is trading at the current low levels.

And as always, through all the years, we have always been prioritizing to acquire companies and believe that in the long run, that gives the shareholders a better return. So there is no discussions going on, on that theme. That's the simple answer on that.

Yes. And I think that was the only written question. So Anders --

Yes.

-- any final remarks?

Yes. No, I think it's good. The message we would like to send is that, yes, we are continue to do or work with our strategic priorities. We are not done, for sure not.

We are working on it. We're implementing it. And it's also going to be a long-term mindset shift with this everything we talked about, the capital efficiency and everything around that. That's important to have for us for the long term.

But again, we are happy with a solid quarter ending 2025 and now we are definitely looking forward to 2026. It's going to be exciting for the group to enter into this new year as well.

So with that, I think, thank you, everybody, for listening and good questions as well.

Thank you.

Good afternoon, and a big welcome to all of you here in Wallenbergsalen, and also a big welcome to you who are watching online. And as you know, this is Sdiptech's Capital Markets Day 2025. I'm Linda Nyberg, and I will be your host today.

So I'm really looking forward to this because last time I was hosting a Capital Markets Day for Sdiptech, was 2021. And for those of you who remember, that was during the pandemic. So I do not have the pleasure to meet all of you in-person. So I think this is great to see so many of you here as well, present.

We're going to jump straight into today's agenda, and I hope it comes here that I'm doing the right thing now. And here also, you have the speakers, of course, of today, and we will start with the CEO, Sdiptech's CEO, and there will be an update on the business strategy, of course, and also to just look at the new financial targets that was announced earlier today. Maybe some of you have seen that already.

And after Anders, we will go into deeper in the business, and we will listen to the 4 business areas and the heads of those. And we will continue with, as you can see, also Michael L -- Michael Lund, sorry, from ELM. ELM in Swedish, which is one of the business units. And we will talk about their journey and also the partnership with Sdiptech and how the development -- the long-term development is supported because of that partnership.

We will also shift focus later, and we will listen about -- listen to the Head of M&A, Peter Helsing, who will also then, of course, talk about the acquisitions. And we will see the new framework and what the future looks like with the M&A perspective.

But first of all, we're going to get the financial overview from the CEO, but I have to say something because we're in Wallenbergsalen, and that's the air hostess information. So you know what I'm going to say now. We have 2 exits in the back. And for those of you who are not aware of that, there's a powdering room, as we say, in English. And you've probably seen it just by the stairs when you enter the room.

And there's a meeting point we're in Sweden. So in case of emergency, God forbidden, we will meet at 7:11, that's everybody knows where that is, right, the closest. And we're not going to meet Sarah, sorry for the joke.

So anyhow, I think now, Anders Mattson, are you ready, the CEO of Sdiptech, Give him a warm hand.

Okay. Now we can hear better. Perfect. Yes, I also would like to take the opportunity to welcome you to our Capital Markets Day. Great to see all of you here and also the one on the webcast. And thank you all for taking the time to listen to us today.

I am then Anders Mattson, CEO of Sdiptech since June this year. I started my -- I came into Sdiptech in 2018, so I've been here over 7 years now, and I've gained a lot of experience working with some fantastic companies and also some very interesting entrepreneurs over the years. And today, I'm very glad to be leading Sdiptech now for the future.

I would like to start to present my management team that you will meet later today. You will be listening to the heads of the business area, the forum. Daniel Unge, Roger Wood, Amanda Berninger and Sarah Strom. And later, you will also then listen to our Head of M&A, Peter Helsing, and our CFO, Bengt Lejdstrom.

We have 2 people today that will not be on stage, and that's our Head of IR and Communications. That's My Lundberg. She's on parental leave. And then we also have Peter Stegersjo, Head of Strategy and Corporate Development. He's the one responsible for all the divestment at the moment, and he will not present here today. But I'm glad to demonstrate a very strong team that now we'll be leading Sdiptech together with me for the coming years.

So let me begin with a brief overview of Sdiptech as a foundation for today's presentation. Sdiptech acquire, develop and create a long-term home for niche companies within attractive infrastructure segments. Today, we consist of 30 companies in the group and divided in the 4 business areas: Supply Chain, Transportation, Energy & Electrification, Water & Bioeconomy and Safety & Security.

And the numbers you can see here on the slide, they are excluding central cost and goodwill to show the operational performance of our entities. I just would like to highlight 2 KPIs. That's the margin. The average adjusted EBITA margin of 23.6% and also the return on capital employed, the average of 46%. These KPIs demonstrate that we have a very strong group of companies in the group and also that we have some strong initiatives that we are positioned within. And you will hear more about the different business areas later today from the heads of the business areas.

U.K. is our biggest market with roughly 50% of the sale, remaining 50% is distributed among other European countries and 5% into the U.S. We operate in a decentralized model, and it's very important that the day-to-day mandate responsibilities is with the local companies.

Our market, we have a modern view of looking and defining an infrastructure that goes beyond the classic definition or roads, tunnels and utilities. Our selected infrastructure segments are broad enough to enable a lot of M&A opportunities for the future, but they also create a focus for us as a group. And the -- but the most important aspect of our segment is that we see clear structural growth trends for the future.

We know that European transportation, water and energy systems are old, and they require a lot of upgrades, digital upgrade as well, replacement and modernization. We also have a growing population, especially around urban areas, and that's demanding that we need to expand all of these systems as well.

And finally, we have stricter regulations and also sustainability demands, so we need to invest to meet up to those requirements. And all of these megatrends that we see creating a very good platform for us going into the future.

Before I talk about areas, we would like to improve that we have talked a lot about in our strategic now planning over the last couple of months, I would like to show you or discuss a little bit about our strong foundation.

We have a strong track record of EBITA growth. We've been growing CAGR 26% since 2019. We are positioned well with our current portfolio within the attractive infrastructure segments, I just mentioned. Since 2018, we have acquired a very strong group of companies that will be the basis for our organic growth going in now to the future.

And our internal M&A capabilities is strong. We have built up over many years, a strong pipeline that we constantly execute on at the moment. And our decentralized model is in place. It's working, and we have very strong leaders in several of our business units out there.

Also on a more soft aspect, many entrepreneurs say that Sdiptech demonstrate a trust and belief that they really like the companies that would like to do something good with the companies. And I think that's very important because we know it's more than just financial metrics, when you're going to acquire family businesses that need to be sold or need to, but will be sold.

So having described our strong foundation, we still have a number of challenges that we have addressed. We have had several companies in our portfolio that has not met up to our investment criteria, the investment criteria or proprietary products, EBIT margin above 15% and exposure to noncyclical end markets. We have also had a volatile growth for many years, which has led to challenges to drive sustainable and long-term organic growth with the core portfolio.

We have focused on a little bit too much, we believe, on growing the EBITA and not on total return. A decentralized model doesn't mean that you cannot be active and support your companies out there. We feel that we have been a little bit too hands-off with many of the companies in the group. And we also have had a negative organic EBITA development over the last 1.5 years, and that's, of course, something we would like to address.

So what are we doing then? What -- how we have addressed this? We have assessed our portfolio, and we have decided to divest 11 companies from the group. This is an ongoing process. And actually, as of yesterday, we have signed 1 of the 11 to be sold within the near term.

We have also strengthened our business area organization. We felt ourselves; we wanted more expertise and experience. So we have recruited new people and we are also recruiting on more in the U.K. that's to come. And during the autumn, we have also created a strategic review together with the management team to clarify how we're going to ensure the long-term growth for the companies and also increase the focus on return on capital employed going forward.

So based on the strategic work, we have defined new financial targets for the group. Firstly, we have moved away from a separate M&A and organic growth target, and now we are targeting a total growth instead. The target is to achieve 15% growth per year until 2030, which will result in a doubling of the EBITA over the 5-year period.

Secondly, we have decided to increase our focus on return on capital employed. And we're targeting to reach about 15%. To be able to improve the return on capital employed, we need to improve the focus on cash flow in our current portfolio, but we also need to be very disciplined in the future M&A opportunities.

On leverage, we also have a new updated leverage target and the target is to be below 3% in total net debt divided by EBITA, and we have stepped away from a separate or a financial external net debt target.

In summary, we believe the new target give us the right focus and there are balance between growth and return on capital employed, and also keeping a healthy balance sheet in place for the long-term.

To reach the new financial targets, we have defined 4 strategic pillars to focus on. And they are enhanced portfolio management, proactive ownership, disciplined and return-focused M&A and also cluster strategy to accelerate both the organic and also the M&A growth. I will go through now the different pillars, so you will understand a little bit more about the content.

The first pillar is about portfolio management. We have decided not to treat all the companies the same in the portfolio, and we need to become more prudent on how we invest and where we invest for the future. First step has already been taken, and that was to assess the strategic fit of the companies, and we decided to divest 11 companies from the group. Again, to repeat, it's companies without proprietary products, EBIT margin around 10% and also exposure -- high exposure to cyclical end markets.

Secondly, we have defined companies that strengthen, accelerate and harvest. So if the external market conditions are good, but we do not have the right products in place, so we do not have a great leadership team in place. We need to fix that. So we need to invest smart to change that position, and we should not focus on anything else. This position we call strengthen. If the external market conditions are good, and we also have the right products and the right services in place, and a great management team, we should dare to invest for growth, and this we call accelerate.

And the last one, if the market conditions are not so good, it's a lower growth projection, but we have strong products and strong management team in place. We don't need to invest. We should try to harvest this position instead. So if you see to the right, you can see that the majority of our companies, they are in the accelerate quadrant. So by this framework, we will be able to prioritize investment towards these companies going forward.

Next one is to become more of a proactive owner. Proactive for us means that we would like to guide and take more active decision with our companies. We will implement return on capital employed. That's a key metric to work with other companies. And to do that, we're going to implement a strategic framework, the classic DuPont analysis. So if you want to grow your return, you can work on your EBIT margin perspective, but you can, equally important, work on your capital efficiency side to increase total return. We will also -- which is very important, we will also tie incentives towards return on capital employed instead of just, for example, grow your EBIT every year.

And we do not see that this more active approach interfere with our decentralized model. Actually, instead, I think this will guide the local leaders to make better decision day-to-day, and they will also be aligned with our target as a group. And if any support is needed to accelerate any development, we are there to support and come with active initiatives as well. That could be about pricing opportunities. We cannot require each and every MD out there know exactly how you are excellent in your pricing. We can come there and support. We can support with add-on acquisition. And of course, we can also support with from a working capital perspective, how can you improve your safety stock, for example? We don't do it all the time, but selected initiative where it makes sense.

The other very important growth driver for us is the M&A. Peter will talk more about our approach to M&A, but I would like to highlight some specific areas, which is very important for us. Our M&A capabilities are strong. We have a central team in place that are supporting the business areas, each business area, but also the geographies. With improved experience and expertise from our business areas, we believe we can strengthen this position together with the central team.

Second one is that we have to be disciplined in our evaluation to improve our return on capital employed, as I already mentioned. And we have shift focus to only look at EBITA multiples to look more for returns, and we're looking for IRR returns on each and every acquisition. The target is to reach 20% IRR for every acquisition we will do.

And we also need to open up new geographies to support our M&A growth. We can do that by central initiatives like we talked about entering Germany centrally, but we could also do it from an individual company perspective. We get a great opportunity to move into a new geography. Don't hesitate, do that if it makes sense.

And the last pillar is clusters. Cluster is a connected group of companies that benefit from supporting each other. It has nothing to do with 4 synergies from us as owner. With a more coherent portfolio, we see clear evidence of collaboration opportunities in the group. Collaboration usually comes from the customer or customers -- the companies themselves. It could be about opening up doors to customers, could be talking about great suppliers. We actually have examples where they can cooperate in R&D activities as well.

And the benefit from cluster thinking is clear even from an M&A perspective. If we know the markets, we know the player in the market, it is more easily for us to identify those great targets that we would like to acquire. And it's another strong benefit as well, and that is about sector expertise. So if we know about the sector, we will most probably become a better owner. We also can come with an attractive offer to some of the companies. You can join our group. We have this cluster. This is what we bring to the table as well. And in the future, if we grow a cluster big enough, we can easily then, let's say, create a subsegment within one of the business areas. And you will hear example from this from our business areas as well later today.

So the journey to achieve our financial target will include a number of milestones under the way. For 2025, we have now defined our strategy going forward. And we have also -- we will also enter now with a core portfolio after the divestment will be done. Next year, we will enter with a healthy balance sheet in 2026. We have a new team in place, and we will start to ramp up our growth. And that's also for the M&A growth, of course.

From 2027, we will be forming a full potential as we call it. And to be able to double the company in 5 years, we need to increase the growth from '27 to 2030 to be abling to reach those 15% over 5 years.

Just to summarize our financial targets again. Our target is to grow adjusted EBITA by 15% per year. The organic growth will come from our strong attractive segments that's going to grow more than GDP in Europe, which we all know is going to be -- or the forecast is going to be quite moderate for next year. Our proactive ownership model is going to generate more organic growth. And then on top of that, we have our M&A growth. That's going to be critical to reach the 15%.

We will improve our return on capital employed to above 15%, and we need to focusing more on the capital efficiency and to be disciplined in our M&As. And our leverage should come down below 3%.

So some last word from me, key takeaways from this introduction here today. Sdiptech has a strong position within our key infrastructure segments, and we see clear trends that these segments is going to grow for a long time. We have a strong core portfolio. You will be hearing some examples of that today, but that's the portfolio we're going to drive forward organically.

Our growth agenda will be built on proactive ownership and also disciplined M&A, focusing on IRR for each and every acquisition going forward. Financial targets, focusing on the total growth target, improving the return on capital employed and have the total leverage below 3.

So that was all from my presentation.

Well, thank you, Anders. It's a big hand. Thank you. We actually -- I have questions for a journalist, but you know in the chart, for those of you online, there's a chat function. So you can get your questions in there, and they can ask you later.

But I'll start with the question now. And guys, if you have a question by the end of the day, save them. But you talked about a decentralized model. And then you also mentioned that we're going to be more hands on. Can you explain that a little bit further? What do you mean by that?

Yes. I think the essence in a decentralized model is that you have strong local leaders that not only there, but they believe that they -- or they have the mandate, and they believe they make the right decisions every day. That's extremely important that they have that belief, and they dare to do that.

We think from an owner perspective that we can be much more clear on the strategic or financial targets for the year. Each company know where we would like to develop the company from an owner perspective. And that, for us, doesn't interfere with the decentralized model. And then sometimes I also mentioned it before, and specific selective initiatives like pricing, we definitely can support the companies to accelerate some of the development that we see from our perspective.

I know there'll be more questions on this. So thanks for now. Thank you. Warm hand on this. And as we said, for those of you here, you actually have microphones, as you can see, next to the chairs. Have you seen that? If you've been in Wallenbergsalen before? So it's excellent for the Q&A by the end of the session.

Now we're going to go through the 4 business areas, but we have one who's going to start. So Sarah, you will be first, but we later have also Roger Wood, Amanda Berninger, of course, and Daniel Unge. But Sarah, please stage is yours.

Thank you, Linda. You can hear me, yes? Yes, it works. Good afternoon, everyone. My name is Sarah. I'm Head of Business Area Water & Bioeconomy. I've been with Sdiptech, just over 3 years, and I've spent most of that time with the companies in this segment. And I will give you an update of the segment, how it looks, also the landscape and how we see the market drivers. And at the end, I will give an example of 1 of the 4 strategic pillars, and as was referring to about clusters.

So this is the water and bioeconomy area as it looks today. It focuses on technologies and systems within water, waste and bio-based solutions. We are currently 9 companies in the area spread over 5 countries. The companies in the group of water and bioeconomy, they are a mix of products, services and aftermarket offerings, and they generated an average EBITA margin of 25%. The returns are in general good, achieving 110% return on capital employed.

And this is an area I'm very passionate about, not only because it holds business opportunities, but also because water is an essential part of life and our society. And it's well known, the growing -- the demand for water is growing, and it's expected that by 2030, the available resources in water will exceed the demand by 40%. And this is driven by private consumption, agriculture, but of course, new industries and existing ones like the semiconductor manufacturing, data centers, power generation and pharmaceuticals. All of those businesses rely on high-quality water supply.

And at the same time, water has become a scarce resource. Only 27% of the surface water in Europe is achieving a good chemical status. And this is actually a reduction from 33% a few years earlier. Pollution, climate change and aging infrastructure generating leakages up to 50% are all areas affecting the amount of fresh water available. So there is a need for investments, and these investments are also driven by regulatory measures in the European Union.

Water has been high on the European agenda for a long time. And this year, this has reinforced even more with the launch of a new water resilience strategy. This strategy has 2 components: one being to reinforce existing laws and regulations. And the other part is to drive investments and stimulate both private and public investments in the area.

And on the right-hand side, you see an example of an urban water cycle. And we see that the companies in the Water & Bioeconomy segment is well positioned in this area from collection, distribution to treatment and used, all the way to wastewater treatment and discharge and recycling.

And I will give two examples of what the companies within this area is currently doing. One is the group of 4 companies to the right-hand side, offering chemicals and products in the water treatment area. It's Pure Water Scandinavia, WTP in the U.K. WaterTech of Sweden and Kemi-Tech in Denmark. They offer solutions for water treatment to primarily hospitals and industries. And this market is driven by the need for to protect the equipment and also reduce the amount of water.

Another interesting area is the area of data and analytics. And in this area, we have one of the newest acquisitions we have done, and that is Wintex in Denmark. They are offering high-quality soil sampling equipment for the agriculture industry. And this is a growing area as agriculture is seen as one of the drivers for an increased pollution affecting the water cycle.

And we are, of course, looking after more companies in this area, and Europe is a good area to look. It's seen as the industry leader -- the leader in water management with 40% of the patents being placed in Europe. And the area in Europe consists of about 80,000 companies. And hopefully, a few of them will be part of the Water & Bioeconomy segment going forward.

I will also give an example on how we work with the companies when they are in the group. And I will refer to the fourth pillar that Anders was talking about being part of one of our strategic areas going forward. And in the Water & Bioeconomy area this is in particular important because many of the companies in this area are quite local. Sludge is treated locally and waste and water management is also based on local -- yes, local solutions.

So we see there is a great value in adding those companies together, share best practice and collaborate in areas like R&D, sourcing and pricing. And 2 of the companies in this cluster has taken this collaboration even further. That's WaterTech of Sweden and Kemi-Tech in Denmark. 12 of the products currently being sold by WaterTech of Sweden in Sweden is being produced in Kemi-Tech in Denmark. And this has resulted in a cost improvement by 5% in production and administration.

And this collaboration is expected to grow even further in 2026 and to see opportunities in both markets. And the water treatment cluster is also a particular interesting cluster to look for more acquisition targets. And we have a list of approximately 10 companies that we're currently looking at complementing this cluster going forward.

Another example has emerged in the wastewater treatment area, where we have Auger specialized in water mains and drainage solutions, and TOPAS, manufacturing water treatment solutions in Sweden. They are currently exploring an opportunity in the U.K. where there is a need to update aging infrastructure, also driven by regulatory demands. So they are currently looking at places, see if the Swedish products can be applicable on the U.K. market and is expected to make a pilot in 2026.

So working in clusters for us is not only an opportunity to improve profitability and strengthen the local market positions, but it's also an opportunity to find new companies and develop the area going forward.

So to summarize the Water & Bioeconomy area, we see this as an attractive segment based on the urgent need for water and wastewater solutions going forward. In 2025, we have been focusing on establishing clusters and collaboration and strengthen the business areas -- business units we have in the area, with local expertise and strengthen local market positions. And going forward, there will be an increased focus on M&A and to find new niche companies that are adding to the water -- urban water cycles and solve the challenge of water.

And by that, thank you for listening to this area, and welcome Roger Wood, who will present another interesting area for the future, energy and electrification.

Thank you, Sarah. Good afternoon, everyone. I'm Roger Wood. I'm Sdiptech's feet on the ground in the U.K., having joined 3.5 years ago as U.K. M&A Director and currently acting as Head of Energy & Electrification.

So Energy & Electrification is technologies, products for efficient generation, transmission and consumption of energy. The business area contains 6 niche high-margin companies together comprising about 1/4 of group revenue and profit. In recent years, the business area has been characterized by some variation in individual company performance, which has limited overall segment growth to around 3%, however, has continued to deliver robust and significant margins.

The outlook for the business area is particularly positive. All of the businesses are operating in high-growth segments and there's significant international growth opportunities. And as talked earlier about the high-level macro drivers for infrastructure sector as a whole, as a number of these particularly at play in energy and electrification, underpinning the long-term attractiveness of the sector.

We've got the ongoing upgrade to high-voltage infrastructure linked to the transition to green energy sources. This is obviously a function of climate change, but the rate of change is driven by government legislation. This transition brings some challenges, but also opportunities. The greener sources of energy are geographically dispersed and intrinsically intermittent in nature. This means lower scheduling accuracy and increasing demand for energy storage systems, load balancing tools and infrastructure for cross-border energy transmission.

We've got rapidly increasing consumption in energy, driven by the obvious data centers, electric vehicles, climate change, urbanization. You combine this increased consumption with the unstable geopolitical environment and the fact that gas still remains a significant proportion of power generation, this means high energy prices. Commercial behavior is very much driven by the desire to save money rather than react to government legislation. And this is resulting in significant demand for products that reduce energy costs, so products and solutions that deliver energy efficiency.

We focus more on the distribution and consumption end of the spectrum, as you'll see with where our portfolio sits, largely because this is the lower capital-intensive end of the market. And within distribution and consumption, we see some particular opportunities, energy management systems, sensors, storage, temporary power and of course, EV charging. All of these segments are forecast to grow significantly in the coming years. Within generation and transmission, we see some selective opportunities around power efficiency and quality.

I'd now like to talk in detail about one of the companies in the portfolio, Resource Data Management. This is a great example of the proactive portfolio engagement that Anders talked about through our shareholder transition strategy. We acquired RDM in 2022, has a global footprint, headquartered in the U.K., sales office in the U.S., manufacturing and sales in Asia and strong distribution in Australia and New Zealand.

RDM provides technology, products and software to control refrigeration, heating, ventilation and is fully integrated with building management systems. This product suite has enabled its customers or lots of its customers to save over 30% on its energy costs at the same time as maintaining regulatory compliance.

RDM has a strong presence in retail and fast-food sectors, hospitality and leisure, fuel retail, smart buildings and cold chain. Cold chain is particularly interesting. This is an area that we see significant potential for cross-business area collaboration and potential clustering.

So shareholder transition. When we acquired the business, there was a broad management structure, but as is typical of an entrepreneurial business, one shareholder, Managing Director, controlling all aspects of the business. The structure was fine for where the business was at that meant there was a number of bottlenecks for future growth. One example of this being the finance function was outsourced. This meant perfectly adequate financial reporting. However, in terms of actual financial data for day-to-day running of the business, that was a little bit more lacking.

Post acquisition, we introduced a more formal board structure. This meant more regular and broader commercial discussions and a greater focus on long-term strategy. The only was cognizant of the need to develop the business for the future, so is happy to work with us for the recruitment of an experienced MD, who is now in place. And he has been incentivized and empowered to drive the business forward for the future in the next 5 years.

So whilst the work is -- this recruitment now is ongoing with more functional expertise being brought into the business, heads of supply chain, technical and an in-house finance function. There's also an ongoing development of the sales structure with the help of an external consultant, and we're recruiting a new general manager for the U.S. market. So once the work is not complete, improvement in the organizational structure, combined with these expert functional heads is enabling the business to deliver efficiently on operational priorities.

I'd like to finish by summarizing how we see the Energy & Electrification segment going forward. A very positive outlook with increasing global energy demand and the fundamental shift in how energy is being produced and delivered, and also a clear focus on high-grade subsegments. There'll be more proactive engagement to focus on operational strategies that will deliver more stable performance and work towards more efficient working capital. A number of the businesses in the segment are facing significant international growth opportunities, and we'll look to support these with targeted investment.

And finally, through intelligent M&A, we'll look to identify products and technologies that we can add to our existing distribution channels and create some clustering around end customer needs and requirements. Very exciting times for the segment. Thank you for listening. I hope you found it interesting.

And now I'd like to hand you over to Amanda Berninger.

Thank you, Roger. My name is Amanda, and I Head the Safety & Security business area. I joined Sdiptech in 2022.

And in this business area, Safety & Security, we acquire high-quality companies that contribute to a more safe society. That can be both hardware as well as software products and services that somehow protects critical infrastructure, physical assets but also data, digital assets, and us, ourselves, the people and also the environment that we live in.

Today, we are 7 business units in this segment. All market leaders within their respective niches, we generate the majority of the sales outside the company's domestic markets, which is enabled by, for example, strong distribution networks. And this has resulted in double-digit growth, high margins, 30% EBIT margin, and a high return on capital employed of 155%.

So the current portfolio of the 7 companies that we have serve 4 key subsegments: cybersecurity, perimeter security, fire safety and clean air. These are all subsegments where we see a good underlying growth and where we think that we can find and attract more high-quality companies. In addition to that, there's also other adjacent safety and security areas that we will explore, but this is the main focus for us at the moment, these 4.

And Anders mentioned in the beginning that and how the modern definition of infrastructure ties really nicely to all our business areas. And that is true also for Safety & Security. What makes Safety & Security a bit special is that it spans across all the business areas. So when we see underlying growth in any of the verticals, that means that there are more assets to protect.

In addition, we live, unfortunately, in a geopolitically uncertain world economic instability, which has led to a sharp increase in threats, digital as well as physical. And as we see the threat level intensifying and escalating, we also see more regulatory compliance -- more regulatory control and loss. And there are a number of examples of recent acts that has been launched. That means or that as a result, we need more protective solutions.

And to give you a little bit more example of the type of companies we have in the group, in perimeter security, for example, we have a company that offers security gates and other type of structural bollards, blockers to mitigate vehicle intrusion outside, for example, a data center that holds a lot of high-value assets, of course, but also airports with a lot of assets and also people.

In fire safety, we have advanced solutions for detecting fire in metros, escalators, tunnel, complex buildings, and also specialty alarm systems to evacuate people in case of a fire.

The fourth segment, clean air, we have our newest acquisition, Dado Lab, which detects and measures emissions in the outside air that we breathe, and specifically fine particles. And fine particles is the most deadly type of air pollution. Out of the 8 million people per year that die from air pollution, 90% of those have been exposed to too much of fine particles.

We also have a couple of other companies in the Clean Air segment that focus on indoor clean air solutions. That is primarily to detect workers, for example, in a hospital or in a laboratory that can be exposed to too much of dangerous gases. And I thought I'd tell you a little bit more about one of these companies where we've done a great journey.

Temperature Electronics, TEL, is a U.K.-based company that's been around for 50 years. We acquired the company in 2022. They make air flow controls and monitors. They work really closely with the fume cupboard manufacturers to develop the airflow monitors to make sure that they meet the regulatory standards. And when you optimize the airflow inside the fume cupboard, you don't just make sure that the workers are always safe, of course, but also you can reduce a lot of energy consumption, up to 85% of the energy consumed can be saved. And that saves, of course, costs for the customers as well as it preserves our environment.

At TEL, we acquired them in 2022. And since then, we've done an impressive journey. We've grown the profits by 12% per year, while at the same time, increasing return on capital employed to above 200%. We've been able to do that by having a strong local leadership in place. We've applied our proactive ownership with clear targets and strategic support, but we have a really good team in place, a management team.

There are also a couple of other prerequisites that has enabled this journey. For example, we own the designs, the IP, and then we outsource everything that is not core. We've also been able to scale through strong distribution partners outside of the U.K. distributors that are -- we have good relationships with and that are loyal to our products. And thanks to the fact that we can save the customers a lot of money, we've also been able to apply a value-based selling approach. So a great example, again, of a company where we've applied our proactive ownership with strong decentralized leaders.

So looking ahead then, we, of course, need to continue the journey that we are on with TEL. We've just started that, but we also need to replicate this with other companies in the portfolio and in the group to continue to grow while maintaining capital efficiency. And in the Safety & Security segment, we have a couple of companies that have not just hardware offerings, but also attractive software offerings, recurring services and maintenance offerings where we can take the opportunity to explore and drive these type of high profit and the capital-efficient sales.

And lastly, we see a lot of good underlying growth in the -- for example, the 4 key subsegments that I mentioned, but also other adjacent segments. And there are a lot of interesting companies for us to acquire there.

So to summarize, we're a high-quality portfolio, high-quality companies, high profit, high cash conversion, and we have an interesting journey to continue with. We have just started, a lot of potential going forward. Thank you.

And with that, I hand over to Daniel.

Thank you, Amanda. So I'm Daniel Unge, I'm Head of Supply Chain and Transportation business area. And the business area, supply chain transportation consists of 8 companies, which, in total, has a revenue of SEK 2.1 billion and a combined EBITA of SEK 443 million. It is categorized by stable growth and also diversified exposure to several growing segments. The growth has been on EBITA level, 32% since the Q3 2023.

So if we look at the business area, we have 4 clear subsegments, the first one being the intra hub logistics, where we mean that we move products and goods within a factory or a warehouse. We have the hub-to-hub, which means moving in between hubs, so between a warehouse and the factory, for example. We also include maintenance of roads, for example, in that as well to facilitate easy transportation between the hubs. We have the Rail and Marine segment, where we mean moving goods using trains or ships and also, last but not least, the fourth segment last mile distribution.

They all have common market drivers, but still, they have unique special needs and also end customers as well. So if we look at the market drivers, the first one being quite clear, e-commerce and cold chain exposure or expansion -- sorry. We have the second driver being the regionalization of production, but also resilient supply chain. By that, we mean that factories moving back from the Far East, for example, and also not be independent so much, so building up supply chains in Europe, for example.

The last driver is regulatory demands, where especially in sustainability, where we have 0 emission cities coming in, for example, that shifts the behavior and how we transport goods within cities. These are all coming into play. If I just go back 1-second and mention the company GAH here in last-mile distribution. They are a company that are part of what both Sarah and my colleague Amanda and even Roger and Anders also mentioned, the clusters. So here, we have formed a cluster that we call the cold chain cluster. So this company is part of that.

What they do is that they supply refrigeration units to trucks that ships food to supermarkets and other warehouses, et cetera, within the cold chain. They have niche products, and they are a niche leader within the segment or cluster, and they also are really, really strong in the U.K. They have several blue-chip customers that has reoccurring contracts, also with service and aftermarket sales as well.

And the subsegment is experiencing, like I said before, but not in sustainability. They see regulatory demands coming in, in the temperature control. So it's getting more and more important to make sure and to be able to report and promise that you have kept the temperature through the entire cold chain. This has increased and is still increasing as an important factor.

And then we acquired GAH back in 2020, and it's been a fantastic journey. I was not here. I joined Sdiptech back in August, but most of the colleagues were here, especially you too, of course, you've been here the longest maybe in the room, but they've done a fantastic journey with this company. They initiated let's call it, value creation initiatives and selected a few that really would bring value to this company and also then to Sdiptech.

What they did was they put a strong management team in place, of course, together with that strong leadership and the proactive ownership of Sdiptech, they created something very good. So they worked on pricing as 1 lever where they, instead of maybe just raising prices every year, 2%, 3%, they looked at the data and use data-driven pricing to be able to have a diverse pricing strategy for them, which was really beneficial. And that led to great impact.

Secondly, they also worked on looking at the service and aftermarket. So as we buy and acquire product companies, usually, there is a service and aftermarket sales as well with these companies. And they managed to grow this by 30%.

Last but not least, with the help of Sdiptech, together with GAH, they also managed to enter new markets and also new segments. So new markets, we mean new countries like Canada, for example, they've entered during these years and other markets as well in Europe and outside of Europe.

The other example is that they also found new segments. And thanks to or due to COVID, I think you all know about vaccine transportation. They also require a strict cold chain transport as well. So the Pharmaceutical segment has grown tremendously from almost 0 up to 20% of the revenue today. And GAH is a fairly big company, one of the biggest one we have in the group. So it has a really good impact.

So GAH are also, of course, continuously looking at new markets and segments as well. So this is something that we shouldn't forget. We don't stop here. This is the beginning.

So going forward for the business area, we would like to enhance the value creation. You saw one example, there are, of course, more, but there is also more to do with all the business units that we have. Through our proactive ownership that Anders mentioned earlier, we can help the companies to grow even further.

We want to continue to invest in growth levers, specific growth levers to facilitate organic growth, but still maintain a capital-efficient approach. And thirdly, we would like to strengthen the market cluster formation and also focus our M&A activities in the most attractive niches.

Thank you very much.

Daniel, thank you very much. I can see the questions in the chart already actually. But one for me because I mean with your experience also from different areas, business areas and the models also you have experience of, what would you say would be the key areas now for you to improve given that?

I think that all companies are unique. So that, of course, has to be taken into account. But there are a couple of generic ones, so I mentioned maybe 2 of them, but pricing is definitely one that is very often overlooked and just automatically happens each year. So that's something where we can be smarter. I think also since we are acquiring product companies, it is important to have a look at also the aftermarket and service sales as these are margin contribution from that is really good as well. So those would be the top ones.

Thank you so much. Warm hand. Thank you. Thank you, Daniel. It's time now for me to present our next speaker. I think it's used to it, the people say, Michael L, Mr. Michael Lund, right. So welcome up Michael Lund from ELM, Managing Direct.

Thank you very much. So my name is Michael, and I work as CEO for the attachment company for forklift trucks. We are a manufacturing company with the base in Denmark.

So our company, since our foundation in 1967, we have aimed for perfection in whatever it comes to the way we produce, how we design or how we promote our solutions to our European customers. That have been a key part of the reason that we today have grown our team to 200 people, mainly based at our 2 different plants, 1 plant in Denmark and 1 plant in the eastern part of Slovakia.

Since 2022, we have been owned by Sdiptech. And today, we are part of the business area, Supply Chain & Transportation. As I said just before, the majority of our colleagues work from the 2 different plants that we do have. But in addition to that, we have an extended sales team based locally in all our key markets, able to support all our customers with local support.

In addition to that, we have, over the past decades, been working hard to establish a close collaboration with all the OEM partners within our -- in our industry, the manufacturers of forklift trucks. That is one of the key reasons that we have been able to grow our business and one of the key reasons that we believe that we will also, in the coming years, be able to grow our business.

Our products, what we do? Ever since the foundation of our company 56 years ago, our mission has remained the same, develop the perfect attachment to ensure an efficient and safe internal logistics and handling solution. Today, we have award a very broad range of different products to highlight a few of them, fork positioners that you use to move euro pallets, rotators in many different variations and in many different capacities. Clamps, many different variations and many different capacities for clamping, steel, paper, white good clamps, et cetera.

In addition, in the recent years, we have developed a new business area within our business, designing and producing customized solution. Together with the forklift truck dealer and together with the end customer, we design and manufacture an attachment that fits perfectly to their handling need to ensure and unlock opportunity for a safe and efficient handling solution.

Within the attachment business, there are 2 different types of attachments, hook-ons and integrated. The majority of our competitors have decided to focus on the hook-on attachments. Hook-on attachment is based on an ISO standardized framework. It unlocks the following advantages: high flexibility because it's standardized; fast delivery, because it's standardized; can be reused from one forklift truck model to another forklift truck model, because it's standardized.

However, we, at ELM, have decided to focus on the integrated attachment. Doing that, it gives us a more complicated internal value chain to master. We need to modify each and every single product that we produce to the specific forklift truck to the specific forklift truck mast.

We have decided to do that to unlock the following advantages: optimal visibility. I hope it's pretty clear, and this is real pictures. The more you can see, the faster you can operate. The more you can see, the more safe you can operate. So we are not just providing our customers with bended, painted, welded steel. We support them with improved efficiency and improved safety. In addition, the lifting capacity of the forklift truck will be increased. The turning radius will be lower, meaning that the racks in the warehouse can be closer together and there is a lower noise level.

Our standards. When you are a customer to ELM, we make very much focus on to make sure that all customers understand that, as I said before, we are not just a supplier of bended, welded and painted steel. We supply all our customers with best-in-class when it comes to safety, quality and sustainable production.

Safety. Safety have been key to us since forever. That's why for so long, it has been a critical part of our product development. With an ELM attachment, you will have the best visibility on the market and thereby safety.

Quality. We don't aim to be the cheapest. We aim to be the best. We build equipment that will last from the coldest part of Norway to the dustiest part of Saudi Arabia. Our products will have -- are designed with a significant higher safety margin compared to the minimum requirements of the CE marking.

Climate impact. Sustainability matters to us, and we know that it matters to many of our customers. Therefore, we have committed ourselves to measure our CO2 emissions and committed ourselves to reduce our CO2 emissions by 50% before the end of 2026 compared to the base year 2022.

Our financials. We aim to be the best, the best within our niche. We don't aim for growth. We aim for sustainable growth, growth within our niche. We believe that's why we can achieve a significant higher operating margin compared to all our competitors.

Before Sdiptech took over our company, we had, I would say, basic understanding of financial performance. We worked hard for a year. Between Christmas and New Year, we checked our bank accounts, we emptied our bank account and filled our pockets. After Sdiptech acquired our company, we got a more nuanced understanding of financial performance. Thanks to that, we believe that we now today perform at a better level. Based on this DuPont analyze, I will show you, our development.

In 2021, the year before Sdiptech took over, we had an EBIT margin around 10%, a capital turnover just above 2.5% and a ROCE just above 30%. In 2022, our EBIT margin increased to 13%, capital turnover close to 3% and a ROCE 35%. 2023, margins just below 20%, capital turnover just above 3%, ROCE almost 60%. 2024, EBIT margin above 20% capital turnover, a word that we didn't know were existing before 2022, almost at 3.3 and ROCE 74% -- 72% sorry.

Our ownership, we act independently, but of course, as a part of a group. Our success does not depend on our ownership nor on the performance from the other companies within the Sdiptech Group since we operate independently. But at the same time, we pay great attention to the group of companies that we now belong. We benefit from a stable long-term owner with a clear financial target and with valuable strategic inputs. The group's portfolio of companies offer us great opportunities for learning.

Our journey going ahead hand-in-hand with Sdiptech. We support the M&A team at Sdiptech, and we support the business areas. We actively seek for business -- for M&A activities when we do our daily operation. We are the boots on the ground for the M&A team at Sdiptech. Companies that would fit into ours or companies that would fit into the investment principles to Sdiptech are shared with the M&A team at Sdiptech.

Obviously, we have been able to improve our financial performance in recent years. Of course, we are very happy to share all our experience within our business area and actively take part to try to improve the financial performance for the other companies within the business area. This was my words, and I hope that you enjoyed a short lecture about attachments.

Thank you for your time.

Thanks, Michael. Technical for that from ELM. Actually, now it's time for the Head of M&A. So please welcome Peter Helsing, give him a warm hand. Stage is yours.

So good afternoon, all. Anders talked about some changes that we wanted to implement, and that is also very true for M&A. We want to leave behind a mindset of overly focusing on EBIT and EBIT growth and adopt a framework more holistic view on value creation and cash flow generation. It's also important to not overpay, of course, as it is for many compounders and not necessarily in terms of the multiples we pay, but more in relation to the cash flow we get.

I will take you through this updated framework for M&A today. But before that, I'm Peter Helsing, I'm the Head of M&A at Sdiptech. I joined the group in May. And before that, I was the Head of M&A at Essity.

So when we think about changing the framework, it's, of course, important to not jeopardize what we do well. And that is, of course, to buy great companies. Remember, more than 70% of our companies in the portfolio have a return on capital employed above 50%. So we have acquired fantastic companies over the years.

So looking at the framework again, the in-house value creation is super important. So that is one of the 3 pillars that we have when we think about M&A and value creation. And in-house sourcing, that is about finding great companies first. Secondly, it's about having a great home for entrepreneurs. So for us, it's super important to have a great package to bring to the table. It's not only about paying a good price. Thirdly, we need to be disciplined in terms of M&A execution. Anders talked about this, and it's very relevant, of course. And we need to be disciplined in many ways.

So one thing is, of course, to be very disciplined in the way we -- the number of acquisitions we do and how fast we can run. So we have the ability to run fast, but we can never run faster than the engine. And that is, of course, the organic cash flow generation. We also need to be disciplined in terms of the price we pay, of course, super important when you do acquisitions. And then finally, we also need to be disciplined when it comes to the quality of the businesses we acquire.

So what do we look for? Yes, we have the European footprint, of course. We have our core markets in U.K. and the Nordics and Italy, but we also see M&A as a tool to move into new markets. And we look at Germany, for instance, now, that could be a very promising area to enter.

We look for niche players in well-defined segments and also supported by the cluster thinking. We look for innovative players with high barriers of entry, and we look for companies in resilient markets with low cyclicality and underlying growth drivers. When it comes to the financials, we look for companies with an EBIT of between SEK 20 million to SEK 50 million. We look for companies with a proven track record, and we look for targets with a return on capital employed of above 50%.

Finally, it's very important with finding situations where the founders and the entrepreneurs want to stay on board and continue to create value together.

So how do we do when we source the deals? I mentioned this is very important, and this is about finding great companies first. We do this in many ways. First of all, we have in-house capabilities. We have a dedicated team looking at roughly 500 companies per week. We have a lot of collaboration throughout the group through the business areas, but also with the portfolio companies to try to find good targets out there. And this is further supported by the cluster thinking.

We have an in-house proactive outreach team. So this is everything from cold calling these companies, but also building long-term relationships. And we all have that hat on us when we think about the daily business. We think about businesses we can acquire and building these long-term relationships is, of course, key, not only for bilateral deals, but also for structured deals where the competition is higher, of course. And if you have a relationship already, you can get a head start.

So by working in this fashion over several years now, we have built up a fantastic asset in terms of a solid pipeline. And as you can see here, we have over 800 companies in this pipeline, and we are actively pursuing this. It's also well balanced between our segments, and it's also well balanced between our markets. And here, you can see also Germany there, which is a potential new market for us. We believe that Germany can be a good fit for us. I will come on to why, but it's a very attractive market in many ways. It's a huge market, and it's also the biggest market for family-owned businesses in Europe.

So how do we win the deal? For us, it's important to provide a great home for entrepreneurs. That is key. So we're not like many players out there. I shouldn't mention any names, but there are players out there taking over businesses, restructuring heavily, changing the management and then reselling the business after, say, 5 years. And we're not like an aggressive industrial player either integrating the businesses beyond recognition. So we offer something else.

So we're basically a long-term ownership. That's what we're in. We have a buy-and-hold philosophy. And by that, we can create a lot of continuity for the businesses we acquire. We value the brand and the culture of the companies we acquire, and we think that the local identity that has normally been so important to building up the company in the past that, that also will be beneficial in the future value creation.

We have our decentralized structure, of course, but we can get a lot of support for the businesses through the work with the business areas and the cluster thinking. And we provide also opportunities to collaborate between the different portfolio companies.

Finally, I talked about the importance of aligned incentives. Here, we have a toolbox that we can use. And one tool is, of course, to use earn-outs. And if they are structured well, they can be very efficient.

So looking at an example here, just to demonstrate how earn-outs can work for us. Going back to GAH that Daniel talked about before, we acquired in 2020, and it has been a very nice addition to the group.

So it's a busy slide, of course, but I will take you through it. So basically, the way we structured this deal, it was a SEK 26 million upfront payment and then a potential SEK 14 million in a full earn-out situation. At the bottom of the slide here, you can see 3 different cases. So first of all, bottom left, you have the business case from when we acquired the business in 2020. The mid-case there is the actual outcome. And then the last case, there is a fictive case based on where the company doesn't perform at all or running at a flat growth in profits.

So going through them one by one. Starting with the business case back in 2020, what we believe then was a profit growth of 7.5%. And with that, the purchase price was SEK 33 million in total, so SEK 26 million in day 1 payment and then another SEK 7 million in earn-out.

Here, we had, as I said, 7.5% in profit growth with a cash conversion of 90%, and that translated into an EBIT multiple of 7x for the first day and then a multiple of 5.2x year 4. And then, of course, the most important figure there is the internal rate of return, which was 24%. So very good returns.

Looking at the mid-section there, the outcome, very attractive. We actually paid out a full earn-out after 4 years. So instead of paying SEK 33 million for this business, we paid SEK 40 million. And this business also performed better in terms of cash flow generation. So the cash conversion went up from 90% to 110%. So then you can see that, of course, the day 1 multiple goes up from 7x to 8.5x. And the year 4 multiple there was still 5.2. So that's quite stable. And here, you can see that even though we paid a higher price, the return went up from 24% to 28%, so super attractive returns.

And then the final case there, I think it's important to have it in there because it demonstrates how we can protect from downside risk. So here in this example, we didn't pay any earn-out because the profit growth was only 0%. We still have 90% cash conversion in this example. So the multiples day 1 was 5.5. And of course, it stays at 5.5 then year 4. And this is what's important. You still get the return we require, which is the 20% return. So even though the business did not perform, we got the returns that we want.

Of course, when you look at all these 3 examples, you can see that the actual outcome was the most desired outcome. So even though we paid the highest multiple in that scenario, the return is the highest and the value creation is the highest, and that's what it's all about, of course.

So key takeaways. Looking forward now in terms of M&A, what we focus on is the great capabilities we have in the in-house sourcing. It's about finding great companies first. We offer a great home for entrepreneurs. It's about finding win-win solutions where we can create value together. And finally, being disciplined in terms of M&A execution. And this is about finding projects with an internal rate of return of about 20%. And in terms of leverage, always having a healthy balance sheet and the leverage below 3x EBITDA.

Thank you for listening.

Thank you, Peter, but we're not going to let you go. You mentioned it there. You just -- you came in May from Essity.

Yes.

And looking into the markets and your experience, I mean, working with the same thing. You mentioned the new markets. And I know this is not in the script. Sorry about this because I know you good. No, but I think Essity had when I was there, 72 markets operating on something like that. If you look into what you just -- if we look into what we just saw here, you were focusing a lot on Germany. Can you explain that a bit? And also why are new markets now important for Sdiptech at this -- where you are right now, why?

Yes. I think it's not straightforward in a way. I mean many compounders and other companies have struggled with Germany. But it's a huge market, a lot of family-owned businesses in Germany, so that's attractive for us. And then I think the model that we have, the model that I just described fits very well in Germany. But we're not only focusing on Germany. We can -- if we -- through our cluster thinking, if we find other opportunities in other markets, then we can move into other markets as well. So that's the way we reason at least.

I love the way you also said taking note there, super -- I've heard you saying that before through the year, super attractive...

What was that?

You said super attractive returns. I hear you also say...

Yes. yes. I can't do that.

Well, we're looking forward to that and more of those. Thank you so much. Thank you. Give him a warm hand.

And now we will talk to somebody you know, and he's been with the company for a while now. So let me introduce to Bengt Lejdstrom, our CFO.

Thank you, Linda. Good afternoon. I'm Bengt Lejdstrom, the CFO of Sdiptech. And ever since joining Sdiptech in August 2018, I think it has been a really exciting journey, and I look forward to continue with that together with all my bright colleagues here.

Before I start my presentation, I should apologize a bit since having the Capital Markets Day today. We realized that it was Thanksgiving yesterday, which means that some people interested may have a long sleep over today. But they can watch the full conference here on our web page later on as you can as well if you want to see some parts again. And as well, it's Black Friday today, right? So perhaps today is the last day you can buy Sdiptech share at a discount and let's see how it goes further.

Right. So my colleagues have given you some insights in our operations and the way of working with M&A. And I will try then to tie it back to what Anders mentioned about our targets by looking on some financial priorities. So I have divided the presentation then into the growth, the leverage, the returns and then also the financial as a foundation for all of this.

So let's start with the growth target. As Anders was mentioning, it's a total growth target. Previously, we had 2 organic growth and acquired growth. But now it's one consolidated target. But of course, still, it's very important with organic growth.

So when we say that this is crucial for our future and is that just talking or can we prove that we actually have it in our numbers and in our companies. This chart to the left, each dot here showing a company that has been part of the group since -- well, it's actually data ever since 2020, regardless if they have been part of the group since 2020 or not. But of course, relating to data availability and also since its CAGR on that left axis, it's also companies with a positive CAGR. We have 1 or 2. Every group has that, that temporarily has a negative organic growth, but we work to support them to get back on track. So these are some very good examples then.

And all in all, if you want to some statistics that for the core business units in 2023, we had a 14% organic growth, means excluding currency effects. And in 2024, it was 5%. So that's better numbers for the core business than compared with the total group.

And what you also can see from this chart is that companies that we have in our sweet spot to call it like that, they've once having a profit of around EUR 2 million to EUR 4 million EBIT have a very good growth as well. So we really do believe that we have great companies out there that can continue to deliver an organic growth, even though our target is a total group growth.

And for those of you who are worried that we will stop reporting on that, we will not. We will continue to report on organic growth, of course, both when it comes to sales and EBITA. So you can follow-up how things are doing. So we think we have a very solid foundation for that part of our total growth target.

The other part is then the acquired growth, and Peter has mentioned how we work with that and what's important with us -- for us with the returns. It comes some financial characteristics to these things when we talk specifically about the conditional debt or the earn-outs as we typically call them. It's an important part for us. It minimizes the risk if something doesn't turn out as expected, but it also gives the seller an opportunity to really earn some good money if things turn out very well.

So -- and I guess many of you understand the model. But just to give you an example then on the left here that if we value a company to, say, SEK 100 million, for example, day 1, we may agree then that we pay the entrepreneur 19. We keep 10 as a potential consideration in the future. If things turn out as expected as they are at the time of acquisition. Let's say, we expect this company will grow 3%, all right.

So as long as they meet that requirement and have a growth journey of at least 3%, we will pay those 10 eventually after the earn-out period is over. And if they didn't succeed, of course, they don't get that money. So that's the downside protection. Could be constructed in some different ways, but basically.

But of course, most entrepreneurs, they want something more than just this. They want to have the opportunity to earn more money, so they want an upside. And for us, we have decided to have a little bit longer earn-out periods than many of our colleagues. Typically, you have a 2-year perhaps earn-out, 3 years at the maximum. We very often work with 4- to 5-year earn-out periods.

And it has some advantages and some disadvantages, of course, as everything. The advantage being that we have the entrepreneur on our side and working and we get to know the company, we can have a succession in an orderly manner and so on. The downside is perhaps the same thing. We have the entrepreneur on board for 5 years, which means that some changes may take some longer time. And when the entrepreneur eventually leaves after 5 years, we may have a gap to close there when it comes to some investments or so. But we try to monitor this in a good way.

If things turn out well and the company has earning more money than expected, more than the 3%, in my example, then the additional -- well, in this case, up to SEK 25 million could be paid out. And we're really happy and glad to pay out earnouts because that means that everything has succeed in a very good way.

So to summarize, it's a good way for us to minimize the risk to have a downside protection and give the seller an opportunity to earn more money. And it's also, for us, a way of funding the actual deal instead of paying more upfront to say that, well, I will at least increase my business with 10%. So I want a higher multiple day 1 and we pay that, we can push that payment further ahead. So it's kind of a cash-free debt. We don't pay an interest on it. And so it's an important source of funding that we push that payment forward. But it has some implications for our books and bookkeeping, and I will come back to that. But all in all, we have investigated this model, and we will still continue to use earn-outs as an effective tool for us.

Then looking at the other target, leverage. Previously, we have had a target about financial leverage, excluding these earn-outs. But since we are very much an acquisitive company, acquiring companies all the time, why not have also debt associated with that process also in our target. So our target now, the 3x to be below 3x is an all-in debt leverage. So everything that's interest, we pay interest on or as with the earn-outs, as I say, we don't pay it, but we book it. So all interest-bearing debt is included in this one, whether they are earn-outs or leases or anything else.

To the left here, you see the development of our leverage over the years since '21 when this starting and what has affected the curve? Well, we have had a very aggressive M&A agenda sometimes. So you see here in the first 2 years, '21, '22, leverage going up. But then again, we acquired perhaps 30% of our total earnings in a year. We were at SEK 160-plus million per year in acquired profit. Of course, that strengthened the leverage. And we have also had some years with a bit slower organic growth, especially in '22 and '24, which then affects this curve as well.

And through the years, we have done a couple of new issues of shares in order to bring the leverage down a bit, 3x since I joined and, on this chart, it's twice in '21 and '22. And of course, that brings leverage down. But that is not our plan or the strategy for us now to keep the target. So I don't think that we will issue shares every now and then to make sure we stay below the 3. That's definitely not in the plan. We are going to manage this with our own cash flow and operations.

So as I said then, to drive the leverage a little further down, as you see, we are a little tiny above the 3.0, work with the organic growth, make sure the organic growth results in a good cash flow and then be selective, as Peter was saying, when we acquire new companies. That will make us really reach our target.

Of course, from time to time, if we make a bigger investment, a larger acquisition, temporarily, that can make the leverage go up a bit. That's because we take on the debt. We take on the conditional debt also day 1, but we haven't got the profit yet. So typically, part of this conditional debt, now it gets a bit theoretical, part of this conditional debt would not be paid out if profits stay where they are today because they require and assumes a higher profit in the future. So if everything just stays as it is, we can release some debt and the leverage go down then, of course.

One then important component of the leverage is the cash flow. Cash flow is important for us. It gives us flexibility to invest in different things. Here, you see the chart on the left here showing the free cash flow per share. That's the yellow line and compared with the earnings per share in the black line.

Two different KPIs based on two different -- very different things. Historically, they have been impacted both on higher interest rates, meaning higher interest costs, put more earnings into high tax countries, U.K. and Italy, for example, and also some periods of a bit slower organic growth.

The EPS curve, it doesn't really follow the free cash curve. And one reason for that is that, again, with these earn-outs, which we book as debt, we need to put the theoretical interest rate as well. And that hits the P&L. It's not tax deductible, of course, and so it goes all the way down and hurts the EPS. Currently, it's quite substantial then with SEK 6 per share.

So this is the historical development. But in the future, we will continue to improve the free cash flow per share. That's very important for us. And that gives us the strength to do acquisitions, but we, of course, have to be careful there. We will work to improve the working capital efficiency.

We mentioned the projects that we do from a central perspective and supporting our companies to help them to be more efficient with their working capital is, of course, one, make more inventory management, for example, and other types of initiatives. We will also be selective in our CapEx spending when companies want us to bring in some money for them to invest in something.

And that leads me over very soon to the next slide. But just to summarize the cash point then that we want to stay at a high cash conversion as we measure it between 70%, 90% of all the profits we make will be generating cash in the pockets. Currently, we're at 81%.

So talking then about the investments and spending the money, the free cash flow give us. The free cash flow, I should have mentioned, the KPI includes CapEx and paying leases, but the cash flow before the CapEx gives us some different opportunities.

You have already seen this chart now in some of the presentations, the DuPont. And here is our core business units, at least the ones acquired before 2024 and those -- and excluding those that have a negative capital employed, that is, of course, very good. If you have a negative capital employed, your return are -- yes, you cannot measure it. And we have a couple of them, thanks to a lot of prepayments, for example, from customers.

But most of our businesses have, of course, a capital employed. And here, you see the return on that. That's the lines. And it's a combination, as not least Michael Lund described, of EBITA margin and capital turnover.

And actually, our average, I think Anders you twisted the numbers around, it's 64%, not 46%. But -- so all in all, a weighted average of all our operating core business units have a 64% return on capital employed. And then you say, well, in your reports, you say 12%, 13%, how come? Well, on the group level, we had all the goodwill and immaterial assets that we need to book when we acquire something and that return on capital employed becomes much lower number then, of course. And that's a more slow-moving object. But that is our target is to bring that slow-moving object up to over 15% that may take a little time. Sorry, since it takes longer time, of course, to improve the KPI that has in it about SEK 8 billion of capital employed compared to supporting the companies that have a much lighter balance sheet. But doing that, we will, of course, improve the full group's return on capital employed.

So coming from a situation with a strong return, we then see how should we then spend the money our free cash flow has given us. And well, depending on then where the companies are in this picture, where should we put the money? Well, to start, the business unit needs to have a solid position to start with. So it's not in any turnaround situation. But if it's a solid return already, but could be better, cash flow steady to generate cash for the investment and of course, a clear business case to generate the profit, then we could discuss.

And then we could select for a company over here with a very high margin. Of course, it's get better outcome to work with the capital turnover because that gives an increase in the return. On the other hand, if it's a company with a very high capital turnover already, it's better to work to improve profits and profit margins to increase the returns. So it's a simple tool. And of course, we have been using this in our minds for a long time, but just wait to show it more explicitly.

So that was the targets. And then going to the financing then is a foundation to be able to deliver on the targets. And this is very illustrative model of our funding. We have a cash position today over here, about SEK 600 million in our pockets as of September and also then, of course, utilizing credit from our financing partners.

Then over this period that we will deliver on our targets. We will have cash flow coming in from operations. We have also unutilized funding headroom from our credit providers, all in all, giving us what we call a financial headroom that's quite extensive for this term. And then we spend the money on M&A, the main thing, but also selective CapEx and leases. So we think our -- when we say that these are our targets, it's to double our earnings in 5 years, keeping the leverage down and the return up. We have simulated and we have proven it in that it works also from our financing position. Again, then which means that we don't need to ask you for more money in an issue, we can manage this on our own.

So summarizing the financial perspective. Organic growth is key for all of our targets. So we will continue with that. Cash flow, of course, to get cash to utilize for acquisitions or the other selective investments, work with our M&A model, continue to enhance that one, but also be very selective and look on the IRRs as an important KPI for selecting which company to acquire. And then also in the foundation to have a solid financial capability going forward.

So thank you very much.

Thank you, Bengt. And we do have questions coming in, but we'll take them later. Thank you.

And now it's actually time for CEO, Anders, to come up and wrap summarize briefly what we have seen here today, all the presentations. And after that, I suggest we do have the Q&A.

Great. Thank you, Linda. Yes. So as Linda said, before some Q&A, I would like to summarize what you have been listening to here today.

The first one that you've heard about is Sdiptech has a strong position within our key infrastructure segments. We see clear growth driver for each of those segments. You also heard the business area talked about the underlying drivers.

A strong core portfolio of high-quality companies. You've been able to listen to some of the examples here today and also listening to Michael from ELM, talking about the company that we believe is one of the really core companies we have in the group.

The organic growth agenda will be built on our proactive ownership. We gave some examples and also the focus on return on capital employed. We have talked and given you some example of where we have strong focus on the return on capital employed, but that's not all the companies. We have more to do, just to give that clear for everybody, and that we want to apply the thinking that we have showed you here today as well.

Our M&A growth will be built on -- continue to build on our in-house sourcing capabilities to supporting the business area, but also to be focused and disciplined in the valuation in the coming years.

And finally, then, our financial targets. They will be focusing on, as Bengt also said then on the total growth, improved return on capital employed and a healthy balance sheet with a leverage below 3.

So that is the short conclusion, the summary here, and I think we can open up for questions.

Thank you. Thank you, Anders. Thank you for that summary of what we've just seen today.

We have a few questions coming in online, but because I think of courtesy, yes, thank you, Peter and Bengt to get up. Out of courtesy, if we have any questions in the room, you are here in Wallenbergsalen, so you should get the first questions while I get my questions here on the iPad, if we can get some technical support there.

Yes, please take the microphone next to your seat and it would be lovely if you want to present yourself as well, where you come from and your question. Thank you.

Nice. Max Bacco from SEB. So perhaps starting with, I mean, to my understanding, the key message here is one thing to do better and a more prudent and disciplined approach in terms of capital allocation, in terms of CapEx spending and net working capital management. And I thought it would be interesting to hear your view on how long does it take to fully implement that thinking throughout the group? And I guess, Bengt, your experience from your previous employer also could be interesting on that topic.

Yes, I think I can start a little bit and then you can take over then. But I think as Michael showed from ELM coming in with a focus in 2022, it can happen quite rapidly if you put in clear targets on what you would like to achieve on the capital side. So I think from that perspective, but -- yes, it needs to take a strategic period, 1-year, something like that before we can fully implement that. But we are not starting from scratch. All the business areas have had this in mind, and they have started to talk about it previous years and also now more in this year for the next year.

And to add, I mean, if we start with the Sdiptech journey when both Anders and I joined 7 years ago, we did that strategic rethinking and which have led up to the position we are today, and that takes time, as you realize, it's now 5 years or even more since then. So it takes some time to turn around the ship. But also experience from our previous employers in the business, also, for example, going from distribution to product-based businesses takes a number of years. But this is what we do now. It's more an update and gradual shift. It's not the total 180-degree turn.

Do you want to follow-up?

Yes. A separate question, a bit more short term. Anders, you mentioned in the beginning that the plan for 2026 was partly to start this transition, but also to return back to organic growth. And on the organic growth part, is it that you see that the market more broadly speaking, is recovering? Or is it more an effect of the initiatives that you have implemented throughout 2025. What's your -- what are you seeing there?

Yes. Just a comment on the 2026 for us as well. So the target of the 15% per year is going to be organic and M&A. So next year, we will come in with a lower M&A growth to start from. We need to start acquiring more for next year. So let's see what that can come in, in the year.

But from organic, I think it's both actually that we see now we have a lot of budget discussions with the companies for the next year. It looks better and looks more positive for many of the companies. But also, I think we have been more focused on where to push for growth and not. And we see clear opportunities in some of the companies that here we can focus a bit more on growing as well. So a combination, I would say.

We have to -- thank you. We have one more question from the room. Thank you, guys. And there's actually questions coming up here to you, Sarah as well. So if you want to step up, I see that questions coming in. So just so we're prepared. Yes, please go, next speaker.

There's a microphone on each seat. Unfortunately, so if you all want to -- just go.

A bit of a technical -- maybe a philosophical question because you have such a big U.K. exposure, which is quite different from many of the other compounders. I don't know what the profit is, but maybe half of your profit is from U.K. And I mean, it happens to be that the British pound is down like 11% in the last 12 months and share price is down 19%. So it could be coincidence, but there's a big correlation to the GDP. So what are you thinking in terms of geographical diversification? I mean, you obviously like U.K., but are there any like ideas on exposure to certain countries?

Well, I can start with the financial part of it, and it's very true, and we had last quarter, almost 5% negative currency effect, as you saw, half of it coming from U.K. and the 10% there means 5% on the group. Of course, we take -- consider that going forward with hedging and so on, but it will affect us also the Q4 and Q1 to a large extent since that's still very tough comparisons with last year.

But to your question about if we like U.K. more than others, it's -- we like U.K. because they have great opportunities for infrastructure business. We know even the U.K.-based investors ask us why are you so much in the U.K. But we are not in consumer business. We are not depending on that. Our companies more follow the need for upgrading and renovating and expanding the infrastructure. So they seen obviously a very good track record, and you have heard some of the colleagues mention a number of them. But it's not an over ambition in itself to become bigger in the U.K. No, it's to become bigger in the other geographies.

And just to add to that, I think, I mean, Roger, as you heard here, has been our M&A person in U.K., and we've been very successful. So it's been easy for us to continue to acquire and also leads coming into us more regularly, and we are becoming more of a well-known player. But definitely, Peter will try to focus as well equally in the other countries as well to make us more -- less dependent on U.K. definitely.

We will stay in the U.K., but you were from SEB, and you are from the last question we got from. Okay. Thank you. So we have a question now to Sarah and in Parenthesis, Anders. Can you please discuss AMP8 in U.K. This is a GBP 100 billion investment plan for water infrastructure. This one is much larger than the last one.

Should I start -- yes, we know there are several investment initiatives going on in the Water segment, and that's also what we see, for example, with our company, Auger there. Who's experiencing and that's also the collaboration I discussed previously with Topas. So that is one initiative, and we also see investments all over Europe with one just recently being launched together with the European Investment Bank of EUR 50 billion. So it's an interesting opportunity for us, but we also see opportunities in all the European countries.

There was actually one more question. You guys have the same question. So to [indiscernible], thank you for your question, but I think it was answered otherwise, e-mail and blame me, but it looks similar.

So we continue here. And this one is to Bengt. You distribute SEK 8 share per year after tax earnings to your preference share. Your redemption price is SEK 105 per share. Thus, this financing costs 7.62% and is not tax deductible. More cost-efficient financing should be available for Sdiptech. Have you considered redeeming the preference shares? I think...

You have heard that question many times.

Yes. That's what I figured.

But to start with, it's a question for our Board of Directors to decide upon this. It's dependent on many factors, depending on our overall leverage situation. I agree it will strengthen the earnings per share a little bit. It will lower the P&L a little bit from increased interest costs, and it will increase the leverage since we, instead of share capital we'll need more debt or at least more net debt. So it's a bit of a complicated question. But I guess our Board will take a thoughtful decision whenever there is a situation that could support such a decision. But it's nothing now.

As a former Communication Director for a listed company, I just take for granted you guys answer what you can. And I'm just going to answer -- ask questions and you answer and if its ticker related, you just tell me.

So we have a question for Peter as well. Peter, it goes back to a bit where you already mentioned Anders and Peter before about the broadening geographically. How -- to Peter, how do you view the risk aspect of broadening geographically? Why do you think it will work? And what are the key risks you foresee? This is from Stefan Knutsson. Thank you.

I think it's a very -- it's a difficult answer -- question to answer, I think, but we look at each individual market individually and we make an assessment there. It's a combination of looking at the market and go for markets we like where we have lower risk situations. But then also it's an opportunistic approach we take. So when we find good targets, we can enter new markets that way. But it always needs to be a good fit with both in terms of the target, but also the market itself.

There's another broad question here now from the same person, and this is for, I think, Sarah and the rest of the team in a way. This is to Anders or business area heads. So you can have a long answer here.

How do you make sure that the products of your core business do not get commoditized, my English should be better, commodity sized, how do you say that in the future? Is that correct? Like a commodity?

I think I can start. I think the example of Michael from ELM was a good example of that, that he showed that these are the standard products, they're commoditized and here, we have the special products for our niches. I think it's clear that the niches we have selected and when we do our research with M&A companies, we focus very much on how protected that niche is, how difficult it is to enter it and if it's broad enough for growth potential in it. So from that perspective, we are quite comfortable we will be able to grow within our niches. There's always, of course, some risk that the specific USPs will disappear fading away, but continue to develop the products, make sure you're investing in R&D and you can keep that strong position.

Any more questions from the room? Otherwise, I continue. It's a long -- there's a lot of questions, but I think we will have time. So I go straight to this question from [indiscernible] his name. Anders or Bengt, does your group ROCE metric exclude goodwill from the capital employed? And if so, how do you plan on hardwiring discipline into your valuations, including earnouts?

No. In our group KPI, the 12%, 13% return on capital employed, all the goodwill and everything else is on the balance sheet. So it's when we look at our operational units, we don't include the goodwill from acquiring them that had been a bit strange. So the answer is yes, it's included.

Okay. Thank you. There's another one here for Anders that came up. I have tried to take them in the order they come up. Can you please talk about organic growth at the continuing operations and how it compares to your reported figures? It looks like continuing operations showed positive organic growth over the last 2 years, despite reported organic growth being negative.

Yes. I was talking more about quarters, the specific quarters that we have shown negative organic growth. I don't know exactly the number of quarters we showed it. This last quarter, Q3 was the first one we could show an organic growth of adjusted EBITA again. So I think it's from that perspective that we're going to continue to build and grow organically quarter-by-quarter and of course, year-by-year as well. That's what I can answer to that, I think.

Thank you. Please text if you're not happy with the answers, and we'll try to do them again. I think this -- I don't get any back here. I think they're happy thumbs up here. Okay. So we have -- this one is to Peter. Out of the pipeline of 800 companies, how many are well advanced as prospects?

Yes. Good question. I think it's a very wide portfolio of opportunities there, of course. It's very backloaded. Many of those deals will take years to convert and many of them will never happen, of course. But I think we always try to have at least, say, 5 to 10 that we can convert within the next 12 months. And that will change from day to day, I would say, but that's the ambition.

Thank you. And then this was to Anders. When are you expecting to have sold the 11 companies?

Yes. It's -- Peter is working hard on that to work on the -- not Peter here, the other Peter I talked about, about the divestments. It's a lot of ongoing processes, and we were actually quite happy to say that we signed the first one. But the plan is to do it before the summer. So before summer 2026, the majority of the companies we would like to have sold them.

Thank you. Anders, you get another one here. And that is when -- Bengt or Anders, when do you expect to be below 3x in leverage? Well written 3x here.

Yes. of course, and this is depending on Peter's work here, more we acquire, a bit slower that will take. And if we don't acquire so much, it will go much faster. So -- but we're almost there. So it's not very far away in the future.

We have another one here. When are you planning to replace your SEK 800 billion bond? And how? And what is your view on the sustainability-linked targets for the bond?

Yes. To start with the bond matures in August 2027. But we have a possibility for some fair amount of extra penalties to make an early redemption in August next year. But we haven't decided if we'll go for that or say all the way to the final redemption. And when we redeem that one, and we will most probably replace it with one or more bonds to the same amount or some other amount that is a reasonable amount at that time, depends on our financial situation.

But when it comes to our sustainability linkage to the bond, it's a goal that goes all the way through 2026. And so we don't have a new goal before that. So before early 2027, we can set a new goal. So it depends if we would -- depending on when we replace this bond, if we will add another sustainability goal. But so far, we only have this one. And for you who may not remember that one is to reduce our CO2 intensity by emissions per turnover by 50% from '21 to '26.

This one -- I think this one is for you, but it's open. How will you ensure financial capacity over the coming years? And what will be the split between bonds, credit facilities, cash flows?

Yes. As I showed on the graph, we have still plenty of headroom in our financial credit facilities. So we don't need to put more either bonds or other credit arrangements in place for a number of years. So the balance will be more or less the same as today going forward, quite some time.

Actually, I think these were somewhat similar. So I took them away. I hope you guys are online are okay with that. It was some similar questions. Do we have any more questions from the floor? Because I know -- I guess you know we have a mingle -- oh, there's one. Here you go. Thank you.

[indiscernible]...

Can you just -- sorry, the microphone, can you just push it? Yes, there you go. So they can hear your question online.

Okay. Perfect. Yes. Linus here from Nordea. First of all, just a question here on the proceeds from the divestitures. Can you give us any valuation range that you're expecting? And in terms of priorities, will you delever? Or will you have it as headroom for M&A?

I can start with, say, the valuation. The valuation of the portfolio has been -- we try to focus and try to find new homes for these companies where it fits good. So we've been -- the initial discussion we have had has been quite good on the valuation side, actually. So it's between 5 and 6 roughly, if we're talking about the multiples. But I think from that perspective, it's important for us not to be too aggressive to sell it. We will have a high speed and try to divest them, but some is actually see a great value of the companies there. So from that perspective, it's quite good.

Yes. And the money, the proceeds itself will, of course, go into our cash accounts and Peter will soon have used them for new acquisitions. So -- but I mean, when it calculates KPIs, it's a net debt. So it will lower the net debt, of course, then as we sell those companies.

Did that answer your question? Yes?

Yes, it did. And just another question, if I may. You talked about Germany in the pipeline for the M&A. I was just wondering, why do you think you will be successful there when others have struggled? And also, what is the size roughly on the companies in the pipeline overall?

The size, I mean, it's in between the SEK 20 million and the SEK 50 million in EBIT. I would say that is also the average for the companies we have. So 800x that.

For Germany, we agree that it can be a challenging market. But the way we operate with the -- with the way we handle the companies also stand-alone, and we value the culture is very important in Germany because of the market and how it looks with a lot of family-owned businesses. So we're not saying it's not a challenge. It's different in Germany. But the way we operate, we think we can be successful there.

I can add to that as well that the previous countries we have entered into the U.K. and Italy, its data availability has been very high. Germany has always been a problem for us from a data perspective, but it's been opening up. So we can, from a sourcing perspective, look much more at the size and the margin, et cetera. So that's also important. We get more information now.

And we've also seen, thanks to other companies in the portfolio that has pinpointed attractive companies in Germany, and we have started discussion and it's been quite fruitful the discussions. So from that perspective, we also believe it's the right thing to do to try to enter it.

Thank you. More questions coming up here. Nobody is addressed, but I think it will probably be Anders or Bengt or Peter.

How much EBITDA contribution through M&A can we expect in 2026? Yes, it's Peter, given that you also aim to delever a bit. Will 2027 be the first year of proper M&A growth, you think? Maybe -- do you want to do that one?

I think the way we -- the way we model it at least, I think we need, say, like 5% in growth to get to the 15% over time. But of course, the growth is somewhat slower probably in next year, as Anders alluded to. So yes, I think that's the way we think about it. It very much relates to how we can deliver organically.

Yes, I like the way we mentioned it before. The engine is really the organic growth, and then we pick up M&A as fast as much as possible to be able to deliver on the 15%.

Thank you. There's a lot of questions from the same person. So with all the respect, I will take a question from somebody has not asked in the chat. And no, it's the same person again, okay. No, you're a lucky man. You're a lucky man. How do you ensure that M&A is done at lower valuations and at higher ROICs? Are there incentives now tied to this metric?

We don't have incentives linked to that directly. But of course, earn-outs is an incentive itself, of course, that has been very, very important for us. So I think it creates good alignment there to create value, absolutely.

But I think it's a very important thing for us that when you acquire a company and you put the earnout in and you tie the earn-out only to the EBIT growth, it's what we have seen in many cases, they drive it and they focus on it. But what we need to do as well then is to tie more of the working capital or the capital efficiency to the earn-outs as well.

And we don't want to complicate it too much for the entrepreneurs. They would like to have a simple target that they can reach. So we have all kind of tools to make that as simple as possible. How much dividend can you make to the owners depending on the yearly result and so on. So it's very clear for them. But again, we need to have some kind of metrics in longer earn-outs to improve capital efficiency as well. That's for sure.

I think this will be the final question actually that came in now, and it's for Anders. How many clusters have you identified within the portfolio?

So we don't actually look at the specific numbers. It's more about what you heard from the business area. It's a few here and there, and we're still exploring new ones. But I think right now, we have 3, 4 that are more structured, and we really see clear benefit from working together in.

Thank you. Thank you so much, and thank you for asking questions online. And if we don't have any more questions on the floor, but we will mingle so you might get some more questions when we have the drinks. So for you online, I would also like, if you want to see this again, you will find this on the website, the presentations on Sdiptech's website within short. But now it's Friday. So should we give them a warm hand. Thank you. And thank you also to you and Michael, the Head of Business areas.

And yes, I will invite everybody to drinks, Anders, right?

Perfect.

Good afternoon, and a big welcome to all of you here in Wallenbergsalen, and also a big welcome to you who are watching online. And as you know, this is Sdiptech's Capital Markets Day 2025. I'm Linda Nyberg, and I will be your host today.

So I'm really looking forward to this because last time I was hosting a Capital Markets Day for Sdiptech, was 2021. And for those of you who remember, that was during the pandemic. So I do not have the pleasure to meet all of you in-person. So I think this is great to see so many of you here as well, present.

We're going to jump straight into today's agenda, and I hope it comes here that I'm doing the right thing now. And here also, you have the speakers, of course, of today, and we will start with the CEO, Sdiptech's CEO, and there will be an update on the business strategy, of course, and also to just look at the new financial targets that was announced earlier today. Maybe some of you have seen that already.

And after Anders, we will go into deeper in the business, and we will listen to the 4 business areas and the heads of those. And we will continue with, as you can see, also Michael L -- Michael Lund, sorry, from ELM. ELM in Swedish, which is one of the business units. And we will talk about their journey and also the partnership with Sdiptech and how the development -- the long-term development is supported because of that partnership.

We will also shift focus later, and we will listen about -- listen to the Head of M&A, Peter Helsing, who will also then, of course, talk about the acquisitions. And we will see the new framework and what the future looks like with the M&A perspective.

But first of all, we're going to get the financial overview from the CEO, but I have to say something because we're in Wallenbergsalen, and that's the air hostess information. So you know what I'm going to say now. We have 2 exits in the back. And for those of you who are not aware of that, there's a powdering room, as we say, in English. And you've probably seen it just by the stairs when you enter the room.

And there's a meeting point we're in Sweden. So in case of emergency, God forbidden, we will meet at 7:11, that's everybody knows where that is, right, the closest. And we're not going to meet Sarah, sorry for the joke.

So anyhow, I think now, Anders Mattson, are you ready, the CEO of Sdiptech, Give him a warm hand.

Okay. Now we can hear better. Perfect. Yes, I also would like to take the opportunity to welcome you to our Capital Markets Day. Great to see all of you here and also the one on the webcast. And thank you all for taking the time to listen to us today.

I am then Anders Mattson, CEO of Sdiptech since June this year. I started my -- I came into Sdiptech in 2018, so I've been here over 7 years now, and I've gained a lot of experience working with some fantastic companies and also some very interesting entrepreneurs over the years. And today, I'm very glad to be leading Sdiptech now for the future.

I would like to start to present my management team that you will meet later today. You will be listening to the heads of the business area, the forum. Daniel Unge, Roger Wood, Amanda Berninger and Sarah Strom. And later, you will also then listen to our Head of M&A, Peter Helsing, and our CFO, Bengt Lejdstrom.

We have 2 people today that will not be on stage, and that's our Head of IR and Communications. That's My Lundberg. She's on parental leave. And then we also have Peter Stegersjo, Head of Strategy and Corporate Development. He's the one responsible for all the divestment at the moment, and he will not present here today. But I'm glad to demonstrate a very strong team that now we'll be leading Sdiptech together with me for the coming years.

So let me begin with a brief overview of Sdiptech as a foundation for today's presentation. Sdiptech acquire, develop and create a long-term home for niche companies within attractive infrastructure segments. Today, we consist of 30 companies in the group and divided in the 4 business areas: Supply Chain, Transportation, Energy & Electrification, Water & Bioeconomy and Safety & Security.

And the numbers you can see here on the slide, they are excluding central cost and goodwill to show the operational performance of our entities. I just would like to highlight 2 KPIs. That's the margin. The average adjusted EBITA margin of 23.6% and also the return on capital employed, the average of 46%. These KPIs demonstrate that we have a very strong group of companies in the group and also that we have some strong initiatives that we are positioned within. And you will hear more about the different business areas later today from the heads of the business areas.

U.K. is our biggest market with roughly 50% of the sale, remaining 50% is distributed among other European countries and 5% into the U.S. We operate in a decentralized model, and it's very important that the day-to-day mandate responsibilities is with the local companies.

Our market, we have a modern view of looking and defining an infrastructure that goes beyond the classic definition or roads, tunnels and utilities. Our selected infrastructure segments are broad enough to enable a lot of M&A opportunities for the future, but they also create a focus for us as a group. And the -- but the most important aspect of our segment is that we see clear structural growth trends for the future.

We know that European transportation, water and energy systems are old, and they require a lot of upgrades, digital upgrade as well, replacement and modernization. We also have a growing population, especially around urban areas, and that's demanding that we need to expand all of these systems as well.

And finally, we have stricter regulations and also sustainability demands, so we need to invest to meet up to those requirements. And all of these megatrends that we see creating a very good platform for us going into the future.

Before I talk about areas, we would like to improve that we have talked a lot about in our strategic now planning over the last couple of months, I would like to show you or discuss a little bit about our strong foundation.

We have a strong track record of EBITA growth. We've been growing CAGR 26% since 2019. We are positioned well with our current portfolio within the attractive infrastructure segments, I just mentioned. Since 2018, we have acquired a very strong group of companies that will be the basis for our organic growth going in now to the future.

And our internal M&A capabilities is strong. We have built up over many years, a strong pipeline that we constantly execute on at the moment. And our decentralized model is in place. It's working, and we have very strong leaders in several of our business units out there.

Also on a more soft aspect, many entrepreneurs say that Sdiptech demonstrate a trust and belief that they really like the companies that would like to do something good with the companies. And I think that's very important because we know it's more than just financial metrics, when you're going to acquire family businesses that need to be sold or need to, but will be sold.

So having described our strong foundation, we still have a number of challenges that we have addressed. We have had several companies in our portfolio that has not met up to our investment criteria, the investment criteria or proprietary products, EBIT margin above 15% and exposure to noncyclical end markets. We have also had a volatile growth for many years, which has led to challenges to drive sustainable and long-term organic growth with the core portfolio.

We have focused on a little bit too much, we believe, on growing the EBITA and not on total return. A decentralized model doesn't mean that you cannot be active and support your companies out there. We feel that we have been a little bit too hands-off with many of the companies in the group. And we also have had a negative organic EBITA development over the last 1.5 years, and that's, of course, something we would like to address.

So what are we doing then? What -- how we have addressed this? We have assessed our portfolio, and we have decided to divest 11 companies from the group. This is an ongoing process. And actually, as of yesterday, we have signed 1 of the 11 to be sold within the near term.

We have also strengthened our business area organization. We felt ourselves; we wanted more expertise and experience. So we have recruited new people and we are also recruiting on more in the U.K. that's to come. And during the autumn, we have also created a strategic review together with the management team to clarify how we're going to ensure the long-term growth for the companies and also increase the focus on return on capital employed going forward.

So based on the strategic work, we have defined new financial targets for the group. Firstly, we have moved away from a separate M&A and organic growth target, and now we are targeting a total growth instead. The target is to achieve 15% growth per year until 2030, which will result in a doubling of the EBITA over the 5-year period.

Secondly, we have decided to increase our focus on return on capital employed. And we're targeting to reach about 15%. To be able to improve the return on capital employed, we need to improve the focus on cash flow in our current portfolio, but we also need to be very disciplined in the future M&A opportunities.

On leverage, we also have a new updated leverage target and the target is to be below 3% in total net debt divided by EBITA, and we have stepped away from a separate or a financial external net debt target.

In summary, we believe the new target give us the right focus and there are balance between growth and return on capital employed, and also keeping a healthy balance sheet in place for the long-term.

To reach the new financial targets, we have defined 4 strategic pillars to focus on. And they are enhanced portfolio management, proactive ownership, disciplined and return-focused M&A and also cluster strategy to accelerate both the organic and also the M&A growth. I will go through now the different pillars, so you will understand a little bit more about the content.

The first pillar is about portfolio management. We have decided not to treat all the companies the same in the portfolio, and we need to become more prudent on how we invest and where we invest for the future. First step has already been taken, and that was to assess the strategic fit of the companies, and we decided to divest 11 companies from the group. Again, to repeat, it's companies without proprietary products, EBIT margin around 10% and also exposure -- high exposure to cyclical end markets.

Secondly, we have defined companies that strengthen, accelerate and harvest. So if the external market conditions are good, but we do not have the right products in place, so we do not have a great leadership team in place. We need to fix that. So we need to invest smart to change that position, and we should not focus on anything else. This position we call strengthen. If the external market conditions are good, and we also have the right products and the right services in place, and a great management team, we should dare to invest for growth, and this we call accelerate.

And the last one, if the market conditions are not so good, it's a lower growth projection, but we have strong products and strong management team in place. We don't need to invest. We should try to harvest this position instead. So if you see to the right, you can see that the majority of our companies, they are in the accelerate quadrant. So by this framework, we will be able to prioritize investment towards these companies going forward.

Next one is to become more of a proactive owner. Proactive for us means that we would like to guide and take more active decision with our companies. We will implement return on capital employed. That's a key metric to work with other companies. And to do that, we're going to implement a strategic framework, the classic DuPont analysis. So if you want to grow your return, you can work on your EBIT margin perspective, but you can, equally important, work on your capital efficiency side to increase total return. We will also -- which is very important, we will also tie incentives towards return on capital employed instead of just, for example, grow your EBIT every year.

And we do not see that this more active approach interfere with our decentralized model. Actually, instead, I think this will guide the local leaders to make better decision day-to-day, and they will also be aligned with our target as a group. And if any support is needed to accelerate any development, we are there to support and come with active initiatives as well. That could be about pricing opportunities. We cannot require each and every MD out there know exactly how you are excellent in your pricing. We can come there and support. We can support with add-on acquisition. And of course, we can also support with from a working capital perspective, how can you improve your safety stock, for example? We don't do it all the time, but selected initiative where it makes sense.

The other very important growth driver for us is the M&A. Peter will talk more about our approach to M&A, but I would like to highlight some specific areas, which is very important for us. Our M&A capabilities are strong. We have a central team in place that are supporting the business areas, each business area, but also the geographies. With improved experience and expertise from our business areas, we believe we can strengthen this position together with the central team.

Second one is that we have to be disciplined in our evaluation to improve our return on capital employed, as I already mentioned. And we have shift focus to only look at EBITA multiples to look more for returns, and we're looking for IRR returns on each and every acquisition. The target is to reach 20% IRR for every acquisition we will do.

And we also need to open up new geographies to support our M&A growth. We can do that by central initiatives like we talked about entering Germany centrally, but we could also do it from an individual company perspective. We get a great opportunity to move into a new geography. Don't hesitate, do that if it makes sense.

And the last pillar is clusters. Cluster is a connected group of companies that benefit from supporting each other. It has nothing to do with 4 synergies from us as owner. With a more coherent portfolio, we see clear evidence of collaboration opportunities in the group. Collaboration usually comes from the customer or customers -- the companies themselves. It could be about opening up doors to customers, could be talking about great suppliers. We actually have examples where they can cooperate in R&D activities as well.

And the benefit from cluster thinking is clear even from an M&A perspective. If we know the markets, we know the player in the market, it is more easily for us to identify those great targets that we would like to acquire. And it's another strong benefit as well, and that is about sector expertise. So if we know about the sector, we will most probably become a better owner. We also can come with an attractive offer to some of the companies. You can join our group. We have this cluster. This is what we bring to the table as well. And in the future, if we grow a cluster big enough, we can easily then, let's say, create a subsegment within one of the business areas. And you will hear example from this from our business areas as well later today.

So the journey to achieve our financial target will include a number of milestones under the way. For 2025, we have now defined our strategy going forward. And we have also -- we will also enter now with a core portfolio after the divestment will be done. Next year, we will enter with a healthy balance sheet in 2026. We have a new team in place, and we will start to ramp up our growth. And that's also for the M&A growth, of course.

From 2027, we will be forming a full potential as we call it. And to be able to double the company in 5 years, we need to increase the growth from '27 to 2030 to be abling to reach those 15% over 5 years.

Just to summarize our financial targets again. Our target is to grow adjusted EBITA by 15% per year. The organic growth will come from our strong attractive segments that's going to grow more than GDP in Europe, which we all know is going to be -- or the forecast is going to be quite moderate for next year. Our proactive ownership model is going to generate more organic growth. And then on top of that, we have our M&A growth. That's going to be critical to reach the 15%.

We will improve our return on capital employed to above 15%, and we need to focusing more on the capital efficiency and to be disciplined in our M&As. And our leverage should come down below 3%.

So some last word from me, key takeaways from this introduction here today. Sdiptech has a strong position within our key infrastructure segments, and we see clear trends that these segments is going to grow for a long time. We have a strong core portfolio. You will be hearing some examples of that today, but that's the portfolio we're going to drive forward organically.

Our growth agenda will be built on proactive ownership and also disciplined M&A, focusing on IRR for each and every acquisition going forward. Financial targets, focusing on the total growth target, improving the return on capital employed and have the total leverage below 3.

So that was all from my presentation.

Well, thank you, Anders. It's a big hand. Thank you. We actually -- I have questions for a journalist, but you know in the chart, for those of you online, there's a chat function. So you can get your questions in there, and they can ask you later.

But I'll start with the question now. And guys, if you have a question by the end of the day, save them. But you talked about a decentralized model. And then you also mentioned that we're going to be more hands on. Can you explain that a little bit further? What do you mean by that?

Yes. I think the essence in a decentralized model is that you have strong local leaders that not only there, but they believe that they -- or they have the mandate, and they believe they make the right decisions every day. That's extremely important that they have that belief, and they dare to do that.

We think from an owner perspective that we can be much more clear on the strategic or financial targets for the year. Each company know where we would like to develop the company from an owner perspective. And that, for us, doesn't interfere with the decentralized model. And then sometimes I also mentioned it before, and specific selective initiatives like pricing, we definitely can support the companies to accelerate some of the development that we see from our perspective.

I know there'll be more questions on this. So thanks for now. Thank you. Warm hand on this. And as we said, for those of you here, you actually have microphones, as you can see, next to the chairs. Have you seen that? If you've been in Wallenbergsalen before? So it's excellent for the Q&A by the end of the session.

Now we're going to go through the 4 business areas, but we have one who's going to start. So Sarah, you will be first, but we later have also Roger Wood, Amanda Berninger, of course, and Daniel Unge. But Sarah, please stage is yours.

Thank you, Linda. You can hear me, yes? Yes, it works. Good afternoon, everyone. My name is Sarah. I'm Head of Business Area Water & Bioeconomy. I've been with Sdiptech, just over 3 years, and I've spent most of that time with the companies in this segment. And I will give you an update of the segment, how it looks, also the landscape and how we see the market drivers. And at the end, I will give an example of 1 of the 4 strategic pillars, and as was referring to about clusters.

So this is the water and bioeconomy area as it looks today. It focuses on technologies and systems within water, waste and bio-based solutions. We are currently 9 companies in the area spread over 5 countries. The companies in the group of water and bioeconomy, they are a mix of products, services and aftermarket offerings, and they generated an average EBITA margin of 25%. The returns are in general good, achieving 110% return on capital employed.

And this is an area I'm very passionate about, not only because it holds business opportunities, but also because water is an essential part of life and our society. And it's well known, the growing -- the demand for water is growing, and it's expected that by 2030, the available resources in water will exceed the demand by 40%. And this is driven by private consumption, agriculture, but of course, new industries and existing ones like the semiconductor manufacturing, data centers, power generation and pharmaceuticals. All of those businesses rely on high-quality water supply.

And at the same time, water has become a scarce resource. Only 27% of the surface water in Europe is achieving a good chemical status. And this is actually a reduction from 33% a few years earlier. Pollution, climate change and aging infrastructure generating leakages up to 50% are all areas affecting the amount of fresh water available. So there is a need for investments, and these investments are also driven by regulatory measures in the European Union.

Water has been high on the European agenda for a long time. And this year, this has reinforced even more with the launch of a new water resilience strategy. This strategy has 2 components: one being to reinforce existing laws and regulations. And the other part is to drive investments and stimulate both private and public investments in the area.

And on the right-hand side, you see an example of an urban water cycle. And we see that the companies in the Water & Bioeconomy segment is well positioned in this area from collection, distribution to treatment and used, all the way to wastewater treatment and discharge and recycling.

And I will give two examples of what the companies within this area is currently doing. One is the group of 4 companies to the right-hand side, offering chemicals and products in the water treatment area. It's Pure Water Scandinavia, WTP in the U.K. WaterTech of Sweden and Kemi-Tech in Denmark. They offer solutions for water treatment to primarily hospitals and industries. And this market is driven by the need for to protect the equipment and also reduce the amount of water.

Another interesting area is the area of data and analytics. And in this area, we have one of the newest acquisitions we have done, and that is Wintex in Denmark. They are offering high-quality soil sampling equipment for the agriculture industry. And this is a growing area as agriculture is seen as one of the drivers for an increased pollution affecting the water cycle.

And we are, of course, looking after more companies in this area, and Europe is a good area to look. It's seen as the industry leader -- the leader in water management with 40% of the patents being placed in Europe. And the area in Europe consists of about 80,000 companies. And hopefully, a few of them will be part of the Water & Bioeconomy segment going forward.

I will also give an example on how we work with the companies when they are in the group. And I will refer to the fourth pillar that Anders was talking about being part of one of our strategic areas going forward. And in the Water & Bioeconomy area this is in particular important because many of the companies in this area are quite local. Sludge is treated locally and waste and water management is also based on local -- yes, local solutions.

So we see there is a great value in adding those companies together, share best practice and collaborate in areas like R&D, sourcing and pricing. And 2 of the companies in this cluster has taken this collaboration even further. That's WaterTech of Sweden and Kemi-Tech in Denmark. 12 of the products currently being sold by WaterTech of Sweden in Sweden is being produced in Kemi-Tech in Denmark. And this has resulted in a cost improvement by 5% in production and administration.

And this collaboration is expected to grow even further in 2026 and to see opportunities in both markets. And the water treatment cluster is also a particular interesting cluster to look for more acquisition targets. And we have a list of approximately 10 companies that we're currently looking at complementing this cluster going forward.

Another example has emerged in the wastewater treatment area, where we have Auger specialized in water mains and drainage solutions, and TOPAS, manufacturing water treatment solutions in Sweden. They are currently exploring an opportunity in the U.K. where there is a need to update aging infrastructure, also driven by regulatory demands. So they are currently looking at places, see if the Swedish products can be applicable on the U.K. market and is expected to make a pilot in 2026.

So working in clusters for us is not only an opportunity to improve profitability and strengthen the local market positions, but it's also an opportunity to find new companies and develop the area going forward.

So to summarize the Water & Bioeconomy area, we see this as an attractive segment based on the urgent need for water and wastewater solutions going forward. In 2025, we have been focusing on establishing clusters and collaboration and strengthen the business areas -- business units we have in the area, with local expertise and strengthen local market positions. And going forward, there will be an increased focus on M&A and to find new niche companies that are adding to the water -- urban water cycles and solve the challenge of water.

And by that, thank you for listening to this area, and welcome Roger Wood, who will present another interesting area for the future, energy and electrification.

Thank you, Sarah. Good afternoon, everyone. I'm Roger Wood. I'm Sdiptech's feet on the ground in the U.K., having joined 3.5 years ago as U.K. M&A Director and currently acting as Head of Energy & Electrification.

So Energy & Electrification is technologies, products for efficient generation, transmission and consumption of energy. The business area contains 6 niche high-margin companies together comprising about 1/4 of group revenue and profit. In recent years, the business area has been characterized by some variation in individual company performance, which has limited overall segment growth to around 3%, however, has continued to deliver robust and significant margins.

The outlook for the business area is particularly positive. All of the businesses are operating in high-growth segments and there's significant international growth opportunities. And as talked earlier about the high-level macro drivers for infrastructure sector as a whole, as a number of these particularly at play in energy and electrification, underpinning the long-term attractiveness of the sector.

We've got the ongoing upgrade to high-voltage infrastructure linked to the transition to green energy sources. This is obviously a function of climate change, but the rate of change is driven by government legislation. This transition brings some challenges, but also opportunities. The greener sources of energy are geographically dispersed and intrinsically intermittent in nature. This means lower scheduling accuracy and increasing demand for energy storage systems, load balancing tools and infrastructure for cross-border energy transmission.

We've got rapidly increasing consumption in energy, driven by the obvious data centers, electric vehicles, climate change, urbanization. You combine this increased consumption with the unstable geopolitical environment and the fact that gas still remains a significant proportion of power generation, this means high energy prices. Commercial behavior is very much driven by the desire to save money rather than react to government legislation. And this is resulting in significant demand for products that reduce energy costs, so products and solutions that deliver energy efficiency.

We focus more on the distribution and consumption end of the spectrum, as you'll see with where our portfolio sits, largely because this is the lower capital-intensive end of the market. And within distribution and consumption, we see some particular opportunities, energy management systems, sensors, storage, temporary power and of course, EV charging. All of these segments are forecast to grow significantly in the coming years. Within generation and transmission, we see some selective opportunities around power efficiency and quality.

I'd now like to talk in detail about one of the companies in the portfolio, Resource Data Management. This is a great example of the proactive portfolio engagement that Anders talked about through our shareholder transition strategy. We acquired RDM in 2022, has a global footprint, headquartered in the U.K., sales office in the U.S., manufacturing and sales in Asia and strong distribution in Australia and New Zealand.

RDM provides technology, products and software to control refrigeration, heating, ventilation and is fully integrated with building management systems. This product suite has enabled its customers or lots of its customers to save over 30% on its energy costs at the same time as maintaining regulatory compliance.

RDM has a strong presence in retail and fast-food sectors, hospitality and leisure, fuel retail, smart buildings and cold chain. Cold chain is particularly interesting. This is an area that we see significant potential for cross-business area collaboration and potential clustering.

So shareholder transition. When we acquired the business, there was a broad management structure, but as is typical of an entrepreneurial business, one shareholder, Managing Director, controlling all aspects of the business. The structure was fine for where the business was at that meant there was a number of bottlenecks for future growth. One example of this being the finance function was outsourced. This meant perfectly adequate financial reporting. However, in terms of actual financial data for day-to-day running of the business, that was a little bit more lacking.

Post acquisition, we introduced a more formal board structure. This meant more regular and broader commercial discussions and a greater focus on long-term strategy. The only was cognizant of the need to develop the business for the future, so is happy to work with us for the recruitment of an experienced MD, who is now in place. And he has been incentivized and empowered to drive the business forward for the future in the next 5 years.

So whilst the work is -- this recruitment now is ongoing with more functional expertise being brought into the business, heads of supply chain, technical and an in-house finance function. There's also an ongoing development of the sales structure with the help of an external consultant, and we're recruiting a new general manager for the U.S. market. So once the work is not complete, improvement in the organizational structure, combined with these expert functional heads is enabling the business to deliver efficiently on operational priorities.

I'd like to finish by summarizing how we see the Energy & Electrification segment going forward. A very positive outlook with increasing global energy demand and the fundamental shift in how energy is being produced and delivered, and also a clear focus on high-grade subsegments. There'll be more proactive engagement to focus on operational strategies that will deliver more stable performance and work towards more efficient working capital. A number of the businesses in the segment are facing significant international growth opportunities, and we'll look to support these with targeted investment.

And finally, through intelligent M&A, we'll look to identify products and technologies that we can add to our existing distribution channels and create some clustering around end customer needs and requirements. Very exciting times for the segment. Thank you for listening. I hope you found it interesting.

And now I'd like to hand you over to Amanda Berninger.

Thank you, Roger. My name is Amanda, and I Head the Safety & Security business area. I joined Sdiptech in 2022.

And in this business area, Safety & Security, we acquire high-quality companies that contribute to a more safe society. That can be both hardware as well as software products and services that somehow protects critical infrastructure, physical assets but also data, digital assets, and us, ourselves, the people and also the environment that we live in.

Today, we are 7 business units in this segment. All market leaders within their respective niches, we generate the majority of the sales outside the company's domestic markets, which is enabled by, for example, strong distribution networks. And this has resulted in double-digit growth, high margins, 30% EBIT margin, and a high return on capital employed of 155%.

So the current portfolio of the 7 companies that we have serve 4 key subsegments: cybersecurity, perimeter security, fire safety and clean air. These are all subsegments where we see a good underlying growth and where we think that we can find and attract more high-quality companies. In addition to that, there's also other adjacent safety and security areas that we will explore, but this is the main focus for us at the moment, these 4.

And Anders mentioned in the beginning that and how the modern definition of infrastructure ties really nicely to all our business areas. And that is true also for Safety & Security. What makes Safety & Security a bit special is that it spans across all the business areas. So when we see underlying growth in any of the verticals, that means that there are more assets to protect.

In addition, we live, unfortunately, in a geopolitically uncertain world economic instability, which has led to a sharp increase in threats, digital as well as physical. And as we see the threat level intensifying and escalating, we also see more regulatory compliance -- more regulatory control and loss. And there are a number of examples of recent acts that has been launched. That means or that as a result, we need more protective solutions.

And to give you a little bit more example of the type of companies we have in the group, in perimeter security, for example, we have a company that offers security gates and other type of structural bollards, blockers to mitigate vehicle intrusion outside, for example, a data center that holds a lot of high-value assets, of course, but also airports with a lot of assets and also people.

In fire safety, we have advanced solutions for detecting fire in metros, escalators, tunnel, complex buildings, and also specialty alarm systems to evacuate people in case of a fire.

The fourth segment, clean air, we have our newest acquisition, Dado Lab, which detects and measures emissions in the outside air that we breathe, and specifically fine particles. And fine particles is the most deadly type of air pollution. Out of the 8 million people per year that die from air pollution, 90% of those have been exposed to too much of fine particles.

We also have a couple of other companies in the Clean Air segment that focus on indoor clean air solutions. That is primarily to detect workers, for example, in a hospital or in a laboratory that can be exposed to too much of dangerous gases. And I thought I'd tell you a little bit more about one of these companies where we've done a great journey.

Temperature Electronics, TEL, is a U.K.-based company that's been around for 50 years. We acquired the company in 2022. They make air flow controls and monitors. They work really closely with the fume cupboard manufacturers to develop the airflow monitors to make sure that they meet the regulatory standards. And when you optimize the airflow inside the fume cupboard, you don't just make sure that the workers are always safe, of course, but also you can reduce a lot of energy consumption, up to 85% of the energy consumed can be saved. And that saves, of course, costs for the customers as well as it preserves our environment.

At TEL, we acquired them in 2022. And since then, we've done an impressive journey. We've grown the profits by 12% per year, while at the same time, increasing return on capital employed to above 200%. We've been able to do that by having a strong local leadership in place. We've applied our proactive ownership with clear targets and strategic support, but we have a really good team in place, a management team.

There are also a couple of other prerequisites that has enabled this journey. For example, we own the designs, the IP, and then we outsource everything that is not core. We've also been able to scale through strong distribution partners outside of the U.K. distributors that are -- we have good relationships with and that are loyal to our products. And thanks to the fact that we can save the customers a lot of money, we've also been able to apply a value-based selling approach. So a great example, again, of a company where we've applied our proactive ownership with strong decentralized leaders.

So looking ahead then, we, of course, need to continue the journey that we are on with TEL. We've just started that, but we also need to replicate this with other companies in the portfolio and in the group to continue to grow while maintaining capital efficiency. And in the Safety & Security segment, we have a couple of companies that have not just hardware offerings, but also attractive software offerings, recurring services and maintenance offerings where we can take the opportunity to explore and drive these type of high profit and the capital-efficient sales.

And lastly, we see a lot of good underlying growth in the -- for example, the 4 key subsegments that I mentioned, but also other adjacent segments. And there are a lot of interesting companies for us to acquire there.

So to summarize, we're a high-quality portfolio, high-quality companies, high profit, high cash conversion, and we have an interesting journey to continue with. We have just started, a lot of potential going forward. Thank you.

And with that, I hand over to Daniel.

Thank you, Amanda. So I'm Daniel Unge, I'm Head of Supply Chain and Transportation business area. And the business area, supply chain transportation consists of 8 companies, which, in total, has a revenue of SEK 2.1 billion and a combined EBITA of SEK 443 million. It is categorized by stable growth and also diversified exposure to several growing segments. The growth has been on EBITA level, 32% since the Q3 2023.

So if we look at the business area, we have 4 clear subsegments, the first one being the intra hub logistics, where we mean that we move products and goods within a factory or a warehouse. We have the hub-to-hub, which means moving in between hubs, so between a warehouse and the factory, for example. We also include maintenance of roads, for example, in that as well to facilitate easy transportation between the hubs. We have the Rail and Marine segment, where we mean moving goods using trains or ships and also, last but not least, the fourth segment last mile distribution.

They all have common market drivers, but still, they have unique special needs and also end customers as well. So if we look at the market drivers, the first one being quite clear, e-commerce and cold chain exposure or expansion -- sorry. We have the second driver being the regionalization of production, but also resilient supply chain. By that, we mean that factories moving back from the Far East, for example, and also not be independent so much, so building up supply chains in Europe, for example.

The last driver is regulatory demands, where especially in sustainability, where we have 0 emission cities coming in, for example, that shifts the behavior and how we transport goods within cities. These are all coming into play. If I just go back 1-second and mention the company GAH here in last-mile distribution. They are a company that are part of what both Sarah and my colleague Amanda and even Roger and Anders also mentioned, the clusters. So here, we have formed a cluster that we call the cold chain cluster. So this company is part of that.

What they do is that they supply refrigeration units to trucks that ships food to supermarkets and other warehouses, et cetera, within the cold chain. They have niche products, and they are a niche leader within the segment or cluster, and they also are really, really strong in the U.K. They have several blue-chip customers that has reoccurring contracts, also with service and aftermarket sales as well.

And the subsegment is experiencing, like I said before, but not in sustainability. They see regulatory demands coming in, in the temperature control. So it's getting more and more important to make sure and to be able to report and promise that you have kept the temperature through the entire cold chain. This has increased and is still increasing as an important factor.

And then we acquired GAH back in 2020, and it's been a fantastic journey. I was not here. I joined Sdiptech back in August, but most of the colleagues were here, especially you too, of course, you've been here the longest maybe in the room, but they've done a fantastic journey with this company. They initiated let's call it, value creation initiatives and selected a few that really would bring value to this company and also then to Sdiptech.

What they did was they put a strong management team in place, of course, together with that strong leadership and the proactive ownership of Sdiptech, they created something very good. So they worked on pricing as 1 lever where they, instead of maybe just raising prices every year, 2%, 3%, they looked at the data and use data-driven pricing to be able to have a diverse pricing strategy for them, which was really beneficial. And that led to great impact.

Secondly, they also worked on looking at the service and aftermarket. So as we buy and acquire product companies, usually, there is a service and aftermarket sales as well with these companies. And they managed to grow this by 30%.

Last but not least, with the help of Sdiptech, together with GAH, they also managed to enter new markets and also new segments. So new markets, we mean new countries like Canada, for example, they've entered during these years and other markets as well in Europe and outside of Europe.

The other example is that they also found new segments. And thanks to or due to COVID, I think you all know about vaccine transportation. They also require a strict cold chain transport as well. So the Pharmaceutical segment has grown tremendously from almost 0 up to 20% of the revenue today. And GAH is a fairly big company, one of the biggest one we have in the group. So it has a really good impact.

So GAH are also, of course, continuously looking at new markets and segments as well. So this is something that we shouldn't forget. We don't stop here. This is the beginning.

So going forward for the business area, we would like to enhance the value creation. You saw one example, there are, of course, more, but there is also more to do with all the business units that we have. Through our proactive ownership that Anders mentioned earlier, we can help the companies to grow even further.

We want to continue to invest in growth levers, specific growth levers to facilitate organic growth, but still maintain a capital-efficient approach. And thirdly, we would like to strengthen the market cluster formation and also focus our M&A activities in the most attractive niches.

Thank you very much.

Daniel, thank you very much. I can see the questions in the chart already actually. But one for me because I mean with your experience also from different areas, business areas and the models also you have experience of, what would you say would be the key areas now for you to improve given that?

I think that all companies are unique. So that, of course, has to be taken into account. But there are a couple of generic ones, so I mentioned maybe 2 of them, but pricing is definitely one that is very often overlooked and just automatically happens each year. So that's something where we can be smarter. I think also since we are acquiring product companies, it is important to have a look at also the aftermarket and service sales as these are margin contribution from that is really good as well. So those would be the top ones.

Thank you so much. Warm hand. Thank you. Thank you, Daniel. It's time now for me to present our next speaker. I think it's used to it, the people say, Michael L, Mr. Michael Lund, right. So welcome up Michael Lund from ELM, Managing Direct.

Thank you very much. So my name is Michael, and I work as CEO for the attachment company for forklift trucks. We are a manufacturing company with the base in Denmark.

So our company, since our foundation in 1967, we have aimed for perfection in whatever it comes to the way we produce, how we design or how we promote our solutions to our European customers. That have been a key part of the reason that we today have grown our team to 200 people, mainly based at our 2 different plants, 1 plant in Denmark and 1 plant in the eastern part of Slovakia.

Since 2022, we have been owned by Sdiptech. And today, we are part of the business area, Supply Chain & Transportation. As I said just before, the majority of our colleagues work from the 2 different plants that we do have. But in addition to that, we have an extended sales team based locally in all our key markets, able to support all our customers with local support.

In addition to that, we have, over the past decades, been working hard to establish a close collaboration with all the OEM partners within our -- in our industry, the manufacturers of forklift trucks. That is one of the key reasons that we have been able to grow our business and one of the key reasons that we believe that we will also, in the coming years, be able to grow our business.

Our products, what we do? Ever since the foundation of our company 56 years ago, our mission has remained the same, develop the perfect attachment to ensure an efficient and safe internal logistics and handling solution. Today, we have award a very broad range of different products to highlight a few of them, fork positioners that you use to move euro pallets, rotators in many different variations and in many different capacities. Clamps, many different variations and many different capacities for clamping, steel, paper, white good clamps, et cetera.

In addition, in the recent years, we have developed a new business area within our business, designing and producing customized solution. Together with the forklift truck dealer and together with the end customer, we design and manufacture an attachment that fits perfectly to their handling need to ensure and unlock opportunity for a safe and efficient handling solution.

Within the attachment business, there are 2 different types of attachments, hook-ons and integrated. The majority of our competitors have decided to focus on the hook-on attachments. Hook-on attachment is based on an ISO standardized framework. It unlocks the following advantages: high flexibility because it's standardized; fast delivery, because it's standardized; can be reused from one forklift truck model to another forklift truck model, because it's standardized.

However, we, at ELM, have decided to focus on the integrated attachment. Doing that, it gives us a more complicated internal value chain to master. We need to modify each and every single product that we produce to the specific forklift truck to the specific forklift truck mast.

We have decided to do that to unlock the following advantages: optimal visibility. I hope it's pretty clear, and this is real pictures. The more you can see, the faster you can operate. The more you can see, the more safe you can operate. So we are not just providing our customers with bended, painted, welded steel. We support them with improved efficiency and improved safety. In addition, the lifting capacity of the forklift truck will be increased. The turning radius will be lower, meaning that the racks in the warehouse can be closer together and there is a lower noise level.

Our standards. When you are a customer to ELM, we make very much focus on to make sure that all customers understand that, as I said before, we are not just a supplier of bended, welded and painted steel. We supply all our customers with best-in-class when it comes to safety, quality and sustainable production.

Safety. Safety have been key to us since forever. That's why for so long, it has been a critical part of our product development. With an ELM attachment, you will have the best visibility on the market and thereby safety.

Quality. We don't aim to be the cheapest. We aim to be the best. We build equipment that will last from the coldest part of Norway to the dustiest part of Saudi Arabia. Our products will have -- are designed with a significant higher safety margin compared to the minimum requirements of the CE marking.

Climate impact. Sustainability matters to us, and we know that it matters to many of our customers. Therefore, we have committed ourselves to measure our CO2 emissions and committed ourselves to reduce our CO2 emissions by 50% before the end of 2026 compared to the base year 2022.

Our financials. We aim to be the best, the best within our niche. We don't aim for growth. We aim for sustainable growth, growth within our niche. We believe that's why we can achieve a significant higher operating margin compared to all our competitors.

Before Sdiptech took over our company, we had, I would say, basic understanding of financial performance. We worked hard for a year. Between Christmas and New Year, we checked our bank accounts, we emptied our bank account and filled our pockets. After Sdiptech acquired our company, we got a more nuanced understanding of financial performance. Thanks to that, we believe that we now today perform at a better level. Based on this DuPont analyze, I will show you, our development.

In 2021, the year before Sdiptech took over, we had an EBIT margin around 10%, a capital turnover just above 2.5% and a ROCE just above 30%. In 2022, our EBIT margin increased to 13%, capital turnover close to 3% and a ROCE 35%. 2023, margins just below 20%, capital turnover just above 3%, ROCE almost 60%. 2024, EBIT margin above 20% capital turnover, a word that we didn't know were existing before 2022, almost at 3.3 and ROCE 74% -- 72% sorry.

Our ownership, we act independently, but of course, as a part of a group. Our success does not depend on our ownership nor on the performance from the other companies within the Sdiptech Group since we operate independently. But at the same time, we pay great attention to the group of companies that we now belong. We benefit from a stable long-term owner with a clear financial target and with valuable strategic inputs. The group's portfolio of companies offer us great opportunities for learning.

Our journey going ahead hand-in-hand with Sdiptech. We support the M&A team at Sdiptech, and we support the business areas. We actively seek for business -- for M&A activities when we do our daily operation. We are the boots on the ground for the M&A team at Sdiptech. Companies that would fit into ours or companies that would fit into the investment principles to Sdiptech are shared with the M&A team at Sdiptech.

Obviously, we have been able to improve our financial performance in recent years. Of course, we are very happy to share all our experience within our business area and actively take part to try to improve the financial performance for the other companies within the business area. This was my words, and I hope that you enjoyed a short lecture about attachments.

Thank you for your time.

Thanks, Michael. Technical for that from ELM. Actually, now it's time for the Head of M&A. So please welcome Peter Helsing, give him a warm hand. Stage is yours.

So good afternoon, all. Anders talked about some changes that we wanted to implement, and that is also very true for M&A. We want to leave behind a mindset of overly focusing on EBIT and EBIT growth and adopt a framework more holistic view on value creation and cash flow generation. It's also important to not overpay, of course, as it is for many compounders and not necessarily in terms of the multiples we pay, but more in relation to the cash flow we get.

I will take you through this updated framework for M&A today. But before that, I'm Peter Helsing, I'm the Head of M&A at Sdiptech. I joined the group in May. And before that, I was the Head of M&A at Essity.

So when we think about changing the framework, it's, of course, important to not jeopardize what we do well. And that is, of course, to buy great companies. Remember, more than 70% of our companies in the portfolio have a return on capital employed above 50%. So we have acquired fantastic companies over the years.

So looking at the framework again, the in-house value creation is super important. So that is one of the 3 pillars that we have when we think about M&A and value creation. And in-house sourcing, that is about finding great companies first. Secondly, it's about having a great home for entrepreneurs. So for us, it's super important to have a great package to bring to the table. It's not only about paying a good price. Thirdly, we need to be disciplined in terms of M&A execution. Anders talked about this, and it's very relevant, of course. And we need to be disciplined in many ways.

So one thing is, of course, to be very disciplined in the way we -- the number of acquisitions we do and how fast we can run. So we have the ability to run fast, but we can never run faster than the engine. And that is, of course, the organic cash flow generation. We also need to be disciplined in terms of the price we pay, of course, super important when you do acquisitions. And then finally, we also need to be disciplined when it comes to the quality of the businesses we acquire.

So what do we look for? Yes, we have the European footprint, of course. We have our core markets in U.K. and the Nordics and Italy, but we also see M&A as a tool to move into new markets. And we look at Germany, for instance, now, that could be a very promising area to enter.

We look for niche players in well-defined segments and also supported by the cluster thinking. We look for innovative players with high barriers of entry, and we look for companies in resilient markets with low cyclicality and underlying growth drivers. When it comes to the financials, we look for companies with an EBIT of between SEK 20 million to SEK 50 million. We look for companies with a proven track record, and we look for targets with a return on capital employed of above 50%.

Finally, it's very important with finding situations where the founders and the entrepreneurs want to stay on board and continue to create value together.

So how do we do when we source the deals? I mentioned this is very important, and this is about finding great companies first. We do this in many ways. First of all, we have in-house capabilities. We have a dedicated team looking at roughly 500 companies per week. We have a lot of collaboration throughout the group through the business areas, but also with the portfolio companies to try to find good targets out there. And this is further supported by the cluster thinking.

We have an in-house proactive outreach team. So this is everything from cold calling these companies, but also building long-term relationships. And we all have that hat on us when we think about the daily business. We think about businesses we can acquire and building these long-term relationships is, of course, key, not only for bilateral deals, but also for structured deals where the competition is higher, of course. And if you have a relationship already, you can get a head start.

So by working in this fashion over several years now, we have built up a fantastic asset in terms of a solid pipeline. And as you can see here, we have over 800 companies in this pipeline, and we are actively pursuing this. It's also well balanced between our segments, and it's also well balanced between our markets. And here, you can see also Germany there, which is a potential new market for us. We believe that Germany can be a good fit for us. I will come on to why, but it's a very attractive market in many ways. It's a huge market, and it's also the biggest market for family-owned businesses in Europe.

So how do we win the deal? For us, it's important to provide a great home for entrepreneurs. That is key. So we're not like many players out there. I shouldn't mention any names, but there are players out there taking over businesses, restructuring heavily, changing the management and then reselling the business after, say, 5 years. And we're not like an aggressive industrial player either integrating the businesses beyond recognition. So we offer something else.

So we're basically a long-term ownership. That's what we're in. We have a buy-and-hold philosophy. And by that, we can create a lot of continuity for the businesses we acquire. We value the brand and the culture of the companies we acquire, and we think that the local identity that has normally been so important to building up the company in the past that, that also will be beneficial in the future value creation.

We have our decentralized structure, of course, but we can get a lot of support for the businesses through the work with the business areas and the cluster thinking. And we provide also opportunities to collaborate between the different portfolio companies.

Finally, I talked about the importance of aligned incentives. Here, we have a toolbox that we can use. And one tool is, of course, to use earn-outs. And if they are structured well, they can be very efficient.

So looking at an example here, just to demonstrate how earn-outs can work for us. Going back to GAH that Daniel talked about before, we acquired in 2020, and it has been a very nice addition to the group.

So it's a busy slide, of course, but I will take you through it. So basically, the way we structured this deal, it was a SEK 26 million upfront payment and then a potential SEK 14 million in a full earn-out situation. At the bottom of the slide here, you can see 3 different cases. So first of all, bottom left, you have the business case from when we acquired the business in 2020. The mid-case there is the actual outcome. And then the last case, there is a fictive case based on where the company doesn't perform at all or running at a flat growth in profits.

So going through them one by one. Starting with the business case back in 2020, what we believe then was a profit growth of 7.5%. And with that, the purchase price was SEK 33 million in total, so SEK 26 million in day 1 payment and then another SEK 7 million in earn-out.

Here, we had, as I said, 7.5% in profit growth with a cash conversion of 90%, and that translated into an EBIT multiple of 7x for the first day and then a multiple of 5.2x year 4. And then, of course, the most important figure there is the internal rate of return, which was 24%. So very good returns.

Looking at the mid-section there, the outcome, very attractive. We actually paid out a full earn-out after 4 years. So instead of paying SEK 33 million for this business, we paid SEK 40 million. And this business also performed better in terms of cash flow generation. So the cash conversion went up from 90% to 110%. So then you can see that, of course, the day 1 multiple goes up from 7x to 8.5x. And the year 4 multiple there was still 5.2. So that's quite stable. And here, you can see that even though we paid a higher price, the return went up from 24% to 28%, so super attractive returns.

And then the final case there, I think it's important to have it in there because it demonstrates how we can protect from downside risk. So here in this example, we didn't pay any earn-out because the profit growth was only 0%. We still have 90% cash conversion in this example. So the multiples day 1 was 5.5. And of course, it stays at 5.5 then year 4. And this is what's important. You still get the return we require, which is the 20% return. So even though the business did not perform, we got the returns that we want.

Of course, when you look at all these 3 examples, you can see that the actual outcome was the most desired outcome. So even though we paid the highest multiple in that scenario, the return is the highest and the value creation is the highest, and that's what it's all about, of course.

So key takeaways. Looking forward now in terms of M&A, what we focus on is the great capabilities we have in the in-house sourcing. It's about finding great companies first. We offer a great home for entrepreneurs. It's about finding win-win solutions where we can create value together. And finally, being disciplined in terms of M&A execution. And this is about finding projects with an internal rate of return of about 20%. And in terms of leverage, always having a healthy balance sheet and the leverage below 3x EBITDA.

Thank you for listening.

Thank you, Peter, but we're not going to let you go. You mentioned it there. You just -- you came in May from Essity.

Yes.

And looking into the markets and your experience, I mean, working with the same thing. You mentioned the new markets. And I know this is not in the script. Sorry about this because I know you good. No, but I think Essity had when I was there, 72 markets operating on something like that. If you look into what you just -- if we look into what we just saw here, you were focusing a lot on Germany. Can you explain that a bit? And also why are new markets now important for Sdiptech at this -- where you are right now, why?

Yes. I think it's not straightforward in a way. I mean many compounders and other companies have struggled with Germany. But it's a huge market, a lot of family-owned businesses in Germany, so that's attractive for us. And then I think the model that we have, the model that I just described fits very well in Germany. But we're not only focusing on Germany. We can -- if we -- through our cluster thinking, if we find other opportunities in other markets, then we can move into other markets as well. So that's the way we reason at least.

I love the way you also said taking note there, super -- I've heard you saying that before through the year, super attractive...

What was that?

You said super attractive returns. I hear you also say...

Yes. yes. I can't do that.

Well, we're looking forward to that and more of those. Thank you so much. Thank you. Give him a warm hand.

And now we will talk to somebody you know, and he's been with the company for a while now. So let me introduce to Bengt Lejdstrom, our CFO.

Thank you, Linda. Good afternoon. I'm Bengt Lejdstrom, the CFO of Sdiptech. And ever since joining Sdiptech in August 2018, I think it has been a really exciting journey, and I look forward to continue with that together with all my bright colleagues here.

Before I start my presentation, I should apologize a bit since having the Capital Markets Day today. We realized that it was Thanksgiving yesterday, which means that some people interested may have a long sleep over today. But they can watch the full conference here on our web page later on as you can as well if you want to see some parts again. And as well, it's Black Friday today, right? So perhaps today is the last day you can buy Sdiptech share at a discount and let's see how it goes further.

Right. So my colleagues have given you some insights in our operations and the way of working with M&A. And I will try then to tie it back to what Anders mentioned about our targets by looking on some financial priorities. So I have divided the presentation then into the growth, the leverage, the returns and then also the financial as a foundation for all of this.

So let's start with the growth target. As Anders was mentioning, it's a total growth target. Previously, we had 2 organic growth and acquired growth. But now it's one consolidated target. But of course, still, it's very important with organic growth.

So when we say that this is crucial for our future and is that just talking or can we prove that we actually have it in our numbers and in our companies. This chart to the left, each dot here showing a company that has been part of the group since -- well, it's actually data ever since 2020, regardless if they have been part of the group since 2020 or not. But of course, relating to data availability and also since its CAGR on that left axis, it's also companies with a positive CAGR. We have 1 or 2. Every group has that, that temporarily has a negative organic growth, but we work to support them to get back on track. So these are some very good examples then.

And all in all, if you want to some statistics that for the core business units in 2023, we had a 14% organic growth, means excluding currency effects. And in 2024, it was 5%. So that's better numbers for the core business than compared with the total group.

And what you also can see from this chart is that companies that we have in our sweet spot to call it like that, they've once having a profit of around EUR 2 million to EUR 4 million EBIT have a very good growth as well. So we really do believe that we have great companies out there that can continue to deliver an organic growth, even though our target is a total group growth.

And for those of you who are worried that we will stop reporting on that, we will not. We will continue to report on organic growth, of course, both when it comes to sales and EBITA. So you can follow-up how things are doing. So we think we have a very solid foundation for that part of our total growth target.

The other part is then the acquired growth, and Peter has mentioned how we work with that and what's important with us -- for us with the returns. It comes some financial characteristics to these things when we talk specifically about the conditional debt or the earn-outs as we typically call them. It's an important part for us. It minimizes the risk if something doesn't turn out as expected, but it also gives the seller an opportunity to really earn some good money if things turn out very well.

So -- and I guess many of you understand the model. But just to give you an example then on the left here that if we value a company to, say, SEK 100 million, for example, day 1, we may agree then that we pay the entrepreneur 19. We keep 10 as a potential consideration in the future. If things turn out as expected as they are at the time of acquisition. Let's say, we expect this company will grow 3%, all right.

So as long as they meet that requirement and have a growth journey of at least 3%, we will pay those 10 eventually after the earn-out period is over. And if they didn't succeed, of course, they don't get that money. So that's the downside protection. Could be constructed in some different ways, but basically.

But of course, most entrepreneurs, they want something more than just this. They want to have the opportunity to earn more money, so they want an upside. And for us, we have decided to have a little bit longer earn-out periods than many of our colleagues. Typically, you have a 2-year perhaps earn-out, 3 years at the maximum. We very often work with 4- to 5-year earn-out periods.

And it has some advantages and some disadvantages, of course, as everything. The advantage being that we have the entrepreneur on our side and working and we get to know the company, we can have a succession in an orderly manner and so on. The downside is perhaps the same thing. We have the entrepreneur on board for 5 years, which means that some changes may take some longer time. And when the entrepreneur eventually leaves after 5 years, we may have a gap to close there when it comes to some investments or so. But we try to monitor this in a good way.

If things turn out well and the company has earning more money than expected, more than the 3%, in my example, then the additional -- well, in this case, up to SEK 25 million could be paid out. And we're really happy and glad to pay out earnouts because that means that everything has succeed in a very good way.

So to summarize, it's a good way for us to minimize the risk to have a downside protection and give the seller an opportunity to earn more money. And it's also, for us, a way of funding the actual deal instead of paying more upfront to say that, well, I will at least increase my business with 10%. So I want a higher multiple day 1 and we pay that, we can push that payment further ahead. So it's kind of a cash-free debt. We don't pay an interest on it. And so it's an important source of funding that we push that payment forward. But it has some implications for our books and bookkeeping, and I will come back to that. But all in all, we have investigated this model, and we will still continue to use earn-outs as an effective tool for us.

Then looking at the other target, leverage. Previously, we have had a target about financial leverage, excluding these earn-outs. But since we are very much an acquisitive company, acquiring companies all the time, why not have also debt associated with that process also in our target. So our target now, the 3x to be below 3x is an all-in debt leverage. So everything that's interest, we pay interest on or as with the earn-outs, as I say, we don't pay it, but we book it. So all interest-bearing debt is included in this one, whether they are earn-outs or leases or anything else.

To the left here, you see the development of our leverage over the years since '21 when this starting and what has affected the curve? Well, we have had a very aggressive M&A agenda sometimes. So you see here in the first 2 years, '21, '22, leverage going up. But then again, we acquired perhaps 30% of our total earnings in a year. We were at SEK 160-plus million per year in acquired profit. Of course, that strengthened the leverage. And we have also had some years with a bit slower organic growth, especially in '22 and '24, which then affects this curve as well.

And through the years, we have done a couple of new issues of shares in order to bring the leverage down a bit, 3x since I joined and, on this chart, it's twice in '21 and '22. And of course, that brings leverage down. But that is not our plan or the strategy for us now to keep the target. So I don't think that we will issue shares every now and then to make sure we stay below the 3. That's definitely not in the plan. We are going to manage this with our own cash flow and operations.

So as I said then, to drive the leverage a little further down, as you see, we are a little tiny above the 3.0, work with the organic growth, make sure the organic growth results in a good cash flow and then be selective, as Peter was saying, when we acquire new companies. That will make us really reach our target.

Of course, from time to time, if we make a bigger investment, a larger acquisition, temporarily, that can make the leverage go up a bit. That's because we take on the debt. We take on the conditional debt also day 1, but we haven't got the profit yet. So typically, part of this conditional debt, now it gets a bit theoretical, part of this conditional debt would not be paid out if profits stay where they are today because they require and assumes a higher profit in the future. So if everything just stays as it is, we can release some debt and the leverage go down then, of course.

One then important component of the leverage is the cash flow. Cash flow is important for us. It gives us flexibility to invest in different things. Here, you see the chart on the left here showing the free cash flow per share. That's the yellow line and compared with the earnings per share in the black line.

Two different KPIs based on two different -- very different things. Historically, they have been impacted both on higher interest rates, meaning higher interest costs, put more earnings into high tax countries, U.K. and Italy, for example, and also some periods of a bit slower organic growth.

The EPS curve, it doesn't really follow the free cash curve. And one reason for that is that, again, with these earn-outs, which we book as debt, we need to put the theoretical interest rate as well. And that hits the P&L. It's not tax deductible, of course, and so it goes all the way down and hurts the EPS. Currently, it's quite substantial then with SEK 6 per share.

So this is the historical development. But in the future, we will continue to improve the free cash flow per share. That's very important for us. And that gives us the strength to do acquisitions, but we, of course, have to be careful there. We will work to improve the working capital efficiency.

We mentioned the projects that we do from a central perspective and supporting our companies to help them to be more efficient with their working capital is, of course, one, make more inventory management, for example, and other types of initiatives. We will also be selective in our CapEx spending when companies want us to bring in some money for them to invest in something.

And that leads me over very soon to the next slide. But just to summarize the cash point then that we want to stay at a high cash conversion as we measure it between 70%, 90% of all the profits we make will be generating cash in the pockets. Currently, we're at 81%.

So talking then about the investments and spending the money, the free cash flow give us. The free cash flow, I should have mentioned, the KPI includes CapEx and paying leases, but the cash flow before the CapEx gives us some different opportunities.

You have already seen this chart now in some of the presentations, the DuPont. And here is our core business units, at least the ones acquired before 2024 and those -- and excluding those that have a negative capital employed, that is, of course, very good. If you have a negative capital employed, your return are -- yes, you cannot measure it. And we have a couple of them, thanks to a lot of prepayments, for example, from customers.

But most of our businesses have, of course, a capital employed. And here, you see the return on that. That's the lines. And it's a combination, as not least Michael Lund described, of EBITA margin and capital turnover.

And actually, our average, I think Anders you twisted the numbers around, it's 64%, not 46%. But -- so all in all, a weighted average of all our operating core business units have a 64% return on capital employed. And then you say, well, in your reports, you say 12%, 13%, how come? Well, on the group level, we had all the goodwill and immaterial assets that we need to book when we acquire something and that return on capital employed becomes much lower number then, of course. And that's a more slow-moving object. But that is our target is to bring that slow-moving object up to over 15% that may take a little time. Sorry, since it takes longer time, of course, to improve the KPI that has in it about SEK 8 billion of capital employed compared to supporting the companies that have a much lighter balance sheet. But doing that, we will, of course, improve the full group's return on capital employed.

So coming from a situation with a strong return, we then see how should we then spend the money our free cash flow has given us. And well, depending on then where the companies are in this picture, where should we put the money? Well, to start, the business unit needs to have a solid position to start with. So it's not in any turnaround situation. But if it's a solid return already, but could be better, cash flow steady to generate cash for the investment and of course, a clear business case to generate the profit, then we could discuss.

And then we could select for a company over here with a very high margin. Of course, it's get better outcome to work with the capital turnover because that gives an increase in the return. On the other hand, if it's a company with a very high capital turnover already, it's better to work to improve profits and profit margins to increase the returns. So it's a simple tool. And of course, we have been using this in our minds for a long time, but just wait to show it more explicitly.

So that was the targets. And then going to the financing then is a foundation to be able to deliver on the targets. And this is very illustrative model of our funding. We have a cash position today over here, about SEK 600 million in our pockets as of September and also then, of course, utilizing credit from our financing partners.

Then over this period that we will deliver on our targets. We will have cash flow coming in from operations. We have also unutilized funding headroom from our credit providers, all in all, giving us what we call a financial headroom that's quite extensive for this term. And then we spend the money on M&A, the main thing, but also selective CapEx and leases. So we think our -- when we say that these are our targets, it's to double our earnings in 5 years, keeping the leverage down and the return up. We have simulated and we have proven it in that it works also from our financing position. Again, then which means that we don't need to ask you for more money in an issue, we can manage this on our own.

So summarizing the financial perspective. Organic growth is key for all of our targets. So we will continue with that. Cash flow, of course, to get cash to utilize for acquisitions or the other selective investments, work with our M&A model, continue to enhance that one, but also be very selective and look on the IRRs as an important KPI for selecting which company to acquire. And then also in the foundation to have a solid financial capability going forward.

So thank you very much.

Thank you, Bengt. And we do have questions coming in, but we'll take them later. Thank you.

And now it's actually time for CEO, Anders, to come up and wrap summarize briefly what we have seen here today, all the presentations. And after that, I suggest we do have the Q&A.

Great. Thank you, Linda. Yes. So as Linda said, before some Q&A, I would like to summarize what you have been listening to here today.

The first one that you've heard about is Sdiptech has a strong position within our key infrastructure segments. We see clear growth driver for each of those segments. You also heard the business area talked about the underlying drivers.

A strong core portfolio of high-quality companies. You've been able to listen to some of the examples here today and also listening to Michael from ELM, talking about the company that we believe is one of the really core companies we have in the group.

The organic growth agenda will be built on our proactive ownership. We gave some examples and also the focus on return on capital employed. We have talked and given you some example of where we have strong focus on the return on capital employed, but that's not all the companies. We have more to do, just to give that clear for everybody, and that we want to apply the thinking that we have showed you here today as well.

Our M&A growth will be built on -- continue to build on our in-house sourcing capabilities to supporting the business area, but also to be focused and disciplined in the valuation in the coming years.

And finally, then, our financial targets. They will be focusing on, as Bengt also said then on the total growth, improved return on capital employed and a healthy balance sheet with a leverage below 3.

So that is the short conclusion, the summary here, and I think we can open up for questions.

Thank you. Thank you, Anders. Thank you for that summary of what we've just seen today.

We have a few questions coming in online, but because I think of courtesy, yes, thank you, Peter and Bengt to get up. Out of courtesy, if we have any questions in the room, you are here in Wallenbergsalen, so you should get the first questions while I get my questions here on the iPad, if we can get some technical support there.

Yes, please take the microphone next to your seat and it would be lovely if you want to present yourself as well, where you come from and your question. Thank you.

Nice. Max Bacco from SEB. So perhaps starting with, I mean, to my understanding, the key message here is one thing to do better and a more prudent and disciplined approach in terms of capital allocation, in terms of CapEx spending and net working capital management. And I thought it would be interesting to hear your view on how long does it take to fully implement that thinking throughout the group? And I guess, Bengt, your experience from your previous employer also could be interesting on that topic.

Yes, I think I can start a little bit and then you can take over then. But I think as Michael showed from ELM coming in with a focus in 2022, it can happen quite rapidly if you put in clear targets on what you would like to achieve on the capital side. So I think from that perspective, but -- yes, it needs to take a strategic period, 1-year, something like that before we can fully implement that. But we are not starting from scratch. All the business areas have had this in mind, and they have started to talk about it previous years and also now more in this year for the next year.

And to add, I mean, if we start with the Sdiptech journey when both Anders and I joined 7 years ago, we did that strategic rethinking and which have led up to the position we are today, and that takes time, as you realize, it's now 5 years or even more since then. So it takes some time to turn around the ship. But also experience from our previous employers in the business, also, for example, going from distribution to product-based businesses takes a number of years. But this is what we do now. It's more an update and gradual shift. It's not the total 180-degree turn.

Do you want to follow-up?

Yes. A separate question, a bit more short term. Anders, you mentioned in the beginning that the plan for 2026 was partly to start this transition, but also to return back to organic growth. And on the organic growth part, is it that you see that the market more broadly speaking, is recovering? Or is it more an effect of the initiatives that you have implemented throughout 2025. What's your -- what are you seeing there?

Yes. Just a comment on the 2026 for us as well. So the target of the 15% per year is going to be organic and M&A. So next year, we will come in with a lower M&A growth to start from. We need to start acquiring more for next year. So let's see what that can come in, in the year.

But from organic, I think it's both actually that we see now we have a lot of budget discussions with the companies for the next year. It looks better and looks more positive for many of the companies. But also, I think we have been more focused on where to push for growth and not. And we see clear opportunities in some of the companies that here we can focus a bit more on growing as well. So a combination, I would say.

We have to -- thank you. We have one more question from the room. Thank you, guys. And there's actually questions coming up here to you, Sarah as well. So if you want to step up, I see that questions coming in. So just so we're prepared. Yes, please go, next speaker.

There's a microphone on each seat. Unfortunately, so if you all want to -- just go.

A bit of a technical -- maybe a philosophical question because you have such a big U.K. exposure, which is quite different from many of the other compounders. I don't know what the profit is, but maybe half of your profit is from U.K. And I mean, it happens to be that the British pound is down like 11% in the last 12 months and share price is down 19%. So it could be coincidence, but there's a big correlation to the GDP. So what are you thinking in terms of geographical diversification? I mean, you obviously like U.K., but are there any like ideas on exposure to certain countries?

Well, I can start with the financial part of it, and it's very true, and we had last quarter, almost 5% negative currency effect, as you saw, half of it coming from U.K. and the 10% there means 5% on the group. Of course, we take -- consider that going forward with hedging and so on, but it will affect us also the Q4 and Q1 to a large extent since that's still very tough comparisons with last year.

But to your question about if we like U.K. more than others, it's -- we like U.K. because they have great opportunities for infrastructure business. We know even the U.K.-based investors ask us why are you so much in the U.K. But we are not in consumer business. We are not depending on that. Our companies more follow the need for upgrading and renovating and expanding the infrastructure. So they seen obviously a very good track record, and you have heard some of the colleagues mention a number of them. But it's not an over ambition in itself to become bigger in the U.K. No, it's to become bigger in the other geographies.

And just to add to that, I think, I mean, Roger, as you heard here, has been our M&A person in U.K., and we've been very successful. So it's been easy for us to continue to acquire and also leads coming into us more regularly, and we are becoming more of a well-known player. But definitely, Peter will try to focus as well equally in the other countries as well to make us more -- less dependent on U.K. definitely.

We will stay in the U.K., but you were from SEB, and you are from the last question we got from. Okay. Thank you. So we have a question now to Sarah and in Parenthesis, Anders. Can you please discuss AMP8 in U.K. This is a GBP 100 billion investment plan for water infrastructure. This one is much larger than the last one.

Should I start -- yes, we know there are several investment initiatives going on in the Water segment, and that's also what we see, for example, with our company, Auger there. Who's experiencing and that's also the collaboration I discussed previously with Topas. So that is one initiative, and we also see investments all over Europe with one just recently being launched together with the European Investment Bank of EUR 50 billion. So it's an interesting opportunity for us, but we also see opportunities in all the European countries.

There was actually one more question. You guys have the same question. So to [indiscernible], thank you for your question, but I think it was answered otherwise, e-mail and blame me, but it looks similar.

So we continue here. And this one is to Bengt. You distribute SEK 8 share per year after tax earnings to your preference share. Your redemption price is SEK 105 per share. Thus, this financing costs 7.62% and is not tax deductible. More cost-efficient financing should be available for Sdiptech. Have you considered redeeming the preference shares? I think...

You have heard that question many times.

Yes. That's what I figured.

But to start with, it's a question for our Board of Directors to decide upon this. It's dependent on many factors, depending on our overall leverage situation. I agree it will strengthen the earnings per share a little bit. It will lower the P&L a little bit from increased interest costs, and it will increase the leverage since we, instead of share capital we'll need more debt or at least more net debt. So it's a bit of a complicated question. But I guess our Board will take a thoughtful decision whenever there is a situation that could support such a decision. But it's nothing now.

As a former Communication Director for a listed company, I just take for granted you guys answer what you can. And I'm just going to answer -- ask questions and you answer and if its ticker related, you just tell me.

So we have a question for Peter as well. Peter, it goes back to a bit where you already mentioned Anders and Peter before about the broadening geographically. How -- to Peter, how do you view the risk aspect of broadening geographically? Why do you think it will work? And what are the key risks you foresee? This is from Stefan Knutsson. Thank you.

I think it's a very -- it's a difficult answer -- question to answer, I think, but we look at each individual market individually and we make an assessment there. It's a combination of looking at the market and go for markets we like where we have lower risk situations. But then also it's an opportunistic approach we take. So when we find good targets, we can enter new markets that way. But it always needs to be a good fit with both in terms of the target, but also the market itself.

There's another broad question here now from the same person, and this is for, I think, Sarah and the rest of the team in a way. This is to Anders or business area heads. So you can have a long answer here.

How do you make sure that the products of your core business do not get commoditized, my English should be better, commodity sized, how do you say that in the future? Is that correct? Like a commodity?

I think I can start. I think the example of Michael from ELM was a good example of that, that he showed that these are the standard products, they're commoditized and here, we have the special products for our niches. I think it's clear that the niches we have selected and when we do our research with M&A companies, we focus very much on how protected that niche is, how difficult it is to enter it and if it's broad enough for growth potential in it. So from that perspective, we are quite comfortable we will be able to grow within our niches. There's always, of course, some risk that the specific USPs will disappear fading away, but continue to develop the products, make sure you're investing in R&D and you can keep that strong position.

Any more questions from the room? Otherwise, I continue. It's a long -- there's a lot of questions, but I think we will have time. So I go straight to this question from [indiscernible] his name. Anders or Bengt, does your group ROCE metric exclude goodwill from the capital employed? And if so, how do you plan on hardwiring discipline into your valuations, including earnouts?

No. In our group KPI, the 12%, 13% return on capital employed, all the goodwill and everything else is on the balance sheet. So it's when we look at our operational units, we don't include the goodwill from acquiring them that had been a bit strange. So the answer is yes, it's included.

Okay. Thank you. There's another one here for Anders that came up. I have tried to take them in the order they come up. Can you please talk about organic growth at the continuing operations and how it compares to your reported figures? It looks like continuing operations showed positive organic growth over the last 2 years, despite reported organic growth being negative.

Yes. I was talking more about quarters, the specific quarters that we have shown negative organic growth. I don't know exactly the number of quarters we showed it. This last quarter, Q3 was the first one we could show an organic growth of adjusted EBITA again. So I think it's from that perspective that we're going to continue to build and grow organically quarter-by-quarter and of course, year-by-year as well. That's what I can answer to that, I think.

Thank you. Please text if you're not happy with the answers, and we'll try to do them again. I think this -- I don't get any back here. I think they're happy thumbs up here. Okay. So we have -- this one is to Peter. Out of the pipeline of 800 companies, how many are well advanced as prospects?

Yes. Good question. I think it's a very wide portfolio of opportunities there, of course. It's very backloaded. Many of those deals will take years to convert and many of them will never happen, of course. But I think we always try to have at least, say, 5 to 10 that we can convert within the next 12 months. And that will change from day to day, I would say, but that's the ambition.

Thank you. And then this was to Anders. When are you expecting to have sold the 11 companies?

Yes. It's -- Peter is working hard on that to work on the -- not Peter here, the other Peter I talked about, about the divestments. It's a lot of ongoing processes, and we were actually quite happy to say that we signed the first one. But the plan is to do it before the summer. So before summer 2026, the majority of the companies we would like to have sold them.

Thank you. Anders, you get another one here. And that is when -- Bengt or Anders, when do you expect to be below 3x in leverage? Well written 3x here.

Yes. of course, and this is depending on Peter's work here, more we acquire, a bit slower that will take. And if we don't acquire so much, it will go much faster. So -- but we're almost there. So it's not very far away in the future.

We have another one here. When are you planning to replace your SEK 800 billion bond? And how? And what is your view on the sustainability-linked targets for the bond?

Yes. To start with the bond matures in August 2027. But we have a possibility for some fair amount of extra penalties to make an early redemption in August next year. But we haven't decided if we'll go for that or say all the way to the final redemption. And when we redeem that one, and we will most probably replace it with one or more bonds to the same amount or some other amount that is a reasonable amount at that time, depends on our financial situation.

But when it comes to our sustainability linkage to the bond, it's a goal that goes all the way through 2026. And so we don't have a new goal before that. So before early 2027, we can set a new goal. So it depends if we would -- depending on when we replace this bond, if we will add another sustainability goal. But so far, we only have this one. And for you who may not remember that one is to reduce our CO2 intensity by emissions per turnover by 50% from '21 to '26.

This one -- I think this one is for you, but it's open. How will you ensure financial capacity over the coming years? And what will be the split between bonds, credit facilities, cash flows?

Yes. As I showed on the graph, we have still plenty of headroom in our financial credit facilities. So we don't need to put more either bonds or other credit arrangements in place for a number of years. So the balance will be more or less the same as today going forward, quite some time.

Actually, I think these were somewhat similar. So I took them away. I hope you guys are online are okay with that. It was some similar questions. Do we have any more questions from the floor? Because I know -- I guess you know we have a mingle -- oh, there's one. Here you go. Thank you.

[indiscernible]...

Can you just -- sorry, the microphone, can you just push it? Yes, there you go. So they can hear your question online.

Okay. Perfect. Yes. Linus here from Nordea. First of all, just a question here on the proceeds from the divestitures. Can you give us any valuation range that you're expecting? And in terms of priorities, will you delever? Or will you have it as headroom for M&A?

I can start with, say, the valuation. The valuation of the portfolio has been -- we try to focus and try to find new homes for these companies where it fits good. So we've been -- the initial discussion we have had has been quite good on the valuation side, actually. So it's between 5 and 6 roughly, if we're talking about the multiples. But I think from that perspective, it's important for us not to be too aggressive to sell it. We will have a high speed and try to divest them, but some is actually see a great value of the companies there. So from that perspective, it's quite good.

Yes. And the money, the proceeds itself will, of course, go into our cash accounts and Peter will soon have used them for new acquisitions. So -- but I mean, when it calculates KPIs, it's a net debt. So it will lower the net debt, of course, then as we sell those companies.

Did that answer your question? Yes?

Yes, it did. And just another question, if I may. You talked about Germany in the pipeline for the M&A. I was just wondering, why do you think you will be successful there when others have struggled? And also, what is the size roughly on the companies in the pipeline overall?

The size, I mean, it's in between the SEK 20 million and the SEK 50 million in EBIT. I would say that is also the average for the companies we have. So 800x that.

For Germany, we agree that it can be a challenging market. But the way we operate with the -- with the way we handle the companies also stand-alone, and we value the culture is very important in Germany because of the market and how it looks with a lot of family-owned businesses. So we're not saying it's not a challenge. It's different in Germany. But the way we operate, we think we can be successful there.

I can add to that as well that the previous countries we have entered into the U.K. and Italy, its data availability has been very high. Germany has always been a problem for us from a data perspective, but it's been opening up. So we can, from a sourcing perspective, look much more at the size and the margin, et cetera. So that's also important. We get more information now.

And we've also seen, thanks to other companies in the portfolio that has pinpointed attractive companies in Germany, and we have started discussion and it's been quite fruitful the discussions. So from that perspective, we also believe it's the right thing to do to try to enter it.

Thank you. More questions coming up here. Nobody is addressed, but I think it will probably be Anders or Bengt or Peter.

How much EBITDA contribution through M&A can we expect in 2026? Yes, it's Peter, given that you also aim to delever a bit. Will 2027 be the first year of proper M&A growth, you think? Maybe -- do you want to do that one?

I think the way we -- the way we model it at least, I think we need, say, like 5% in growth to get to the 15% over time. But of course, the growth is somewhat slower probably in next year, as Anders alluded to. So yes, I think that's the way we think about it. It very much relates to how we can deliver organically.

Yes, I like the way we mentioned it before. The engine is really the organic growth, and then we pick up M&A as fast as much as possible to be able to deliver on the 15%.

Thank you. There's a lot of questions from the same person. So with all the respect, I will take a question from somebody has not asked in the chat. And no, it's the same person again, okay. No, you're a lucky man. You're a lucky man. How do you ensure that M&A is done at lower valuations and at higher ROICs? Are there incentives now tied to this metric?

We don't have incentives linked to that directly. But of course, earn-outs is an incentive itself, of course, that has been very, very important for us. So I think it creates good alignment there to create value, absolutely.

But I think it's a very important thing for us that when you acquire a company and you put the earnout in and you tie the earn-out only to the EBIT growth, it's what we have seen in many cases, they drive it and they focus on it. But what we need to do as well then is to tie more of the working capital or the capital efficiency to the earn-outs as well.

And we don't want to complicate it too much for the entrepreneurs. They would like to have a simple target that they can reach. So we have all kind of tools to make that as simple as possible. How much dividend can you make to the owners depending on the yearly result and so on. So it's very clear for them. But again, we need to have some kind of metrics in longer earn-outs to improve capital efficiency as well. That's for sure.

I think this will be the final question actually that came in now, and it's for Anders. How many clusters have you identified within the portfolio?

So we don't actually look at the specific numbers. It's more about what you heard from the business area. It's a few here and there, and we're still exploring new ones. But I think right now, we have 3, 4 that are more structured, and we really see clear benefit from working together in.

Thank you. Thank you so much, and thank you for asking questions online. And if we don't have any more questions on the floor, but we will mingle so you might get some more questions when we have the drinks. So for you online, I would also like, if you want to see this again, you will find this on the website, the presentations on Sdiptech's website within short. But now it's Friday. So should we give them a warm hand. Thank you. And thank you also to you and Michael, the Head of Business areas.

And yes, I will invite everybody to drinks, Anders, right?

Perfect.

Welcome to Sdiptech Q3 2025 Report Presentation. [Operator Instructions]

Now I will hand the conference over to CEO, Anders Mattson and CFO, Bengt Lejdstrom. Please go ahead.

Hi, everybody, and welcome to our Q3 presentation and Q&A. I am Anders Mattson, CEO of Sdiptech, and I will be presenting the results together with CFO, Bengt Lejdstrom, here today.

I will start with the highlights of the quarter before we go into the more general content with the financial results. So in the quarter, we have implemented and streamlined our portfolio and Sdiptech will become a more coherent and better aligned group going forward.

Until today, we have consisted of 41 companies in our 4 business areas. We have historically been growing our adjusted EBITA at a good level, but we have, at the same time, been quite volatile.

Our portfolio has partially been based on installation companies, companies with exposure to cyclical end markets like construction and quite a few companies with a margin around 10% in the group. And these companies were usually or most of them required before our strategic shift into. So if we look at the financials here for this total portfolio in Q3, we had approximately 19% in adjusted EBITA margin and 12% return on capital employed.

If we look in the middle, so what have we done? We have assessed on our key strategic priorities. We prefer product-based companies. We like markets with strong underlying growth drivers. And we would like to see a clear niche, which is usually protected a good way and that's also the reason why we [Technical Difficulty] in many of our business units. So based on this assessment, we have made a decision to divest 11 companies from the group. We have already started the process of finding new homes to these companies, and we have good progress with several of divestments so far.

As these 11 companies only stand for roughly 3% of the year-to-date adjusted EBITA, their P&L effect is minor. On the balance sheet, the result will be a write-down of SEK 500 million in goodwill and other intangible assets. And Bengt will come back to this later in the presentation.

So if we look to the right here, from today and going forward, we will consist of 30 companies and a better aligned portfolio. We believe we will be able to more proactively drive organic growth with this portfolio. And from our point of view, it's also a better allocation of capital towards our strategic priorities going forward.

Financially in the quarter, as I said, is a minor effect. Adjusted EBITA will be reduced by SEK 7 million from SEK 242 million to SEK 235 million. but our adjusted EBITA margin will go up from 19.4% to 21.3%. And return on capital employed will increase from 12% to roughly 13%. So in the presentation going forward now, I will present numbers according to the core portfolio.

So summary of the quarter from a financial perspective, net sales increased with 9%. That was 4.5% organic growth and roughly 9% due to acquisition. We were glad to see solid demand from all our business areas. It was positive to see a slow recovery from some larger business units where orders have been pushed forward in the year from Q1 to Q2 and now in Q3, we finally got some sales realized.

Adjusted EBITA increased with 9% at 2.4% organic and rough from acquisitions. The increase in sales made EBITA grow as well. So it's not only because of cost adjustment. And year-to-date, we are still behind last year's numbers, but positive with the organic growth in the quarter. We have also been able to maintain the margin of 21.3% in the quarter, which has been quite challenging due to tough market conditions, both on price and also actually to getting the customer to commit to the orders.

We had a strong cash flow generation in the quarter as well of 94%, which resulted in SEK 255 million in cash. And that was primarily a result of improved inventory levels from a high level in the last quarter.

If we're going into the net sales, the net sales increased with 9% to SEK 1,102 million. And as I said, there was a good demand, solid demand from all our business areas. And the 4.5% organic growth is something we are, of course, satisfied with in the quarter.

As I also talked about previous quarters, we have experienced a slow first half of the year, especially from some larger business units in the group. So it's a positive sign that I mentioned as well that we have been able to deliver and recognize sales in the quarter.

We have also had a strong contribution from acquisitions. And some of the acquisitions is influenced by strong growth drivers linked to security around data center as one example, and that is in our smallest business area, Safety & Security.

In the graph to the right, we have separated the core portfolio since 2023. And from this date, you can see we have achieved a CAGR of 13% in sales growth.

If we're looking at the sales split, the sales split of the portfolio looks now a little bit different. After the separation of the core, Sweden has decreased in size and now it's only between 5% and 6% in total sales from the portfolio. U.K. is still our biggest market. We believe we are successful in the U.K. We like the trend with the long-term investments in infrastructure assets. Other Europe is now roughly at 20%. This is a geographic area we foresee to continue to grow in.

If you look to the right, turnover by type, proprietary products is the dominant type of revenue for us as a group. Installation has been reduced as a result of the core portfolio. The installation and service that you still hear -- you still see now is primarily on our own products. And we have several companies with a strong service offering that enables stability in the earnings. And that's usually both service on hardware, software and manual labor hours as well. But again, on our -- primarily on our own products then.

Coming into the adjusted EBITA. Adjusted EBITA increased by 9% to SEK 235 million. That is, for us, a stable profit growth with 2.4% organic growth. We also had a strong contribution from acquisitions with 10%, and it's coming primarily from companies within Safety & Security and also from companies within Energy & Electrification. And again, that's the trend around security for data center that has been driven this acquisition quite good in the quarter.

The margin at 21.3%, we have been able to maintain from last year. As I mentioned before, it's been a price pressure in the market. So being able to maintain this margin is a result of a good cost control, both from activities within purchasing, but also from overall overhead cost development.

If we look at the diagram to the right, we see a stable and high level in adjusted EBITA in percentage since 2023. If you also then look at the CAGR, the CAGR of the EBITA is at 11%, and we know we can do better than this. But in this graph, it's affected by a slower pace of acquisitions since last 1.5 year and it's also a weaker, as we know, organic growth since the beginning of 2024.

So looking at the development in our 4 business areas, I think it's important to mention that we believe our 4 business areas serves us well as a group. They are broad enough to enable good M&A opportunities within each and every business area. And they also align our focus to the markets with strong underlying growth drivers, which is very important for the long-term development for us as a group.

In Q3, all 4 business areas had solid demand. It's also positive to see that our smallest business area, Safety & Security, had a strong development in the quarter.

If you look at Supply Chain & Transportation, we have begun to recover in this one after a weaker first half of the year. Several customers in this business area postponed their orders, actually from Q2 during the summer into Q3 and some into Q4. But in Q3, we released some sales, and it was also a good scalability, which led to margin improvements in the business area. Safety & Security, as I already mentioned, had a strong quarter, and there was several smaller units benefiting from favorable market trends, the one I already mentioned around data center, but also around emission control, pollution control, which is a strong area for us. And the new acquired companies in this business area also affected positively.

Within Energy & Electrification, performance was mixed. A few units were driven by continued strong demand from energy efficiency, while some units were still affected from some very tough comparison from last year. That was from Q1, Q2 and also now in Q3.

In Water & Bioocconomy, several units performed well, although margins were impacted in this business area by some cost pressure. And we are working to -- but we also need to be balanced to foresee future opportunities and future growth in regards to our cost base.

And with that said, I hand over to you, Bengt.

Thank you, Anders. Yes. And let's have a little bit deeper look into the cash flow and cash conversion for the whole group. As Anders was mentioning, we had a very good cash conversion of 94%, much of that coming from the inventories that were built up during the summer for seasonal sales that have started now and will continue into Q4. Improved the whole situation with inventory levels.

We also saw some lower tax payments compared to last year. So all in all, a good quarter. And as you can see there on the chart that typically, we are between 70% to 90% in cash conversion. That's from operations and from working capital ups and downs. And we're now on a last 12-month basis, right in the middle at 81%, comparable with last year's 83%.

We also start to show in our reports now the free cash flow per share. We haven't reported that for a very long time, but we report it now. And we had a very good free cash flow. That means all cash coming in from the business and also after the working capital adjustments, but then deducting the amortization of different leasing contracts as well as deducting the capital expenditures for different type of investments in the companies.

So really, the only thing not included is when we acquire companies or pay earn-out debts to already acquired companies. So that cash flow was very good. And apart from the good cash flow from the operations, we saw a lower CapEx level in this quarter as we have done also for the full year. We work very closely with the companies, of course, to decide what type of the investments they should do. And we do that by looking at a classical DuPont chart, you could say that we -- where we look at both their EBIT margins and their capital turnover and see what kind of return on capital employed they have and from that decide what's most prioritized. So yes. And also the free cash flow for the last 12 months, as you see here at the last bullet is also very strong coming then both from the operations and from lower capital expenditures.

Looking then at some additional metrics. We have the profit after tax, of course, an important measure. And -- but this quarter, it's a bit affected quite heavily actually by this write-down of goodwill when -- and it's all of SEK 500 million, this write-down of goodwill and other immaterial assets. When we moved these companies that will be divested out of the business areas, we could then make a full impairment test of their values. As you know, we do our impairment tests on goodwill, et cetera, based on our business areas because they are our cash-generating units. And all our 4 business areas have been able to defend very well the values that are in there. There is no risk for write-downs of the business areas. But when we then subtract out these specific companies, we have enabled them to look at them individually and in fact did total write-down of SEK 0.5 million.

But if we exclude that more bookkeeping exercise, it's not cash generating anything, not affecting the cash flow, then we see that the profit after tax was a little bit lower. The difference is mainly because of the currency effects. We had SEK 14 million of currency loss in the quarter. And as you could see and hear from Anders previously that it affects both top line and profit, of course, this 4%, 5% all in all FX effect. But in our finance net, it affects us with SEK 14 million in the quarter. And that also affects us on the last 12 months. Then total, the finance net is affected with SEK 50 million, most of that coming from currency effects.

And as you saw on the chart on our distribution of sales that currency effect could, of course, be quite substantial as the Swedish currency becomes stronger as we have more than 90% of our revenues kicking in from other currencies.

Then another measure then taking that profit after tax and take it per ordinary share after dilution, you see then a very hefty minus in the quarter, minus SEK 11.14 per share. But if we then exclude this write-down, it's 2 -- a little bit more than SEK 2 per share, and it's of the same reasons as I just explained. And that also goes for the last 12 months compared with last year.

Then taking a look on the leverage. We saw a quite big increase in the financial debt leverage compared with last year and also compared with the year-end last year. And that's because we have paid out earn-out debts. These earn-outs have been provided for in the balance sheet ever since we acquired the companies. So the payout of earn-outs do not affect the net debt in total, the bottom line, but it affects the financial net debt. So that has -- we have paid out about SEK 150 million in the quarter and almost SEK 400 million in the year, year-to-date. So that's, of course, a lot of money going out, but it's going up and it's having performed very well since we acquired them. So it's a good thing to pay earn-outs.

The total net debt compared with the adjusted EBITA has decreased since new year since we haven't made so much acquisitions, but it increased from last year September because we have acquired SEK 85 million of profit in the last 12 months. And of course, that affects the balance sheet and since the organic growth hasn't been top notch during that period. That affects the profit and results in an increased -- slightly increase in the net debt leverage.

Then as the last financial metric here presented, we look at the return on capital employed, the ROCE. And as Anders mentioned, it was 12% now. It's counted as, of course, on the average capital employed for the last 4 months and then compared with the EBITA profit we have had. And that decreased because we have increased the capital employed from the acquisitions and the organic growth, as I said, has been -- last 12 months have been slightly negative.

If we just look at the outgoing balance of capital employed after the write-downs of goodwills, we are at almost 13%. And if we only look at the core businesses, taking their capital employed and their profits, then we're at 13.5% now. So as we divest these companies one by one, then, of course, then the capital employed is reduced and this ROCE will increase slowly, but steadily.

If we look upon the operational return on capital employed, that is the average from our operating units, we're at 51%, which is, of course, very good, we believe.

Okay, with that, back to Anders.

Okay. Thank you, Bengt. So coming into acquisitions, which is a very important aspect of our business model. Year-to-date, we have acquired SEK 40 million in EBITA, and we hope to close one small deal before year-end. We have some ongoing discussions that is quite far in the process. So that's the aim for the year.

I think it's important to mention our guiding principles here in regards to M&A. Regarding the pipeline, we continue to build the pipeline to meet the customers and customers -- sorry, companies to come to the discussion about the final acquisitions, and we do that, and we have a strong, solid pipeline in place continuously building that one.

In regard to valuation, we're disciplined here. We know that it's easy to go away in valuation. And we have -- during this quarter, we have stepped away from 2 deals that I was part of as well due to the valuation was going too high for us. And on the leverage side, as we have said, our aim is to reduce the leverage in the future. So of course, that together with our disciplined evaluation is affecting as well the numbers of acquisition and the number of EBIT we have done so far in the year.

I can also add here that we have started to look into Germany. We did it already last quarter, but it's a good progress and a lot of exciting companies in that region for us now and also for the future, we believe.

Okay. So last slide before we go into the Q&A, a little bit of the takeaways from the quarter from us. I think the solid underlying demand is positive. A majority of our companies had a stable demand in Q3. It is still uncertainty out there in the market. And the condition for many of the businesses in Q4 is unstable. We see that 2026 is a positive sign for us, but it's still uncertain. And that's what we see right now. And we don't want to say anything more about 2026 than that here today.

On the second bullet here, on our strategic actions for the long-term value creation, we have taken some very important steps in the [ quarter line ], our portfolio. We have been talking about that for quite some time, and it's -- I think it's good for us for Sdiptech to finally have done this decision now going forward. Many of the companies, we will divest. We have ongoing discussions with and progress in a good way. We have not set any strict deadline when it needs to happen, the divestment. But both from our perspective, from the company's perspective, we would like to be efficient and fast in the process. So that's what we are driving at.

We have -- during the autumn as well, we have looked into our strategy, and we have made some adjustments, and we will present that on a Capital Market Day in end of November. And on the last note then, the acquisition pipeline. It is a solid pipeline that we have. Discussions ongoing, but we keep a strong discipline in our valuation and also around our investment criteria, especially with our aim to decreasing the leverage over time in the future.

So that was, I think, everything from us as a presenter, and I think we can open up for our Q&A session as well now.

[Operator Instructions] The next question comes from Max Bacco from SEB.

Well done in the quarter. Three questions from my side, 3, 4 questions. Perhaps starting with the cash flow. As you said, very strong here in the quarter, partly due to lower tax, but also lower CapEx and then quite neutral impact from net working capital. So the first question on cash flow, I think you mentioned this, Bengt. But here in the end of 2025 in Q4, do you see potential for further support from net working capital in terms of the cash flow? Or yes, what's your thought on that, if you start with that one?

Exactly. Now typically, Q4 could be quite good from a working capital perspective since we have some seasonal oriented comp. There's no moving equipment and heat work and so on. And they have been building stocks during the summer and starting now then to sell it and turn it into accounts receivables, of course, but then also get the cash in from those invoices. So -- last year, it was actually above 100%, the cash generation. So it's not that high this year, but still Q4 is typically good for net working capital.

Okay. Sounds promising. And then you actually touched upon this also during the presentation that in the quarter, CapEx was a bit lower and that you have a very strict process with the subsidiaries when deciding how to allocate capital. And perhaps thinking a bit more long term than just next quarter, but historically, Sdiptech has been at some 4% of sales in terms of CapEx. Do you see a potential to reduce that number going ahead and perhaps allocate more into acquisitions instead and deleveraging? What's your thought thoughts on that going forward?

Yes. I mean it's typically perhaps difficult to say the exact number for the future. But I think if we have been sometimes around 4 and even above, I think we're more around of sales now in CapEx spending. So -- but as I said, it's always depending on the actual situation and what's most profitable for that company, for example. But yes -- but we have tightened up the process quite a bit.

I can add to that as well, then. Yes, I think what Bengt said there, it's important for us to see the CapEx and the need for the total portfolio and to prioritize in the coming years in a better way. And that's something we have looked into ourselves in our strategic work as well.

Okay. Sounds good. And then changing topic. I mean as you have explained yourself, quite a lot of things going on right now in Sdiptech, I mean, everything from improvement measures in several core subsidiaries. You still have an active M&A pipeline, you have ambitions to divest several companies. And I guess you're preparing as well for Capital Markets Day here in the end of November. Just curious how you allocate responsibilities internally? And do you consider yourself to be able to execute on all parts without, I guess, losing momentum and/or sacrificing quality? What's your thoughts on that?

Yes, I think from -- I agree, it's a lot of -- on the agenda, but I think we have structured it quite good. The M&A team is not responsible for the divestment. So they are focusing on building the pipeline and meeting and executing on the M&A side. We have other internal individuals responsible for the divestment. And it's going quite good actually with -- we are not going on big broad processes. We are identifying smart, we think, key potential buyers to the businesses, and we drive that process quite efficiently.

And from the other perspective is that we are still working on establishing the new business area organization. In August, Daniel started as the new Head of Supply Chain & Transportation. And we are quite far in the process to recruit somebody in the U.K. as well for Energy & Electrification. And I think that will, of course, be very important going forward to have that stable organization in the business area side as well. But so far, it looks -- feels good on that side.

Okay. Perfect. And then one final question, turning a bit more short term again, Just if it's possible, if you could help us how we should think about Q4 here in the next quarter in terms of comparable numbers, both for core and noncore? I mean at first glance, it looks like that noncore or other operations seem to have a quite weak Q4 last year. I guess it's some seasonality into it as well, whereas core had a more -- it looks like more decent quarter Q4 last year. Did you share that view on things?

Yes. Yes, I can -- definitely, it's correct. In our situation, we look at the divestment process. So it might be that some of the companies might be divested now during Q4. And then, of course, it's going to affect that comparable numbers then. From the core, I think Bengt was touching upon that as well, that it's important that our companies with a bigger seasonal effect deliver now. And it's a little bit -- as we said, it's a little bit unsecured at the moment. We have some more slight negative, so to say. But overall, it's a positive sign for the future. But it's -- right now for Q4, we have said not to guide anything more than this at the moment.

The next question comes from Simon Jönsson from ABG Sundal Collier.

First, just I want to say, it's a nice addition with the free cash flow per share KPI. Things like that are appreciated. And then I also have a question, like Max, on the acquisition pace. You -- it sounds like you expect maybe one more smaller acquisition this year. And it sounds like you remain quite active in new deals. So I just wonder how you think about new acquisitions versus your preferred gearing levels sort of what you're comfortable with and where you think your limits might be in terms of gearing and how much you can do on the acquisition side in near term. So I guess that's maybe not Q4, but in coming quarters or so. Anything on that would be helpful how you're thinking?

Yes. So I think on the first perspective of this, it's important to be active. We prefer to say no to deals than not having the deals to not sit at the table. So we are, yes, definitely building the pipeline and meeting the customer and trying to get to the deal, so to say. But regarding the exact numbers, we will touch upon that, and we have discussed that internally in regards to our Capital Markets Day that we will come up with targets, I think, around some potentially new financial targets there. But right now, we are at 3.2%, as Bengt showed you, but I think we would like to go down from there and not to go up. So that's the balance.

We still would like to acquire those value companies that are out there when we can get them at a good valuation, but still ambition is to drive down leverage. But we don't want to make it too fast and not make any stupid decisions when we have the good targets out there.

All right. Good answer. Then I just have a follow-up on the margins on the segments, specifically on Water & Bio. You commented briefly on the margins in that segment were impacted by cost pressures. Could you maybe elaborate a bit more specifically due to the margin decline year-over-year and how we should expect that those pressures going forward?

Yes, we have a company, which is having a lot of big workforce. So from a salary perspective, salary increased quite significantly in the beginning of the year in -- especially in the U.K. And we are having some longer contracts with insurance customers, which is very hard to adjust for those kind of compensation or salary conversations. So there's a tough year for that company specifically in the U.K. And then -- but that's really the majority.

And then we have also in other companies, we have been taking some decision to build up a little bit more because it's -- we need that for -- to be able to deliver for a possible upside in the coming quarters. It looks good from a revenue side in projects and orders.

The next question comes from Martin Wahlstrom from Redeye.

The first one is related to the dynamic you say, where you postpone orders from H1 to H2. Could you give any more color on the split between kind of what lands in Q3 and what lands in Q4?

I think we have a good -- let's say, part of that was actually now coming into Q3. But yes, it's still -- some of those orders, it's -- I'm thinking specifically of the 3 companies in the group. They have been promised orders. It didn't come in Q3. So yes, potentially, it will come in Q4. The good thing when we have the U.K. companies that they have the budget year in actually end of March 2026. So it's still on the right side in the budget, so to say, for some other companies. But no, it's difficult to say that, specifically how much of it came in Q3 and how much is going to be realized in Q4. Q4 is more about what I think we answered before as well, the seasonality in some of the winter needs to come, and we need to be able to deliver for the season or in season as well.

I see, I see. And then one final question is related to if you could give some more color on the distribution in your acquisition pipeline when it comes to kind of the split between business areas and geographies going forward?

So from business area perspective, it's, let's say, it's equally among the 4 business areas. We have had some good discussions within supply chain, but also in Safety & Security in the recent quarter. So I think that's good. It's important that we work with all 4 business areas in acquisitions.

From geography, it's actually nothing special there. It's our main geographies. It's U.K., it's the Nordics, it's Italy as well. And then as I said as well, we are going into Germany, and we have some good discussions with German or Dutch as well companies. So the DACH countries. It's -- so that's new and fresh into the pipeline, but nothing more or more significant than other geographies at the moment.

The next question comes from Linus Alentun from Nordea.

Just a quick couple of questions here from me. Starting off in Water & Bio, what would you say is a normalized margin here once we see a rebound?

Well, I could perhaps step in there.

Yes.

Yes, we have seen -- typically, they have been around 24%, 25%. And then as the companies we now count as the core companies in that business area. Now it was 21% in this quarter for the reasons that Anders mentioned. So we're working to get it up there again. So whether it will be 23% or 24%, 25%, that's, of course, still to be seen because there are many different unique situations to take care of. But at least we're working to improve from the current 21%, that much we can say.

Okay. And on '26 here, you mentioned in the report that, that is when you see a broader recovery. What makes you confident in that? Is there anything -- any indicator you've seen turning more positive or...

No, I think it's the discussion with the companies. We are in a budget process as well, and we've been asking -- or in our discussions with the companies, it is positive momentum for business areas or business units and orders and they are looking into projects for next year and new potential customers. So no, it's from that perspective, talking to the companies and seeing there what they see for the orders and for the potential in the coming year.

Okay. Super. That's super clear. And just one last question here. If I remember correctly, you had some swaps here that are contributing negatively in the net financials. What's the time line? When will they stop affecting here?

Yes, we have 2 types of hedging arrangements. One is for interest and those interest swaps are right now negative. They were positive before when the interest rates were higher. Right now, we pay an extra 0.2 or so percent on the debt. But they will be closed from end of next year. And so 1, 2 years, you could say. So it's not a very big downside, but still, we pay about 20 basis points more than we should because of those hedging. But they have been giving a good return because they were better before.

The other side, we have hedging arrangements on currencies. And there, we tried to hedge our currency exposure in the balance sheet to some extent. And not -- we're still net asset positive, which means that when, for example, British pound sterling is weakening towards the SEK, all in all, we get then a cost in the P&L, but not as much as we would if we hadn't those FX swaps and hedges.

Okay. Super. So 20 bps there.

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

Yes. And I could kick off then with the questions. We have received 3 questions in the chat here. I think one we have already answered that was regarding the EBITA margin in the Water & Bioeconomy business area.

And the second question was that some of the companies we are now intending to divest among the other companies. They have quite well-performing companies with good margins and product based to some extent. Why divesting such companies?

Yes. I think I can add to that question is that -- so what I said, what we look for in the companies we would like to buy in our strategic priorities is around 3 things. We would like to have a strong promise that actually have their own products. They sell and they make service to them. We also want to have not cyclical end markets. It has been a challenge with some of the companies, which is very cyclical and working, trying to proactively work with organic growth is quite difficult if you don't have the mindset, that's what it is with those companies.

And the third thing around the niche. If you have niche, you can protect it and you can drive growth from that niche. And all of these companies that we're giving examples of here, they have some aspect or they are not meeting that criteria. So it's been -- for us, been challenging, and we would like to allocate that money into more our prioritized businesses and future businesses. And we believe many of these businesses, as we said, it's not because they are performing financially bad, it's more that -- to allocate that capital to something that we believe in the future is better according to us.

Thank you, Anders. And then the last written question, as I see, it's regarding the write-down if -- was that a one-off? Or could that potentially continue to be more write-downs Q4 and also next year? But what we have done now is to the best of our knowledge, as it's typically called and also to write down the value. So we don't foresee that we need to do any more write-downs. And of course, it's depending on how much money, high considerations we will get for the companies once we divest. But we believe at least that the value of these companies represent their market value and potential than consideration that we will get. So it shouldn't be any major at least. It could be -- go both ways. We could both have some profits or we could have some smaller losses when we divest, but it shouldn't really be any big numbers. But no write-down of goodwill as such because of any impairment.

I think that was all of the written questions. So back to you, Anders.

Yes. I think then thank you for the written question and asked question. And yes, thank you all for listening in, and we are looking forward. And hopefully, we will meet some of you at the Capital Markets Day in November, which will be held here in Stockholm, and we are looking forward to that. So with that, thank you, everybody, for today.