Sweco Stock

Hello, everyone, and thank you for joining us for this presentation of Sweco's Q2 report. Asa Bergman, Sweco's President and CEO, is here together with Jan Allde, Sweco's CFO, to take us through the results of the second quarter. And after their presentation, there will, of course, be an opportunity for you to ask questions.

So with that said, please, Asa.

Welcome, everyone, to Sweco's Q2 presentation. Before we present the results for the second quarter, let me give you a quick overview of Sweco. Sweco is Europe's leading architecture and engineering consultancy with operations in 8 geographical business areas across 14 markets in Europe. We are a well-diversified business operating across 3 different segments with a good balance of private and public clients. The foundation for Sweco's long-term success is our mix of competencies spread across 23,000 experts, our focus on organic and acquired growth as well as our efficient and decentralized operational model. With a strong financial track record and financial position, we are focused on continuing our growth journey and build on Sweco's success.

Let's start with a summary of the second quarter of 2026. It was a solid second quarter in a continued mixed market, characterized by broad organic growth, higher average fees, a strong billing ratio and continued acquisition activity. Net sales increased by 9% to SEK 8.6 billion, and organic growth amounted to 3% adjusted for calendar effects. EBITA increased to SEK 864 million, corresponding to an EBITA margin of 10.1% and EBITA increased by 7% adjusted for calendar effects. The positive development was supported by higher average fees and an improved billing ratio as well as positive contributions from recent acquisitions. We also continue to execute on our M&A agenda by announcing 2 new acquisitions during the quarter.

Moving over to the operational highlights. Overall, we delivered a solid second quarter. 7 out of 8 business areas reported organic growth and 6 out of 8 increased EBITA. We continue to navigate the market well, increasing both order backlog and orders received. We also maintained a strong focus on efficiency, reflected in an increased billing ratio of 75.9%. The solid operational trend continues across several business areas with 3 reporting double-digit margins. I would also like to highlight the strong EBITA improvements in the quarter from Sweco Sweden and the Netherlands. Overall, we are pleased to see that we continue to make progress across our business areas.

Turning then to the market overview. Demand for our services remained broadly unchanged compared with previous quarters. Demand was good in energy, infrastructure, water and environment. We also continue to see growing demand related to security and defense across several of our markets. At the same time, residential and commercial buildings as well as parts of the industry segment remained weak. While the geopolitical and macroeconomic environment is uncertain, Sweco benefits from a diversified business model, a strong local presence and a clear European focus. Trends related to sustainability, demographic shifts, digitalization and AI as well as security and defense are driving demand for Sweco services across our core segments.

With that, I welcome our CFO, Jan Allde, to walk you through the numbers. Please, Jan.

Thank you, Asa. I'll start with a summary of the Q2. So net sales was SEK 8.6 billion with a calendar adjusted organic growth rate of 3% and with a prior growth of 5%, giving a total sales growth of 9% versus last year. Calendar effect was 5 more working hours versus last year. EBITA increased 7% or SEK 53 million adjusted for the calendar effect. EBITA margin came in at 10.1% versus 9.6% last year and a net debt-to-EBITDA ratio of 0.8x at the end of June, which is the same as last year.

Then let's look at net sales. So organic growth of 3% was driven by higher average fees and higher billing ratio. We saw organic growth in 7 out of 8 BAs. Germany and Central Europe had the strongest organic growth rate at 7%, driven by higher average fees and FTE growth in an overall stable market. The growth in Finland was still low, but we saw a somewhat improved demand situation within the public and commercial building segments. Denmark was impacted by lower investment in the pharmaceutical industry. However, they have been able to compensate this by strong growth in other segments and hence, showed an organic growth in Q2.

The U.K. reported negative growth rate of 3% due to less subconsultants and less FTEs while the overall market was stable. Please note that the growth in both Finland, Denmark and the U.K. was negatively impacted by lower FTEs due to ongoing efficiency improvements and measures taken to adapt the organizations to current market conditions. Sweden, Norway and the Netherlands all reported organic growth rates of 4% versus last year.

Then we look at the EBITA. So EBITA increased by 7% versus last year adjusted for calendar effect. The quarter was negatively impacted by restructuring and integration costs in Sweden and Finland of SEK 30 million, which is SEK 18 million higher than last year. Adjusting for this, EBITA for the group increased by 10% versus last year. The EBITA improvement was driven by higher average fees, improved billing ratio and contribution from acquisitions, while higher personnel and other operating expenses had a negative impact. The reported EBITA margin was 10.1% versus 9.6% last year, and the calendar effect in Q2 affected the result positively in Sweden and Norway.

Now let's look through the performance by BA. Sweden continued to improve its underlying EBIT margin as the positive calendar effect and the negative effect of restructuring and integration costs in Sweden was almost the same. The EBITA margin in Norway was unchanged adjusting for the calendar effect. Denmark reported improved margins from already high levels, and the Netherlands reported a strong margin improvement versus last year. The EBITA margin in Belgium was lower than last year, but they continue to perform at a high level. The EBITA margin in Germany and Central Europe was lower, while the margins in Finland and the U.K. were roughly in line with last year.

Then let's have a look at the EBITA bridge. So starting with Sweden, where the result was 10% higher than last year, driven by higher average fees, higher billing ratio and positive contributions from the PE acquisition. Please note that the Sweden booked SEK 26 million of restructuring and integration costs in Q2. Excluding this, EBITA improved by 20% versus last year. The restructuring integration costs were mainly related to optimizing the organizational structure in Sweden and drive efficiencies. The costs related to the PE integration was minor as the integration is now completed. The result in Norway was SEK 7 million higher than last year, driven by positive FX effects and the higher result in Finland was due to SEK 8 million less restructuring and integration costs compared to last year, but also due to a higher billing ratio.

The result in Netherlands was 34% higher than last year, driven by higher average fees, higher billing ratio as well as contributions from the acquisitions made last year. Denmark and Belgium delivered EBITA improvements, while the result in the U.K. was stable. The result in Germany, Central Europe was slightly lower due to higher personnel costs and less positive project adjustment versus last year. The calendar effect was 5 more working hours versus last year, corresponding to a positive year-on-year impact of SEK 60 million. Overall, the integration of the acquisitions made in -- made last year and also this year are progressing well, and we expect synergies to continue to materialize during the quarter -- sorry, during the year.

Now let's look at the financial position. So cash flow from operating activities was SEK 911 million compared to SEK 680 million last year. M&A cash outflows was SEK 176 million, and dividend paid was SEK 1.355 billion (sic) [ SEK 1.335 billion ] The net debt position at the end of June was SEK 2.9 billion, slightly higher than last year, while our net debt-to-EBITDA ratio was 0.8x, same as last year. Hence, our leverage is well below our target, and we remain financially very strong to pursue an active M&A agenda.

Then lastly, look at the calendar. So the calendar effect for 2026 is that we expect to have 7 hours more than 2025. And in Q3, we expect 1 hour more than the same quarter last year.

And by that, I hand back to you, Asa.

Thank you, Jan. During the second quarter, we announced 2 new acquisitions. In Finland, we announced the acquisition of Platom, a specialist consultancy providing technical advisory services across the full life cycle of nuclear operations. The acquisition strengthens Sweco's position in Finland, making us the leading nuclear consultancy in the country. It also strengthens our European capabilities in this growing sector. We also announced the acquisition of Sitowise Sverige AB, adding approximately 250 experts within structural engineering, building services, project management and transport infrastructure. The acquisition further strengthens Sweco's position and geographical footprint in Sweden. After the quarter, we also announced the acquisition of STEIN Ingenieure in Germany. STEIN are experts within water and wastewater infrastructure, including sewer system rehabilitation, structural engineering, pipe jacking and inspection of engineering structures.

The acquisition further strengthens Sweco's position in the growing water segment. Acquisition is a key growth driver for Sweco. And during the second quarter, we announced 2 new acquisitions. All in all, we completed 5 acquisitions to date. And by the end of July, Sitowise will also be completed. During the quarter, we secured several significant client projects that contributed to a stronger order book. These projects underscores the breadth of our offering and the continued demand for our expertise in resilience, sustainability and infrastructure across Europe. Some examples from the quarter and the rest you find in the report, as always. Sweco was selected to provide planning and design consulting for a new railway section between Molndal and Landvetter Airport in Sweden, forming part of one of the country's largest infrastructure investments.

During the quarter, Sweco was also commissioned to plan and design a new emergency hospital campus in Helsingborg, which will be one of Sweden's largest health care properties projects in modern time. In Norway, Sweco was awarded a framework agreement related to flood protection, supporting climate adaptation and critical infrastructure resilience across the country. Finally, Sweco was selected for the planning of Rail Nordica in Finland, a strategic railway project aimed at strengthening cross-border logistics, security of supply and military mobility across Northern Europe.

I would also like to take the opportunity to give you a quick update on how Sweco is using AI to maximize business benefits. We see AI as an ongoing structural transformation of our industry and an opportunity to strengthen our market position. We have worked with incorporating AI in Sweco's operations since 2023 and see the development as a natural technological leap for us as consultants. [indiscernible] and BIM 1 stage, we now use AI to create value for our clients and improve our own efficiency. Our AI approach is focused on 3 overarching business benefits: individual productivity, allowing every employee to work smarter, creating immediate effects throughout Sweco by large-scale use of AI, process automation, which is about creating structural efficiency by automating and reshaping workflows within our core business.

And the third part is about accelerating digital innovation, developing and delivering IT solutions as integrated components in projects and thereby creating client value. Also, let's not forget in this as Europe is facing a significant shortage of engineers with major infrastructure investments planned while facing deficit of roughly 2 million STEM experts, we are already today using AI as a mechanism for closing this gap.

To summarize then, Sweco delivered solid second quarter characterized by broad-based growth, higher efficiency and improved profitability. Looking ahead, our priorities remained unchanged. First, we continue to position Sweco in attractive growth segments while we see continued long-term demand building on a solid foundation. Second, we continue to execute our AI strategy with the opportunity-based approach I just talked about, supporting both our experts and our clients. Third, acquisitions remain an important part of our growth strategy. We will continue to evaluate opportunities across our core markets while maintaining a strong focus on successful integration and value creation from recent acquisitions. And finally, we remain committed to operational efficiency and continued margin improvement.

Strong billing ratio, disciplined execution and efficient resource allocation will remain key priorities going forward. With a strong market presence, diversified portfolio and a solid financial standing, Sweco is well positioned to continue transforming society together with our clients.

Thank you, everyone.

Thank you, Asa, and thank you, Jan. And it's now time to open up for questions. So please, Sharon, if you could give us the instructions.

[Operator Instructions]

And the first question today comes from the line of Julia Sundvall from ABG Sundal Collier.

I have a few questions. And my first question is on the utilization rate. It rose some in the quarter. But how should we think forward? How much headroom do you think is left?

Julia, First of all, it's an area where we have focused quite a long time, and we are really pleased to see that we are continuing to move in the right direction. And it's really hard to say where the limits are in this. So I mean, the only thing I can give you is that we will continue to work on the efficiency as it's as important as it has always been.

Yes. Okay. And moving on the average fees. You have had a positive momentum for quite some time. Will you be able to lift the price further in a mixed market? Or is the momentum from now, is it sustainable? Or how do you view it?

I mean we had shown in the past that we have been able to meet the salary inflation and cost inflation with the fee increases. And the fee increases, just to remind us that it's both about what prices we put on the market and how we execute our projects. So our intention is to continue to focus on this and ensuring that we can meet the cost inflation and including then salary inflation into the future.

Yes. Yes, that sounds good. And looking at both the utilization rate and the prices and like kind of bridging it to your financial targets, going forward, how do you think you should work with these 2 components to reach your financial target of the margin?

I mean I think it's fair to say that it depends on where you're looking at Sweco. On the overall level, of course, we work with both and among others, when it comes to different levers for creating the result. But it's also about which country you look at. Some needs to work more on their efficiency and some countries needs to work with the price expansion. So it depends on how -- both how the -- how far they have come with having this broad product portfolio that we're aiming for with the Sweco model and making sure that we actually cover all the sectors, cover all the kind of clients and have this balanced product portfolio in place. So we will work with both, and it depends on which business areas you're looking into.

Yes. Perfect. Sounds reasonable. Moving on to acquisitions. You have started the year quite good. Do you have any update on how the integration is going on the large ones?

Julia, Jan here. I would say the integrations are progressing well, and you see the comments that we make that we see good contributions from acquired companies into our P&L. So yes, overall, progressing well.

Is there some dilution effect in any BAs?

Yes. I would say, overall, the margins of the acquired companies as they come through the P&L, I would say, are almost in line with the group with some variations between the BAs. But overall, I would say they are quite close to the group average from a margin point of view.

Okay. Perfect. And just the last question on the order stock that you say it's coming up in the quarter. Just wondering how is your visibility of the order backlog? And can you say anything about the margin?

Julia, as Asa said, we see that the order book is developing well. I believe you have seen also the orders that we have announced I would say we -- one of the key aspects of our strategy is to make sure that we remain very price disciplined. And that's also why we continue to see price expansion in our P&L. I think that's all I can comment on.

Your next question today comes from the line of Daniel Djurberg from Handelsbanken.

Congrats on a strong quarter. I just wanted to ask a little bit on -- you had some SEK 25 million in restructuring charges and SEK 5 million in integration costs in Q2 here and now you hope close as well. Can it possible to give some indication on what we should expect here for Q3 and Q4 with regards to the similar levels or any input would be great.

Just to clarify, Dan, you were asking about the restructuring and integration charges that we have taken and how we see them going forward?

Yes, correct.

Yes. I mean if we start with the Q2 then, as I said, we took in total, SEK 30 million of restructuring and integration costs. I would say the vast majority of that was restructuring costs related to Sweden. We took some integration cost, I would say, minor integration costs related to the PE acquisition in Q2. And we took some integration costs related to the Fimpec integration in Finland. I would say going forward, starting maybe with integration and going forward, I would say, as I said, the PE integration is complete, so you shouldn't expect more integration costs there. On the Fimpec case, there will be some integration costs coming through in the remainder of '26.

When it comes to the restructuring cost, I mean, I would say we continuously adapt our organizational structure as the market situation develops. That's why you -- and also to drive efficiency improvement actions. So I think it's difficult to -- we don't normally provide forecast on restructuring. So I think it's just -- it's part of our business model that when needed, we adapt our organization for the market efficiency -- for the market situation.

Yes, that's fair. May I ask you on Finland, you saw some improvement in public and you've taken some nice orders. So my question is, should we expect this mainly to be Sweco related, i.e., that you take market share? Or is it so that you have the trough in Finland now behind? And if so, can you also use some historical temporary layoffs to bring back people quite fast, if so?

I think, first of all, I think the points we have here is related to that we have taken some orders and that we are growing our order backlog or we will see orders received in the back end of this quarter positive in Finland. I think it's too early to say if this is a start of some market expansion that we don't have any proof points of yet. And then as you said, we have this temporary layoff situation that we can maneuver. So of course -- but mainly, of course, it's about making sure that we can focus on growing the order backlog continuously and working with our own efficiency and also working with recruitment ahead. So too early to tell if this is the start of something positive on the Finnish market.

Perfect. And if I may, last question from my side would be a little bit on your stronghold in data center build special entities there. And I think you do this from your U.K. business. Can you tell us a little bit on how important this is and the trends? Is it like growing still? Or is it like flattening out? And do you work with a lot of suppliers or names like Microsoft and others? Or is it only a few hyperscalers?

So first of all, I would say that the exposure for us is limited by the breadth of our business. But with that said, data center is, on your question, a growing area. and I mean, for -- in our perspective, this is a long-term trend, and we work with a broad range of different stakeholder clients in this. And of many reasons, I can't outline them. But -- and we work with them locally, of course, distributing the design and the resources in our different business areas. But as the clients are mostly located from the U.K., we have strong client relationships from our U.K. business, and that is the reason to why we work with leading and heading the client relationships and the projects from the Sweco U.K. Mostly, we work with data centers in early planning, permitting and predesign and those kind of areas, but also with the full scope, so to say.

Your next question comes from the line of Dan Heimer from SEB.

A couple of questions from my side as well. Maybe starting off on Germany. If we adjust for the project adjustments last year, would you say you're around par in terms of profitability in Germany versus last year? And also, if you can share a few words on the strategy on how to lift Germany towards the next level now? And maybe we can add U.K. to the mix also how to get that into more group standards in terms of margins.

Yes. First of all, I would like to say that -- I mean, we have a positive -- really positive outlook for the German market. I think -- I mean, it's fair to say that we see it as an attractive market. And as you know, we're also focusing on finding the right M&A targets with this example now that we signed early this week. What we see in this quarter is that we see a somewhat lower EBITA margin compared with last year. And this is mainly related to the accounting practices for the addenda projects that we have talked about before. I mean, since we had difficulties in our German business back in the days, we implemented really strict procedures when it comes to accounting. So it's more of a seasonal effect when it comes to the addenda works that you see now in Germany rather than any material changes in the underlying business.

So all in all, we are having a good position, and we are winning good contracts. So this is really related to the addendums in Germany. When it comes to U.K., on your second question, we have repositioned ourselves on the market, and we are moving in the right direction. So that is a continued work step by step to strengthen our portfolio, both when it comes to clients and when it comes to projects in U.K. and work really disciplined with our projects. And I mean, that will continue to pay off.

Makes sense. And just to get it right, to get to the next level, so to speak, I mean, double-digit margins in Germany, what would it require? Would it be more density and you're getting a little bit more market share in Germany? Or what's sort of the big lever to take it from -- to where it is today to the next level in the next few years?

I mean it is a continued work. I mean, exactly in line with what we have done so far. I would -- I mean -- and also getting a bit more stability with the results over the yearly cycle, meaning that this addenda work that I referred to needs to be focused on a bit more in the organization. So it's a bit about operational excellence, market position-wise and looking at the orders we are winning on the German market, we are in good shape. But there is always room to, of course, improve. So it's no rocket science. It's more about continue to work with the Sweco model and being very diligent when it comes to how we deliver and execute our projects.

And then the final one is following up on the M&A pipeline. I think you discussed earlier that you really picked up in pace in terms of bolt-on acquisition. But despite the earnings growth you have right now and have had for the last few quarters, your net debt-to-EBITDA ratio is unchanged compared to last year. And seasonally, of course, your net debt will probably come down now depending on what you do. So thinking a little bit on capital allocation, how is the M&A pipeline in terms of larger acquisitions as well? Do you think you will land something there in the coming quarters? Or what's your thinking because you have a quite good financial position, which is quite an opportunity here?

As we have done for quite many years, we work really actively in all our countries now to find good opportunities for us to buy. We have an M&A strategy in place, meaning that we know what we would like to buy in all countries. And we are staying active on all sizes of acquisitions if we think it's the right fit for us culturally, but also competence-wise. And as you know, it takes 2 to tango. So this is really about timing situations for us. And that is all I can say.

Your next question today comes from the line of Johan Dahl from Danske Bank.

Firstly, just a question on the sort of market environment. I think in the first half, you've grown sort of 2% to 3% organically, slightly below sort of long-term trend, I would argue, and you've been fairly optimistic when speaking about the sort of order backlog. I'm just curious to hear sort of do you think that looking at your order backlog, sort of is it a correct reflection that it represents growth of 2% to 3%? Or do you anticipate somewhere that order backlog actually is better or alternatively worse than this 2% to 3%?

It's a good question, of course. I mean we still -- we have the intention to grow around 5% over economic cycle, as you know. So of course, we would like to see a little bit more organic growth coming through. But this is also about what kind of projects we have in our portfolio. And so yes, we focus on this, and we aim for a bit higher organic growth. It doesn't really answer your question, Johan, but...

I just curious if you see some sort of inflection point. I mean you don't -- obviously don't have to guide when that is, but is order -- is this what the market allows right now, sort of 2% to 3% growth? Or are you seeing something else in your order book is the question?

It's fair to say, if you look back the last, I would say, 2 years at least that we have -- or more than that, we have operated in a mixed market with a lot of, how to say, changes that has put really demand on us to maneuver the market. And that goes for most of our markets and depending on market position, of course. So I think parts of what you see when it comes to organic growth is related to that, your ability to maneuver this mixed market and the changes in the market. So the better you are at that and has been, the more organic growth you can, of course, achieve. But let's see ahead. We will continue to maneuver and we will continue to kind of push for more organic growth.

And secondly, just on the margins, and I hate to go into too much detail here. But I mean, in the second quarter, you improved margins, what was it, 50 bps, right, year-over-year. And I think the calendar effect alone was slightly more than that. And also the billing ratio was up quite substantially. So basically, what I'm asking is, is there any sort of headwinds that you're experiencing on margins that we have not talked about today such as cost inflation on certain -- either on wages or on sort of admin or whatever that sort of prevents both the calendar and the billing ratio showing in your reported numbers?

Johan, I think, first of all, we -- if you exclude the restructuring and integration costs that we have taken a lot of -- and part of that, of course, stemming from a lot of the acquisitions we have done. If you would adjust for that, I think the underlying margin do show an improvement quarter-over-quarter. And of course, as we do these acquisitions, you have to -- it will take some time to harvest the synergies from that, and that can normally take 1 to 2 years. Of course, when we do these acquisitions, we do that with a long-term growth in mind. So I think we have to -- as we step up or let's say, we stepped up the acquisition levels last year, and we have a continuous good level of acquisitions this year, of course, short term, that has an impact on the margin. But I think long term, it will support our margin journey.

That makes a lot of sense, but that also implies that the acquisitions made in the LTM period is margin dilutive. I thought you sort of talked about it being close to the group average. But certainly, if they are dilutive, that explains probably a lot of the deviation, I would guess.

Yes. I mean, as I said, if you look so to say from -- if you look at the, let's say, the gross margin that you achieve, I think they are trending very well in line with our financial plan for the acquisitions. And overall, they are, sort of say, keeping up on a good level, but you still have certain costs that takes some time to -- or synergies that take some time to work through. So...

Just a final one on Sitowise. Is that going to be red numbers as you consolidate that in the second half year? And is something perhaps you want to flag for having a sort of short-term negative contribution?

Yes. I mean, short term, yes, they will be margin dilutive. So -- but I think we have a good track record of turning around these type of businesses. We have done a very good job, I think, on the Projektengagemang acquisition to get the synergies and to quickly turn around that business. We have, let's say, confidence to do the same. But you're absolutely right, short term, there will be a margin dilution. Now we have that acquisition approved by local authorities. We hope to close that by end of July. That means that we can now work to plan the integration, plan how we -- that company will look going forward. But again, that will take some time before we can do the same thing there and turn around that.

[Operator Instructions]

And the question comes from the line of Johan Lonnqvist Sunden from DNB Carnegie.

Actually, just one from my side, and it's a little bit tied towards what Dan asked before on margins in Germany and the accounting of the add-on contracts that you referred to. What -- can you please help us how much visibility do you have that those kind of add-on contracts or addendum contracts that you referred to really will take place in H2 this year as we saw in H2 last year?

I mean it's contract that we have, it's contract that we work with, but the addendas are not signed. So of course, it's -- we have comfort in the orders that we have and the contracts that we work with. Otherwise, we would have flagged something else.

Yes. Because if I remember H2 last year, you were pretty clear that the margin step-up is kind of a structural step-up in margins and not a one-off thing. So you're not saying that we should retest that assessment?

No. But with that said, I don't want to give like fair forecast because, of course, until you have things in your financials, you don't have them in your financials. And that is also why I referred to when I got the question regarding what is the next step for our German business, it's really about making sure that we can create a little bit more stability of the result over the yearly cycle. But I have great confidence in the German business.

And as an outsider, what could trigger you not being able to book this kind of extra contract in H2?

It would be if we can't really get the clients to agree on certain things in the projects or that we are kind of overexposed or have worked too much in some projects in relation to the contracts that we have.

There are currently no further phone questions. I will now hand the call over to Anna.

Thank you. There are no questions in the chat. So with that, we thank you for joining and wish you all a nice summer.

Thank you very much, everyone.

Thank you.

Good morning, and welcome to this presentation of Sweco's Q1 report. With me this morning, I have Sweco's President and CEO, Asa Bergman; and CFO, Jan Allde. After their presentation, they will take your questions, and we will give you the instruction at that point.

So over to you, Asa Bergman.

Welcome, everyone, to Sweco's Q1 presentation. Before we present the results for the first quarter, let me give you a quick overview of Sweco.

Sweco is Europe's leading architecture and engineering consultancy with operations in 8 geographical business areas across some 15 markets in Europe. We are a well-diversified business operating across 3 different segments with a good balance of private and public clients. The foundation for Sweco's long-term success is our mix of competencies spread across 23,000 experts. Our focus on organic and acquired growth as well as our efficient and decentralized operational model. With a strong financial track record and financial position, we are focused on continuing our growth journey and build on Sweco's success.

With this introduction, let me start the presentation with a summary of the first quarter of 2026. In Q1, Sweco delivered a stable result in a mixed market, characterized by positive organic growth, increasing fees and billing ratio and continuing acquisition activity. Net sales increased 3% to SEK 8.3 billion, and the organic growth rate was 3% EBITDA amounted to SEK 869 million, corresponding to a margin of 10.4%. EBITDA increased by 5% adjusted for calendar effects. Higher average fees, a higher billing ratio and contribution from acquisitions had a positive effect on the result in the quarter, while restructuring and integration costs as well as higher personnel expenses had a negative impact. Our acquisition activity continued with 3 acquisitions in this quarter.

Now let us go into more details. Overall, most business areas delivered a stable first quarter. 5 out of 8 business areas delivered positive organic growth and 5 out of 8 also improved EBITA in the quarter. We continue to navigate the market well and increased our order backlog. We also maintained a strong focus on internal efficiency as reflected in the billing ratio compared to last year. I would also like to highlight the positive performance in Sweden that delivered solid organic growth and a positive EBITA improvement, supported by synergies from the recent acquisition of Projektengagemang. However, the result was negatively impacted by project adjustments and restructuring and integration costs taken in Sweco Finland. We are pleased to see that most business areas performed well in this quarter.

Let us now turn to the market overview. Demand for Sweco services was broadly consistent with previous quarters. Demand remained good in energy, water, environment, infrastructure as well as security and defense. Residential and commercial buildings and part of the industry segment remained weak. The uncertainty in the broad macro and geopolitical environment increased, but our decentralized operating model and well-diversified business model with a clear European focus provided resilience in the quarter. As capital and policy attention increasingly shift towards Europe's competitiveness and resilience, this focus is becoming even more relevant for Sweco.

With that, I welcome our CFO, Jan Allde, to walk you through the numbers. Please, Jan.

Thank you, Asa. So net sales came in at SEK 8.3 billion with an organic growth rate of 3%, acquired growth of 5% and a negative FX impact of 3%, giving the total net sales growth of 3% in the quarter. The calendar effect was 5 less working hours in Q1 versus last year. EBITA increased 5% or SEK 43 million adjusted for the calendar effect. EBITA margin came in at 10.4% and the net debt-to-EBITDA ratio of 0.5x at the end of March, same as last year.

Looking at net sales. So the organic growth of 3% in Q1 was primarily driven by higher average fees and a higher billing ratio. From a BA perspective, we saw organic growth in 5 out of 8 BAs, Germany and Central Europe had the strongest organic growth rate at 9%, driven by higher average fees and FTE growth in an overall stable market. Growth in Finland was flat in the quarter as the Finnish market remains challenging and Denmark reported a negative growth rate of 2% due to a stable but somewhat weaker demand situation within the industry and energy market segments. The other BAs reported organic growth rates between 3% and 5%.

And looking at EBITA, which increased SEK 43 million or 5% versus last year adjusted for calendar effects. Overall, the EBITA improvement was driven by higher average fees, improved billing ratio and contributions from the acquisitions made in 2025, while higher personnel expenses had a negative impact. The reported EBITA margin was 10.4% in Q1 versus 11.2% last year. Adjusting for calendar effects with negative impact in Sweden and Norway, the EBITA margin was on par with last year.

From a BA perspective, we saw a strong performance in Sweden in Q1 with a margin significantly above last year, adjusting for the calendar effects. Norway also reported slightly higher margin than last year, adjusting again for the calendar effect. The EBITA margin in Finland was impacted by negative project adjustment as well as restructuring and integration costs. The margins in the other BAs were roughly in line with last year. Important to note, though, is that Belgium and Denmark continue to deliver very strong margins.

Now let's look at the EBITA bridge by BA. So the result in Sweden was SEK 68 million or 26% higher than last year, driven by higher billing ratio, higher average fees and a positive contribution from the Projektengagemang acquisition last year, despite having SEK 30 million of integration and restructuring costs in Q1. The result in Finland was SEK 28 million lower than last year and was impacted by negative project adjustment as well as integration and restructuring cost of SEK 17 million following personnel reductions in the quarter. The integration of both Projektengagemang and Fimpec is progressing well, and we expect synergies to materialize gradually during 2026. Norway, Netherlands, Belgium and the U.K. delivered EBITA improvements, while the result in Denmark and Germany and Central Europe were slightly lower. The calendar effect was 5 less working hours in Q1 versus last year, corresponding to a negative year-on-year impact of SEK 75 million, affecting the result in Sweden and Norway.

Now look at the financial position of the company. So cash flow in Q1 was negatively impacted by a seasonal increase in working capital, resulting in a net debt position at SEK 1.9 billion at the end of March, slightly higher than last year. M&A cash outflow was SEK 46 million, and this means that the net debt-to-EBITDA ratio at the end of March was 0.5x, same as last year. Hence, our leverage is well below our target, and we remain financially very strong to pursue an active M&A agenda.

Finally, a reminder of the calendar effects for '26. So the expected total number of working hours for '26 expected to be 7 hours more than in '25. And in Q2, we expect 5 hours more than the same quarter last year.

And by that, I hand back to you, Asa.

Thank you. Acquisitions remained one of Sweco's key growth drivers, and we started 2026 with 3 new acquisitions. In January, we acquired the Finnish architecture firm, Näkymä, with 20 experts specializing in the design of historical and cultural sites. Later in the quarter, we announced the acquisition of Belgian firm CONIX RDBM Architects, a well-known and award-winning practice with 50 experts that will further strengthen Sweco's position in large-scale urban development projects. We also acquired the Belgian architecture firm a-tract architecture with 10 experts specializing in sustainable architecture.

At the same time, we continue to integrate the 13 acquisitions completed in 2025, which are now step-by-step being added to our offering across several business areas. Our M&A agenda remains active and disciplined, and we continue to evaluate opportunities across our core markets. Projects won during the quarter highlight Sweco's role in Europe's transition to a more resilient and sustainable society. In Norway, Sweco was appointed lead consultant by Å Energi to support the development of the Åseral South hydropower project, strengthening renewable power generation through cross-border collaboration and digital delivery.

Sweco also won contracts to support public transport across transport operators across Europe in developing the infrastructure required for electrification. This includes next-generation electrical bus depot in Belgium, enabling low-emission public transport and future-ready mobility systems. In the U.K., Sweco was awarded a major office development project in the city of London, the Dovetail Building, where we deliver technical and sustainability services, including life cycle carbon analysis. In addition, Sweco leads a major system restoration project in Belgium. The project restores natural hydrology, raising groundwater, improving water quality and rebalancing flood dynamics.

To summarize, Sweco delivered a stable first quarter in a mixed market, and we have set clear priorities going forward. First, we will continue to be responsive to market developments. Operating in a mixed market with increasing geopolitical uncertainty makes it essential to remain active and agile Sweco's decentralized operating model helps us stay close to the market and enables both [ proactivity ] in sales and the ability to quickly respond to changing market conditions. Second, we will remain our focus on internal efficiency and further margin improvements, building on the progress we have made over the past quarters. Third, we will continue developing our AI capabilities, strengthening both our offering and our internal efficiency. And finally, we will continue to integration -- the integration of acquisitions and maintain an active and disciplined M&A agenda.

With our strong market position, diversified portfolio and solid financial position, Sweco is well positioned to continue to navigate the market. Thank you.

Thank you, Asa and Jan. And now is the time to open up for questions. So please, operator, if you could give us the details.

[Operator Instructions] And now we're going to take our first question. And it comes from the line of Dan Heimer from SEB.

A couple of questions from my side. Maybe starting a little bit on M&A and integration. You clearly put a lot of effort into the integration of M&A in the last couple of quarters here. And on the integration cost, how far would you say you are in the process of integrating mainly Projektengagemang and Fimpec? Is the heavy work done now, so to say, in terms of cost at least? Or how do you view it here during 2026?

Yes. If I start with Projektengagemang that we bought last summer, we integrated them structurally, so to say, into our organization 1st of Jan, meaning that they are fully integrated in our organization and in our systems. With that said, it takes time before we get fully up to speed in all units. So of course, I would say that we are done with the structural parts of the integration, but now it's more about getting every employee and the full kind of synergy when it comes to our business synergies ahead. But according to plan and in a good stage, so to say, or state.

When it comes to Fimpec, that was an acquisition doing -- that we did later last year, meaning that we are taking some integration costs this quarter in Finland, and we are working with the integration in this quarter. So you will see a gradual improvement linked to those acquisitions. And the same goes for [ our ] architects, where we established a new division in Belgium, focusing on architects. So we reorganized all architects into one division in Belgium. And now we are #1 on the Belgian market when it comes to architecture. I hope that answers your question.

Yes, it does. And maybe one more on the demand, the general demand. You say, yes, market is mixed. It looks like your outlook is similar as previous quarters, but since you increased your order book a little bit here. Can you give any sense of decrease in the order book? Is it growing roughly in line with sales? Or is it growing more or less? Just to get an indication there.

Yes. Dan, I would say we continue to strengthen our order book and I would say, both in absolute terms and also in relation to our, kind of, LTM sales. So I think I see a good development order on the order book. When it comes to the market, maybe you want to comment some more, Asa?

Yes. I mean, as we reported, we see a quarter with almost the same demand and sectors that is strong and a bit weaker that we have seen in previous quarters. So when it comes to our order backlog, of course, we grow across, but it's very much linked to those segments where we see good demand. And that work we will continue, of course. But I mean, it's fair to comment on the geopolitical environment. In this quarter, we don't see any direct effects in our portfolio linked to the situation globally.

And -- but with that said, you need to pay attention to it and have great respect for the situation. And of course, if it gets prolonged, our clients might be influenced by energy prices and the overall investment climate, so to say. And of course, then we might see things in our project portfolio. But when we talk about the business model, it's really about making sure that we really focus on our clients and on our projects, so we really understand what is going on ahead. And another comment is also that when crisis like this occurs and the -- I mean, we are in the middle of this right now. Of course, there might be a push for even a faster energy transition into more renewables in Europe. So I think the same agenda sticks. But I mean, we need to really understand ahead what is going on. So like everyone else, we are following the situation closely and staying close to our clients.

Yes. Makes sense. Maybe a little bit final one from my side. That was on the project adjustment in Finland. Can you give us a sense on the total size? I'm not sure you specify that, but is it just a couple of millions -- or yes, how much is that project adjustments you made in Finland?

Yes. Dan, I would say project adjustments, whether they are negative or positive, it's really part of our ongoing business. But I mean, you've seen the reduction in the profit in Finland. We have given you the integration and restructuring costs. So I think the remaining deviation, you can get a sense of the size of the negative project adjustments.

Now we're going to take our next question. And it comes from the line of Daniel Djurberg from Handelsbanken.

Two questions from my side as well. First, if you could comment a little bit on the improvement seen in the average fees and billing ratios that you mentioned? I think it expanded to 74.4%. Do you see large variations between the regions? Obviously, Finland is tough, but -- and also to what extent are these fees increases triggered by pricing power versus mix effects in the project?

I mean, first of all, we have continued our focus on billing ratio, meaning that we work with efficiency measures in all our business areas. And to your question, of course, we know what good looks like within Sweco, and there is deviations between the different BAs, and that has more to do with how we are exposed in the specific markets and how the market is playing out right now.

So of course, there is deviation. We use that as best practice and benchmarking across the different business areas to really drive continuous performance. So we will continue to focus on this one and expand ahead as well. So that is an important area for you. When it comes to your other question, of course, for us, it's about focusing on increasing our prices on the market and making sure that we expand the prices when we put them out. Another part of that mix that you referred to is about how we deliver and execute our projects. So we minimize any negative project adjustments and work really efficient in our projects.

How much is -- that is one part and another part is hard to measure as we distribute 150,000 projects a year, but we work with all those measures in parallel to really make sure that we expand the prices. And it's also about selecting and deselecting projects, of course, making sure that we try to win on quality and that we are not putting any pressure on our prices.

Perfect. May I also ask you coming back to Finland being a drag in the quarter and so on tough market. And you did this restructuring integration cost. But in Finland, you also can use this system of temporary layoffs. So my question is really, is that more or less fully utilized? And then you have this SEK 17 million for restructuring and integration. And also, should we expect now that Finland at least will have a decent or strong billing ratio following these adjustments? Just a little bit more comments on flavor on Finland would be great.

Yes. We use, of course, the available tools that we have and temporary layoffs, we continue to use in Finland. It's a little bit lower than last year, but we still absolutely use it. What we did in Finland is to reduce on a permanent basis, some 38 people in the quarter. And this is really driven by, I would say, 3 things. One, of course, is that we have to adapt to the current market situation. Secondly is that we continue to drive efficiency improvement programs. And thirdly, we have the integration of Fimpec. So all of these, say, factors are behind the personnel reduction in Finland. But to answer your question, yes, we continue to use all the tools available.

And just a comment from my side is that we have spoken about the Finnish market for quite a long time, but I have great trust in the Finnish management that they are taking the right measures and maneuver the market in a really good way. We are winning great projects as well. And I mean, -- so I mean, the market is what the market is, but our management and our organization is doing a great job over there.

Good. And also a last question from my side. Obviously, we hear this AI questions and AI development all the time. But is it possible to give some more concrete examples and projects where you're using AI now where you have -- can improve your own efficiency and productivity? And if you've seen a big impact on prices versus, so far, in the market triggered by AI usage?

I mean our strategy is to work with AI or use AI in 3 different dimensions. One is the individual productivity across Sweco. And there, we have implemented and we did in 2023. So we're talking now 3 years more or less on the date, where we have our own ChatGPT platform where everyone works and uses this in the Sweco environment every week. And there, we have assistance across different applications. And we have more than 70% of reoccurring use of that platform every week across.

And the second part is that we work to automate our processes and rethinking our different processes in our projects. And that has to do with more of a structural change when it comes to how we work. And the third part is digital innovation, where we sell more of AI solutions to our clients and supporting them with AI in the projects or in kind of new ways totally.

And I would say that if you think about where we are right now, we're talking 3 years in with AI, and we are focusing on expanding our prices and making sure that we are competitive and stay strong and that we have the relevant competence and that we make sure that we are calibrating where we have our competencies and where we grow and how we grow. Of course, if you look at the scale of Sweco and that we are -- our strategy is to integrate AI across, it's really hard to, so far, measure the real implications of AI. Of course, that is on our agenda all the time.

But I think back to what we talked about before, expanding the prices, making sure that we stay competitive and that we win our contracts in the right way and that we continuously evaluate new AI solutions, that is like what we're focusing on right now. I think it's important also to mention that, I mean, there is a huge scarcity when it comes to qualitative competencies across Europe. And of course, and I've said it before, this is a tool for us to let AI support our engineers and architects, so we actually can focus on qualitative work analysis and advising our clients and be more productive as a whole, but also as individuals. So that is where we are right now.

And I mean, concrete examples are like hundreds and hundreds. But I mean, it has to do with when we do report writing, when we do specific analysis and when we test solutions to make a certain choice, we can test much more with this tool. And of course, we have spent time in previous times on things that is like volume work that we use AI and that we can concentrate more on the analysis and the decisions and the support for the client.

Hope that answers your question. It's quite a big question.

Now we are going to take our next question. And the next question comes from the line of Johan Dahl from Danske Bank.

Just a few quick questions. Firstly, on the -- you talked about 5% contribution to top line from M&A in the first quarter. Could you give an indication how much on EBITA that was from acquisitions made last year and this year, approximately sort of round numbers?

And also, if you could update us on the time line, I presume the idea of making these acquisitions were that they would close in on sort of group average in terms of margins. When do you set that sort of time line when you can be at that level?

As was saying, the integration are progressing, I would say, very well, and we see good contributions from the acquisitions that we made last year. I won't give you an exact number, Johan. But what I can tell you is that the contribution that we see in the first quarter from a margin point of view is on par with the group average. So I think that can give you a sense for the contribution so far.

All right. Got you. And speaking specifically about Sweden, I mean, if you add back the restructuring charges and calendar, I think you increased results 29% year-on-year. Is there anything other than acquisitions that is sort of contributing here? I'm just trying to understand sort of underlying dynamics in the Swedish operations, whether there are any structural improvements there to talk about.

And I mean, this has to do with the focus in the Swedish organization. I mean, that we have worked with for quite a long time when it comes to efficiency and also the right kind of focus in the business and good project wins. So I mean it's a strong quarter from the Swedish organization. And then, of course, adding the effects of the integration of Projektengagemang.

Got you. Just finally, I think you talked about flat margin year-over-year adjusting for the calendar. But still, the billing ratio is up almost, I think, it's up 80 bps year-over-year. I understand that there are some one-offs, some sort of charges and also some product adjustments. But is there anything else that is sort of working in the negative direction, such as the net price, wages, et cetera, in this quarter?

Well, if I would mention, we did do some employee reductions in some selected countries. As I said, to adapt to the current market situation. We have continued to drive the internal efficiency programs. We are integrating the acquisitions from last year. So there are some workforce reductions in countries like Finland, Denmark, U.K., part of Sweden. So of course, that is impacting the -- a bit the overall growth.

Now we're going to take our next question. And the question comes from the line of Johan Lönnqvist Sundén from DNB Carnegie.

Three from my side. The first is a bit back on Dan's question on the kind of restructuring and integration work. Can you give some specific guidance for coming, say, 1, 2 quarters of anticipated kind of restructuring charges that you're planning to take out?

Okay. I think what -- the way you should look at this is that the Projektengagemang integration, there we have taken, I would say, almost all of the costs. When it comes to Fimpec, we took some of the costs this quarter in relation to some personnel reductions. We will take some more costs on the Fimpec integration during '26, more related to office consolidation, IT consolidation and things like that. They will not be higher than what you saw in Q1. So in short, Projektengagemang, you shouldn't expect really any significant costs coming through and Fimpec integration, there will be some additional costs coming in the remainder of the year.

And just to be super clear, when you say not higher than what we saw in Q1, do you refer to the total amount for the rest of the year or the quarterly kind of pace amount?

Yes. I'm saying we took the SEK 17 million charge in Finland in Q1 related to both restructuring and integration costs. So the additional integration cost to come is less than that. It's less than what we booked in Q1.

And then my second question is on the kind of cash flow statement. And I note that you're building up a little bit more working capital than you normally do. And I cannot find any kind of more detailed comment in the report rather than seasonality. And from my perspective, building up more than the seasonal patterns, should say, that you should build up. What is the dynamics and driving forces behind the working capital buildup?

Yes. I would say the -- what you see in the first quarter is, on one hand, the seasonal kind of increase in working capital, similar like we saw last year. Then this year, we had some larger invoicing, the timing of some invoices that came a little bit different this year versus last year. Nothing extraordinary. It's just the timing of some invoices that came through in the quarter.

And is it more like invoices coming -- came at the end of '25 and is hampering our Q1 '26? Or is it like invoicing should come in and support in Q2? So the kind of H1 is kind of a normal level?

Yes. I don't see, let's say, any abnormality in terms of buildup of overdue or let's say, [ trade receivable ] overdues or any -- so what you see is that work in progress normally, so to say, comes up in Q1 because on one hand, you had the strong decrease in Q4 of the previous year.

So I would say we see very similar pattern like we've seen in previous years. The only difference, as I said, this quarter is the timing of some invoices and difference versus the same quarter last year.

Okay. So no kind of full year -- the full year working capital swing should not deviate materially from what we have seen historically, so to say.

Of course, I can't stand here and give a forecast for the full year. But I'm just saying, Johan, I don't see a change in the working capital buildup here versus previous years. So I would expect the same kind of seasonal pattern that we've seen in early years. There's nothing else that indicates something different.

That's fine. My final question is on the Danish business, where we saw organic growth, revenue falling organically, but the margins being maintained. You mentioned that they performed well. We've seen them performing well for quite a while. Should we be worried that giving lower kind of investment activity in the Danish kind of pharma industry that the Danish business can maybe say roll down both margin-wise and volume-wise?

I mean, first, maybe a comment from my side when it comes to the market. I mean you all know that the investments in the pharma sector in Denmark has decreased a lot. And it, of course, affects the whole market. But our Danish business has really been able to distribute other kinds of work in parallel with this decrease.

So if you look at the decrease of our Danish business or actually that they're not growing in line with previous quarters, I would argue that in relation to that, they are doing a good job of sales and focusing on other segments. With that said, we work in that sector continuously, and it's an important sector for us. But I mean, it's -- they have, as you say, strong margins. They have focused on the right things, and it's really about continue growing in other segments in parallel.

So no reason to anticipate the margin downtick in, say, the rest of '26?

I mean we don't give any forecast. But I mean, the focus they have on operational excellence that they will continue to work with.

Now we're going to take another question on audio line. And it comes from the line of Julia Sundvall from ABG Sundal Collier.

Just one question from my side, and it's regarding the market and especially the weak real estate market. I was just wondering, we have seen some positive signs regarding the market within the residential market in Sweden. Do you -- even though it's from low levels, have you seen any light in some way regarding the residential market in Sweden? Or do you view it as weak?

Yes, I have to say, if I look back, I mean, the overall residential market and commercial real estate has been weaker or weak since the inflation increase and the war broke out in Ukraine. And we have -- I mean, of course, I mean, our portfolio is quite broad, and we have worked with residential and commercial real estate all along, but on lower levels. But I mean, it's -- we don't see a strengthening market or any market that opens up, if that is your question. It's still on the weak side.

And I have to also add with the uncertainty that we now have, I mean, it's really about focusing on understanding how the market will play out ahead, of course.

Dear speakers, there are no further questions on audio lines. And I would like to hand over to Marcela Sylvander for any written questions.

Thank you so much. We have one question from Edward Donoghue, One Invest, and I think I'm sending this one to you, Jan. Question goes like this.

Good morning, he also says. I was wondering why Central Europe and Germany strength of organic growth was not reflecting in the EBITA percentage progression.

Yes. Thank you for the question -- online question there. I would say Germany had a bit higher cost coming through in Q1. But besides that, I would say the performance in Q1 is in line with previous seasonal view for Q1. So Yes, I would say otherwise, pretty much in line with our expectation, except for a little bit higher costs coming through in the quarter.

Okay. Thank you for that question. And with that, no further questions on my part, and I don't think in the phone line either, operator? No.

So with that, we'd like to thank you for joining us this morning. And also a quick reminder of that Sweco will release our Q2 report on the 17th of July. Thank you, and have a nice day.

Thank you.

Thank you.

Good morning, and welcome to this presentation of Sweco's Q4 and Year-end Report for 2025. Sweco's President, Asa Bergman -- and CEO, Asa Bergman; and CFO, Jan Allde, are here today to get us through the results.

So with that, I hand over to you, Asa.

Welcome, everyone, to Sweco's Q4 presentation. Before we present the results for the fourth quarter and the year, let me give you a quick overview of Sweco. Sweco is Europe's leading architecture and engineering consultancy with operations in 8 geographical business areas across 15 markets in Europe. We are a well-diversified business operating across 3 different segments with a good balance of private and public clients. The foundation for Sweco's long-term success is our mix of competencies spread across 23,000 experts, our focus on organic and acquired growth as well as our efficient and decentralized operating model. With a strong financial track record and financial position, we are focused on continuing our growth journey and build on Sweco's success.

With this introduction, let me start the presentation with a summary of 2025. 2025 was another successful year for Sweco. Despite the challenging macroeconomic environment and mixed market situation, we continue to deliver profitable growth and further strengthen our position as a leading European architecture and engineering consultancy. The results proved the strength of our strategy and operating model, and the commitment across vehicle to drive continuous improvements, find new business opportunities and transform societies together with the clients.

Last year, net sales increased to over SEK 31.5 billion with a solid organic growth rate of 4% and acquisitions adding another 2%. A strict focus on pricing, efficiency and costs resulted in an EBITA improvement of 12% and further improvement of our EBITA margin. We also accelerated our M&A activity, announcing a total of 13 new acquisitions throughout the year. Our financial position remains strong, which provides us with great flexibility to continue to act on opportunities in the market.

Finally, the Board of Directors proposed a dividend of SEK 3.70 per share. Altogether, 2025 was another good year for Sweco, and we entered 2026 from a strong platform. Before we end the summary of 2025, let me share some of the key achievements.

Looking back at 2025 versus 2024, I would like to emphasize that we have delivered on our strategic priorities. One of the key achievements has been our accelerated M&A activity. We announced 13 new acquisitions in 2025 adding more than SEK 2 billion in annual net sales and a total of more than 1,500 new experts to Sweco. We have also continued to deliver price expansion while executing on our efficiency measures and cost control with clear progress, resulting in improvements in our EBITA margin.

Streamlining parts of the organization and keeping a strong client focus has also resulted in further improvements in our billing ratio, and this is the result of hard work across all levels of Sweco, and we are committed to continue this journey.

With this summary of 2025, let's dive then into the fourth quarter results. In Q4, Sweco delivered a solid result in a mixed market. Net sales increased by 6% to SEK 8.5 billion, and the organic growth rate was 5%, EBITA amounted to SEK 979 million, an increase of 7% adjusted for calendar effects with a margin of 11.5%. The positive development was driven by higher average fees, FTE growth and higher billing ratio. Taken together, we sustained our positive operational momentum and ended the year with a solid fourth quarter.

Now let us go into more detail. In Q4, 7 out of 8 business areas reported positive organic growth and we navigated efficiently in a mixed market, maintaining a stable order backlog. The positive operational trend continues with 6 business areas reporting double-digit margins. Belgium demonstrated a strong quarter with margin expansion and Germany, Central Europe was the largest contributor in the quarter, benefiting mainly from positive project adjustments. We also saw continued improvements in the U.K. and in Norway.

As I mentioned earlier, our focus on efficiency also resulted in further improvements of our billing ratio, with a ratio of 74.8% in the quarter. Overall, I'm pleased to see that we make consistent progress across our business areas and deliver on our priorities.

Let's turn then to the market overview. Demand for Sweco services was broadly consistent with previous quarters, with some variations between segments and markets. Demand remained good in energy, infrastructure, water, environment and the increased demand in security and defense persists. Commercial buildings and Real Estate segments remained weak, while demand remained on higher levels in the Public Buildings segment. While there are small differences in the market situation from quarter-to-quarter, we have seen some trends shaping the market during the year.

In the Energy segment, demand is underpinned by substantial investments as Europe strengthened its energy resilience and redesigns its energy systems and Sweco's capabilities and local footprint mean we are closely involved in many of these transition-driven projects.

Across Europe, security and defense have moved higher on the political agenda with countries upgrading capabilities, buildings and critical infrastructure. Sweco is well positioned to support this shift through a long experience across several areas that are crucial to this ramp-up. We are also seeing accelerated adoption of AI driving business opportunities for Sweco. AI is driving both the improvement of Sweco services, integration of AI solutions in client projects and rising investments in data centers to support Europe's need for data power. We see the accelerated development in AI as an opportunity to maximize value for our clients.

With that, I will welcome our CFO, Jan Allde, to walk you through the numbers. Welcome, Jan.

Thank you, Asa. Net sales was SEK 8.5 billion, which represents a growth of 6% versus last year. The organic growth rate was 5% adjusted for calendar effects. On top of the organic growth, we had acquired growth of 4%, which was offset by a negative FX effect of minus 4% due to the strong development of the Swedish krona. We saw the small positive calendar effect of 1 more working hour in Q4 versus last year.

EBITA increased 7% or SEK 65 million to SEK 979 million and the EBIT margin increased to 11.5%. Cash flow was strong in Q4, leading to a net debt-to-EBITA ratio of 0.4x at year-end '25, same as last year.

Let's look at the net sales. So overall, the organic growth was 5% in Q4, primarily driven by higher average fees and positive project adjustments. Higher number of FTEs and improved billing ratio also contributed to the organic growth. From a BA perspective, we saw organic growth in 7 out of our 8 BAs. Germany, Central Europe had the strongest organic growth rate at 16% driven by positive project adjustments, higher average fees and increased number of FTEs. Norway also reported good organic growth rate of 7% and the other BAs reported organic growth rate between 2% and 5%, except for Denmark, that was flat due to lower revenues from subconsultants.

EBITA -- so EBITA increased by SEK 65 million or 7% versus last year adjusted for the calendar effect and the EBITA margin increased to 11.5% versus 11.1% last year. Overall, the EBITA improvement was driven by higher average fees, positive project adjustments, improved billing ratio and FTE growth, while personnel expenses had a negative impact.

From a BA perspective, 6 out of 8 BAs reported double-digit margins and the largest EBITA improvement was reported by Germany and Central Europe, U.K., Belgium, Norway and Finland. The margin in Sweden was impacted by integration and restructuring costs of SEK 43 million, and excluding these costs, the margin was approximately on par with last year. Netherlands reported somewhat lower margin, primarily related to higher OpEx as a consequence of the high M&A activity level in 2025.

Now let's look at EBITA bridge then by BA. So the result in Sweden was impacted by SEK 35 million of costs related to the accelerated integration activities in Projektengagemang and restructuring cost of SEK 8 million. Excluding these costs, Sweden improved their EBITA by SEK 23 million, driven by higher average fees and higher billing ratio. Norway and especially Belgium delivered strong EBITA improvements primarily driven by higher average fees and it was also good to see that the U.K. is continuing its profitability improvement. Germany and Central Europe had a positive effect on net sales and EBITA of SEK 49 million related to a onetime correction issue stemming from the ERP migration in 2024. Excluding this correction, EBITA increased by 19% in Germany and Central Europe, driven by positive project adjustments, and higher average fees.

The group-wide costs increased by -- increased by SEK 26 million versus last year, mainly due to costs related to M&A transactions and periodization effects. With regards to the calendar effect in the quarter, we had a small positive effect of 1 more working hour compared to last year. However, as this positive calendar effect was to be realized in the month of December, with 8 more working hours, a month with many holidays, we estimate the calendar effect in the quarter as insignificant.

So to summarize, the reported results included both some positive and some negative onetime items, which in total was roughly neutral to the results, which means that the reported earnings gives a good view of the strong underlying performance in the quarter.

Then we look at the financial position. Cash flow in Q4 was strong, driven by a seasonal reduction in working capital, resulting in a net debt position of SEK 1.4 billion at the end of the year. So for the full year '25, cash flow from operating activities amounted to SEK 4 billion. M&A cash flows was SEK 1.075 billion and dividend paid was SEK 1.187 billion. That means that we ended the year with a net debt-to-EBITA ratio of 0.4, same as last year. Hence, our leverage is well below our target and Sweco remains financially very strong to pursue an active M&A agenda.

So then let's look at the dividend for 2025. The Board of Directors proposes a dividend of SEK 3.70 for 2025, which represent an increase of 12% versus 2024 and a payout ratio of 60%, which is well in line with the company's historical dividend growth and its dividend policy of paying at least half of profit after tax to the shareholders while maintaining a sound capital structure.

Now if we look at the longer-term financial performance of Sweco, we can see that the net sales growth shows a CAGR of 11%, and EBITA growth of 13% CAGR for the last 10 years. This solid long-term profitability growth shows the strength of our strategy and our operating model. Finally, a reminder of a calendar effect for '26. The expected total number of working hours for '26 is expected to be 7 hours more than '25. However, in Q1 '26, we expect 5 hours less than the same quarter in 2025.

So by that, I hand back to you, Asa.

Thank you, Jan. Acquisitions are one of Sweco's key growth drivers. During the quarter, we have acquired 4 new companies, Fimpec Group in Finland, assar architects in Belgium, and VHGM and MuConsult in the Netherlands. In total, these acquisitions will add around 600 experts at Sweco and strengthen our offering in key segments such as hydrogen, architecture, geothermal and mobility consulting.

The fourth quarter ended a year with, as I mentioned earlier, accelerated M&A activity. Over the course of 2025, we have made 13 acquisitions that reinforce our presence in the key markets and priority segments in accordance with our M&A strategy. We have a good mix across markets and segments as well as a good mix of niche acquisitions and larger acquisitions.

One of the key components in our strategy is to have an offering combining the expertise of architects and engineers. And during the year, we have strengthened our architecture capabilities in Sweden, in the Netherlands and Belgium. And in Belgium, we are now the largest architecture agency. In Finland, we have strengthened our offering in energy and are now one of the leading players in the energy segment. Altogether, these acquisitions added more than 1,500 experts and more than SEK 2 billion in annual net sales.

With our M&A strategy, strong pipeline and proven model for integration, we will remain focused on new opportunities going forward. Clients projects won during the quarter highlights Sweco's role in future-proofing societies and industries. We extended our long-term collaboration with Swedish energy company, Vattenfall. In a new framework agreement, Sweco will deliver technical consultancy services across wind, hydro, thermal and nuclear power. In the quarter, we were also awarded a multidisciplinary engineering project in Norway to support improved water quality in the local water courses and the Oslofjord. In the Netherlands, Sweco won a framework agreement with the Flemish public authority for waterways to upgrade the 16-kilometer Roeselare�-Leie Canal which transports 4 million tonnes of goods annually. Finally, our architects delivered award-winning design for a part of Germany's largest subway project.

With that, I will conclude with our key priorities and focus areas going forward. To summarize, 2025 was another successful year for Sweco. Net sales exceeded SEK 31.5 billion. EBITA amounted to SEK 3.3 billion, and we delivered a solid EBITA margin of 10.5%. During the year, we demonstrated the strength of our strategy and operating model by continuing to improve margins and efficiency, raising our average fees and increasing our billing ratio.

As we enter 2026, we do so with a strong market position and strong financial position and clear strategic priorities. We will remain focused on capturing business opportunities as Europe invest in competitiveness and resilience. At the same time, we will continue our efforts in efficiency and pricing to further improve profitability, while maintaining an active and disciplined M&A agenda with efficient integration. All in all, we have a strong platform, and we look forward to continuing our transformation of the society together with our clients. Thank you.

Thank you, Asa and Jan, and the time has come to open up for questions, and you can ask them directly through the phone line or through the chat function. So Sandra, please, if you could give us the instructions.

[Operator Instructions] We will now take the first question, coming from the line of Fredrik Lithell from Handelsbanken.

Congrats to a good ending to the year. I had a question on the positive project adjustments you had -- you had that in Finland, Denmark and Germany. If you could sort of put a number on that would be interesting to hear. And also, if the ERP correction in Germany, is that the same thing as a positive project adjustment? Or is that a totally different thing? So that would be interesting to clarify a little bit.

Yes. So let's start then with the ERP correction. So this is a correction that relates back to the migration of the ERP system in Germany in 2024, it involved an acquired company that at the same time, was converting from German GAAP to IFRS causing this issue. So on the project adjustments, project adjustments are, I would say, a normal part of our daily operations. And I wouldn't see it as any, let's say, unusual. It do provide some fluctuations, of course. But overall, I would say it's simply a normal part of a project business.

Okay. But you can't give us a number on it. I mean do you feel it's a sort of normal part?

Yes. Again, I think it's -- if you assess the operational performance of the business that we conduct, I think you have to include project adjustments in simple -- as normal part of the operations.

And I think, I mean, adding to that, if you look at the result of Germany, taking out the SEK 49 million, you see a strong improvement, and part of that is project -- positive project adjustments. And that is part of business as usual for us.

Okay. That's clarifying. And if I could also then ask a little bit your order backlog. I think also you said it was around flat? Or is it up? Or can you sort of talk a little about the order backlog and how you see it when you enter 2026 would also be interesting.

No, I would say that if I look at the project won in the quarter and the tender activity that we have had, we are in a good position. We are -- have orders received ratio on good levels. So the order backlog is -- I mean, it's stable or actually we see that we have a good order backlog. So there is no change compared with previous quarters.

We will now take the next question from the line of Dan Heimer from SEB. .

Two questions from my side. Starting on the first one, the integration costs here of SEK 35 million related to Projektengagemang, could we see more now in 2026? Or is this sort of the large chunk you took now in Q4?

Yes, so the integration cost that was taken in PE here in Q4, this is really the result that we accelerated the integration costs. And this really stems from a reduction of administrative overhead costs that's really not needed in the combined new entity, so to say. And I would say this is the last piece in the integration efforts, and that means that we are now well on track with the integration plan in Projektengagemang. So -- and we, of course, expect gradually to see the synergies coming out during '26.

Understood, very clear. And a question on fees as well. You highlight positive development here in Q4. Can you give some sort of feeling on what sort of increases you see right now? Are we sort of at the normal 2%, 3%? And do you see any changes compared to previous quarters throughout 2025?

I mean we -- as you know, we focus heavily on making sure that we project by project, contract by contract, distribute the right prices, and also making sure that we -- because the price increases is -- there's 2 components to it in the mix. It's both how we price ourselves on the market and how we execute our projects. So we do that with quality.

So I mean, we have said it quarter-by-quarter that we focus on expanding our prices. And I mean, if you look at the EBITA improvements, the main part comes from price increases even if we, of course, have the element of the billing ratio and the FTE growth in that mix as well. But I mean you can expect that we will focus on that going forward as well.

Yes. Very clear. Maybe a final one, if I may. I mean, as you highlighted, you had a very active M&A year this year or 2025. How do you feel about 2026? I mean do you need some time to digest, given that you've done quite a few sizable builds, both in Sweden, but also in other markets as well? Or yes, will you continue to -- on this way into 2026 as well?

I mean our plans -- and as I said before, we have an M&A strategy in place in most of our business areas. And then we have an active pipeline which you see the result of during 2025. So our focus is to continue. If we will digest is, of course, depending on what kind of cases we will have ahead of us. But I mean if we get opportunities, we will take the opportunities and buy companies and secure that we can in a qualitative way, integrate them. So I think it's more related to if we get the opportunities or not. We have a good integration process in place. We have good capabilities and knowledge of how to work and integrate with this and at the same time, keeping focus on business as usual, so we don't lose track of that as well. But it's a fair and good question, Dan.

Yes. And a very strong balance sheet, of course, still. So yes, will be interesting. I think that was all from my side.

We will now take the next question from the line of Tom Guinchard from Pareto Securities.

Question on the billing ratios here going into 2026. We've seen quite strong development over the past year. Just wondering if we're going to see a dilution through the recent acquisitions that we've seen or if you think you can manage the sort of headline numbers here despite quite an active M&A agenda throughout '25 and your thoughts on sort of underlying billing ratio organically?

Yes. I mean, we continue to work on further improving the billing ratio. That's part of what we do on a daily basis and also to drive further efficiency improvement programs. And of course, as we work to integrate the acquired companies, that is, of course, part of the, let's say, game plan to also drive billing improvements of the acquired entities that we've done in '25. So we simply will continue to work on this topic and drive further improvements.

But we don't see sort of a technical drop in reported billing ratio going into '26 as a result of the acquisitions. Just so we don't read the headline figures wrong here going into the following quarters.

No, I think you should see -- I mean, we have already integrated most of the companies or actually all of them into our business, meaning in the KPIs for Q4. You already see the effects of our acquired companies in the billing ratio numbers. So part of the integration now and onwards is to create value from increasing efficiency in those both companies and implement the Sweco model. And part of Sweco model is, of course, to make sure that we increase efficiency if we have a dilution of the billing ratio linked to those companies. It's not for -- I mean, not all companies we buy has lower billing ratio, but some of them. So we implement the Sweco model and then, of course, work with the contracts and trying to expand together as we move into 2026.

Perfect. And just a follow-up on Dan's question in terms of M&A going into '26, '27. Any specific regions that you're targeting now in the sort of midterm? You've spoken a lot about the DACH region and Benelux historically?

Yes. And I mean, as I said before, and sorry for repeating myself, it's -- we try to look at all our geographies at the same time and making sure that we have a strategy in place with we -- the combination of architects and engineers is the headline. And then we are looking for niche competencies, expertise by expertise. And of course, we're also looking for scale. So it depends on what we get opportunities to buy going into 2026. But it's more a business area by business area to make sure that we roll up this broad portfolio of services that -- where we get traction growth-wise and where we see the growth is coming in the next years. So it depends on which business areas you're looking at. I mean the overall trends of Europe is saying something about what we're looking for because that is where the growth will come.

We will now take the next question from the line of Johan Lonnqvist Sunden from DNB Carnegie.

A couple from my side. Firstly, a nitty-gritty question. It's on the group cost level that was up versus Q4 last year, any color what drove that uptick that we should be aware of?

Yes, Johan. So the higher cost in group coming in the quarter versus last year. I quickly mentioned that during the introduction here, it's partly M&A integration costs that we decided to take on a group level. And secondly, we had a [indiscernible] effect in Q4 related to our captive insurance company that sort of say, came into Q4. And those [indiscernible] really I would say Q2, Q3, Q4, but for the full year, it's correct.

And then going back to the German, Central Europe business, been quite impressive margin development over the last few quarters. Just so we don't push up our expectations too high. What is a reasonable run rate expectation for the German, Central Europe business and margin network going forward? Because there's been quite a few one-offs that has had positive the impact of the margins during this year.

You can start.

Yes, I can start. So of course, looking at Germany, I would say, excluding this onetime year, let's say, correction related to the ERP, I think it's a sensible first thing to do. As I said earlier, I think the other, let's say, normal product adjustment is part of the business. But of course, it does give you some fluctuations in the profitability in the quarter, and we've had some positive project adjustment coming through Q3, Q4. So I think a good way to look at that is to look at the German profitability maybe over a longer time period, rolling 12 months, full year. I think at least that provides a better basis for comparison. .

Nothing to add.

So rolling 12 months, adjusting for the ERP thing should be pretty decent, should be manageable?

Yes, at least as a basis for, let's say, understanding the performance in '25. Yes.

Great. And then another a little bit nitty-gritty question, it's more on the kind of differences between the cash flow and the P&L. I note that CapEx levels has come up, maybe both '24 and '25, and this has been a bit higher than your kind of normal depreciation levels. Anything to highlight here why CapEx levels have been, say, SEK 90 million above what you depreciate in the P&L?

I would say, Johan, there is nothing specific there that stands out. There's -- of course, as we acquire the quite large number of companies that we do, you, of course, get some fluctuations on items like that. But I'd say underlying, there's no reason to -- there's nothing that sticks out.

Great. And just a final question from my side. It's on the kind of synergy outtake from newly acquired units. Do you think that should -- how should we think about the profile of synergy outtake? Will it be front-end load or back-end loaded for '26? Or what should be the expectations there?

Well, I think it's important when you look at '25 and Sweco, acquiring 13 companies that we have done with that, of course, comes on one hand, high transaction costs. We have had transaction costs of some SEK 50 million this year. We have quite high integration costs. I mean PE now in Q4 of SEK 35 million, and then on top of that, of course, we acquired companies or some companies that comes into the group at a lower margin than the group average. So overall, of course, it has, let's say, it's burdening, let's say, the company this year, and we expect, of course, then to gradually get the synergies from those acquisitions going forward. On the other hand, we intend to keep up this momentum in M&A. So yes.

I think it's important to add, I mean, if you look historical wise, the 2024 was a weak transactional year market-wise, but also for us. And that, of course, also comes into play here. When we accelerated the agenda for this year, and you get lots of transaction and integration costs, as Jan is referring to. But I mean, we -- of course, we expect some more costs coming in Q1 when it comes to integration. But -- we also expect, as we said before, really to see the value creation as we move into 2026, and also this decision to take a more accelerated integration approach when it comes to PE when you have those kind of opportunities when you well plan and you can execute that faster, is exactly how we should play things because I think it's important to remember when you buy consultancy services, you buy people's willingness to stay and perform.

So it means that the faster you can move, the better because you create security and understanding how this will affect the individual and the business that you're buying, but also your existing business. So fast integration is also part of the recipe for success.

And Johan, maybe to add. I mean there's kind of 2 synergies from a cost point of view. One is that you can combine the administrative, let's say, activities and those actions you can take fairly fast, then the other is the co-location of offices and such. And of course, that takes a little bit longer to execute depending on the length of the lease contracts and so forth.

Okay. But the administrative part should at least be able to be crystallized fairly quickly or beginning of '26 at least, given you're taking out those costs now?

Correct.

We will now take the next question from the line of Johan Dahl from Danske Bank.

A few questions. Firstly, on Sweden, being a bit -- looking at the results here for the fourth quarter and adjusting for the one-offs in Sweden, margins down slightly, I think organic growth for the full year well below the group average. I was just thinking if you focus on Sweden with the changes also in management happening there, what sort of levers from a group level are you aiming to pull here? And what sort of initiatives can you envisage for Sweden to improve financial performance going forward? I appreciate its early developing that management agenda, but just in your view, would be interesting to hear.

Yes, maybe I can comment. I mean, if we start with this cost, of course, you need to take out that extra cost for the PE integration for Sweden and also the transactional cost that has burdened 2025. And -- but I mean, you're right, you could expect more and the largest business areas is Sweden. So of course, I expect that and the full mandate for the new business area President Fredrik Wallner, is to make sure that we continue to stay attractive and strengthen our market position in Sweden and also implement efficiency measures as we move along.

So I mean, it's the normal recipe of profitable growth from the position that we have. I mean, the portfolio of the Swedish business, we are really well positioned. We're strong in architecture, and we have a widespread of different engineering capacity, so we are well positioned in all the areas that I refer to is growing on the Swedish market.

Got you. And sorry to repeat this on your acquisitions. But just in terms of -- I mean, the massive amount of acquisitions you made last year, and just looking at the specific cost-out actions, i.e., charges, redundancies, lease closures, et cetera. How far will those actions that you've already taken in '25 take you to sort of sort of approach at least some sort of group average on margins? I appreciate the Sweco model and all that is a somewhat longer perspective. But in terms of cost out actions, what sort of delta is that on '25 earnings?

Yes. As I said, I mean, there are certain actions that we can act on quickly and everything from integrating them into our ERP systems, making sure that we have the right overhead structure, things like that and that, speed and integration is super important for us and something we execute, I would say, normally within the first 6 months, and we can start to see impact of -- and then the, say, the more co-location of offices, driving billing ratio improvements and things like that, of course, takes a little bit longer time. I would say, 1 to 2 years.

I appreciate that.

And when you look at -- but can I just add, Johan. I think if you look at the companies that we have bought, we have bought them over the year. And of course, the first phase is as Jan referring to, is that we take actions with the synergies linked to overcapacity, mainly on staff functions. And then we start to co-locate. And in some cases, we have already done parts of that.

So of course, now when we're talking about the biggest swings we're talking about Projektengagemang and Fimpec and assar mainly and the small ones that we did in Q4 that those actions will be a bit dragged into the beginning of 2025. But then we have another synergy package, which we don't talk that much about, but that is the business synergies. So we have already started to work together, but the full potential value creation when it comes to that synergy, of course, that takes a longer time. So office leases and co-locations will be into 2025 in parts of the cases and PE, especially and then also, of course, the business synergies that we see ahead.

All right. Let's leave it at that. Final question, just on the calendar effects. I think you referred to 7 extra hours, '26 versus '25. I'm just wondering is that -- I think the labor agreement in Sweden, '26 awarding 1 extra holiday. But those 7 hours, is that the net realizable effect for Sweco? Or should we sort of deduct that sort of change in labor market agreements?

No, that should be included in that calculation and also that's, of course, partly why you see an impact in the first quarter, a negative impact in Q1.

[Operator Instructions] We will now take the next question from the line of Julia Sundvall from ABG SC.

Just one question from my side. I would like to come back to the ERP system correction. Is this revenue only for '24 that you take now? Or is it from others as well?

Yes. So this goes back to, I would say, partly 2023, but mostly 2024, yes.

And do you have a more detailed split on that or just mostly '24?

No, I think that's what we can say right now. .

Thank you. There are no more questions at this time on the telephone. I would like to hand back over for the webcast questions.

Thank you. And we have a couple of questions from the webcast. And -- they are from Edward Donahue, [indiscernible], and I will move from the M&A now to AI. So the question is with the market fixation on AI, could you give some color on how Sweco uses AI tools internally and how clients see AI in existing services offered by Sweco. How do we use it in our services? How do we work internally? .

Okay. So we have worked with AI for quite a long time, and we are distributing AI solutions across Sweco. We have 3 different parts: digitize the core; creating client value; and ensuring that we capture new business opportunities. So beginning of 2023, we built a sandbox for ChatGPT in Sweco, to make sure that everyone in Sweco uses the AI technology.

With that in combination with all the different applications and new ways of working that we have added to this platform but also we work with innovation within our design business to make sure that we become more and more efficient. So we use all the new technology to innovate and implement and look at the consequences to make sure that we price ourselves right that can expand, and we understand what kind of expertise we need around that. And that is already ongoing.

We have some cases when it comes to creating client value where we sell AI solutions for our clients. So that is happening right now. We are really trying to leaning forward and making sure that we constantly evolve and making sure that we try test, as I said, and develop new tools all the time across Sweco. We also worked with our data market internally to make sure that we can utilize the right data and create value for our client out of that data market.

But as you all know, this landscape moves fast. So today's technology is something and next month's technology is something else. So it's a continuous work that we have set up some years ago and that we're following really closely. So to secure we are competitive to secure that we are relevant to secure that we bring efficiency into the system and that we also can price ourselves right in this landscape. I hope that answers your question.

And we touched lengthy on our M&A, but I'll ask this question anyway to clarify. So the question is from the same participant. You stated that the billing ratio of Q4 reflects the M&A companies. Are these on average lower, so the Q4 is a base to build on. Would you see an acceleration for 2026 versus -- or sorry, versus '25 based on the M&A vintage of '24? Jan, I think this is for you.

Yes. I mean, it's always a mix. You have some companies coming in with strong billing ratio. There are some other companies coming in with lower billing ratios. And secondly, some of the companies came into the group here in late 2025. I mean Fimpec was -- came in, in December, for example. So it's a bit of a mix. But I would say excluding those, the underlying billing ratio has been making a continuous progress here during the year. And yes, of course, if you compare Q4 with Q4 of '24, that's where we really started to improve the billing ratio. So of course, in a way, you can say we have tougher comparables now this quarter versus last year. But still, we continue to drive a higher billing ratio. So maybe not super clear, but clear enough.

Thank you. We have no further questions. I want to thank you for joining us this morning and for your questions. And I also want to take the opportunity to thank Asa and Jan and to inform you of our Annual General Meeting that takes place on the 22nd of April and we will release our Q1 report on the 28th of April. With that, I'll wish you all a nice day.

Thank you.

Thank you.

Good morning, and welcome to this presentation of Sweco's Q3 Report. Sweco's President and CEO, Asa Bergman is with us this morning together with CFO, Jan Allde. Together, they will take us through the results of the third quarter, and they were presented earlier this morning, as you are aware. And after their presentation, we will open up for questions. So please, Asa.

Welcome, everyone to Sweco's Q3 presentation. Before we present the third quarter results, let me give you a quick overview of Sweco. Sweco is Europe's leading architecture and engineering consultancy with operations in 8 geographical business areas across 15 markets in Europe. We are a well-diversified business operating across 3 different segments with a good balance of private and public clients.

The foundation for Sweco's long-term success is our mix of competencies spread across 23,000 experts, our focus on organic and acquired growth as well as our efficient and decentralized operational model. With a strong financial track record and financial position, we are focused on continuing our growth journey and build on Sweco's success.

With this, let's go into the presentation of Q3 2025. Sweco delivered a strong result in a mixed market. Net sales increased by 5% to SEK 7.1 billion, and the organic growth rate was 4%. EBITA increased to SEK 702 million, an increase of 19% with a margin of 9.8%. The positive development was driven by further improvements in average fees and billing ratio and a higher number of employees as well as improved cost control and realized synergies from previous acquisitions.

We also maintained a high M&A activity, closing 5 acquisitions in the quarter, included the listed company Projektengagemang in Sweden. And after the quarter, we added another 3 in October. I will get back and give you an overview of these acquisitions later in the presentation.

In alignment with our strategy, focusing on selective core markets in Europe, we also divested Sweco's Czech operations in the quarter. Altogether, a strong result and a positive performance in Q3, driven by price billing ratio and M&A synergies as we continue to deliver on our strategic priorities.

Now let us go into more details from the quarter. In Q3, 7 out of 8 business areas reported positive organic growth and 7 out of 8 business areas reported EBITA improvements. We navigate successfully in a mixed market, improving both our order intake and order backlog during the quarter. The solid operational trend continues across most business areas with 3 reporting double-digit margins. Sweco Germany and Central Europe was the largest contributor to the EBITA improvements in the quarter, benefiting from efficiency improvement and positive project adjustments. We also continue to see improvements in the U.K. We have continued effects from the efficiency measures we have taken, resulting in future -- further improvements of our billing ratio. Overall, we are pleased that we continue to make consistent progress across our business areas.

Let us now turn to the market overview. Overall, the demand for Sweco services was broadly consistent with previous quarters with some variations between segments and markets. Demand remained good in the energy and infrastructure and water and environment segments and with increases in security and defense. Certain areas of the building and real estate segments continued to be weak, while demand was somewhat healthier in the public buildings. We also saw continued weak demand in parts of the industry segment.

This quarter demonstrates that our over -- our well-diversified business continues to be a strength for us and provide stability, resilience, the green transition -- resilience and the green transition, digitalization and AI and demographic shifts continue to be the key drivers for our business.

With that, I will welcome our new CFO, Jan Allde to walk you through the numbers. Welcome, Jan.

Thank you, Asa, and it's also very nice to be here. So let's start with the summary. Net sales came in at SEK 7.1 billion, organic growth of 4%, acquired growth of 3% and a negative FX impact of 2%, giving a total growth of 5% in the quarter.

We have the same number of working hours in Q3 as in last year, and EBITA increased by 19% or SEK 114 million to SEK 702 million. EBITA margin increased to 9.8%, and our net debt-to-EBITDA ratio stands at 0.9x.

Looking at sales. So we see organic growth in 7 out of 8 BAs. Germany and Central Europe had the strongest organic growth at 13%, driven by positive project adjustments, higher average fees, higher FTEs and also a higher billing ratio. The U.K. and Netherlands also reported strong organic growth at 11% and 9%, respectively. Due to the recent acquisitions, the Netherlands also reported an 8% acquired growth.

The organic growth in Sweden was flat in a stable but mixed market. The acquisition of Projektengagemang added 7% acquired growth in the quarter. All other BAs grew between 2% and 5%. So overall, the organic growth was driven by higher average fees, higher number of FTEs and a higher billing ratio.

And looking at the EBITA, so it increased SEK 114 million or 19% versus last year. The EBITA margin increased to 9.8% versus 8.7% last year. Germany and Central Europe, Denmark and Belgium reported significantly improved and double-digit margins. Norway also reported higher margins, but from a low-level last year. The U.K. delivered 7% margin in another quarter of improvement, and the Netherlands and Finland was roughly in line with last year. So overall, the EBITA improvement was driven by higher average fees, higher billing ratio and FTE growth with higher personnel expenses had a negative impact. Regards to the calendar effect, we had the same number of working hours in Q3 this year as last year.

So the group result was impacted by transaction and integration costs related to the acquisition of Projektengagemang of SEK 33 million, whereof SEK 28 million impacted the result in Sweden negatively. Excluding this, the result in Sweden improved by SEK 24 million. Germany and Central Europe, Denmark, Belgium and Norway all delivered significant EBITA improvement.

The improvement in Germany and Central Europe was driven by positive project adjustments, higher average fees and a higher billing ratio. The improvement in Denmark was driven by lower operational costs and also less absence, while the improvement in Belgium was the result of higher average fees and higher billing ratio.

We have also started to see a gradual positive impact from previous acquisitions coming through in Belgium and Denmark. And Norway was positively impacted by the higher average fees, but also some one-off costs last year. The Netherlands and the U.K. and Finland also reported higher EBITA.

Let's look at the financial position. Cash flow during the first 9 months of the year was impacted by an increase in working capital, partly a seasonal effect and partly effect of the recent acquisitions. M&A cash flow for the whole period was SEK 739 million, and then we had a dividend of SEK 1,187 million. With regards to the net debt position, it now stands at SEK 3.1 billion at the end of Q3, and the net debt-to-EBITDA ratio was 0.9 versus 1.1 at the same time last year. Hence, our leverage is well below our target, and we remain financially very strong.

And finally, let's take a look at the calendar effect for 2025. So in Q4, we expect 1 more working hours compared to last year, which means that the total impact for the year is 8 working hours less than in 2024. Please also note that we have included a table in the Q3 report showing the expected number of normal working hours per quarter in 2026 versus 2025.

And by that, I hand back to Asa.

Thank you, Jan. Acquisitions are, as you know, one of Sweco's key growth drivers. And as I mentioned in the beginning of the presentation, we have accelerated the level of activities completing and announcing several new acquisitions during and after the quarter. We did 5 acquisitions in the quarter. In the beginning of the quarter, we announced 2 acquisitions, PROgroup and +ImpaKT in Luxembourg and Volantis in the Netherlands.

In mid-July, we completed the acquisition of the listed company, Projektengagemang in Sweden, which adds over 600 experts to Sweco and strengthens our offering and footprint in Sweden. The integration is progressing well, and we are estimating significant synergies to be in beginning and realized gradually in 2026 and 2027.

In August, Sweco also acquired OBOS design operations in Norway as a part of an asset transfer. We also added 3 new acquisitions after the quarter.

Fimpec in Finland offers specialist expertise in renewable energy, hydrogen, bio and circular economy, forest industry, batteries and critical minerals and will add some 400 experts and SEK 577 million in net sales to Sweco Finland. The acquisition will strengthen Sweco's position as an advisory in the ongoing energy and industry transitions.

The Belgium firm, assar architects is a leading architect firm specialized in large-scale public and private sector projects. The acquisition of assar significantly broadens Sweco architecture offering in Belgium and Luxembourg, adding 150 experts and around SEK 189 million in net sales. This makes Sweco the leading architecture company in Belgium.

The company VHGM in the Netherlands is specialized in geothermal energy consulting and will add SEK 22 million in net sales and around 22 experts in Sweco.

All-in-all, we have acquired 12 companies so far in 2025, representing some 1,500 experts and SEK 2 billion in annual revenues. Projects won during the quarter highlight Sweco's role in future-proofing societies and industries. In Sweden, Svenska Kraftnat has commissioned Sweco to renew power lines in the Jamtland region to enhance grid resilience and enable future wind power development.

In Norway, we entered into a framework agreement with a public transport operator Sporveien to support sustainable transportation in the Oslo and Akershus area.

In the Netherlands, Sweco will support the Dutch road and water management agency, Rijkswaterstaat to modernizing the country's primary infrastructure, enhancing safety, resilience and mobility to address climate challenges and such as sea level rise and flooding.

In Finland, Sweco will be responsible for the overall design of the iconic Finnish food company, Fazer’s future chocolate factory in Lahti, a factory designed to operate without direct CO2 emissions.

With that, I will conclude with our key priorities and focus areas going forward. To summarize, Sweco delivered a strong third quarter. The quarter demonstrates the strength of Sweco's well-diversified business and operating model as we continue to successfully navigate in a mixed market. We consistently execute on our key priorities, improving efficiency and margins and build on the strong pipeline of acquisitions.

Going forward, we will remain focused on further improving efficiency and margins and capturing growth opportunities in the currently mixed market situation. We will also continue to pursue attractive M&A prospects and to enhance Sweco's position in the planning and designing of a more competitive and resilient Europe. Thank you.

Thank you so much, Asa and Jan. We will now take your questions. And as said, you can ask them directly through the phone line or through the chat function. So please, Sandra, if you could give us the details of instructions.

[Operator Instructions] We will now take the first question from the line of Adela Dashian from Jefferies.

A few questions from me. If we start with the geographical mix here in the quarter, it's very obvious that your larger exposures to the Nordics, especially Sweden is what is lagging. And we now have another rate cut and I guess you could say maybe we've reached some sort of inflection point. Would you agree with that? Or do you still think that there is more way to go before Sweden and Denmark and other Nordic countries are on the same pace as the European recovery that's currently set in place?

So if you're referring to the profitability in Sweden, the result there was impacted by the costs related to the acquisition of Projektengagemang. And as I said, if you adjust for that, there is an underlying profit improvement in Sweden.

I just want to be clear, it's not the profitability I'm referring to. It's actually the organic growth, which was lower than the rest of the year.

Yes. And if I refer to the market situation, and what we see is the same picture as we are alluding to overall that we see no big shift in the market. This is more about the overall sentiment of the economy. So what we could wish for is really to see an uptick in the market so we can grow more organically in the Nordics going forward. What we have done the last years is really to maneuver the market in a disciplined way and also taking actions in the Nordic market to position ourselves in the right way. But to get into higher organic growth levels in the Nordic countries, we need to see some more tailwind going forward.

Got it. All right. And then maybe on the pricing benefits in several regions during the quarter. What's driving this? Is it a mix of the projects that you're involved in? Or is it an industry-wide phenomenon?

I mean we have a great focus regarding prices all the time. And so we focus country-by-country, project-by-project to make sure that we put the right prices out on the market, and that we cover for the salary cost increases. But it's what you're alluding to, it's a mix of what kind of prices we put out in the market, but also how we execute the project because the price element is a combination of how we price ourselves and also how we execute our projects. So we really get paid for all the work that we are doing. So we are consistently focused on this, and we will continue to do this.

Great. And then lastly, on the U.K., quite a strong acceleration in Q3 versus H1. What's your view on the U.K. market post the spending review in June and also ahead of the budget in November?

I would say that U.K. is coming from a low-level last year. And as we have talked about before, we have focused to reposition the U.K. market. So we kind of focus on the selective sectors and areas where we have a good market position and where we see that we can grow. With that said, it has always also to do with how the U.K. is operating their business. So we have focused to really turnaround the U.K., and that is what you see in the figures more than that the market has shifted in any way in U.K. So repositioning and executing our business in a better way.

We will now take the next question from the line of Raymond Ke from Nordea.

A couple of questions from me as well. First, starting off with Denmark, which has very impressive margins. Is there any element to this that is one-off in nature? Or yes, is there any seasonal about it maybe timing-wise that makes it stand out here in Q3 that should not be considered normalized?

Raymond, I would say the improvement you see in Denmark is, it's good operational improvements and with some lower operational costs, but we also had a little bit less absence in the quarter. And the third aspect, as we said, we do see gradually some positive impact from acquisitions they have done in the past with synergies coming through.

Got it. And you're right that you want to capture growth opportunities in the mixed market that you are working right now, which sounds great. Could you just help us understand a bit more where you think is the best way to execute on this vision in terms of where you see the most attractive growth opportunities right now?

Raymond, as I said, if you look at the big trends in Europe and the agenda of the E.U., but also everything linked to what is in there, Europe's competitiveness, the green transition, defense and security and resilience for Europe and then you link it to the critical infrastructure that needs to be in place. So we're talking about the segments that we refer to where we see good demand. So it's the infrastructure in all aspects. It's the energy area. It's the water segments. I would put out defense and security, as we have talked about a lot before, where we see an increased demand, and we will see an increased demand going ahead as well. We see data centers in Europe. So there is lots of areas.

With that said, if I look back, what we have done since the market turned down is that we have -- and I know you know this, and we have talked about it before, but we have made sure that we are positioned right. We have repositioned us away from, for example, residential and the commercial real estate segments and areas also where we don't see growth. So the repositioning, but also to make sure that we continue to broaden our portfolio. So for example, if you look at the quarter and you see assar architects, they are one example where we fill a gap we kind of want to really grow the architect business in Belgium to take a strong market position there. There is expertise where we add on expertise. So it's a mixed picture where we're focusing our investments, but it's really about a clear picture of that we should have this broad and diverse portfolio, and that we will continue, of course. So yes, I hope that helps.

Very helpful. Yes, definitely. And just one final, maybe a smaller almost technical question, but the project adjustment in Germany that was positive and helped your margins there, how big was it, approximately?

Yes. The project adjustment we had in Germany certainly contributed to the strong EBITA margin that you saw in Germany in the quarter. It's important to remember, we always have project adjustments, positive and negative. So having a little bit of a longer look at the margins are always a good way to look at it.

But it's, for sure, a bit extra in this quarter as you have seen the margin.

Yes. But is there like any number you could maybe give us or a range perhaps?

It's really difficult because in Germany, I mean, it's part of their project portfolio, and so, I mean, if you look at the trend in Germany, they are executing their project in a better way. But maybe the main margin expansion is coming from those project adjustments, but that is really part of their business as usual. So we can't really -- it's really hard for us to specify it.

We will now take the next question from the line of Dan Johansson from SEB.

Good job in the quarter. It looks like the highest margin in the Q3 that I have experienced as a SEB analyst at least. Two questions from my side. On the higher billing ratio here in the quarter year-over-year, I think you face a bit more challenging comparative figures this quarter as you had a bit of a bump during H2 last year. So I'm a bit positively surprised that you continue to improve efficiency. So is there anything specific driving that continued good progress on efficiencies? Is there any specific countries or anything in particular that drives it this quarter?

No, it's a continued work in line with what we have talked about before, making sure that we stay efficient when it comes to our support functions, making sure that we really distribute and plan our workload in a good and efficient way. So we continue to take measures, and we are continuing to look into where we need and could do more. So it's the same kind of work that we continue to focus on it. And for sure, you are right that we are up against completely different figures last year. But of course, we know that as well. So it's really about within and I said it before, within Sweco, in some countries, we have really the best practice, and we try to look into that, and we try to implement ways of working structures, ways of working into the other business areas step-by-step. But it's -- and of course, it's also about how the project portfolio looks like in a business area, and also, how much projects we win and how the order backlog looks like. So again, to continue the expansion, I would wish for a little bit more tailwind in the Nordics.

Yes, that's all for that and thank you for the clarification. And maybe one more on the balance sheet, still quite strong, especially for being in Q3, and you had a high M&A activity here and typically have good cash flows in Q4. So it sounds like you're in a good position there. But operationally, do you need some time to digest and integrate the acquisitions you've done here? You've done a couple of midsized acquisitions here in several countries? So do you think you can continue to be active and add more businesses here in coming quarters?

Yes. Yes, for sure. I mean we have -- we worked as we always do with the M&A pipe, and we lean forward, and we will try to do or we will try to do the acquisitions that we want to. But as I said before, it takes two to tango. So it's more of a timing question. But you are right. Of course, we -- if I look back, we have a track record of acquiring companies on lower level and integrate them and take out the synergies and expand the value from there, and that we will continue to do.

And I mean, we see the acquisitions really case-by-case locally and follow them and handling like that. But I mean, if we acquire quite many in one country, we also need to be a bit cautious to make sure that we consolidate and integrate with quality. But I mean, we haven't changed the strategy when it comes to M&As. So we will continue.

We will now take the next question from the line of Tom Guinchard from Pareto Securities.

A question on divestments here. Any other geographies or areas that you wish to leave?

No. We are focusing on the business areas that we have. And when it comes to Czech, it was a minor 150 employees in Czech, and they were -- our strategy is really to make sure that we can roll out the whole portfolio. So it was really about focus on that. So no, the geographical footprint we have is the footprint we plan to have. And we also see growth opportunities in those markets ahead.

Perfect. And just a question on the margin impact here in the German division or Central Europe, given the divestment. Do you have any sense of how much that impacted?

Yes. The impact -- financial impact of the divestments in Czech is really hitting the EBIT and not the EBITDA line. So it would be no impact on the EBITDA as it's reported.

[Operator Instructions] We will now take the next question from the line of Johan Lonnqvist Sunden from DNB Carnegie.

A couple of questions from my side as well. First one is related to the M&A side. And when you're a little bit curious to learn more about the synergy effect that you have started to realize from previous acquisitions. Can you give some color on what you have been able to realize and just to hear how the kind of integration work looks like given that you also have a couple of big transactions that are to be integrated over the coming 2 years?

Well, the impact or the comments that we made regarding that we are starting to see some synergies coming through, I think it's more in general nature and I don't want to attach specific numbers to that in the quarter. But you're saying that we do see some positive impacts, particularly then on Denmark and Belgium. And you see that in terms of efficiencies coming through. So I wouldn't really like to provide any figures. That was more meant to show that we do see that as a positive impact here coming through gradually.

And then if you, for example, take VK Architects and Engineering in Belgium then what Jan is referring to, what we do is that we fully integrate that company, and they were high performing when we bought them. And then, of course, that case is really to integrate and get the value out of the combination when we win greater projects on the market together. So that is -- it's not a synergy case in itself. So of course, it's a mix also in our portfolio of what kind of companies we buy. But for sure, in the quarter, you see the effect of Projektengagemang, which we have described in the report affecting us with costs mainly and will affect us in Q4 and in the first quarter next year, yes.

But with that said, the integration is working as planned, and we will start to take out synergies of that integration in the beginning of next year. So it's as Jan said, it's hard to quantify as it's a mixed portfolio, and we have different cases with different volumes of synergies.

I understand. But is there any specific nature, I guess, given your explanation, the VK in Belgium is more like a revenue synergy case, while maybe other can be more on the cost side. Just curious to hear if there's any specific bucket that you can do more with than others?

I mean, when we focus, and of course, I fully understand that you want figures here. But I mean, we focus to really find the right expertise and to -- so it's the right expertise, the geographical footprint, sometimes the scale in a certain growth direction, so it's really a mixed picture. And so, it's not that we focus more or less on anything. It might be so that we have a case in front of us with the right expertise, high profitability levels. And then our job is to make sure that we can keep those profit levels when we integrate them into the Sweco.

So it's more about, as I said, aiming for the right expertise, rolling up our project portfolio and making sure that we can grow in the right areas. And then the cases looks different each time.

And the kind of integration of the deals we are referring to that has happened in the past, are the synergy realization surpassing your initial expectations? Or is it just in line with your initial business case?

Yes, that is, of course, also a mixed picture, but we try to be strict and as strict and as prudent as we can. But of course, we have situations where we might face a situation when the market shifts and something happens on the market that we can't really excel, but a clear business case, a clear integration project with a strict follow-up. But of course, the most important thing is to select the right companies for the future that is complementary for us.

I understand. And just to follow-up on the other topic you mentioned, Jan. Any guidance for further integration costs for Projektengagemang in coming 2 quarters that we should be aware of?

Yes. I mean, so general comment on the P integration. So the integration is going well. And of course, we see clear synergies in terms of shared resources, shared offices and things like that. And of course, then we -- so we will, and we are planning to take, say, integrated related costs then in Q4, and also into 2026.

But as Asa said, we see that we can offset those as we generate the synergies gradually over the next 2 years. So yes, there will be integration costs, but we cannot comment specifically on those right now.

Okay. I understand. But good to give some further guidance along the way on what kind of integration costs that will come. But we can get back to that in another forum. Just a final from my side also on the calendar tailwinds. You highlighted in the presentation that you have a calendar guidance for '26. Any kind of reason to believe that the tailwind that you highlight here should not materialize? Is there any impact from certain kind of union agreements that make the kind of theoretical calendar tailwind not materializing as it should, that we should be aware of?

No, not specifically.

No.

There are no further questions on the phone. I would like to hand back over for any webcast questions.

Thank you so much. And there are no further questions. So with that, we want to thank you for joining us. And I also want to remind you that we will publish our year-end report Q4 on February 11 next year.

And with that, I wish you a pleasant day.

Thank you.

Thank you.