Good day. Thank you for standing by. Welcome to the TCM Group Interim Q4 2025 report. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during the session, you will need to slowly press star one and one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please slowly press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Torben Paulin, CEO of TCM. Please go ahead.
Thank you. Good morning, ladies and gentlemen, and welcome to the presentation of the fourth quarter results for TCM Group. Presenters today are our Interim CFO, Hans Barslund, and myself, CEO Torben Paulin, and we will comment on the business and the financial results, after which we will hand over to the operator for the Q&A session. Let's start the presentation and turn to page two for the business update. Sales in the fourth quarter developed in line with our expectations, with growth in both the B2B and B2C segment. Total sales for the quarter increased by 10.5% year-on-year to DKK 333 million , corresponding to organic growth of 5.3%. Revenue in Norway increased by 12.8% compared to Q4 2024, reaching DKK 62 million , continuing the positive trend from the first three quarters of the year.
Order intake developed positively in B2C, the B2B segment experienced solid growth in the quarter, mainly driven by increased orders from housebuilder and in line with higher activity in the residential newbuilds. The gross margin improved in the quarter, gaining two margin points on Q4 last year, driven by higher average selling prices and efficiency gains in our supply chain. Please turn to page three. Some financial headlines for the quarter. Reported revenue was DKK 333 million, corresponding to a revenue growth of 10.5%, hereof 5.3% organic growth. Adjusted EBIT was DKK 31 million, compared to DKK 30 million in Q4 last year. Adjusted EBIT margin was 9.3%, compared to 9.9% in Q4 last year.
The reported revenue of DKK 1.279 billion for the full year was at the high end of the most recent financial outlook of DKK 1.26 billion-DKK 1.28 billion. Adjusted EBIT of DKK 98.3 million was also at the high end of the most recent financial outlook of DKK 93 million-DKK 100 million. Net working capital ratio was 0.5%, compared to a - 1.2% last year. Cash conversion was 72%. Please turn to page four. As mentioned, revenue in Q4 increased organically by 5.3%, with a year-on-year increase of 10.5% due to the inclusion of Celebert and the four own retail stores.
Revenue in Denmark, our main market, accounts for 81% of the group's revenue, increased by 10.1% year-on-year, with an organic growth of 3%. Supported by the modest growth in the B2C segment, segments within B2B also delivered growth during the quarter. Revenue in Norway in Q4 increased by 12.8% compared to Q4 last year, continuing the positive trend from the previous quarters of the year. The share of third-party sales was 24%. A consequence of the addition of Celebert and the four own retail stores, we have added a retail segment that accounts for 11% of the group revenue. I will now hand over to Hans. Please turn to page five.
Thank you, Torben. Gross margin improved to 24.3% in Q4, compared to 22.5% last year, driven by higher average selling prices and efficiency gains in production and supply chain. The addition of Celebert and the own stores are also having a positive effect on the consolidated gross margin. EBIT in Q4 was DKK 49 million. EBIT is influenced by DKK 18 million in non-recurring income from the revaluation of the original 45% stake in Celebert to the same value as the purchase price for the latest acquired 55%. A normalized EBIT was DKK 31 million, compared to DKK 30 million in Q4 last year, corresponding to an EBIT margin of 9.3% compared to 9.9% in Q4 2024.
The EBIT margin decrease is primarily driven by an increase in SGA cost due to the increase in selling expenses from acquisition of retail stores and Celebert. EBIT is also influenced by adjustment of contingent payment obligations relating to the previous acquisition of AUBO. It was adjusted in Q4, resulting in an income of DKK 4.5 million, compared to an income of DKK 9.5 million last year. It has a negative effect on 1.5% on the EBIT margin in the quarter, if we compare it with last year. Depreciation and amortization in Q4 amounted to DKK 11 million, compared to DKK 9 million same period last year. Please turn to page six. The net working capital ended at DKK 7 million compared with - DKK 14 million last year.
Compared to Q4 2024, net working capital was negatively impacted by an increase in inventories due to the acquisition of Celebert and the four own retail stores. Receivables increases DKK 39 million due to higher sales and a temporary increase in payment terms for one big account at the end of the year. The payment term has been normalized and at the beginning of 2026. Net interest bearing debt amounted to DKK 418 million at the end of Q4 2025, compared to DKK 316 million end of year, last year. The increase is a consequence of the additional net working capital and the acquisition of Celebert. The leverage ratio increased to 3.0 at the end of 2025, compared to 2.5 at the end of 2024, but still remain well within the governance. Please turn to page seven.
Free cash flow in Q4 2025 was DKK 7 million, compared to DKK 15 million in Q4 last year, negatively impacted by the development in the net working capital. Cash conversion ratio, measured over a 12-month period, was 72%. I'll now hand over to Torben again. Please turn to page eight.
Thank you, Hans. Even with an increased leverage ratio, there is room for distribution of dividends. Our policy is to distribute between 40% and 60% of the profits. The Board of Directors proposed to distribute a dividend of DKK 4.5 per share, equal to DKK 46 million or 60% of net profit. We will now turn to an update of the Celebert acquisition. Please turn to page nine. In 2021, we merged TCM Group's online activities in Kitchn.dk with Celebert and acquired a 45% stake in the joint business. After running the company in good cooperation for four years, the Founder decided to exercise his put option. TCM will acquire the remaining 55%.
On the 10th of November 2025, TCM Group agreed on the final purchase price with the seller for the remaining 55% of shares, which amounts to DKK 80 million. The Danish competition authorities approved the transaction, and it was closed on the 25th of November 2025. Celebert has been 100% included in the books from 1st of December 2025. The, this acquisition give us full ownership, strengthen our digital position, and support our multi-channel growth strategy. Please turn to page 10. Looking ahead to 2026, we believe there is a good reason to expect moderately positive development in the markets in which TCM Group operates. Consumer confidence appears to be gradually improving, albeit from a very low level.
Sales in the housing sector remain strong, although consumers continue to be wary of making big investments, thus only modest growth is expected in the B2C segment of the kitchen market. The B2B market is showing some signs of improving, will most likely stay well below historical levels. The market for larger building projects is expected to benefit from lower interest rates, feeding through to increased housing construction activity. In 2026, we will fully integrate the labor into our operations, maximize the value of our new lacquering facility, initiate the rollout of our new ERP platform. Together with our strong market positions and proven brands, we believe the 2026 initiatives will position TCM Group well for continued profitable growth. Based on the above, we expect the following key figures for the full year 2026.
TCM Group estimates revenue for the financial year 2026 to be in the range of DKK 1.4 billion-DKK 1.5 billion. Adjusted EBITA for 2026 is estimated to be in the range of DKK 120 million-DKK 140 million. TCM Group has decided to guide on adjusted EBITA going forward, as we believe this figure better reflects the underlying profitability of the business. This concludes our presentation, and we will now hand over to the operator for the Q&A session.
Thank you. As a reminder, to ask a question, you will need to slowly press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please slowly press star one and one again. We'll now go to our first question. Our first question comes from the line of Anders Christian Preetzmann from Danske Bank. Please go ahead. Your line is open.
Yes. Hi, Torben and Hans, and thank you for taking my questions. I have a few. Let's start with are you able to share what you've seen from the potential customer activity here in the months of January and February? Are we seeing similar dynamics as of recent months, or has there been a change there?
Yeah, I think I should answer that. The traffic to the stores and to the activities there, you know, we are always having kitchen activities the first weekend of January and February, and in January, there was less traffic than we normally see, but the actual outcome of meeting bookings with clients was on the same level as normal. So it looks like the quality of the traffic is better. Secondly, the stores report that they have leads to work with, but when they have done drawings and quotations, the customer is taking a long time to make the final decision.
Whether this is just the insecurity in the general market conditions, or it's because they are looking for more discount with our competitors, we can't say, but it takes a while before they make their decision. You could say that is also sort of the same picture as we had, at least in the second half of 2025.
Okay, yeah, it sounds like that. Are the dynamics similar for Norway as well?
It's hard to say anything about Norway in January. They don't have the same high activity level as in Denmark. They, I think they enjoy Christmas holiday for a little bit longer than we do in Denmark, also the weather conditions, et cetera, is not means that January is not a high, a big month in Norway. On the B2B side, in Norway, we continue to see slowly, but sure, more activities than we have seen for several years.
Okay, that's very clear. You mentioned a goal for 2026 being a gain of market share in the B2C market. Could you possibly share what potential initiatives that could drive a market share gain?
It's very much the same as is well rooted in our strategy that we continue to develop new products. We also launched Svane, a new design here during Christmas and New Year, and then the improved customer journey that we launched a couple of year ago. It is the same activities and tools that we have succeeded with in the past.
Okay. Thank you very much, Torben. Moving on to just a few couple questions on the guidance. How much of the growth that's baked into the guidance is organic and how much is inorganic?
The full year addition of Celebert is roughly DKK 100 million in net addition to revenue.
All right. That's perfectly clear then. Your expectations on growth, are split between B2C and B2C, where do you expect the highest growth rate for next year? I suppose it's fair to assume B2B may grow more than the B2C segment. Am I wrong there?
We had when we guided first time for 2025, we also there expected B2C to have the highest growth. That didn't materialize. We still believe that we will have growth in both segments, both B2C and B2B. How it will, how it then will materialize, it's really difficult to say so early in the year.
Okay, yeah. That's, that's certainly fair. What's your expectation on the input prices? Where do you expect them to go for next year? Have you seen any meaningful changes in your production costs, in recent periods, and what you expect?
Yeah. When it comes to input cost, we are met with price increases for most categories. They are then covered by the price increase in sales prices that we have launched at year-end. On our own production, we have several initiatives that should improve efficiency in own factories. One of them being this new lacquering facility that we installed from the beginning of last year, and that was finalized in the late spring. That should also contribute this year together with the other activities. Sorry.
All right. Yeah. Are you able to put a number on the price increases?
Normal level, 2%-3%.
Okay, thank you very much. Just a final question for me then. The change of the guidance metric going from EBIT to now, EBITDA for 2026 and onwards, can you help us bridge the two metrics? I mean, what amortization charge should we model in here in 2026? What's your expectation there?
You will be able to see the amortization in for full year of 2025 in the report. That will be higher due to...
T hen it'll increase due to the labor.
I don't have the exact figure here.
Is it DKK 45 million in 10 years? M aybe we will come back to you with that answer, Anders.
Okay. That's, that's super reasonable. Thank you very much for answering my questions.
Thank you. Once again, as a reminder, to ask a question, you will need to slowly press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please slowly press star one and one again. We'll now move on to our next question. Our next question comes from the line of Sindre Sørbye from Arctic Asset Management. Please go ahead. Your line is open.
Yep. Hi, good morning. Congrats with the quite recent results. I think most of my questions have been answered on the, previously here, but to details. First, you have a quite significant contribution from associates. Is that only included now to this Norwegian store that was taken over, but subsequently divested, so there should be no associates going forward, no contribution from associates?
Sorry, it's a very, yeah, Sindre, hello, Sindre. Your line is not very stable, so we, I think we missed the topic you were asking for. We got that it was the Norwegian business. What was the topic?
Yes. I was asking about the negative contribution from the associates. Is that only related to this Norwegian store that was taken over, but subsequently sold? Is there any expectations of zero contribution from associates going forward?
No, there's no other negative, all stores are up running in Norway.
Okay, there are no associates anymore now after that divestment and the acquisition of Celebert?
Yeah. We divested the Norwegian store this year we had in that, and then we had the acquisition of Celebert. We also in September, reported the acquisition of one Nettoline store and one AUBO store.
Okay. The second question: Do you have any figures for Celebert? What was their... You said you estimated turnover approximately DKK 100 million, but what's the EBIT run rate contribution from Celebert into 2026?
The figures for 2025 is DKK 135 million in revenue and a net profit of DKK 3 million.
Okay. I mean, if you paid DKK 80 million for 55%, DKK 3 million in net profit sounds kind of very low. What do you expect as an earnings contribution in 2026 from that part of the business?
The profit expected for Celebert for 2026 is a lot higher than that. You are absolutely right, Sindre.
Okay, you won't.
The purchase price was based on the result from 2024. We are looking for gaining or coming back to about the same level in 2026.
Okay. Yeah, finally on Celebert, there are no earn-out adjustments forthcoming from... That's finally closed or is it any earn-out?
No earn-out.
Adjustments.
No earn-out, it's finally closed.
Okay. Okay. Okay, excellent. Thank you.
Thank you.
Thank you. There are no further questions at this time, so I'll hand the call back to Torben for closing remarks.
Thank you very much. Thank you to all of you for joining in this morning and spending the time together with us. Have a nice day.
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