Welcome to the Beijer Ref Q4 presentation for 2025. During the questions and answers session, participants are able to ask questions by dialing pound five on their telephone keypad. Now, I will hand the conference over to the CEO, Christopher Norbye, and CFO, Joel Davidsson. Please go ahead.
Welcome, everyone. Christopher and Joel here. Looking forward to present the full year in Q4 and, of course, some questions. So I guess we'll get straight into the numbers. Thanks. So just wanted to start a little bit talking about the year as well, and then we'll dig into the quarter. But all in all, we're very happy with the year. We're highlighting here on the slide a fantastic cash flow, which we surely will come back to, but we see the improvements coming through here during the year on the things we worked on for quite some time. So it's very satisfactory.
And of course, on the cash flow, it puts us in a very good position to continue on the M&A activity, and we'll come back to that as well. Also very happy about the margin. Very good margins throughout the year, despite, you know, limited growth in the business. We continue to see progress in all the initiatives we're doing on the margin side. And also, in a solid year, 3% organic growth. And of course, we expect that when the markets improve a little bit, to come back at a higher level, which puts us in a very good position, I would say. So also then, the record margin, 10.7%, so solid margin developed for the year.
We also have SEK 4.4 billion of cash flow, which I think is 110%-111% cash conversion, so it's very good, which puts us in a strong balance sheet with a net debt of SEK 1.7 billion. You know, including all the acquisitions here that we announced in Q4, so I think it looks very good. And then we have, finally, the dividend proposal of a growth of 7% at SEK 1.50. So all in all, I mean, we continue to grow. The model continues to develop, and we see a solid 2025 behind us and look forward and also to move into 2026.
So then looking into a little bit on Q4, and I think it's the same story as we had all year long on the business. Remembering also Q4 is our smallest quarter of the year, and we turn into more heating and other products. It's not a massive quarter for us, but the way we see the quarter stable across the board. We do have quite some high comps in U.S. and APAC. U.S. growing 11% in Q4 last year, and APAC, 10%. And I think in the U.S., especially a lot of residential project that we saw in Q4 last year that we didn't see this year, but some other good development in the U.S. that we'll talk about.
And then also, we lose the trading day in the quarter in most of our big regions, which does have a negative effect on our business. We'll come back. I think Q1, it's gonna be same amount of trading days, so that's, of course, better than minus one. And then we do almost had 7% organic growth in Q4 last year. So all in all, when we look at the Q4, it came in at a stable level, similar to how we've been trading during the year on the sales side. We do have, as I said before, nice development acquisition, four in Q4, two more announced, and then a very good pipeline moving in here to 2026 and a nice rollover, so very positive on that side.
You all talk a little bit on the restructuring program. Also, EBITDA came in very good. Underlying margin 9.5%, so solid quarter. We did have SEK 25 million of acquisition cost of the acquisition we announced and what we're working on, so a very active quarter on that side, but underlying solid performance across the group and very good in especially the U.S. and APAC, and we'll come back to that. The cash flow I have highlighted, I think it's worth highlighting again, because it's very nice to see the flow through and an important part of our growth journey going forward, and we talked about the acquisition. So all in all, we're happy with the development in Q4 as well.
If you go in a little bit more on the, on the product groups, I think nothing revolutionary there. Fairly stable across the board, and we did see, as we said, starting to see an uptick on the OEM side, especially driven by our green OEM, which makes us, of course, happy because that's a segment we want to grow. Strong development in our SCM Frigo refrigeration side, and also a nice growth in Fenagy, and also a good pipeline going forward. So also a, you know, better position, I would say, in going into 2026 and 2025, so very satisfying on that. HVAC, of course, more affected in the quarter of the trading days and especially also in the commercial industrial refrigeration.
So I think the highlight area is stable underlying business for the year and the quarter, and also a nice little uptick starting to show in the OEM segment. If you then move in a little bit to the segments, starting with the EMEA, a lot of things happening in the quarter. But if you start off the year, 3% organic growth versus zero the year before, so slight improvement, and again, in a stable market. Of course, the EMEA spans across so many regions from south, east, west, north, down in Africa. So we have some ups and downs. But in general, a stable year, solid on the margin, good acquisition growth, good pipeline also in the acquisition going into 2026.
I think worth mentioning here also, this Green OEM in SCM Frigo strategy that we talked about. We, of course, have some nice project growing in Q4 and orders in there. And then, we are, I guess, still pretty much done from the strategic consolidation according to plan. So moving nicely. Also integrating Airwave, nice acquisition for us in the Baltics, that we're gonna continue to leverage in our strategy around HVAC. So all in all, also a stable quarter on the margin side. The year, a little bit improvement compared to the previous year, and also highlighting the very good development on the Green OEM side.
If you move into APAC, of course, on the margin side, one of our stars for quite some time now, and it's very satisfying to see the margin development driven by our strategic initiatives. You can see in the quarter or for the year, the margins are up, in a nice way, continuing to drive. I know, however, remember when we started three, four years ago, saying we wanna go over the 10% for the year in APAC. And it has step by step gone in that direction. And you can see now 10.6% in 2025. So I would say better than we expected and faster. So done a fantastic job in that region. Also, you know, a strong Q4 last year, +10%.
So we lost a trading day and came in flat. So I would say it's still a good development in the APAC region. And also, of course, Q4 is one of their key quarters, as you have summer in Australia and New Zealand. So a lot of good activity in that region. We do have a little bit still challenge on the OEM side. We see nice project in South Korea, and the Asian market is very promising 'cause it's not driven by regulation, it's driven by interest to switching over to these type of solution, which also means we're building up a training center now in South Korea to further leverage on that. And we see quoting activity in Australia and New Zealand picking up. So be interesting to follow this during 2026.
Also, of course, did some acquisitions there, strategic, and we also announced an acquisition in New Zealand that's going through the competition authorities, as we speak. Then moving over to North America. Also see here, we start with a full year, a nice year. I think our organic growth of 3% is very solid in an uncertain market in the U.S. So extremely happy how they delivered and executed during the year. Also, starting to see the improvements here on the strategic side, on the work we're doing on the margin side, despite having diluting M&A and branch openings in there. And also, you know, signing and closing two acquisition in Q4 with a continued very good pipeline going into 2026.
So looks very, very promising on that side. We do have in if you're looking Q4, -4%, but it's also compared to 11% growth in Q4 last year. So still a solid underlying growth, and I'm sure we'll talk about it, but a lot of project-residential projects in Q4 last year that we didn't see this year. But on the other side, stable replacement and good activity on the repair side, which is part of explaining the very nice margin development in Q4, as we make more money, but less sales dollars. So the repair side for us, of course... And of course, it's creating pent-up demand in the market.
So also, will be nice when I start moving forward on the, on the replacement and also the, the project business. So all in all, a very solid quarter, and we continue to expand our branches and have a plan to further expand that in 2026. Private label continue to expand, and it is also a key point as we move these into our new acquisitions, going forward. So I would say, all in all, a very good year in an uncertain market in the U.S. and a solid Q4 with good potentials as we move here in 2026. Here's a lot of numbers over the quarters.
I think it's just worth highlighting as we move into 2026, we'll start seeing a nicer tailwinds from the, from the acquisitions. We expect this to pick up as we move in 2026, as well as a nice, rollover, plus a good pipeline here in the beginning of, 2026. Then on the margin side, you can see here, here, a similar margin as, as the last quarter. But, you know, if you look at adjusting for the M&A, it's, it's a nice pickup, despite, one minus in, in organic and, and driven by the development we said in, in APAC and North America. So we're thinking it's a very solid, Q4. And of course, on the last couple of years, you can see the development, on the margin side.
So wrapping that up before I hand over to Joel, you can see the total sales growth, adjusted for the currency, 2% in Q4, organic -1. EBITDA +3% and +4% on the EPS. But I think if you look at the full year, it's a very solid year. I would say 9% growth, organic 3%, 11% EBITDA growth, and 15% EPS growth. So putting all that together, we're happy with the year, and I look forward as we transition into 2026. Joel?
All right. Thank you, Christopher, and good morning, everyone. As always, I will jump into our reported EBITDA, this time excluding items affecting comparability, which is amounting to SEK 758 million, which reportedly is down 6% compared to last year. However, it is very important to keep in mind here that our EBITDA, excluding items affecting comparability, is impacted by SEK 25 million of acquisition costs following, as Christopher said, a high acquisition pace here in Q4. In addition, as you know, we faced a pretty significant FX headwind in Q4 of 8%. So, if you look at this on a currency-neutral basis and also adjusting for the M&A cost, our underlying Q4 EBITDA is actually grown by 6% here in the quarter, with an underlying margin of 9.5%. Our financial net continues to develop very well.
I mean, it's another benefit of our strong cash flow generation, and financial net came in at SEK 106 million, which is SEK 24 million below last year. And if you exclude currency effects and so on, I would say that the underlying interest costs remain around SEK 35 million lower in the quarter compared to last year. Tax expenses, excluding items affecting comparability of SEK 151 million, which is an effective tax rate of 25%, slightly below last year. All in all, Q4 report net profit, excluding items affecting comparability, of SEK 445 million, down 3% versus last year. But then again, adjusting for the FX translation headwind, the net profit is up 4%. Moving over to our EPS.
EPS in the quarter of 0.87, reported down 2% compared to last year, but, as already mentioned, on a currency neutral basis, it's an increase of 4%. And for the full year, reported +10%, which is a good number, despite the tough currency headwind. And if you adjust for that, our EPS grew by 15% during 2025. Moving over to cash flow. We continue to develop a very strong cash flow in Q4, SEK 1.7 billion. Cash flow this year is around SEK 400 million higher than last year, and absolutely majority of that is driven by lower working capital tied up as a result of our inventory and capital efficiency programs across the group.
And for a full year, we print a record of SEK 4.4 billion, which is driven by the same development in inventory and capital efficiency in general. So, over to the next slide. I don't have that many more comments on this slide, I would say. I think it's a great visualization of the path we are on in terms of cash, cash generation and capital efficiency. So a very nice development here for the last couple of years. Moving over to leverage.
Thanks to the strong cash flow, of course, our net debt measured against EBITDA, excluding leasing and pension, is stable in the quarter, despite the high M&A activity, and we end the year at 1.7 times, which is leaving us with a very strong balance sheet to continue to execute on our fantastic M&A pipeline. So with that, hand over back to Christopher.
All right, let's try and summarize this. Nothing new on this slide. I think it's somewhere in 2025 with a stable growth, 9% with acquisition, good EBITDA development, 11%, 11% growth, and also a record margin for us, despite not being strong markets out there. So I think that's also a sentiment to what we're doing. Cash flow gives us a nice firepower as well moving into 2026. And you can hear we're fairly, I guess, fairly, we're positive on how we're gonna use this money in 2026 to continue to improve the business model, you know, goes hand in hand with the balance sheet.
I think also, if you look at the EPS growth in a year, very solid, and even if you adjust for your currency, +15%, which I think is a nice, nice development for the year. Seven new acquisition integrated into the business, and also, as I said, a good rollover moving into 2026. So then summarizing Q4, I think we went through all of this, to be honest. I'll, I'll move more into, you know, a little bit how we see the general market out there and some updates. We are pretty much... Well, we are done with our A2L transition in the portfolio in the U.S. That's business as usual now, in there.
We also believe that our, or, or we see that our platform continues to develop in the U.S., both on opening new branches, launching private label-building the acquisition platform and capabilities is around there. So, we're very happy with the trend there, and of course, also some uncertainty in the market, as you can see, if you follow the OEMs and other things and, but I think we perform extremely well in these times. And of course, as the market picks up again, it'll be very strong development from our side. We talked about the pipeline in there, that also looks very good in the U.S. and also in EMEA for 2026.
I think one caveat I had. I just wanna share here, and I'm sure we'll get it on the Q&A, is I don't know how closely you follow some of us for the business, but knowing, you know, in the U.S., what do we have? Around 120 branches. It continues to grow, but we were completely shut down for two days with this winter storm running through, with snow and ice down in Alabama and Tennessee, as well. So we lost two full days of business, and we also have continued to have branches shut down because of power outages in the business, and also you have a lot of things to clean up.
So we expect in January, we might lose 3-4 days of sales because of this. Hopefully, we'll see a pickup as we move into, you know, the rest of the quarter, but right now, at least, you should think about 3-4 days of shutdown because of that, and I'm sure I'll get more question, I can develop it. So with that, we would like to open up for Q&A. Thank you for listening in on the presentation.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Adela Dashian from Jefferies. Please go ahead.
Thank you, and good morning, gentlemen. Would it be possible to specify in greater detail what all these moving items actually contributed in terms of the organic growth or the organic decline? Like, if we start with the trading day, and then maybe also the lower volumes from the projects in the U.S. and so on. Whether potentially also, if that's possible, just to get a view on what the magnitude is and how much of it could be phased into the coming quarters.
Oh, okay. So, so is it two question? One is around Q4, and, and the second one is just around what, what I told you about the U.S. for Q1.
Correct.
Okay. All right, so,
Just so that we can compare-
Yeah?
Q4 versus Q1 effect and so on.
Yeah. So, I mean, the trading days is relatively straightforward. I mean, one day in the quarter, in Q4 is fewer trading days than the normal quarter, so that is roughly 2%, I would say. And then in the U.S., I mean, as Christopher alluded to, we are underlying business is not so different in Q3 compared to Q4. It is a tough market, and the comps is primarily driven by a difference in residential project sales. But you also have, of course, in the general business, in this type of environment, a higher degree of exposure towards the repair as opposed to the replacement, which is also affecting revenue dollars, of course.
I think I would look at it this way, is that, of course, the trading days is straight up mathematical effect on the business. It's fairly easy. Well, you know, if we have more projects or less projects in a quarter, that's business, right? It's not. It's part of the business, how it runs. So I think the only one worth calling out there is that what we saw, the underlying market in the U.S., where we continue to have a strong development on repair, which you can see in the market, and fairly stable around the day-to-day replacement market in the U.S. So I think in general, it's not any big.
What we want to portray, if it's worth it, is that the market continues to be at the levels we saw in the year in general, and then in Q4, also remembering both Q4 and Q1 are smaller quarters for us, so it's hard to make big conclusions on it. So in general, our view is it's a stable underlying market, and then we had some projects in the U.S. that didn't come in, and a development in repair that also drove the good margin development. So I mean, it's a nice balance you have in your portfolio because we have so much on aftermarket spare parts in the U.S. versus equipment.
So it builds, in our view, you know, a stable development in still tougher times right now, reading into OEMs, and also other comments in that. So that would be on the Q4 and the Q1. I, you know, Joel, you told me 3-4 trading days would be in the U.S. about, f or the quarter.
Yeah. So you have a roughly 6%-7% impact in the U.S., potentially on that.
If you do it straight up, let's see if we get a pickup, and I guess that's about 2% on the full Q1, depending on how we see February, March developing. And we're just highlighting that out. It is hard for us to control that type of situation in the U.S.
I see, and that's very good colors. I appreciate that, but I guess it would, it would be fair to say then that maybe you were caught a bit by surprise over the development because if I remember correct, the comments coming out of Q3 were a bit more robust on the remaining months of the year?
Do you speak in general or on the U.S.?
In just market conditions in the U.S. in general.
Okay. No, I don't see. So we see the trading, you know, also more details per branch and the repair and all that. So maybe you could say, did I expect more projects coming through in Q4? Maybe, maybe not. Those things move around quite a lot. So it's nothing that we have, you know, in our daily business reviews. It's, you know, you get more and it falls in, especially in smaller quarters. So, no, I think we expected this, you know, or, I mean, I would say if you look at everything else you hear about the U.S. market, we continue to do, in my view, better than anything else I see there.
So, I guess I'm still positive in how we're executing the U.S. in the market. So I think a stable market development right now is a pretty good place to be, and of course, adding on the mix with repair, that's not bad if you look at the margin development in the U.S. as well, so.
Thank you. Just two more, if I may. Sorry if I missed, but did you specify how much you have left in terms of the refrigerant transition? Because you were nearing 10% at the end of the third quarter. Is that now completed?
Yes.
And then lastly, on, yeah, your comment here on the margins. I mean, you, you have been a bit active on the M&A pipeline lately, so should we expect some sort of dilutive effect now coming through in, in 2026?
Yeah, and I think if you, I would say maybe we can take that offline with you, well, and we'll come back and be more clear, what is or if you want to take it right now.
Yeah, it is relatively similar. I mean, the acquisitions we have been pursuing is relatively typical of what we see in the market, where you have a few percentage points lower margin in that type of businesses. So it's relatively short term, simple mathematics as well on the share of acquisitions at a few points lower margin. So absolutely some dilutionary effects of that going into next year gradually disappearing on realization of synergies. And of course we are working on improving the underlying margin in the core business, of course, as always.
Thank you so much, Joel. I'll step back into the queue. Thanks.
Thank you, Adela.
The next question comes from Carl Ragnerstam from Nordea. Please go ahead.
Good morning. It's Carl here from Nordea. A couple of questions from my side as well. Starting on the working capital side, you released over SEK 1 billion, as you also mentioned. Is it possible to sort of give a split by market on that, where it came from?
Yeah. It is, I mean, we are working with this capital efficiency, of course, globally. We are at, as we have mentioned, at a little bit different maturity levels across the business. And it is gradual improvements, but I think it's fair to say that EMEA is behind the largest improvement here. We are operating on a slightly more efficient level in general in the APAC region, obviously working with there as well. And then in the U.S., also improvements, but a lot of things going on there. So it's a little bit the good opportunities ahead is also coming from moving further on the efficiency in the U.S..
A little bit more than what the EMEA represent of sales comes from the working capital improvement in Europe.
Okay, that's very clear. So then it's fair to assume that the majority of the working capital release is driven by your new—I mean, initiatives and incentives with the capital charges. And how much do you think is more to come from those initiatives if you look into 2026?
Yeah, it's a good, good point. Yes, it is, absolutely majority of the improvement in working capital is related to, inventory efficiency. We are, we are, far, I mean, come away on the journey. We are, approaching, or more or less on levels, pre-pandemic levels. But I would say, overall, this is a long-term focus area for, for Beijer Ref, and I think, for the- we should see, improvements, for a number of years to come in terms of capital efficiency.
I think what we said before, right, Carl, is the ambition over the years now to generate the, you know, well, let's call it at least 100% cash conversion, as we improve the inventory situation and structurally do it. And of course, we hundred and eleven for this year, you get some more low-hanging fruit, and you structurally need to work with it. But I think at least our ambition is continue over the years to be at the 100%, and let's see if we can do more than that, but at least have that as a guideline.
That's very clear. And I think, I mean, we have seen rally in many of the raw material inputs, both to the AC units, but also I mean, related to your component distribution, such as the copper, that used to be I mean, a quite big earnings driver for you historically when it moved. I mean, with the quite steep rallies we've seen in those materials, how do you see that impacting your business in 2026? I mean, it could be a tailwind, of course, could be a headwind, depending on how you manage it.
Yeah. So for us, I would describe in this way, and it's early days, right, in January, and there are processes and a structure on... Because mostly what I'll be looking at is, you know, we, of course, if you take copper, for example, we also trade copper and sell it. I mean, that price is always move with the information you have on the stock, but it's not a major driver in our business. But of course, copper in these things is components into HVAC and in refrigeration products that you alluded to.
So, you know, the clearest example we have of announcements and if you follow the OEM is that there will another price increase coming in the U.S. market of anywhere from five to seven, eight percent rolling into the end of Q1. That's the signals we're getting on that side of the fence. In Europe, we're right now seeing normal price increases on the refrigeration side. There's still very little information on HVAC. And HVAC in Europe, I'm not giving you more details, or you already know this, is more a price increase discussion around mid-April before the season in that sense. And then if you fly over in being Australia and New Zealand, it's the middle of the high season.
We haven't seen any big price change in there yet from the OEMs, but the market is pretty active. So all in all, if those type of translate into the market, in a way with increased prices from OEM, it's a good thing for Beijer Ref.
Amazing. And the final one, if I may, is on OEM. We saw a slight sequential acceleration in the organic growth. It would be great to hear more what you see in... I mean, more specifically in the green part of your business, because you still have the tough comps, right, in the rest. So when those comps are easing, what kind of growth are we looking at in the underlying operation then?
Sky is the limit, Carl.
No, but what, what do you see in orders and-
Sorry. No, I get your question, and I think what we've been saying is this OEM segment today is the 50%-55% is the green, which is related to Fenagy and SCM Frigo mainly. And if you look at Fenagy, right, it's a European platform, and they continue to grow double digits last year, and we expect that to continue throughout this year with a nice pipeline and orders moving into Germany and other places. SCM Frigo, as you know, the other core and the other component delivery into us, has a strong backlog and also grew double digits in 2025. Both those companies have a better backlog in 2026 than they had in 2025. And then it's also seeing that the comps and the rest of the OEM biz starts easing up.
So I think at least our view is that we'll have a better OEM growth in 2026, and the green will continue to grow, you know, good double digits number. And we can clarify a little bit then as we move in. I think the only area where we still haven't seen the progress on the green OEM related to SCM Frigo is a business, Australia and New Zealand, that's been very muted over the last 2-3 years, more flattish type of development. We do see quoting activities picking up quite nicely in those markets, but it's too early to say when quoting moves into order. So in general, we're more positive on the OEM side here in 2026 than we were in 2025. So we expect it to continue to improve.
Very clear. Thank you.
Thank you.
The next question comes from Karl Bokvist from ABG Sundal Collier. Please go ahead.
Thank you. Good morning. First one, on the number of branches, I believe you said 120 in the U.S., but it would be interesting about the total number.
Yeah, I don't know, Karl, because I know I had to put the K&R and Dennis Supply in. So, I mean, offline, I can give you exact numbers. We have the data, but, you know, 121?
All right. All right. Fair enough. We'll discuss it later. But then on the refrigeration side, just looking at it from a multi-year perspective, we have regulations supporting the transition there on the F-gas, and many stores needs to replace these types of equipment. And yet, just organically, it's been a couple of years now with lower growth. So just out of curiosity, how you view the replacement cycle that we have been potentially waiting for because of regulatory changes?
Yeah, no, I think it's fair. I mean, it's two ways to looking at. When we talk, you know, that's driven on the system side, it's more an SCM Frigo discussion. You know, the solution they're selling based on the CO2, which is growing 10%+, and as I said, backlog. I think if you go back on the SCM Frigo two years, and after the pandemic, most of food retail was very slow. They pushed out a lot of CapEx, which then affected. Now we have very other good segments, SCM Frigo, so they were doing better, I would say, than most of the competition. So you started to see the pickup in SCM Frigo order book and orders coming into, you know, Q1 2025, and after that, it's just been accelerating.
So also 2026 looks very good here to have a strong growth in SCM Frigo. If you then take out the where we report the commercial refrigeration, that's been more the, you know, the 1%-3% growth that I don't see that accelerating to, you know, 5%- 10%. But you do have also technology in there, that we're waiting on this technology shift to start giving a tailwind in that segment. But I think in general, we separate those two, and the main driver for this regulation will fall into the OEM SCM Frigo segment.
All right, understood. That would be all. Thank you.
Thank you, Karl.
The next question comes from Karl Hedberg, from DNB Carnegie. Please go ahead.
Morning, guys. A couple of questions from my side. First of all, I wanted to come back a little bit to the U.S., and if we could talk a little bit about the private brands rollout. You know, we talked about this in Q3. You seem very happy with the sort of initial shipments. Yeah, so just general update there, how many branches are you with there? And maybe if you could allude a little bit on your expectations here into the new year. Thank you.
Yeah, it's still evolution versus revolution. Just had a board meeting yesterday, and then we went over it. It's still early days, but the indication we're getting in this rollout is that so now we, you know, we put our or we did a couple of orders in for the 2026 on the ducted. We're also launching the ductless in 2026 on that product portfolio. Also, high expectations on that. But if you know that market in the U.S., 85% is ducted, 15% is ductless. So I would say that. And it's continued to trade very well in December. I mean, we're in the winter season now, right? So it's building up the capabilities for 2026 and for the summer season.
But also now, when we made acquisitions of K&R and Danny Supply, we're gonna launch these products into their portfolio as well and preparing for that. We have some other pipelines in the acquisition pipeline. We're gonna try and get cleared up before the season and do the same thing. So I would say in general, and of course, it's also, you know, we can attack the transactional part of the market, a segment that we're not very strong in our platform. It's a nice margin. Of course, it also is part of our margin evolution here in Q4, but it's more when we roll out to the summer season. It's. I won't go into the dollars and cents right now.
It's the building up these capabilities, but I would say maybe in 2025, we had it active in 30 branches, and of course, now we're rolling out to 70, 80 branches for this year, plus the acquisitions we made. So pretty high expectation on that segment, but too early to say it's gonna drive the business in 2026. But it's a nice tailwind, and we have high expectations for it.
Very well. Then I wanted to ask also further on the U.S., I mean, the acquisition pipeline, you seem to be quite happy here entering the new year. And I'm just curious a little bit on the mix here. I mean, you've done a couple of acquisitions in refrigeration. You talked a little bit about the at least the initial sort of margin dilution from that. But yeah, curious to hear on sort of the pipeline and maybe the mix you're sort of looking at here going forward, you know, HVAC relative refrigeration a nd those volumes.
Yeah, I mean, i t comes a little bit in, you know, as. The reason when we say, just to take a step back, we're positive. You know, we talked about this, I think, in Q3, and of course, we can track LOIs, and usually, then we know that we're gonna close, then timing is different, especially on, you know, you buy family-owned companies, things takes time to explain, put together. But we like these companies. For us, these are the jewels that we wanna go after, and these are all built by personal relationships, and that we like, you know, a lot, as well. It may take a little bit longer, but we think it's the right strategy.
And then, of course, we talked a lot, and if you look at the U.S., our refrigeration part of the business is a smaller part, but it's growing very nicely, and it's because we can roll it out in more and more branches. And as we, K&R and Danny's are a strong refrigeration platform. Then we had Young Supply, and now we're expanding that into other ones. We built relationship now stronger, and we're launching with Bitzer in the U.S. We're working with Danfoss, Copeland. So it's gonna continue to be a strong strategy for us, using this platform to organically grow, and it looks very good, and we are investing in it. Then if you turn to your question on acquisitions, it changes, right?
But most of the companies, if you look for an acquisition platform, et cetera, is majority of HVAC, because it's such a much bigger, bigger part of the business. So that will go in cycles. We're looking at both journeys, and of course, as we build more capabilities in refrigeration, we get more relationship and context because those companies knows the other companies in refrigeration, et cetera. So it will move in both directions, but majority sales, if I just take a view in 2026, will be HVAC expansion in the U.S.
Very clear. Finally, I just wanted to hear you out also, and this is obviously very early days, but on the OEM side, we've obviously seen quite significant consolidation with Paloma Rheem acquiring Atlantic in France. And again, of course, that's haven't been completed yet, but that's an important partner for you in the U.S.. And I just wanted to hear, you know, would you see opportunities with them now going into Europe with a quite strong platform in France or, yeah, any thoughts around that, given your current relationships with them?
Yes.
Yes, on-
No, no, I want to keep it brief because it is very strong. It's our strongest partner in the U.S. Our relationship is really, really good. It's not only the Paloma, right? It's the Fujitsu that they also are closing out where they have a portfolio for the U.S.
Mm.
Of course, you have this. So we do speak. We have agreement. You know, our agreement with Rheem is global, and we built it in t hat way together. So it's too early, as you said, but these are the levels we're always talking to them, you know. Also, we have a strong platform in Australia looking at their water heating business that fits in. So for us, this is good news.
Okay. Exciting.
Yeah.
Thanks, guys. I'll stop there.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Yeah, so thanks for a good discussion. Thanks for listening in, and I'm sure we'll keep in touch and yeah, we'll move forward now. So thank you very much, and have a good rest of the day.
Thank you very much.