Welcome to the Dustin Q4 presentation for 2025/2026. During the questions and answers session, participants are able to ask questions by dialing #5 on their telephone keypad. Now I will hand the conference over to the CEO, Samuel Skott, and CFO, Julia Lagerqvist. Please begin your meeting.
Good morning, everyone. Welcome to Dustin's presentation of our fourth quarter and full year results. As you heard, I am joined today by our CFO, Julia Lagerqvist, and together we will take you through the highlights of the quarter before opening up for questions. I am pleased to report improved profitability in the fourth quarter, where we saw the full effect of the efficiency measures implemented earlier in the year, while we continued to sharpen our commercial focus. Net sales declined in the quarter with organic growth of -5%. The development mainly reflects orders brought forward earlier in the year in the second and third quarters, particularly within the public sector. On the other hand, we, for the first time in very many quarters, saw growth in the SMB segment. In total, the organic growth adjusted for the discontinued consumer business was -3%.
The gross margin increased to 13.2% compared to 12.7% last year. This higher margin is mainly explained by higher price levels, continued efforts to improve profitability in our customer contract portfolio, and a more disciplined approach to new business. Adjusted EBITA increased to SEK 110 million, compared to SEK 83 million a year ago. The improvement was mainly driven by the stronger gross margin and a lower cost base following the efficiency measures implemented. The adjusted EBITDA margin increased to 2.3%, compared with 1.6% last year. Cash flow from operating activities amounted to -SEK 204 million, compared to -SEK 73 million last year. If we look at leverage measured as net debt- to- EBITDA, it came in at 2.8x compared to 4.1x last year, and continued to stay within our target range of 2x- 3x .
Also, the board proposes no dividend to be paid for the financial year of 2025/2026. If we then go to the next slide, talking about the incident we had early in Q1. As we communicated already early in September, we then identified unauthorized access to certain internal IT systems. We acted immediately and proactively shut down systems to contain the incident, protect our IT environment, and minimize the impact on our customers. External cybersecurity experts were engaged, and the relevant authorities were notified. We were able to restore the order flow within a few days, followed by our websites and customer portals for order handling just a few days after that. Since September 10th, our operations have been fully restored. The forensic investigation and data analysis are now largely completed.
Some remaining work is still ongoing, but a significantly lower level of activity than during the initial phase of the incident. The findings from the incident will be taken into account in our ongoing work to even further strengthen our security and resilience. By this, I hand over to Julia to give you some more details on our financials.
Thank you, Samuel. If we then move to page four, we will look more closely at the LCP segment, our large corporate and public customers. Sales in LCP was SEK 3.7 billion in the quarter, or -4.5% versus last year. The organic growth was -4.7%, so basically no Forex effect this quarter. The decline was, as Samuel said, mainly driven by lower sales in the public sector, where orders had been brought forward to Q2 and Q3, driven by the memory component shortage and customers wanting to secure volumes and prices. We did not see that same effect in this quarter. On the opposite for our corporate customers, we saw more stability. They have also made some choices to prioritize margin over volume, especially when pricing has been so volatile. This has resulted in lower sales in, for example, Finland.
On the opposite, we saw growth in Denmark and Belgium, driven by new rollouts. We also saw growing demand within our lifecycle services offering. As I said before, we can see large volatility in sales between quarters in LCP due to the large order sizes. On the positive side, gross margin improved versus the previous year, which helped offset the volume decline. The margin benefited from a more mature contract portfolio as well as higher market prices. A slightly more selective approach to the new business also benefited the margin development. This, together with the implemented efficiency measures, helped improve the bottom line versus last year, leading to a segment result of SEK 87 million versus SEK 80 million last year. The segment margin ended at 2.4% versus 2.1% last year.
Then we move to the SMB segment on page five, where sales landed at SEK 1.1 billion , or 5.7% below last year. The organic growth was -6.1%, so very little Forex effect here as well. Adjusted for the exit of the B2C, however, the organic growth was +3.4%, so encouraging to see growth in the B2B leg of our SMB segment again. We see some signs of stabilization in the market, mainly in the Nordics, where the hardware and software business continue to develop positively and remains a key focus area going forward. The growth is, of course, supported by the increased pricing. The gross margin continued at the similar solid levels as in Q3, supported by the higher market prices and continued strong price discipline.
The ongoing phase-out of the non-standard services, which we discussed last quarter, which then burden profitability, is starting to deliver positive effects for the bottom line. We also saw continued improved cost base due to our efficiency measures. All in all, this led to an improved segment result, which landed at SEK 47 million versus SEK 34 million last year. This corresponded to a segment margin of 4.2% versus 2.9% last year, so a clear improvement. Moving then to cash flow on slide six. We see that the cash flow for the period was minus SEK 291 million versus minus SEK 1.2 billion last year. Last year was impacted by the repayment of debt of the rights issue. The cash flow from operating activities before net working capital changes was +SEK 168 million, a clear improvement versus last year, and driven by the improved operational result.
The opposite effect from net working capital was clearly negative, -SEK 374 million. This was driven by two main effects. First, the normal seasonality that we see in Q4, and also that Q3 was unusually low. I will talk more about net working capital on the next slide. Cash flow from investing activities was -SEK 40 million and mainly related to development of different IT platforms. The cash from financing activities was at normal levels and mainly linked to leasing, while last year was then impacted by the repayment of debt of the rights issue. Even though the cash flow were negative this quarter, it was positive for the full year. This together with the improved result led to that leverage landed at 2.8x, a clear improvement versus last year. It was higher than Q3 due to the increased net working capital.
This was expected, and it is the normal trend for Dustin given seasonality net working capital. But still in line with the target range of being between 2x- 3x for the third consecutive quarter. Coming then to page seven, we look at net working capital. Net working capital landed at SEK 167 million , an improvement versus last year where we were at SEK 477 million . Inventory dropped to just above SEK 1 billion , which was lower than both last year in Q3 and now close to the target level of SEK 1 billion . The main improvement versus last year was then on accounts receivables, driven by continued effort to settle the receivables from previous periods, and also the fact that we came from high levels last year, mainly related to LCP and timing of invoicing.
As stated before, Q4 is usually weaker in terms of net working capital due to the timing of large rollouts at the end of the quarter, driving higher receivables. We always have some timing effects between individual quarters, but our long-term target for net working capital remains to be around -SEK 100 million . With that, I hand back the word to Samuel.
Thank you, Julia. This is a year where we've taken several important steps to build a new and stronger Dustin. We're now fully focused on B2B customers with the phase-out of the consumer business. We've implemented a new sales organization with clear local accountability, strengthening local market execution and customer engagement. We continue the transition towards more standardized and scalable service offering with improved profitability through the phase-out of non-standardized services. Our organization-wide efficiency measures have been completed and are now delivering annual savings of approximately SEK 80 million, contributing to a structurally lower cost base. Through these actions and through a lot of hard work by the team, we have been, during the year, able to deliver organic growth, improved profitability, stronger cash flow, while also significantly strengthening our overall financial position.
Looking ahead, the market remains dynamic and to some extent uncertain. Continued component shortages are expected to drive further price increases and impact product availability also in 2027. Higher prices are expected to weigh on workplace demand, while the rapid development of AI is creating new opportunities and drives demand for updated IT infrastructure. Against this backdrop, our priorities are clear. We will continue to strengthen local market execution, being close to our customers and partners to be able to focus on the opportunities lying ahead. We'll drive profitable growth in SMB, leveraging on our strong position in the Nordics and utilize our full service offering in that segment.
We will complete the phase-out of non-standardized services to improve profitability, maintain a strong pricing discipline, and continue to drive efficiencies across the organization. At the same time, we will continue to work closely with our customers and suppliers to manage component availability and changing pricing dynamics. Finally, we plan to host the Capital Markets Day on the January 25th, where we look forward to providing a more detailed update on our strategy and long-term ambitions. With that, we'll open up for Q&A.
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 Jesper Stugemo from Handelsbanken. Please go ahead.
Yes, good morning and thank you for taking my questions. A couple from me, I start on this IT incident. Given that you didn't comment on any potential sales impact for fiscal Q1 here, I guess that you have seen limited loss from this incident, or how should we view it?
Yes, that's the short version. I would say, obviously, like Samuel Skott said, we will have impact from the lost sales days in September. It's where we basically were closed. We don't view this as a material impact for the quarter.
Okay. You don't have any estimate that you could share with us or anything like that?
No, we are still assessing the full effect of it, and we will obviously come back to it when we close the Q1. At this moment, we are not sharing any specific numbers as we're still in the middle of it.
Okay, I understand. That is fair. On the volume side then, how do you look at demand for next fiscal year Q1? You highlighted some volume pressure given higher prices. It appears that both IDC and some other global vendors are also expecting some double-digit decline in PC volumes for 2027. How much do you think price could compensate for top line versus volume loss? I think it will be challenging to drive growth for the next year.
If I will comment on that. Yes, if you look at what the market consensus is and if we look at the research houses and also the vendors, the expectation is that there will be a pressure on demand on PCs next year. On the other hand, prices will continue to go up. The exact balance of that outcome, I think is too early to tell. Yes, we also expect some weigh on demand on the PC side. On the other hand, we are seeing a kind of recovery in the SMB segment. One quarter of underlying growth is too early to say everything is great and will continue to grow, but at least it is an encouraging sign.
Yes, we see a way on demand on PC, but on the other hand, AI is driving increasing demand when it comes to the infrastructure part all across the hardware, software, and services. I think it is several different things happening at the same time, which is both kind of a bit of a headwind in terms of PC demand, but also opportunities in SMB and infrastructure driven by AI.
Okay, thank you. On LCP, given the somewhat lower sales from the public sector, could you just remind us how big Enterprise is as a percentage of LCP?
I would say it's around 1/3 .
1/3.
Of the total LCP business, yeah.
Yeah. Okay, thank you. I'll jump back in queue.
The next question comes from Daniel Thorsson from ABG Sundal Collier. Please go ahead.
Yes, thank you very much. First question on LCP, what is the pipeline then rollout schedule for the coming quarters here? Any comments on maturity degree for the contracts as well?
In general, we do not guide about the pipeline and the future. No comment on that. Of course, we can see, as we talked about, that some contracts are a bit more mature compared to a year ago, for instance, in Belgium, and that is why we see improvements there. But naturally, this is an area where there will be seasonality effects and swings between the quarters. I think also commenting in general, coming back to the previous question on what do we expect, we do expect some pressure on demand on PCs.
As we saw in Q4 and something we will continue to prioritize is not only the volume, but the value side of things, where price increases are expecting to continue, and where we will continue and focus driving margins through disciplined pricing and through being very clear on what type of deals we take and do not take in terms of pricing and risk. It is not only about top line.
I see. Okay, fair enough. Linked to that, are there any larger tender frameworks or potential agreements out in the market in the coming quarters that are good to look at or that you are trying to shape, do you think?
There are continuously fairly large tenders out in the market. I don't see a huge difference in that compared to any other quarter or situation.
Okay, perfect. On the margin here and the higher gross margin, is that potentially a result of lower proportion of PC sales in the quarter due to lower volumes or any of the other explanations you already mentioned here?
I would say it's mainly the other explanations. We don't see that big of a mix effect here in terms of the product base. So it's again, coming back to having a more mature contract portfolio on the public side, not taking some of the deals with really low margins. On the SMB side, it's related to the pricing as we talked.
Yeah, I see. And third one, I guess that some of your inventory that was delivered or sold in this quarter was perhaps purchased earlier at potentially lower prices. What is kind of the current status of your inventory today? Will that have a negative impact on gross margin in the coming few quarters?
No, we do not guide for the future on this one. But no, I do not expect any negative impact on the margin. If I look into Q1, I would say it would still rather be a positive impact.
Okay, I see. Just a final one on central costs then. You just write that there is a positive one-time effect in the quarter here. Any magnitude, or is it just a few million SEK?
It is just a few million SEK. It is more to indicate that this is not the going level I would have put in my model going forward. But we have had some positive corrections, partly related to bonus accruals at the end of the year, basically.
Okay, perfect. Thank you very much.
You're welcome.
The next question comes from Thomas Nilsson from Nordea Markets. Please go ahead.
Thank you for taking my question. When it comes to Benelux, where would you say Benelux still lacks the Nordics operationally? And what milestones should we watch over the next 12 months to see if the new regional organizations is leading to improvements here?
I wouldn't say it lacks anything operationally in that sense. The starting point in the business models are different. If we look to Nordics, we have a much higher weight on SMB because that's where we came from. Whereas in Benelux, it's more a large Enterprise and public entity. So it's different business dynamics and different starting points. If we take Belgium, we can already see that we are growing and we are growing with better margins because of the contract maturity, and that's something we expect to continue. In The Netherlands, it is still a challenging market. Highly competitive, high price pressure. There, as we talked about, we fairly recently launched a new locally focused organization. We also now have a strong local leader in place. So we will work with that setup now to make sure that we improve day by day.
Some improvements, especially on the net working capital and cash flow, has already been made, as we've been able to see during the year. So I think from an operations standpoint, we're fairly stable. Now it's much more about the go-to market, the trust with the customers, getting that momentum going for the future.
Okay. Thank you. A final question from me. The SMB recovery. Is the SMB recovery driven more by more active customers, higher spending per customer, or price increases? Are you seeing any previously inactive customers?
I would say we see all of the things you mentioned, but of course, given the price increases we've seen, that is the main driver. But we also see volume increase in SMB, so it's not only price increase.
Okay. Thank you very much.
Thank you.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Martin Wahlström from SB1 Markets. Please go ahead.
Yes, good morning. Thank you for taking my question. Just to follow up on the cybersecurity incident. You had a few days of lost sales there. Will there be any impact on inventory buildup or something in the next quarter related?
No, we have not seen that. If I should add anything on the cost implications, we obviously had some one-off cost when we were handling the incidents in terms of external support, et cetera. That we will be taking as items affecting comparability. No impact on inventory that I can speak of.
Yep. All right. Got it. I also noted that software sales were up quite a bit here in the quarter against last year, and also if you compare it to earlier quarters this year. What's driving this, and does this have any margin implications?
I would say it's mainly seasonality effect.
Yeah.
Nothing larger than that.
Yep. Then also follow up on the pull forward dynamic of demand. It is more of a headwind than a tailwind now, perhaps, but could you just remind us in what regions this has been especially prominent? I guess it is in Benelux, given the LCP focus there.
Yeah. I think if I talk a little bit in general on the different product mix, maybe Julia can comment on what we saw in the different countries in the quarter. But I think in general, what we are seeing is that the market dynamics right now is weighing on the demand, especially in large Enterprise and public in the workplace segment. So the computers and everything associated with that. But on the other hand, there is an increased demand when it comes to AI infrastructure and supporting the AI journey. This is what we expect. Then of course, we come from a position where we have an overweight today in workplace, and we have an overweight in public and Enterprise. So yes, of course, that will be a little bit of a headwind. I think, let us be honest about that. But still with that, there is also opportunities.
We see continued price increases, and that is an opportunity. We see the recovery opportunities in SMB, and we see the increased demand in infrastructure. So I think that is what we see and that is what we expect, and that is forming our priorities overall. Then maybe if you want to comment on the geographies, Julia.
When we look at the sales development in the Q4, it also is a lot linked to the different market impact that we talked about, the volumes that we brought forward to previous quarters, the fact that we maybe did not take all the deals that were on the table. So maybe not that different market dynamics, more different business management, if I would say it, so in the different markets. But I guess we can say in general, as I said, Nordics is a bit more stable than maybe the Netherlands, but we still have very positive momentum in Belgium, which we had in the last quarters. That is also good to take with us.
Yep. Great. Then one final question from me on the phase-out of the non-standard services offering. It is stated as a positive driver for margins. Can you give any comments on the progress of this and perhaps quantify the impact you expect there going forward?
It means it's a lot about sizing down the organization, and that we have implemented now. Then going forward, it would be an ongoing decline, we would say, in this business. We haven't really guided on the size of the savings. It's not large amounts for us in that sense. It's in the single digit, I would say, impact per quarter.
Okay.
Still progressing according to plan, and I think also we talk a lot about top line and market development, which is, of course, extremely important. But I think also important to note is our focus also on the gross margin, the pricing discipline, utilizing the price increases, and making sure we do the right deals. So that's also a focus area. Then, of course, another focus area is even further down in the P&L, where we have the efficiency measures, and efficiency will continue to be a priority going forward. So our ambition is, and what we've been able, I think, to demonstrate also in the last quarter, is that, yes, the market is dynamic. It's a bit uncertain in some areas. There are headwinds, there are opportunities. But with the focus we have, with the priorities we have, it's not only about that.
It's also to be able, despite these swings, to make sure that we have a sound underlying financial situation. And that's definitely something we're looking to continue.
Super. Thank you. That was all the questions from me.
There are no more phone questions at this time, so I hand the conference back to the speakers for any closing comments.
Thank you. Thank you everyone for listening in. Thank you for the question. This concludes the fourth quarter presentation and Q&A. Wishing everyone a great day. Bye.