Now, I will hand the conference over to the speakers, CEO Anders Erkén and CFO Fredrik Jignéus. Please go ahead.
Hi, and very welcome to the presentation of the Q4 2025 Report from the VBG Group. It's me and Fredrik here, and I will give you an overview, and Fredrik will give you more details during the presentation. First of all, we will take a quick snapshot and summarize 2025. As you all know, it was sort of a turbulent year, and from a geopolitical point of view, from a trade war point of view, and we can say that we have spent a lot of resources, and the organization has done a fantastic job when it comes to mitigating the tariffs that was imposed by the U.S. administration. Overall, we can see we can split the year in two halves.
First of all, the first half, we considered to be slower demand, and from quarter three and also, as you will see in quarter four, the demand picked up, and we can see it on the revenue side and also on the order intake side. We ended up by close to SEK 5.4 billion in revenues, which is a revenue decline of 3.3%. But also we had a tough currency headwind of about 6%. We are also proud that we achieved three really nice acquisition during the first part of the year, and they are also contributing to the overall targets of VBG Group. We can go to the next.
Quarter four, to summarize the highlights, during the quarter, and we can say overall that it's the fifth consecutive quarter that we see revenue growth quarter to quarter. We have revenues increased by 2.8% compared to the fourth quarter, 2024, and adjusted for currency and acquired volume, sales increased by almost 5%, 4.6% to be exact. And as I mentioned, the currency headwind escalated in the end of the year and reached about 10%. But if you just adjust for currency, the group increased revenues by 13%, where the three acquisitions from last year contributed with 65% of the growth.
It's also worth mentioning that our geographic footprint continues to develop, and we saw revenue growth in all three geographic markets, which we call North America, Europe, and rest of the world. From the revenue side, it's interesting to see where we had a slowdown in the first half of the year on one of the most important segments, the side-by-side segment for MTS. Revenue continued to grow also in quarter four and reached an increase of 32%. Also positive things for us, that is that the defense segment within Truck and Trailer Equipment increased with 46% compared to quarter four last year, or 2024. Of course, price adjustments, or price compensations has added to the growth during the quarter.
Another important thing for us that we see a good momentum is the growing order intake, and we can see that order intake in the quarter increased by 7%, and if you just make it currency adjusted, it's 16%, which is good momentum stepping into the quarter one, 2026. We managed to maintain a gross margin of 13.1%, and here is a lot of swings and carousels, as we say in Swedish, but Fredrik will give you all the details. And I can just mention that we are disappointed by the development in the quarter for the division MTS. And the reasoning behind the weak performance from a profitability point of view, that is really three things.
That is the raw material. If you look at in raw material commodities, I would say copper and aluminum is a major part of the material cost in MTS. And raw material prices for copper has increased by 30% from the beginning of August until the year-end. And it's the same thing with aluminum. That has increased by 17% from August to the end of the year. And we are committed to increase prices in the market until this will be finalized in the end of quarter two. And of course, as mentioned, the currency had a major effect on the result as well. And last but not least, the customer mix.
When we talk about the customer mix, it's the specialty segment within Mobile Thermal Solution that dropped in sales compared to quarter four, 2024. And specialty, that could be mining trucks, that could be also fire trucks and these kind of specialty vehicles. That is an important segment for us. Last but not least, we had a very strong operating cash flow of SEK 270 million in the quarter, and it's the second best quarter from a cash flow point of view for an individual quarter. By that, I leave the word to Fredrik, please.
Thank you, Anders. In the fourth quarter, sales increased by 2.8%, and adjusted for currency and acquired sales, the growth rate was 4.6%. Like Anders mentions, FX headwind is about 10% for the group. EBITDA amounted to SEK 172 million in the quarter, and our EBITDA margin declined from 14.3% in the third quarter of 2024 to 13.1% in the quarter of 2025. The SEK continued to strengthen during the quarter and have an impact on the group in all three divisions. During the fall, we unfortunately discovers errors in the inventory evaluation in the Polish company within MTS. The errors mostly affects the historical years 2022 to 2024, but SEK 13 million affects the fourth quarter of 2025.
The SEK 13 million refers to the period before September 2025, but was entered into the fourth quarter as part of the correction. The correction of the error is shown in note 2 in the quarterly report, and all numbers for the comparison year 2024 has been corrected throughout the report. We have taken actions and strengthened the internal control in order to avoid similar errors to go undetected going forward. During the fourth quarter, we have received another retroactive pandemic support in the U.S. of total 11 million SEK, which has affected EBITDA positively. At the same time, we had some restructuring costs within MTS of SEK 2.8 million . The operating margin was affected by increased prices for raw materials, such as copper and aluminum.
EBITDA was positively affected by a one-time income of SEK 19.6 million relating to the reversal of an additional purchase price or earn out that will not be paid to the former owners of the company that was acquired. EBITDA was negatively affected by almost SEK 8 million in revaluation of working capital items in the balance sheet as a result of the strengthening of the SEK. In comparison quarter, the corresponding positive impact was almost SEK 8 million. EBITDA in the comparison quarter was affected by a capital gain of almost SEK 10 million, relating to the sale of a warehouse and distribution property in Denmark.
Operating cash flow, as Anders said, was strong and amounted to SEK 270 million in the fourth quarter, compared to SEK 294 million in the fourth quarter of 2024. We will go through the fourth quarter with some touch down on each division. Truck and Trailer Equipment to start with, sales in the quarter increased by 10.6% compared to the previous year, amounting to almost SEK 406 million. Adjusted for FX and acquired volumes, organic growth amounted to 5.2%. The demand for the coupling products was continuous, still high, and the defense sector has grown by almost 57% in the quarter. The market for trailer components in Europe moved sideways on low level during the fourth quarter of 2025.
EBITDA for truck and trailer equipment has decreased in the fourth quarter compared to the previous year to SEK 80 million , with an EBITDA margin of 19.7% compared to 22.5%. But like I said, before, EBITDA in the comparison quarter was affected by the capital gain of SEK 10 million relating to the sale of the warehouse and distribution property in Denmark. Mobile Thermal Solutions, sales for the quarter increased by 0.6%, compared to the previous year, amounting to almost 641 million SEK. Adjusted for FX and acquired volume, the organic growth increased by 9.5%. EBITDA for Mobile Thermal Solutions amounted to SEK 41 million , and the EBITDA margin decreased from 8.1%- 6.3%.
The result, the result in the quarter was negatively affected by the SEK 13 million relating to the cost in the Polish operation, and that should have been recorded in the previous quarters of 2025. The quarter was then affected by increased cost for raw materials, primarily copper and aluminum, as well for a less favorable customer mix. During the quarter, restructuring cost of almost SEK 3 million was taken, which expect to strengthen profitability going forward. This has contributed to a lower operating profit and a lower operating margin compared to 2024. Ringfeder Power Transmission sales for the quarter decreased by 2.8% compared to the previous year. Newly acquired Malmedie contributes according to plan, and adjusted for FX, organic growth amounted to -7.6%.
We should remember that the quarter of 2024 was one of the best quarters in Ringfeder Power Transmission's history regarding sales and profitability. EBITDA for Ringfeder Power Transmission increased to SEK 58 million, with an EBITDA margin of 21.8%. EBITDA was positively affected in the quarter by a one-time income, the SEK 19.6 million relating to the reversal of the earn-out that will not be paid out. Ringfeder Power Transmission, excluding Malmedie, is primarily affected by product mix variation between quarters. North America sales amount to 49%. Sales outside Europe and North America are increasing by 21%. Of course, the acquisition of Italytec in Brazil is a large portion of this growth.
We have an after-market business, in average in the group of 23%. For 2025, the cash flow came in somewhat lower than comparable year. The cash flow before changing working capital tied up is the main reason for that, but we have also seen high working capital tied up in accounts receivable in the end of the year due to the revenue growth that we have seen the last six months. After 2025, we have a net debt position, if we adjust for pension liabilities and leasing commitments, of SEK 573 million. During 2025, we have had lower cash flow from operations due to lower underlying result and somewhat higher working capital tied up in accounts receivables.
We have also made three acquisitions and started to build our new production facility in Toronto, which explains the change in cash position. VBG Group has still a strong financial position that can be used to develop the group going forward. ROCE amounts to 29.7%. The decrease during 2025 are relating to the acquisition of land and building in Toronto, which increases the balance sheet but does not give a positive EBITDA contribution before consolidating the three facilities that we have in Toronto. The acquisition of Italytec, Ledson, Malmedie together with lower EBITDA compared to 2024. This KPI is not a pro forma, which means that Italytec, Ledson, Malmedie does not contribute with full 12 months in this KPI.
Thank you, Fredrik. We can say that like many other companies listed on the stock exchange, we have the sustainability agenda high up. We will publish our first yearly report within the sustainability area in April this year, and we can also mention that the board of directors took a decision to have a Scope 3 target to reduce CO2 emissions by 62% based on with 2024 as a base until 2040. Last but not least, if we talk about future focus and looking ahead, it's clear that we anticipate a continued market volatility, and of course, all the geopolitical tension that we have in the world, and that this will continue.
We don't see an end to it, but we have a strong, stable organization that is agile and responsive to changing conditions. As we mentioned in the Q3 call, of course, these tariffs, it's a challenge, but it's the net impact on our operations is marginal. What we are seeing now in quarter four, that the largest impact was the commodity price increases for MTS. As we have mentioned many times, it's copper and aluminum. But we are committed to offset these cost increases with price adjustments during the first half of 2026. It's really still ongoing, but we will see the effects in the latter part of 2026, Q2 2026.
Importantly, we see we have a, as Fredrik mentioned, we have a strong financial position, and we will continue to increase our revenues in the companies. We see good potential in the M&A area, and of course, we will also capitalize on the organic growth and the momentum we see in the market now, both on the truck side in Europe, but also on machine building, the mining sector, and also on the off-road side, especially in the U.S. As we mentioned with the ordering take, we are committed to capitalizing on the strong order book going forward. We see a strong momentum with 7% adjusted for currency and 16% underlying if you adjust for currency.
And of course, we see opportunities and the need to increase profitability in certain areas, and we will continue to do price adjustments in the market, but also work on the efficiency side. We see positive signs now that we have a better capacity utilization, and we will make efficiency gains during the coming quarters as well. Last but not least, we have a good plan now to complete the new building in Toronto, where we consolidate three units into one. We will have the keys to the building in quarter three, and we will see the first good gains from this during the second half of 2027. So, we have a lot of good activities going on with a good momentum in the organization.
By that, we are open for question and answers.
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 Gustav Berneblad from Nordea. Please go ahead.
Yes, good afternoon. It's Gustav here from Nordea. Just to start off here on your comments on the order intake growth of 16%, and you say it's adjusted for FX. Is it also adjusted for M&A, meaning that we are looking at a 16% organic order intake growth in the quarter, or what's your take there?
Yes. We want to be very, very clear. The 16% includes the order intake from the acquisitions as well.
That's very clear. Perfect.
Yes.
But-
But currency adjusted.
Oh, that's very clear. Thank you. And out of the, sort of the 330 basis point year-over-year decline in MTS on the margin there, how much was related to the increased raw material costs seen in the quarter? And with the price increases you are implementing now in MTS, will that offset this headwind fully, would you say, or?
You're totally correct. I can't say exact figure, what the commodity prices over the quarter should be, but we have a clear plan to mitigate these cost increases during the first half of 2026. And it's already started, but before we have gone through all the customer base in North America, I believe we will be finalized during quarter two.
Oh, that's perfect. Then I thought maybe you can help me here, because you, you comment on a weaker customer mix in MTS, right? But you also comment on stronger demand within side-by-side, which should, I guess, contribute to a more positive mix effect also. So I was just wondering if you can elaborate a little bit of the total mix effect here coming in on the margin in MTS?
Yes. For us, we have three customer segments within the off-road side. It's the side-by-side segments, it's agriculture and construction, and then specialty vehicles. And from a gross margin point of view, the specialty vehicles, low volume, high customization, has a higher margin. And during the quarter four, we have a lower sales that doesn't offset the volume increase that we have in the side-by-side segment.
That's very clear. Thank you for that. And the last question, sorry, from me here, when you look at the full year 2025 margin in MTS reaching, you know, 10%, we saw here for 2025, do you see this as a difficult margin to reach for full year 2026 when you head in here?
Of course, it's hard to look in the crystal ball, but we are confident that the price increases will mitigate. We see a strong trend in the order book, but I think you know it better than us, Gustav. I think we will see the peak of the currency headwind in quarter one. So how these parameters will impact, of course, it's in our genes to increase profitability in this area. We do a lot of activities, but... We have to understand that the peak, at least in quarter one, will be on the currency side.
That's, that's, very clear. Perfect. Thank you very much. That was all for me.
Thank you, Gustav.
The next question comes from Jonny Jin from SEB. Please go ahead.
Good afternoon, Anders and Fredrik. I hope you can hear me. I have a couple of questions as well. I think I will start with order intake, and we touched upon that a little bit, and the orders looks good. But could you please comment how was the order growth in each segment respectively?
Yes, we can say it like this: the highest order intake from a percentage point of view was for RPT. Secondly, it comes to MTS, and third is Truck and Trailer Equipment. And just to make it clear, if you adjust for currency, the order intake increase in quarter four is 16%, including the three acquisitions in the whole thing.
Okay. Yeah, that's clear. And in Ringfeder Power Transmission, I know that you said that we need to look at this rolling twelve-month basis, but there's stronger orders than in this quarter. When is that set to be delivered in sales?
Generally, for all divisions, we have a visibility of three-to-four months. When it comes to Ringfeder Power Transmission, in particular, it is in the same range, three-to-four months visibility in this area.
Okay. Yeah, that's clear. And on MTS, we are in your order intake. I know you talked about the price of commodity prices and such, but mix, if you look at the mix in the order intake for MTS, how is that mix looking?
The mix system at the moment is that we have higher order intake in on the off-road side, and particularly in the side-by-side segment.
Okay, so the mix in Q4 is rather representative for Q1 as well. Maybe it's a fair assumption, then?
Absolutely. I fully agree with you.
Mm-hmm. Okay. Yeah, that's fair. And then, just one, if you compare the order intake to sales in the quarter, I assume that it sounds that order intake is higher than sales, but what sort of book-to-bill are you entering the new year with?
Johnny, we have a higher order intake than sales in the quarter. That is by far.
Okay. Can you say something, how much higher than sales?
I don't have the currency-adjusted figure in my hand, but somewhere between 8% and 10%.
Okay. Yeah, that's clear. That's clear. And then just, one final from my side. I mean, given your current visibility, as you said here, I mean, and now also, now we are in February. So what sort of your— What is the outlook here, for 2026, would you say?
Yeah. As I mentioned, with the order book and the visibility, we had a good start of the year. We see a good trend in the market, good momentum in the market, both in North America, and that we see a good sign, we, we see the light in the end of the tunnel when it comes to Europe. So all in all, we, we feel we have a good momentum, and, and basically, with our visibility, of course, we don't see any dark clouds in the sky. The only thing which I mentioned before, that is the currency at the moment, and I think we will reach a peak when it comes to the strengthening of the krona and especially to the US dollar and the euro during quarter one.
Okay, that's clear. Sounds promising. I would just squeeze in one final, sorry. But on the MTS, I mean, you mentioned the order intake is looking good and such, but how is the inventory level, would you say, at your customers now?
I think it's a relevant question. And we saw the first half year of 2025, whether it was a clear inventory reduction in, in, especially in the side-by-side segment in the distribution landscape. But from quarter three, I think the, the inventory levels are maybe a little bit too low, but, but the general trend we can see now that, sales and order intake continues in, in this area. But, that is the only answer I can give at the moment.
Okay. Yeah, that's clear. Thank you. That was all from me. Have a great day.
Thank you, Johnny.
Thank you, Johnny. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad.
So since-
There are no more phone questions at this time.
Mm-hmm.
I hand the conference back to the speakers for any written questions and closing comments.
I think this was fairly clear because we don't have any more written questions. By that, I thank you very much for your attention and wish you a good, nice day.
Thank you very much.
Thank you. Bye-bye.