VBG Group Aktie

Welcome to VBG Group Q1 Report 2026 presentation. [Operator Instructions]

Now I will hand the conference over to the speakers, CEO, Anders Erken; and CFO, Fredrik Jigneus. Please go ahead.

So very welcome to the presentation of VBG Group Quarter 1 2026. I will make a short summary of quarter 1, the highlights, and Fredrik will give you all the details, and then we will make a short summary in the end on the direction that we are going in.

So if we conclude the quarter 1 highlights, we can say that it was a stable quarter from our side. Revenue increased by 2% and compared to the first quarter 2025 and adjusted for currency and acquired volume, sales increased by 5.3%. I think it's important also that we understand the 3 divisions and our geographic spread and it's confirming and comfortable that all 3 divisions grow organically and also that we grow organically on the 3 main geographic areas, Europe, North America and rest of the world. We will dive in a little bit on the next slide to see our market segmentation split, but it's interesting to note that the the drivers here, that is price adjustments. And one of the most important segments within Mobile Thermal Solutions, the side-by-side segment grew by 24%.

And of course, both defense segment for truck and trailer equipment and Ringfeder Power Transmission had a good quarter when it comes to that. So for truck and trailer equipment, the growth was 24% in quarter 1. And as [ Martin Loans ] that confirmed last week on Friday, we see the same picture when it comes to the truck suppliers in Europe, we see increased volumes here.

When it comes to the result, we managed to maintain our gross margins and the group delivered a solid EBITA margin of 12.7%. And I think Fredrik will come into details, but it's worth mentioning that the currency, SEK 122 million negative effect on the operating result. Order intake was flat compared to quarter 1 [ 2021. ] But currency adjusted, it was plus 8%, and the book-to-bill ratio increased to 111%. And last but not least, our operational cash flow reached SEK 92 million. You can flip to the next one.

And I think this is a nice picture to understand. We are not just a drawbar coupling company from [indiscernible]. We have 3 divisions as we see, and we are working in many industrial verticals. Of course, the [indiscernible] and Truck business is important for truck and trailer equipment -- but as mentioned, the Defense segment is now in double digits. And as you can see on the Mobile Thermal Solutions, it's a 1/3 split of these sites, and we had a positive trend within the side-by-side business. On the contrary, we had a slowdown on the bus side in Mobile Thermal Solutions.

And as mentioned many times, linked to the power transmission works and is present in a lot of industrial segments or verticals and this time, the machine building segment air and space was growing together with energy and process technology. So you can continue with the details, Fredrik.

Thank you, Anders. Okay. The first quarter sales increased by 1.9% and adjusted for currency and acquired sales, the growth rate was 5.3% and FX headwind is about 9% for the group as a whole. EBITA amount to SEK 175 million in the quarter, and our EBITA margin declined from 13.1% in the first quarter of '25 to 12.7% in the first quarter of '26. The strengthened during the quarter compared to the comparison quarter, and we have an impact on the group in all divisions. The FX effect on EBITA was negative SEK 22 million in the quarter. But most likely, we have now seen the peak of the FX effects. During the first quarter, we took a restructuring cost within MPS of SEK 2.1 million. And the operating margin was also affected by increased prices for raw materials, such as copper and aluminum. And we have a lag compared to our price increases.

Operating cash flow was strong and stable and amounted to SEK 92 million before CapEx in the first quarter compared to SEK 28 million in the comparison quarter of '25. Earnings per share amounted to SEK 4.53 compared to SEK 4.58 last year. We will go through the first quarter with some touchdowns on each division. Truck and trailer equipment to start with. Sales for the quarter increased by 3.3% compared to the quarter last year, which amounts to SEK 448 million compared to SEK 433 million. Adjusted for FX and acquired volumes, organic growth amounted to 1.4%. Demand for coupling products has continued to be high with a continued good market in Australia.

Defense segment has grown by 24% in the quarter and like Anders said before, the market for trailer components in Europe developed slightly positively from a low level in the first quarter. EBITA for Truck & Trailer Equipment increased in the first quarter compared to the previous year to SEK 95 million with an EBITA margin of 21.5%. Truck and Trailer Equipment delivers growing revenues with a stable high margin -- EBITA margin.

Going over to Mobile Thermal Solutions. Sales for the quarter decreased by 4.6% compared to the previous year and amounts to SEK 671 million. Adjusted for FX and then acquired volumes, organic growth increased by 5.7%. EBITA for Mobile Thermal Solutions amounted to SEK 58 million with an EBITA margin of 8.7%. The quarter was affected by FX headwind and strengthened against U.S. dollars in CAD, which has an impact on EBITA of almost SEK 14 million, but also increased cost for raw materials primarily copper and aluminum as well as a less favorable product mix.

During the quarter, restructuring costs of SEK 2.1 million were taken to adopt the organization which we expect to strengthen profitability going forward. This has contributed to a lower operating profit, EBITA and the lower operating margin EBITA compared to 2025. Going over to Ringfeder Power Transmission. Sales for the quarter increased by 20.1% compared to the previous year and amounts to SEK 258 million. Newly acquired Malmedie contributes according to plan. Adjusted for FX, organic growth amounted to 12.1%. Sales in the comparison quarter was very low last year.

EBITA for Ringfeder Power Transmission increased to SEK 29 million, and the EBITA margin amounted to 11.2%. During the period, cost of SEK 4.4 million was incorrectly recognized in the wrong period. It was relating to 2025 and was recognized in the Indian subsidiary.

Given recent acquisitions in Europe, the proportion of European sales has increased over the last quarters and now amounts to 39%. And please note, we have an average aftermarket business of 23% in the group. Rolling 12 months is almost in line with the full year 2025, not adjusted for currency. FX plays still a large role, both in sales and EBITA. EBITA was negatively affected by approximately SEK 22 million in FX effect between the quarters.

For the first quarter, the cash flow before CapEx came in higher than comparable year quarter after 2025, we have a net debt position if we adjust for pension liabilities and leasing commitment of SEK 580 million. During 2025, we had lower cash flow from operations due to lower underlying results and higher working capital tied up in accounts receivables, we made 3 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. ROC amounts to 28.8%. The decrease during 2025 is related to the acquisition of the land and building in Toronto, which increases the balance sheet but has not given a positive EBITA effect or contribution before consolidating the 3 facilities that we have today. But this KPI is also affected by somewhat lower EBITA.

Thank you. And over to you again, Anders.

Thank you. If we look at our sustainability agenda, we partnered for the first time an audited sustainability report in the beginning of April, and we are very much focusing on 3 areas. It's the reduction of CO2 emissions. It's a reduction in waste and reduction of accidents in our factories. So future focus and I might kick in open doors, but looking ahead, I do anticipate continued market volatility and geopolitical tension. But we have an organization that is agile and responsive to changing conditions. Overall, while tariffs remain a challenge, their net impact on our operations is marginal. We have done a tremendous job in offsetting these changes.

The largest impact was the commodity price increases for Mobile Thermal Solutions that Fredrik already mentioned and especially copper and aluminum. And we are committed to offset these cost increases with price adjustments during the first half of 2026. And we have so far reached roughly 75% of the target, and it will be delivered on the rest in quarter 2. We are also positive and we are committed to capitalizing on the strong order book going forward. As mentioned, order intake adjusted for currency during the quarter was plus 8%. And we can also mention that sales and order intake gradually improved during the quarter. And we really can't see any indications of lost business or lost orders or canceled orders because of this geopolitical tension.

We will also continue to finalize our building in Toronto, and we expect to hand that in end of quarter 3, beginning of quarter 4 and fully operational in the first half year of 2027. We also announced this morning that we will consolidate Ringfeder Power Transmission's production facilities in German -- with a Czech facility and build a brand-new building in [indiscernible] Czech Republic. This is part of our strategy to be more efficient to increase capacity and strengthen our long-term competitive edge.

And as Fredrik said, with our financial strength and our decentralized organization, we are prepared what lies ahead. Through our cash-generating divisions, we are committed to complement the acquisitions as well as investing in organic growth. This will lead to continued sustainable profitability.

So by that, we are finished with our presentation, and we are open for questions at this point.

[Operator Instructions]

The next question comes from Gustav Berneblad from Nordea.

It's Gustav from Nordea. Maybe -- so I thought maybe if we could start off the MTS margin, which is down 200 basis points year-over-year. Of course, I mean, natural explanations here with raw material, et cetera. But is it possible to quantify how much of these 200 basis points is related to the raw material impact versus the negative mix effect.

I would say that the majority of this is related to the material cost increase. But we have a negative effect also on the product mix. And this is on the bus side, where we see that the ratio of electric school buses is declining, which has an impact both on revenue and the results. But the majority comes from the cost increase on the material side.

That's very clear. And if you -- if we see sort of the full price increases that you have implemented being finalized here in end of Q2, I mean -- is it fair to assume that the MTS margin will sort of gradually raise up to 11%, 12% here in H2? Or anything that speaks against this?

I mean we are committed to have agreements to mitigate these cost increases during quarter 2. But of course, -- you have to look at the order book also what is orders that are committed to a certain price. But definitely during quarter 3, it will be fully implemented. But we should already see signs in quarter 2 about this.

Okay. That's very clear. And if we take the bus side of the business, you comment on it being slightly soft, partially due to EVs. But is it soft across both school buses and transit buses?

No. As commented before, maybe I should make a longer story about this. We saw since, I would say, 2024 that we were losing volume due to Nova pulling out of the U.S. So the transit bus volumes has deteriorated the whole time. Now we can see even in Swedish money we set that we are stabilizing the transit segment now. And even in local money that we are gaining back. Last year, we put a lot of effort in product development in order to come up come out to the market with competitive products, and we see -- we start to see results on the transit side.

On the school bus side, we can see that there is a clear product mix change. And that means that the number of electrified school bus solutions are decreasing the volumes in itself are the same, but we can see a clear change in the ratio of electrified drivelines on school buses. If this is just a quarter at certain accounts, I can't tell you, but we monitor the situation. And it has a clear impact on quarter 1 revenue and the result from MTS.

Let me also comment and we shouldn't discuss the currency too much. But -- the school bus business is a 100% business in the U.S. And of course, that the headwind is much, much greater than 9% in in the bus business for us. Currency has a larger impact.

That's very clear. And then if we jump over to truck and trailer equipment I mean you commented on the semi-trailer market bottoming out here for a couple of quarters. It looks like the couple of business is holding up well. Defense is growing strongly. And I guess you have some general annual price increases. So just wondering if there is anything holding back the organic growth in truck and trailer equipment here in Q1 that could potentially accelerate going forward?

No. I think we see a good positive trend within truck and trailer equipment. And as you saw on the chart, the major impact for us is the truck business. We can see since the end of quarter 4 2025, that volumes are steadily growing within the 7 big truck OEMs in Europe, which is positive. And by history, we see that the volumes at the OEMs really pulled the market conditions for our largest customer base when it comes to to first installation. And that is the body builders who build the gradual truck, the distribution truck or the timber truck or whatever. So it usually starts like a quarter or 2 quarters after the truck OEMs going forward. So no, we see a good trend going forward.

That's very clear. And sorry, just 1 last question here on your announcement this morning of the new facility for Ringfeder Power Transmission. Is there anything you can say regarding either payback calculations or cost savings that you are expecting here?

No, not at the moment, Gustav. But I mean, this is a long-term investment for us. We see the consolidation within the German production unit where we have been working in roughly 1 shift, and now we consolidated to get a more efficient output and we get the state-of-the-art building to build efficiency and productivity for the future. And this is long-term commitment that we want to stay really competitive in these small niches that we are acting.

The next question comes from Johnny Jin from SEB.

Yes. Anders, Fredrik. I also have a couple of questions. I think I will start with organic growth. I mean all divisions show organic growth in the quarter, which is good. But -- can you give an estimation of the split between price and volume contribution in the quarter? I mean, what is a fair assumption of price impact in the quarter?

Thanks for the question, Jonny. Yes, we can see that the price adjustments, they stand for about 25% of the increase and the rest is organic

Okay. Yes, that's clear. And entering Q2, could we expect similar price magnitude? Or will it be even higher in Q2 or...

It will be basically the same impact.

Okay. Then coming to MTS. I mean, I guess the price impact here mainly relates to the MTS side. But I mean, despite higher price contribution in this quarter compared to Q4, it seems like organic growth is somewhat slower compared to Q4 MTS. So what is sort of driving that? And how is your visibility entering Q2 within MTS, would you say?

I would say, and it's connected to Gustav's question as well. Number one, when it comes to product mix, we can see that in the quarter 1, 2026, there is a clear product mix change compared to the previous quarter's 2025. We have a much lower volume of HVAC systems to electrified drivelines within school buses. That is the main product mix change. And as mentioned earlier, we had a multiple of 3 up to 4x for each system delivered when it comes to electrified drivelines. And on top of that, without knowing exactly the details, but we can see that the currency impact, especially in North America with the U.S. dollar in relation to SEC. It was the peak during quarter 1 2026. So that are the 2 main drivers for not increasing the organic growth to the same level as quarter 4, which was roughly 9%, and now we are talking about 5%.

Yes. That's why I understand that. But I think -- I mean, the prior -- the mix impact, I think you had similar reasoning in your Q4. So should we -- I mean, is the mix effect even more elevated now? Or I also want to tie this to your comment about higher price increases. I mean have you seen any response among customers that they have been more hesitant, which affect volumes? Or how should we read that?

No. We can't see it. It comes back to the order intake figures as well. We can't see any cancellations. Of course, there is discussions when you compensate prices in the market. But I mean it's necessary for us to compensate, and I think it's a general trend to see what has happened to copper and aluminum in the last 9 months.

Okay. Yes. Just 1 final from my side. I mean coming back to orders. If you exclude the acquisitions, what was sort of the book-to-bill in the quarter? And also, could you give the split among the divisions? I mean the order organic book-to-bill in trucks at MTS,

Jonny, the book-to-bill ratio was 111% in the quarter for the group. I can't go in detail about it. And what was your second question around?

Organic growth -- order intake.

Order intake. We split the organic and acquired volumes. So the order intake related organically, that was 3.3% and the rest was acquired volume.

Okay. That's clear. And is it fair to assume that orders is above sales in both Truck & Trailer and MTS.

You can answer.

Yes. It's about sales.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

So thank you very much for all of you participating. We appreciate that you are listening to us and hopefully have a better picture of VBG Group going forward. Thank you very much for your participation.

Welcome to the VBG Group Q4 Report 2025 presentation. [Operator Instructions]

Now I will hand the conference over to the speakers, CEO, Anders Erken; and CFO, Fredrik Jigneus. 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 2 halves. First of all, the first half we considered to be slower demand and from quarter 3 and also, as you will see in quarter 4, 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% (sic) [ 3.4% ]. But also, we had a tough currency headwind, about 6%. We are also proud that we achieved 3 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. So quarter 4, 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 volumes, 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 3 acquisitions from last year contributed with 65% of the growth. And it's also worth mentioning that our geographic footprint continues to develop, and we saw revenue growth in all 3 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 and revenue continued to grow also in quarter 4 and reached an increase of 32%. And also positive things for us that is that the Defense segment within Truck & Trailer Equipment increased with 46% compared to quarter 4 last year or 2024.

And 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 a good momentum stepping into the quarter 1, 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 3 things.

That is the raw material. If you look at -- and raw material commodities, I would say copper and aluminum is a major part of the material costs 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 2.

And of course, as mentioned, the currency had a major effect on the result as well. And last but not least, the customer mix. And when we talk about the customer mix, it's the Specialty segment within Mobile Thermal Solutions that dropped in sales compared to quarter 4 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%. And like Anders mentioned, FX headwind is about 10% for the group. EBITA amounted to SEK 172 million in the quarter, and our EBITA margin declined from 14.3% in the third quarter of '24 to 13.1% in the quarter of '25. The SEK continued to strengthen during the quarter and have an impact on the group in all 3 divisions.

During the fall, we unfortunately discovered errors in the inventory valuation in the Polish company within MTS. The errors mostly affects the historical years '22 to '24, but SEK 13 million affects the fourth quarter of '25. 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 a total SEK 11 million, which has affected EBITA 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. EBITA was positively affected by a onetime 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.

EBITA 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. EBITA 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 touchdown on each division. Truck & 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 -- continues, still high, and the defense sector has grown by almost 57% in the quarter. The market for trailer components in Europe moves sideways on a low level during the fourth quarter of 2025.

EBITA for Truck & Trailer Equipment has decreased in the fourth quarter compared to the previous year to SEK 80 million, with an EBITA margin of 19.7% compared to 22.5%. But like I said before, EBITA 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 SEK 641 million. Adjusted for FX and acquired volume, the organic growth increased by 9.5%. EBITA for Mobile Thermal Solutions amounted to SEK 41 million, and the EBITA margin decreased from 8.1% to 6.3%. The result in the quarter was negatively affected by the SEK 13 million relating to the cost in the Polish operation 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 minus 7.6%. And then we should remember that the quarter of 2024 was one of the best quarters in Ringfeder Power Transmission's history regarding to sales and profitability.

EBITA for Ringfeder Power Transmission increased to SEK 58 million with an EBITA margin of 21.8%. EBITA was positively affected by -- in the quarter by onetime income, 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 amounts to 49%. Sales outside Europe and North America is increasing by 21%. Of course, the acquisition of Italytec in Brazil is a large portion of this growth. We have an aftermarket business in average in the group of 23%.

For 2025, the cash flow came in somewhat lower than comparable year. The cash flow before change in 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 in the last 6 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 3 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. ROOC 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 3 facilities that we have in Toronto.

The acquisition of Italytec, Ledson and Malmedie together with lower EBITDA compared to 2024. This KPI is not a pro forma, which means that Italytec, Ledson and Malmedie does not contribute with full 12 months in this KPI.

Thank you, Fredrik. And 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.

And 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. And what we have seen now in quarter 4 that the largest impact was the commodity price increases for MTS. And 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 Q2 2026. Importantly, we see we have, 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. And as we mentioned with the order intake, we are committed to capitalizing on the strong order book going forward. And 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 3 units into 1. We will have the keys to the building in quarter 3, 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.

[Operator Instructions] The next question comes from Gustav Berneblad from Nordea.

Yes. It's Gustav here from Nordea. Just to start off here on your comments on the order intake growth of 16%, then 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. And...

Yes, but -- but currency adjusted.

That's very clear. 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. The -- I can't say exactly the 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 are -- we will be finalized during quarter 2.

That's perfect. And then I thought maybe you could help me here because 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 3 customer segments within the off-road side. It's the side-by-side segment, 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 4, 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. And the last question, sorry, for me here. When you look at the full year 2025 margin in MTS reaching 10%, we saw here for 2025, do you see this as a difficult margin to reach for full year 2026 when you add 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 1. So how these parameters will impact, of course, it's in our genes to increased profitability in this area. We do a lot of activities, but we have to understand that the peak, at least in quarter 1 will be on the currency side.

The next question comes from Jonny Jin from SEB.

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 orders looks good. But could you please comment how was the order growth in each segment, respectively?

Yes. We can say like this, the highest order intake from a percentage point of view was for RPT. Secondly, it comes to MTS. And third is Truck & Trailer Equipment. And just to make it clear, if you adjust for currency, the order intake increase in quarter 4 is 16%, including the 3 acquisitions in the whole thing.

Okay. Yes, that's clear. And in Ringfeder Power Transmission, I know that you said that we need to look at this on a rolling 12-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 3 to 4 months. When it comes to Ringfeder Power Transmission, in particular, it is in the same range, 3 to 4 months visibility in this area.

Okay. Yes, that's clear. And on MTS here 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 representable for Q1 as well. Maybe it's a fair assumption then.

Absolutely. I fully agree with you.

Okay. Yes, 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?

Jonny, 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 head, but somewhere between 8% and 10%.

Okay. Yes, 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?

Yes. 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 see the light in the end of the tunnel when it comes to Europe.

So all in all, we feel we have a good momentum. And basically, in -- with our visibility, 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 U.S. dollar and the euro during quarter 1.

Okay. That's clear. Sounds promising. I will just squeeze in one final, sorry. But on the MTS, I mean, you mentioned the order intake is looking good and such. But how much is -- how is the inventory levels would you say at your customers now?

I think it's a relevant question. And we saw the first half year of 2025, where there was a clear inventory reduction in -- especially in the side-by-side segment in the distribution landscape. But from quarter 3, I think the inventory levels are maybe a little bit too low, but the general trend we can see now that sales and order intake continues in this area. But that is the only answer I can give at the moment.

[Operator Instructions]

So since...

There are no more phone questions at this time. So 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.

Welcome to the VBG Group Q3 Report 2025 presentation. [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Anders Erkén; and CFO, Fredrik Jignéus. Please go ahead.

Very welcome to the quarter 3 presentation of VBG Group. I will try to give you a short summary on quarter 3, and Fredrik will later on give you all the details about the numbers, and I will come back with a few words after his presentation.

So overall, revenue continued to grow, and we have 4 consecutive quarters with growth despite currency rate headwinds. Revenue increased by 7.5% compared to the third quarter of 2024 and adjusted for currency and acquired volumes, sales increased with 6.3%.

And as many exporting companies, of course, we had a negative impact of the currency rate differences of approximately 7.2%. What's important here that is all divisions showed growth within all 3 geographic areas, like North America, Europe and rest of the world.

Interesting is that the most important segment within Mobile Thermal Solutions, what we call the side-by-side segment, increased by 30% in local currency and the school bus segment with 13%.

On top of that, the Defense segment within Truck & Trailer Equipment increased with 35% compared to third quarter of last year. We managed to maintain our gross margin and the group delivered a solid EBITA margin of 12.5%.

The operating result should have been better, and it was burdened by SEK 11 million by warranty cost of onetime character and ramp-up effects within division Mobile Thermal Solutions.

Operational cash flow reached SEK 136 million, which creates a good platform for future growth. And I think one of the most important thing in the quarter that is looking forward, our order intake increased by 10% in the quarter compared to quarter 3 2024, where all 3 divisions contributed positively.

During the quarter, a new sustainability target was decided, which means that we will reduce CO2 emissions within Scope 3 with 62% until 2040 with 2024 as a base year.

And as we have communicated already in the quarter 2 call, on the 1st of July, we acquired the German company, MALMEDIE, one of the worldwide leading manufacturers of specialized mechanical coupling technology for niche industrial segments and applications and especially in port, crane and steel mill segments. That was a short summary. And now Fredrik will give you all the details. Please, Fredrik.

Thank you, Anders. Coming back, the third quarter sales increased by 7.5%. And adjusted for currency and acquired sales, the organic growth rate was 6.3% in the quarter. FX headwind is about 7% still for the group due to the strengthening of the SEK. EBITDA amounted to SEK 171 million in the quarter and in line with last year.

The EBITDA margin declined from 13.5% in the third quarter of '24 to 12.5% in the third quarter of '25. During the third quarter, we received retroactive pandemic support in the U.S. of total SEK 2.6 million that affected EBITDA positively.

And at the same time, we made reservation for advisory costs for SEK 2.8 million relating to the MALMEDIE acquisition. The operating result or the EBITDA should have been better, as Anders said, as it was burdened by SEK 11 million by warranty costs of onetime character and ramp-up effects in division MTS.

Operating cash flow amounted to SEK 136 million in the third quarter compared to SEK 153 million in the third quarter of '24. Higher working capital tied up, especially in accounts receivables is the main reason for that, but also lower underlying result. Earnings per share amounted to SEK 3.87 compared to SEK 4.49 last year.

We'll now go through third quarter with some touchdown on each divisions. Trucking -- we start with Truck & Trailer Equipment. Sales for the quarter increased by 8.6% compared to the previous year and amounted to SEK 370 million compared to SEK 341 million.

Adjusted for FX and acquired sales volumes, organic growth amounted to 4%. Demand for coupling products has continued to be high. Defense segment has grown by 35% in the quarter, and the market for trailer components in Europe moved sideways on a low level during the third quarter.

EBITDA for Truck & Trailer Equipment increased in the third quarter compared to the previous year to SEK 66 million compared to SEK 52 million in the previous year with an EBITDA margin of 17.9%.

The result in the quarter was positively affected by SEK 2.6 million relating to retroactive COVID support in the U.S.

Mobile Thermal Solutions, sales for the third quarter increased by 1.7% compared to previous year and amounted to SEK 718 million, with Italytec contributing with a larger part of the increase. Adjusted for FX and acquired volumes, organic growth increased by 5.8% in the quarter.

EBITDA for Mobile Thermal Solutions amounted to SEK 76 million, and the EBITA margin decreased to 10.6% from 13.6% in 2024. The result in the quarter was negatively affected by SEK 11 million relating to warranty cost of a onetime character and ramp-up effects in North America.

Ringfeder Power Transmission, sales in the quarter increased by 23.7% compared to the previous year and amounted to SEK 280 million. Newly acquired MALMEDIE contributes according to plan. Adjusted for FX, organic growth was 11.4%.

EBITDA for Ringfeder Power Transmission increased to SEK 36 million, and the EBITDA margin amounted to 12.7%. Ringfeder Power Transmission, excluding MALMEDIE, is primarily affected by product mix variation between quarters.

During the third quarter, cost in connection with the acquisition of MALMEDIE affected the P&L with SEK 2.8 million. The acquisition was completed the 1st of July in 2025 and has positively effect on both sales and operating margin.

Given the market development in North America for our products, the proportion of North American sales has decreased over the last 4 quarters but has now started to stabilize and increase and amount to 52%. Sales outside Europe and North America increased by 21% in the quarter.

The acquisition of Italytec in Brazil is the large portion of this growth. For the first 9 months of 2025, the cash flow became -- came in lower than comparable last year. The result is the main reason for that, but also higher working capital tied up, especially in accounts receivables.

After the third quarter, we have a net debt position if we adjust for pension liabilities and leasing commitments of SEK 591 million. During the first 9 months, we have acquired Italytec, Ledson and MALMEDIE, which explains most of the changing cash position.

VBG Group has still a strong financial position that can be used to develop the group going forward. ROOC amounts to 30.1%. The decrease in the last quarters are relating to the acquisition in the land in Toronto and the 3 acquisitions, together with somehow somewhat lower EBITDA compared to '24.

This KPI is not a pro forma, which means that Italytec, Ledson and MALMEDIE contributes only with 8, 6 and 3 out of 12 months in the rolling 12 months EBITDA. Thank you, and over to you, Anders.

Thank you, Fredrik. Just to finalize this, looking ahead, I do anticipate continued market volatility and geopolitical tension, but we have an organization that is agile and responsive to changing conditions.

Overall, while tariffs remain a challenge, their net impact on our operation is marginal. The organization has made a fantastic achievement compensating for cost increases due to tariffs with price adjustments, and we will continue to do so.

Unfortunately, the situation continues to be unpredictable. And as many people say, it ain't over until the fat lady sings. As a good example of the unpredictability that was on the 18th of August when another 407 HS codes were added to the steel and aluminum tariffs.

That is, for us, an administrative burden to really push that forward in the chain. And as you all know, the U.S. administration announced an additional 100% tariff on Chinese goods from 1st of November. Let's see what will happen in the end of the week, but this is what we work with every day.

On the other hand, we are committed to capitalizing the strong order book going forward. As I mentioned, order intake increased by 10% during the quarter. And as mentioned in the quarter 2 call, the 3 acquisitions made in the first 6 months will contribute with another SEK 100 million of revenues in quarter 4 to margin levels above group targets.

With our financial strength and decentralized organization, we are really prepared for what lies ahead. Through our cash-generating divisions, we are committed to complementary acquisitions as well as investing in organic growth.

This will lead long term to continued sustainable profitability. Thank you very much for listening. Now we are open for Q&A.

[Operator Instructions] The next question comes from Gustav Berneblad from Nordea.

It's Gustav here from Nordea. Maybe just to start off here a bit on a high level to get a bit more sense of the organic growth. Is it possible to just split out the 6% here in terms of how much is price versus how much is volumes or some sort of ballpark figure?

Good Morning, Gustav. Yes, it's -- if you look at the 6.3%, I would say roughly 2%, 2.5% is related to price adjustments and the rest is volume going forward.

That's perfect. And if we go more into the side-by-side, if I heard you correctly, you said it's increasing 30% year-over-year. Is it possible to say how much is organically there? And can you also -- sorry, elaborate a bit more on the market, why it is turning so positively?

Yes. As you remember, Gustav, we had really a slowdown in quarter 3 2024, and it continued in quarter 4 2024. And the reason for that was the destocking operations in the distribution of, I would say, all manufacturers of side-by-side in North American market.

And I mean, we can say it's the U.S. market. It's somewhere between 90% and 95% sold in the U.S. market. This process continued in quarter 1 and the beginning of quarter 2, 2025. And we can see now ramp-up effects or an increased demand.

And it's related to, I would say, 2 things. Of course, the destocking, but also for us that the take rate of HVAC systems in the side-by-side is growing. That is the base for the strong demand in the side-by-side. And of course, if you look on a high level, interest rates have come down in the U.S. now.

And of course, there is a private sector in this as well. And still inflation, even though it has picked up in the U.S., it's still on a marginal level, I would say. That are the main reasons behind the excellent pickup.

That's very clear. Is Italytec also included in this 30%?

No. Italytec is not included in the side-by-side. It's more the Italytec is really related to the Brazilian market, and it's mainly agriculture and construction applications for Italytec.

That's perfect. And then if we turn to the bus side and comment a bit more on that market, it sounds like it's growing 13%, you said here year-over-year. Can you give a little bit more color on this market and also the development or the dynamics between transit bus versus school bus, how those are performing?

So to make it clear, it's the school bus segment that is growing 13% in the quarter compared to the quarter 3 2024. And we can see a continued demand on -- continued growing demand on the school bus side. And it's related to more HVAC and also to still electrification part where we have higher revenues per system.

And as we have mentioned, the transit bus segment for us, we have a slower pace within that based on that we are phasing out from -- with the Nova contracts in the U.S. market. They have moved into Canada. We still have them as a customer. But for us, the transit bus segment is slower compared to the other segments.

That's very clear. And sorry, just the last one here, and then I get back in line. Just regarding Truck & Trailer, I mean, we've commented -- or you commented on the trailer market bottoming out here for quite a while. Now it sounds you are incrementally more positive that it's actually seeing some growth.

If we then turn to the truck part of the business, it sounds like on Fredrik, that you are a bit positive towards that market as well. And of course, you have 3 to 4 months visibility. But can you just comment a bit on where we are in the truck market?

I think it's important to understand the truck market and especially the European market. I mean, we are not into the tractor segment, which is probably 60%, 65% of the volumes in Europe. We are more in the artic trucks. And this is driven mainly by the infrastructure projects.

We have a really good order on hand, a good -- and of course, we have extended our range in the last year. So we sell a higher proportion per system to each truck in this segment, so to say.

And as I mentioned in the summary, we can see a good trend in the defense segment, which has grown by 35% in the quarter compared to last year. And we all know that the order books are really nice going forward in this.

So infrastructure and the military segment is driving the demand in this [indiscernible ]. And of course, as we have mentioned before, the Australian market has been very, very good for us, and we see a good visibility going forward in the Australian market.

The next question comes from Jonny Jin from SEB.

I think I will start with a question on MTS. Good to see back organic growth there. But I mean, a follow-up on the bus segment. I think you mentioned in previous quarter that you had a larger customer that is winding down operation affecting volume negatively.

We touched upon this a little bit. But could you say something how much the drag was in this quarter if we try to pinpoint the underlying growth in MTS operation?

It's hard to say, Jonny. It's probably around SEK 20 million in this quarter, roughly, my guess. I'm not 100% sure, but in that range, I would say.

Okay. That's perfect. And then coming -- given the stronger demand you see now on the contact side-by-side, could we expect a stronger mix and margin as well going forward? Is that a fair assumption?

I would say that it's a similar mix. It shouldn't have an impact on the gross margins with the product mix in this case going into quarter 4. That's my view on the situation at the moment.

Okay. Okay. But I mean, looking at the margins in MTS, it has been a little bit volatile in the last couple of years. So I mean, going forward, what kind of margin can we expect in this segment?

Can we expect that once you fill the utilization and such that we can get back to the sort of 13.5% you did in 2024, coming years? Or what is a fair level, would you say?

I would say, as we have communicated before, Jonny, the -- this division is driven a lot by volumes. So I think it will slowly, slowly come back. And when the margins pick up -- when the volumes pick up, the margins will come with it as well. So it's -- the loss in margin is mainly related to the volume decrease.

Yes. Yes. Okay. So I suppose the 13.5% you did last year is a reasonable level if you can come back to volume growth ahead as well.

Absolutely. This is the interesting thing with going to work or flying around that you have so much opportunity and potential in this company. We will work every day and every week to improve our margins.

Yes, that's clear. And then speaking of volumes and growth in that segment, I mean, you also come from a very high level and then it has been a little bit destocking and now you seem to be back on growth again. So I mean, what sort of normal growth levels ahead I assume in this segment, would you say, your best guess?

I think if you look at the long-term perspective, we think we will grow by somewhere between 4% and 5% compound average growth rate over the next 4 to 5 years. And that's also driven by a higher HVAC proportion in the side-by-side segment. But somewhere between 4% and 5% compound average growth rate.

Yes. Okay. That's clear. Just one final from my side. I mean, coming back to your order outlook comments and the positive order development, which sounds to me is broad driven here, and you sound a little bit upbeat in the near term.

So given that comparables are roughly similar here as well, is it fair to assume that we can expect an acceleration in organic growth ahead? Is that fair to say, what you say?

I think we are positive about the future. And if we look with our visibility 3 to 4 months, we can see that we have -- we will have a growth in quarter 4. That's -- and as we see it in the beginning of October now. It's -- but all of us are experienced, you never know what will happen in December. It's a short month, but October, November looks good.

The next question comes from Lucas Mattsson from Inderes.

If you could provide some color on aftermarket sales performance this quarter and perhaps outline your strategy a bit for driving aftermarket growth going forward?

Can you repeat the question? We lost you in the beginning there.

Yes. Sorry. Can you hear me now good?

Absolutely.

Yes. Great. No, I was wondering if you could provide some color on aftermarket sales performance this quarter and perhaps outline your strategy for driving aftermarket growth going forward?

I mean we had a solid performance when it comes to aftermarket sales, especially in the Truck & Trailer Equipment part, also on the bus business in the U.S. on the MTS side.

And we call the aftermarket business MRO on -- in Ringfeder Power Transmission, and that was solid. We are ranging somewhere between 23% to 25% in aftermarket business.

We see opportunities in certain segments to improve that, and that is mainly availability. And of course, part of the product range to -- but availability is the driving force in the aftermarket sale for us.

Yes. That's very clear. I was also wondering, have you noticed any notable changes in customer sentiment or customer behavior since the end of this quarter, either positive or negative?

No, we haven't seen -- I mean, in the last few weeks, no, we haven't seen any big changes. It's running smooth, I would say, in the start of October.

Yes. Okay. And lastly, you mentioned an ongoing recovery in order bookings. What capacity or supply chain constraints, if any, of course, could limit your ability to sustain growth going forward?

I mean it's -- as you know, it's a supply chain here. And I think we have ramped up our internal capacity at the moment, so we can deliver. But of course, when you ramp up 20%, 25%, 30%, you have issues with some suppliers. And of course, we are working intensively with that.

But with these hockey stick improvements, which is positive, there will be 1 or 2 suppliers, which will not be able to manage, but we don't see that we lose any orders by this.

But -- and I think we will take a few weeks before we are really ramped up in the whole chain. But I don't see it as a main issue at the moment.

[Operator Instructions]

Anders, we have some written questions. We have one question here, if we can elaborate a little bit about the new factory in Canada. I can take a part of that. The new site in Toronto that will consolidate 3 existing production sites in Toronto develops according to plan.

We are now having the foundation ready. We will start raising the building within the coming next 3 months. And the plan is for the production site to be clear and done for us to move in, in the beginning of September in 2026.

And hopefully, during summer 2027, the production will be up and running in the production site. Anders, we have a question regarding the organic growth, how much of the price increases are relating to tariffs?

We spoke about that the price increases and the split are somewhat, 2% to 2.5% and the rest is volumes. It's a little bit hard for us to break down the price increases perhaps just relating to tariffs. But what we have said before, the impact is marginal for VBG Group. I think we are done there.

Then I say thank you very much for attending this presentation. Thank you very much for the questions, and we stop by that. Thank you very much for today.

Thank you.

Welcome to the VBG Group Q2 Report 2025 presentation. [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Anders Erken; and CFO, Fredrik Jigneus. Please go ahead.

Good morning, everyone. Welcome to the quarter 2 presentation of the VBG Group. Let me briefly summarize quarter 2, and Fredrik will give you all the details necessary in the next coming slide. First of all, we had a revenue decline of 9% versus Q2 2024. We can say that a lot of this is related to the currency fluctuations, almost -- a little bit more than 7% of the decline or 83% of the decline was related to the strengthening of the Swedish krona.

But the important thing, if we look at the quarter, that is that the sales improved gradually as the quarter progressed, and we could see a good trend in the month. And the main drivers for this, that is that destocking is completed on the off-road side in North America as well as that the HVAC take rate is improving. So all in all, a good end of the quarter, and we'll come back to that later on.

Even though we had a small decline in volumes, we managed to maintain our gross margins to 32% level. And we had a solid EBITA performance during the quarter as well. What we have done also, that is to -- that we have made 2 strategic acquisitions during the quarter. First of all, as you recall, in the beginning of April, we acquired the Swedish company, Ledson, specialist in lighting for vehicles, and that will contribute to the division truck and trailer equipment aftermarket business, especially the accessories side.

On the 1st of July, we acquired the German company, Malmedie, which will be a complementary acquisition for the division, Ringfeder Power Transmission. It's really a niche company and worldwide top performer when it comes to industrial applications when it comes to coupling technology, mainly niche in the industrial segments, port cranes and steel mill segments. By that, Fredrik, could you please take us further in the details?

Okay. Thank you, Anders. We are still happy to see a resistance in our gross margins due to our ability to adapt our production capacity despite the lower sales, especially in North America. For the second quarter of 2025, we still have a relatively high comps in 2024. In the second quarter, sales decreased by 8.8% and adjusted for currency and acquired sales, the growth rate was minus 5%.

So large FX effects in the quarter. EBITA amounted to SEK 178 million in the quarter, and the EBITA margin amounted to 13.1%, a decline from 14.5% in the quarter of -- second quarter of 2024. The SEK continued to strengthen during the quarter and have an impact on the group, especially in MTS and Ringfeder Power Transmission this quarter, but also in financial items where we revaluate our loans, et cetera. The FX effect from strengthening the SEK, especially towards the U.S. dollars in the quarter affects the P&L and EBITA with SEK 5.2 million negatively relating to revaluation of the balance sheet.

During the second quarter, we also received a retroactive pandemic support in the U.S. of total SEK 13.4 million that affected the EBITA positively. At the same time, we have made some reservations for advisory costs and due diligence costs for 2 acquisition processes of SEK 5 million, and we also have reorganizational costs in MTS of SEK 2.2 million.

Operative cash flow amounts to SEK 83.7 million in the second quarter compared to SEK 204.9 million in the second quarter of 2024. The lower cash flow in the quarter is mainly due to higher working capital tied up, especially in accounts receivable, but also a lower underlying result. Earnings per share amounted to SEK 4 per share compared to SEK 6.71 last year.

Okay. We will go through the second quarter with some touchdown on each division. We start from the left with Truck and Trailer Equipment. Sales for the quarter increased by 2.4% compared to the previous year and amounts to almost SEK 400 million. Adjusted for FX and acquired volumes from Ledson, organic growth increased by 1.7%. Demand for coupling products has continued to be high and the market for trailer components in Europe has stabilized at a very low level during the second quarter of 2025.

EBITA for Truck and Trailer equipment increased in the second quarter compared to the previous year and amounted to SEK 67.4 million with a strong EBITA margin of 16.9%. The result in the quarter was in revaluation of the balance sheet items because of the strengthening of the SEK and also by SEK 1.5 million in cost in conjunction to the acquisition of Ledson Lights.

We go over to Mobile Thermal Solutions. The sales for the second quarter decreased by 13.7% compared to the previous year and amounts to SEK 732 million and North America accounting for the largest decrease. Adjusted for FX and acquired volumes, organic growth decreased by 9.4%. EBITA for Mobile Thermal Solutions amounts to SEK 86 million with an EBITA margin of 11.7%.

MTS is negatively affected by lower sales volume due to continued demand, primarily in the compact segment for the off-road vehicles, but also due to lower volumes in the public transport bus segment due to a major customer closing its operations in the U.S. Overall, this contributes to lower EBITA and decreasing EBITA margin. The result in the quarter was negatively affected by SEK 3 million in revaluation of the balance sheet items. And during the second quarter, SEK 11 million was received in retroactive pandemic support. And at the same time, cost of SEK 2.2 million was recognized due to reorganization.

We move over to the right one, Ringfeder Power Transmission. Sales from the second quarter decreased by 9.4% compared to the previous year and amounts to SEK 231 million. And adjusted for FX, organic growth decreased by 1.7% in the quarter. EBITA for Ringfeder Power Transmission decreased to SEK 33 million, and the EBITA margin decreased to 14.1%. Ringfeder Power Transmission is primarily affected by lower sales volume in the beginning of the quarter and by product mix variation between quarters. Sales volume improved towards the end of the quarter and also the EBITA margin.

In the second quarter, operating profit was negatively affected by cost relating to the acquisition of Malmedie of SEK 3.5 million and negatively affected by SEK 1.2 million revaluation of the balance sheet items. The acquisition was completed -- of Malmedie was completed on the 1st of July. EBITA was also positively affected by onetime income relating to retroactive COVID support in the U.S. of SEK 2.4 million.

Given the market development in the last quarters of our products, the proportion of North American sales has decreased over the last 3 quarters and now amounts to 51%. Sales outside Europe and North America increased by 16% and the acquisition of Italytec in Brazil is a large portion of this. We have a portion of aftermarket sales of 23%.

Okay. For the first 6 months of 2025, cash flow came in lower than comparable first 6 months last year. The result is the main reason for that, but also high working capital tied up, especially in accounts receivables. After the second quarter, we have a net debt position if we adjust for pension liabilities and leasing commitment for SEK 134 million. During the first 6 months, we have acquired Italytec and Ledson.

The VBG Group has still a strong financial position that can be used to develop the group going forward. And in the beginning of the third quarter, we acquired Malmedie and strengthened our position in [ clutches ] and brakes for harbor cranes. ROOC amounts to 31.6%, decreased from the last quarter, so relating to the acquisition of the land in Toronto, but also the acquisitions of Italytec and Ledson together with a lower EBITA compared to 2024. Please note that this KPI is not a pro forma, which means that Italytec and Ledson contributes with 5 and 3 out of 12 months in the rolling 12 months EBITA.

Okay. Thank you for me. Over to you again, Anders.

Thank you, Fredrik. Just to say a few words on our future focus. And I think everyone is aware that we have discussed internally a lot about the U.S. trade tariffs. And the decision by the U.S. administration to postpone the tariff pause creates continued uncertainty and especially also the administrative burden.

But when it comes to that, and I said it also after quarter 1, the tariffs remain a challenge, but the net impact on our operations will be marginal. We have compensated for the cost increases due to the tariffs with price adjustments, and we will continue to do so. With the orders on hand that we have, that we saw coming during quarter 2, and our visibility of 3 to 4 months plus the 3 acquisitions that will contribute with about SEK 200 million in the second half of the year. We are confident that we will create growth in the second half of 2025. We are very positive about that.

And as mentioned many times, we will continue to focus on our profitable growth, both when it comes to acquisitions. We have made 3 acquisitions in the first 6 months. We see that the M&A environment is very positive at the moment. And secondly, we will continue with our organic growth to come out with more new products and to find new markets.

By that, we end the short presentation of quarter 2, and we are open for questions coming up.

[Operator Instructions]

The next question comes from Gustav Berneblad from Nordea.

It's Gustav here from Nordea. So I thought maybe we could start off with Ringfeder Power Transmission. And sort of if we look at the margin development here in Q2 compared to Q1, I mean, it's quite large differences. So is this primarily driven by sort of project-related sales here in Q2? Or is it other reasons? I mean you comment on slight improvement here during the latter part of Q2? So maybe if you can just help us understand that.

No. I mean, as we have mentioned many, many times, Ringfeder Power Transmission is really related to projects. And that means it could have really impact on product mix effects when it comes to this. But again, stable gross margins, and we see that the volumes are coming in, in the second half of the year, which makes it good capacity utilization in the factories that we have across the board.

Yes, that's clear. And if we just focus on sort of the -- it sounds like it's orders you are seeing coming in here that you will deliver in H2. Would you say that the sort of project mix or product mix in those orders are quite okay looking here in the early parts of H2?

Yes. We see pretty much the same product mix. It's hard to say exactly between the quarters, so to say, between quarter 3 and quarter 4, but we believe that the product mix should be fairly stable in the mix.

Perfect. Perfect. And then if we just look at the recent acquisition here of M.A.T., you completed here in Ringfeder Power Transmission, it looks like quite attractive margins. But if we look at the synergies, are there any tangible ones you can highlight? Or how do you look at the case there?

We will drive this short term as a stand-alone company. But of course, there will be synergies, but we don't foresee to take out too much synergies during 2025. But of course, we see it on -- definitely on the sales side where we have cross-selling effects. But that is the midterm synergies that we see.

Perfect. That's very clear. And then if we move to Mobile Thermal Solutions here and sort of the compact segment within off-road, I mean it looks relatively weak here in the quarter, but it sounds on you like you're seeing improvements within this part of the business, highlighting the destocking here. Is this something that has sort of picked up in -- or during the latter part of Q2 as well, or...

You're correct, Gustav. This picked up in the latter part of the quarter. We see really a good trend in the order intake, and we are ready to deliver based on the good order intake that we have in the second half of the year. And as I repeated, it's the drivers -- there are 2 really drivers in this. This is the destocking of the compact segment in North America in the distribution network. And number two is the take rate is improving on the HVAC segment in this product range.

That's very clear. And then just the last one here on MTS as well, if we move to the bus segment. And obviously, we understand the weakness in the transit bus part of the business. But how is the school bus segment performing, would you say?

The school bus segment is performing really, really nicely. It's good momentum in the business. The order books look great for the second half of the year. There is a lot of discussion regarding the electrification within school buses, but we see a good pace during 2025 at least.

[Operator Instructions]

And for this time, we have no written questions.

So I take the opportunity to wish you all a nice summer on the Northern Hemisphere, and we will be back after quarter 3. Enjoy the summer. Thank you very much.

Thank you. Have a nice summer.