Addnode Group AB (publ) (AR7.F) Earnings Call Transcript & Summary

Welcome to the presentation of Addnode Group's Year-end Report 2025. [Operator Instructions] Now I will hand the conference over to the CEO, Johan Andersson; and CFO, Kristina Mackintosh. Please go ahead.

Hello, everyone. It seems like we had some technical trouble in the beginning. So it might be that you didn't hear me in the beginning. So, I just want to start over again and thank you for listening in and we show the agenda, and let's start from there. So, Addnode Group's purpose is all about digitalization for a better society. We operate, acquire, and develop entrepreneurial companies that provide digital solutions. For innovation and continuous development in close collaboration with our customers, we create digital solutions for specific needs. The software and digital solutions that we provide design buildings, infrastructure and cities and also the products that we all use every day like cars and all the way to our life science instruments. When things have been designed and built, it need to be maintained with a life cycle perspective. And the public sector has a responsibility for the design and maintenance of our infrastructure. Our digital solutions makes all this possible. So, looking at 2025, it was a year when we have set the foundation for further expansion. As I look back, I'm proud of the efforts our employees made, and I truly feel confident about the future. We have landed new customers, strengthened our offerings, expand into new geographic markets. Acquisitions have added net sales of approximately SEK 700 million, and we have strengthened the EBITA margin. We have defined new financial targets, secured refinancing on more favorable terms, changed to a new transaction model, adopted the reporting of third-party agreements. We also continue to invest in AI and product development, optimize our organization, and improve the EBITA margin. So, we increased net sales with 4%. We had an EBITA growth also of 5% and EBITA margin increased to 15.6%. Looking at the 5-year perspective in the graph to the right, you will see that from 2021 to 2025, net sales has increased from SEK 3.5 billion to SEK 5.8 billion, and EBITA has increased from SEK 461 million to SEK 903 million. So Q4, we saw significant improvement in margins and profit. Acquisitions and cost efficiency measures contributed to Addnode Group delivering its highest EBITA ever for a single quarter. Net sales increased by 5%, of which minus 4% was currency adjusted organic sales growth. EBITA increased with 20% to SEK 298 million, and EBITA margin improved to 19.1%. You can also see that our EPS increased with 45% if you adjust for revaluation of the consideration for earn-outs. If you look at our 3 divisions, Process Management, thanks to organic growth supported by margin-enhancing acquisitions, increased EBITA by 34%. Product Lifecycle Management posted negative growth on sales, but EBITA was in line with the previous year, thanks to cost savings. EBITA in the Design Management division improved by 16% despite challenging comparative figures for the fourth quarter in last year. Margin-enhancing acquisitions in Canada and Brazil contributed to the improvement. Looking at the 5-year perspective, in the graph to the right for Q4, Q4 in 2021, we increased net sales from SEK 865 million to almost more than SEK 1.5 billion in 2025. And EBITA has doubled from SEK 148 million to SEK 298 million. With that as an introduction, I would like to hand over to Kristina, our CFO, who will give you further guidance on group net sales performance in Q4 2025.

Yes. Thank you very much, Johan. I'm going to take you through the net sales development from the same quarter last year to Q4 2025. And as you can see that net sales has increased by 5% compared to last year, and this growth was supported by the continued execution across core markets and acquisitions, although partly offset by the currency movements. Looking at the organic side, the currency adjusted organic growth was minus 4%, reflecting tough comparison figures from last year, where we had a larger amount of 3-year contracts within Autodesk. In the Design division, in particular, we saw now in Q4 this year, a lower share of the 3-year agreements compared with the same period in 2024. And as we have previously communicated, the option to renew certain 3-year agreements ended after Q2 this year, and these contracts are now being renewed on a 1-year basis. And also in PLM, system sales and related services remained stable in U.K., U.S. and in the Nordic, supported by a broad and diversified customer base. Demand in Germany continued to be weak in the quarter and the market shift from perpetual licenses towards subscription solutions further intensified during the quarter. Process division contributed with currency-adjusted organic growth of 4% and sales to the public sector remained stable during the period. Looking at the contributions from acquisitions. Acquisitions continued to perform according to the plan and contributed SEK 236 million in the quarter. Integration is progressing well and acquired businesses delivered in line with our expectations. Currency, however, the currency movement had a significant impact during this quarter. And the stronger SEK, particularly against the U.S. dollar, reduced net sales by SEK 97 million. And it's mainly within Design division where the majority of the U.S. dollar-denominated business resides. Looking at the cash conversion then on the next page. Our business model is characterized by the asset-light model with moderate working capital and R&D requirements. And we also have strong cash generation supported by the upfront payments that can give our customers. In this graph, as we have been shown before, illustrate the Addnode's cash conversion over the past decade, and it's calculated as free cash flow in relation to EBITA. And the pink trend line that you see shows the average cash conversion of around 70% up to 2023. And as highlighted in previous communication, we have currently experienced a temporary working capital drag related to the changes in payment terms from Autodesk 3-year contracts. And since 2023, these agreements are paid annually rather than upfront for the full 3-year term. And this shift has reduced cash flow in the transition period. Now in Q4 2025, cash flow from operating activities improved to SEK 324 million from SEK 275 million last year, albeit still affected by the payment terms adjustment and the impact is gradually decreasing over the year. And reassuring, the graph now shows the first clear upward trend in the latest quarter, confirming that the working capital headwind is beginning to ease. But as you can see also historically, the cash conversion tends to fluctuate from quarter-to-quarter, and we expect this pattern also to continue going forward. Now let's have a look at the financial position on next page. Over the past years, we have maintained a low debt level and leverage around 1.1 to 1.3. But during 2024, we have completed 10 acquisitions, which have resulted in a temporary increase in leverage. Ahead of the SolidCAD acquisition in late October, we refinanced and also increased our credit facilities, which now total approximately to SEK 3.7 billion, secured by more favorable terms than before. And as of December 31, 2025, net debt, including leasing amounted to SEK 2.5 billion, supported by cash of SEK 625 million. Leverage has increased to 2.4x as a result of the acquisition activity. From the expanded facilities, we currently have SEK 860 million in available unutilized capacity. And as we have communicated previously, we intend to maintain a controlled net debt position going forward. And at the same time, we will also continue to pursue strategic value-creating acquisitions, which may temporarily increase the leverage, depending on timing and scale. Moving over to look at the return on capital employed. Addnode continues to demonstrate the characteristic of a compounder, and we are delivering consistent and strengthening returns to capital employed over time. And you can see that the acquisitions completed in 2025 temporarily impacted reported return on capital employed, while the results from the acquired companies were included only from their respective acquisition's date. And that's, for example, for SolidCAD by end of October, FF Solutions came in beginning of August and Genus, the Norwegian company in the beginning of July. The full amount of capital employed is added immediately to the base at the point of acquisitions. And the timing effect creates a dilution of return on capital employed, which now amounts to 14.1% by end of December 2025. And as the acquired businesses continue to contribute to earnings, return on capital will progressively improve, reinforcing our long-term track record of a disciplined capital allocation and profitable growth. And now let's have a closer look at the performance of our division. I'm going to hand over to Johan again.

Thank you, Kristina. So Addnode Group, we are reporting in 3 different segments, 3 divisions: Design Management, Product Lifecycle Management and Process Management. And if you look at the share of the net sales and the gross profit and EBITA from the 3 divisions, you will see that Design Management is the biggest division with regards to both net sales and profit. And then you will see that Process Management is second in size and third is Product Lifecycle Management. I'm going to walk you through the 3 different divisions and the progress during the quarter. Starting with Design Management, that's where we help our customers with design software, product data management software and the maintenance of buildings and infrastructure. So, in the quarter, you could see that net sales increased by 6% to SEK 701 million. If you adjust for currency effect, reported organic growth was minus 8%. But as Kristina earlier told us that most of the effect of the lower organic growth has to do with this quarter. We have the lower portion of 3 years agreements being sold compared to last year in the Q4 when we had a higher portion. You can also see that we had almost 15% organic growth in Q4 last year on gross profit level. And this, it's minus 8%. So, the lower organic growth is mainly related to the mix of 1-year and 3-year deals being made. But the weaker U.S. dollar also had a negative impact this quarter, as Kristina previously described. But if we look at EBITA, our profit increased by 15% (sic) [ 16% ] to SEK 169 million, and the EBITA margin increased to 24.1% Acquisitions in Canada, Brazil and U.S. have been successfully integrated and contributed to earnings according to plan. This is also the first quarter where we like-for-like, can report with regards to the reporting of our 3-year contracts. So, going forward, we will not be posting pro forma figures as much as we have done because now, we're reporting like-for-like with regards to our partner contracts. Symetri, who is the world's largest Autodesk partner with a supporting offering of own tech and services, noted good demand from customers in infrastructure, construction, process and manufacturing industries. As I mentioned, we can see a negative impact on reported net sales from the 3-year agreements. And as previously communicated, the possibility to renew certain of these deals was ended in 2025. That only meant that the customers are now renewing them as 1-year contracts instead. We're not losing any customers. So, I know that we have some discrepancies here with the reporting net sales and the underlying organic growth, but our belief is that we do have an organic growth in the subscription base. Service Works Global, who delivers digital solution for facility management; and Tribia, who provide collaboration platforms for the construction and infrastructure sector had stable earnings compared with the year earlier period. And if you look on a 5-year period in the graph, you can see that we had a growth going from almost SEK 1 billion in net sales in 2021 to SEK 2.5 billion that we are trailing right now in 2025, and we've been able to improve EBITA along that rise. So, it's been a good, progressing trend over the years. So, if we look at Product Lifecycle Management, we're also providing design, simulation and product data management software to different customer group based on a very good partnership with Dassault Systemes, complementing with own services and products. We can see that we had a net sales decrease by 9% in the fourth quarter. If we adjust for currency effect, the organic growth was minus 5%. And sales and related show a stable trend in U.K., U.S. and Nordics, where we have a broad customer base spanning manufacturing, defense and life science industries. But in contrast, demand in Germany remained weak. But sales to strategically important aviation and defense segment remains strong with several new customers added. We can also see that the trend with customers choosing subscription solutions over licenses with perpetual right of use is continuing to strengthen. EBITA decreased somewhat to SEK 48 million, but the EBITA margin was on par at 10.8% as last year. mainly related to the measures implemented to adapt the organizational cost structure, which were communicated in the first quarter has proceeded as planned and has been successful. These restructuring costs of almost SEK 24 million were charged early in the first quarter in '25, and we now see the benefit, and we are expected to generate at least annual cost savings of about SEK 45 million. In Q4, we acquired a company, X10D Solutions in Sweden and has delivered according to expectation. And in January 2026, we also acquired a customer base in Germany. Looking at the 5-year perspective, you can see we've also been growing here, and you can -- but unfortunately, you can see the decline in the profit, and we've been addressing that, and we believe that we are trending on a higher level than we performed in 2025. Process Management. Here we are predominantly active in Sweden and Norway, providing local and central governments software that makes it possible for them to do their job to both plan the infrastructure that we are all part of, but also case management and also high regulated industries like banks that we serve. Continued fantastic growth here and the division delivered yet another strong quarter with growth and improved EBITA margin. Net sales increased by 24% to SEK 425 million. Adjusted for currency effect, the organic growth was 4%. EBITA was also strengthened by improved operational efficiency and positive contributions from acquired companies. Sales to the public sector remained stable. Large authorities are continuing to show certain restraint when it comes to investing in major projects. EBITA increased even more by 34% to SEK 94 million and EBITA margin increased to 22%. The division's businesses are well positioned in public sector owing to their attractive digital solutions, in-depth experience and strong references. So, all in all, a strong quarter from the division. So, moving on. If you look at acquisitions, we have announced 10 acquisitions in 2025. They are all expected to contribute to annual net sales of approximately SEK 700 million and to strengthen the EBITA margin. This has been supportive to the EBITA increase in Q4 2025. And as Kristina mentioned earlier on, when she talked about net sales that most of these acquisitions were made in Q4, so the majority of the SEK 700 million will have a positive effect in 2026. But since the presentation of the last interim report, Q3 2025, we have announced 2 add-on acquisitions. The first one is ACAD-Plus, it's a U.S.-based provider of CAD-based space management and facilities optimization and software. Its product FMG-Plus, is a powerful AutoCAD add-on that seamlessly integrate with other third-party platforms. This will strengthen existing software portfolio in Symetri. We will have a strong footprint in higher education, almost 150 public and private university and a growing public sector client base. It has net sales today of SEK 12 million and 5 employees, and it's consolidated as part of Design division as of December 2025. Encad is another example of an add-on acquisition, but this is for Technia in the PLM division. It will strengthen their presence in Germany. It's an asset deal, some 80 customers agreement for Dassault Systemes software portfolio, and it will add approximately SEK 18 million in net sales. Customers primarily within aerospace and defense, industrial equipment and transport and mobility, and it's consolidated as part of Product Lifecycle Management from January 2026. So, what are we doing for our customers? If you look from an AI perspective, you can see that there were few cases presented in our interim reports. We also presented cases in our last interim report, and we will continue to present different cases as part of our interim report going forward. This quarter, we are showing 2 cases where we support public sector customers in both U.S. and Europe. Symetri has implemented an AI solution at the Port Authority of New York & New Jersey to streamline infrastructure inspections of bridges, tunnels and buildings. The Port Authority needed a unified system to manage fragmented and inconsistent inspection data. Symetri delivered an automation platform integrating GIS, geographical information solutions, AI and natural language querying for intuitive data access. The solution improved data accuracy, eliminated silos, and accelerated real-time reporting. It achieved 100% data consistency and enabled faster data-driven infrastructure decisions. Another example is Decerno, who has developed an AI-based solution for the city of Stockholm's city planning department to improve and streamline maintenance of the city's geodata system. Stockholm City needed a scalable solution to keep geodata accurate and up to date as manual inspections were too slow and costly. Decerno developed GAIA, an AI tool that compares aerial imagery with maps to automatically detect and update changes. The system delivered reduced manual work by up to 75%, while improving data accuracy and update frequency. GAIA provides a data-driven foundation for digital twins and sustainable urban development. So, these are 2 good examples how we can enhance our offering with AI and increase their efficiency in uses with our customers based on our knowledge of the business that they are working. So, going forward, Addnode Group, we are a decentralized organization, but with the benefit of being part of a bigger group where we can share experience as we move forward. But if you look at the group perspective, we are focused on 4 things to build and expand AI capacity. And one thing is, of course, to deliver business value because everything is that what we do for our customers. So, AI is an enabler for increased customer value, innovation efficiency. The technology which is being integrated into customer solution and internal processes is an important aspect of how we create value. So, all the things that we do is to how can we use AI to drive better customer solutions. But we can also help each other by coordinating leadership and how to move things forward. As I mentioned, we are a decentralized group, but we have very strong teams who are moving things forward and we can share the experience. Our Executive Summit, where we gather all executive management teams is an example on how we can coordinate and share experiences. This year's event was fully dedicated to the theme of AI, focusing on practical applications, business value and the opportunities and challenges AI presents for operations. We also have an everyday task of being more effective and structured when implementing AI solutions. One thing that helps in that is our AI collaboration network. It's a group that brings together employees from across Addnode Group to share experience, ideas and best practices within AI. It connects people working on similar initiatives and strengthen learnings within the organizations. Innovation is always very important for us. It's something that drives us forward. And Addnode Innovations is the group's innovation program, where all employees are given the opportunity to develop ideas and potentially start companies within Addnode Group. In 2026, the focus will be entirely on AI. Participants will have the opportunity to elevate their skills, gain practical experience and tap into insights from industry experts in everything from idea development to applied AI. This year, 56 different teams within Addnode Group has submitted proposal to the jury as a lovable approach to the jury in January, and the winner will be announced in May. So, it's a fantastic opportunity to get all the great ideas that are existing in the organization. So, this is just some examples of how we try to build and expand AI capacity across the group. So, to end, where are we in our strategy and moving towards our financial targets? We believe that we are delivering on our growth strategy, combining organic growth with the value-creating acquisition strategy. Our financial target is to grow EBITA with 15% year-on-year, meaning that we continue to double EBITA every fifth year. Part of this is that we aim to move EBITA margin to 17%. We are in Q4 showing that we are delivering on our targets. If you look at the longer perspective, 2015, EBITA was SEK 160 million and 2025, we are reporting SEK 903 million, meaning that the compounded annual growth rate for the corresponding period has been 18%, and we have moved EBITA margin from 9.6% to 15.6%. The acquisitions that we did in 2025 will add to the EBITA growth in 2026 and expansion of EBITA margins. While we are seeing good demand for our business in mission-critical digital solutions, the global economy and geopolitical situation is still uncertain. But given our combination of diversified business, not only in terms of technologies, but also industries and geographic markets, our leading market positions and our dedicated employees, we believe that we have a good reason to feel confident about the future. With that as a presentation and introduction to Q4, we would like to open up for Q&A.

[Operator Instructions] The next question comes from Mikael Laseen from DNB Carnegie.

I have a few questions, and I'll start with them. One regarding the Design segment. That segment reported minus 8% organic growth in Q4. So, can you help us bridge that growth figure with FX, acquired sales and contract duration implications, so we can understand the different forces here?

Thanks for that question. And just to repeat the question, is that the growth in Design Management, how much is related to organic, how much is related to FX and how much is related to acquisitions?

Yes.

Yes. I think if you have a look at our report that we published, we have all the divisions included in the appendix. So, what you can see from Design Management, we had organic, we were moving up from SEK 660 million net sales. We had a negative organic growth of SEK 50 million. Acquisitions contributed with SEK 158 million and FX by minus SEK 67 million. And as we previously identified that in Q4 last year, 2024, we had the benefit of a larger amount of 3-year contracts in relation to the total sales. And this year, in Q4 2025, we had a lesser amount of 3-year contracts. But I would like to point out on Page 29 in the presentation, you have all the details from the divisions.

And that's a new thing. So, you will see, and what Kristina has related, in the appendix to the presentation that we are discussing are published, we are breaking down the different topics like you mentioned on the division level as well.

That's excellent. I was just curious about this mix effect -- contract duration effect to understand that...

One thing to do is that we do -- as we are reporting net reported organic growth in -- I think it was minus 8%, the underlying organic growth is not minus 8%, and that has to do with, like Kristina said, last year, we had roughly 15% organic growth in Q4, and that was due to that we had a higher portion of 3-year contracts. And this year, we have a lesser portion. So, it's more of a mix effect. So, underlying organic growth is more to what we said on our Capital Markets Day. It has a low digital growth, but it's on organic growth. I think that's the best way to sort of guide you into it.

Okay. Yes, that's helpful. And another one here on -- follow-up on that mix dynamic. You mentioned in the Q4 report that the possibility to renew certain 3-year subscription agreements ended after Q2. So, can you clarify which agreements and -- so we can understand this?

And I think it's for you who have been following us for a long time, it goes back to -- if you remember last year, we had an effect between Q2 and Q3 where we had a big push in Q4 for 3-year agreements and that we saw some -- and that has to do with over 10 years ago, take it all the way back when we moved from perpetual license to subscription models, the customer have a certain -- sort of locked in the price on those contracts, and those were promised over a 10-year period. And as we are reaching the end of that 10-year period, the customers cannot renew within that framework to 3-year contract because there are -- it's just not 3 years left on that timing period. So, it means that they are renewing within that framework to 1-year agreements. So, the customers are renewing there, but they can't renew it to a 3 year, they can renew it on to a 1-year contract. So that's what we are trying to describe there.

Okay. So, this is really this Q2, Q3 temporary...

Yes, it's nothing new.

There's nothing new or nothing that -- Okay. So that means that you, I guess, still expect design to grow low single digit despite the lower share of 3-year agreements in 2026, is that correct?

Yes, that's what we are aiming for.

The next question comes from Erik Larsson from SEB.

I have 2 questions. First off, a follow-up here on the recent question with 3-year deal. So, I just wanted to hear how you think about Q1 '26 in terms of comparisons and mix. Do you see last Q1 as particularly good? Or, yes, just any flavor there would be helpful.

I think what we can say is that we are moving to -- as a portion, we can see that the 3-year contract is moving from a higher to a lower. But at the same time, the renewal rates that we're having also have an expectation. And I think the best guidance is that we ended the last question is that we still believe that we can have a low-digit organic growth in the underlying customer base. And then in design, you have to add the acquisitions that we did predominantly in Brazil and Canada by the end of 2025. That will also add to the reported growth in Q1. So, from organic, we're still thinking about sort of the low-digit organic growth. And then we have to add the acquisitions that we have done.

All right. And then a second question on Process with the strong margins we saw here as well as in Q3. So, I assume this is mostly due to recent acquisitions, but I guess you've also sort of improved margins on an underlying basis for quite some time now. So, I just want to hear around these levels, are you comfortable with maintaining margins here going forward?

Yes, is the short answer. And like you said, it's a mix of the existing organization performing and being more efficient and also adding acquisitions that by themselves are growing after they have been part of Addnode Group. And that adds to the high growth for this group and the improved margins.

The next question comes from Thomas Nilsson from Nordea.

I would like to ask about the sustainability of the record EBIT margin reported, 19% this quarter. To what extent was this driven by one-off favorable product mixes or timing of license renewals versus cost efficiencies that we should expect to persist throughout 2026?

I think one thing is that there are differences in margin. We have between -- Q4 is sort of a good quarter. Q1 is a strong quarter. Q2 is almost a little bit slower compared to the rest of the year. So, there's a difference between the quarter. But having said that, as we are performing now, we have done a lot of focus on cost efficiency measures. So, we're in better shape there. We have added acquisitions that by themselves has a higher margin than the group by themselves. So, there's no special effects in any way that we have. In any cases, in mixes like we have mentioned in the sign is that we do have a sort of a negative mix effects in the quarter, if any. And then we also have SEK 20 million negative in the U.S. predominantly against the sales. So I wouldn't say that there's sort of a boost in that. The boost is that we have done some acquisitions that are adding on top of it. The underlying business, we still -- we are pushing towards our target of 17%, and we believe that it's sort of a feasible target to go for.

Okay. And one last question regarding Germany and the PLM division recovery. With the cost savings program you have in Germany, do you feel that the division is now rightsized for the current macro environment? Or will there be further restructuring ahead here?

I mean, I think yes, we are sort of rightsized for the things as we have enough water under the bow to steer the boat going forward. But we are always focused on trying to be more efficient. So, we can't promise you that we won't do anything more. This all depends on the macro. But for the current situation, we are earning money in Germany. So, it's not a matter of that we need to do something to earning. It's more of what do we feel a good operation should perform and at what level. So, short answer, yes, we believe that we have the organization in sort of in rightsized to face the macro environment, but we will always continue to improve our efficiency.

The next question comes from Fredrik Lithell from Handelsbanken.

Maybe if I could start with sort of a clarification. Kristina, you in your prepared remarks, you talked about the move from perpetual to subscription intensified in Q4. Is that the same discussion as the 3-year and 1-year contracts? Or is this sort of another angle of something that likely took down the organic growth base than year-over-year? If we could sort of split that out a little bit.

Yes. Thank you for the question. Let me clarify that within Design Management, that's where we are talking about the 3- and 1-year contracts. When we're talking about the perpetual licenses, that is mainly within the PLM division, where we are moving away, or the customers are moving away from perpetual licenses to subscription rather. And we saw that was -- we have been communicated that throughout the year, and we saw that continue in Q4 as well. So, it's 2 different divisions that we are talking about.

Yes, that's fine. And how far on that journey are you? I mean, do we still have most of it in front of us so that most customers are still on perpetual? Or have you come a very long way on this so that organic growth ultimately will start to improve?

Yes, we have come quite a long way. This has been visible through the last 2 years that customers are moving away from perpetual to subscription. We could also see that Q4 last year, we had more perpetual licenses in the quarter than we had this year. So, it has an effect on the comparison from Q4 to Q4 this year. So, we have come a long way. And I will also bring your attention to that we are reporting this in our report in the segment section where we specify the licenses, that is the perpetual licenses.

That's very clear. And Johan, if I could ask a question to you. When you now have SolidCAD and FF Solutions being the bigger sort of acquisitions inside your organization and gotten to learn them better and all that stuff, have you discovered any sort of positives that you didn't see in the due diligence processes and everything or something that shed some more light on these acquisitions?

I think in -- what it has done is to confirm our assumption why we would like them to join us and be part of Symetri Group that they are great teams in the different organization. They have strong positions in their respective markets, and they have a culture of growth and taking on the system of the customer. So, if any, it's just confirmed and that we believe that they are -- will be a good part. And the one you mentioned will be a good part of the wider Symetri growth as the [indiscernible]. I think it's more of a confirmation of what we thought about and what we hoped about that they could deliver. So, we're happy.

The next question comes from Daniel Thorsson from ABG Sundal Collier.

Yes. A question on central costs here on EBITA, SEK 13 million in Q4 looks quite low to me. Are there any one-offs in there or any guidance comments into the coming quarters? I would rather guess slightly above SEK 20 million.

Yes. You're absolutely right. We had an effect on the OpEx this quarter on the central cost. And the majority of that is based on the bonuses that we are target -- the bonuses is targeted on growth. And as you can see that the growth has been very moderate from the quarter, we had to release some of the bonus reserves. So that was an isolated effect in the Q4.

Is that around SEK 10 million or...?

The majority of that is relating to bonuses, yes.

Okay. That's fair. And then on cash flow based on your graph that you follow up with now every quarter, do you expect full year '26 free cash flow to EBITA to be back to your 70% line on a reported basis? Or should we think more of the beginning of '27?

Yes. I think what we also communicated in the past is that we still have this year 2026, we will see the upward trend coming by the H2 2026. But we're not expecting to be up at the full level by the end of Q4 next year.

Okay. That's clear. And then final question, how do you see your internal organic net recruitment activities ahead, given improved productivity from AI on your software engineering side? Should we expect a slower personnel ramp in the coming years due to that compared to historically?

I think we have been slower on recruiting for the last 2 years, I would imagine. So -- and I guess that will continue as we are becoming more efficient in the way we are operating and doing things, partly with the help of AI, but also, we don't expect any higher sort of total organic growth. But within that, there can, of course, be changes when you look at new capabilities and things. But on an overall level, we don't expect any high recruitment rates.

Okay. That's fair enough. And then final question on the Nordic public market outlook for kind of IT investments in 2026 here, Process grew 4% in Q4. What's kind of your outlook view? What do you hear from your customers on planning investments in '26?

I think we expect a little bit what we have had this year. We can see some organic growth related to new sort of function futures, deliveries. There are some price increases which are related to our maintenance agreements, roughly about 40% plus is our maintenance agreements in this section, and those are KPI related to prices. So, there are some possibilities to increase prices. Will it be 2%, 3%, 4% organic growth? Let's see, but there are some opportunities to organic growth as well.

The next question comes from Fredrik Nilsson from Redeye AB.

I want to start with a question about SolidCAD there. As far as I understand, you have the ambition to add consulting services over time. Are those initiatives ongoing? Or could you give us some kind of time line for that?

I do appreciate your sort of thoughts about our abilities to implement the changes, but they have only been part of us for 2 months. So, we haven't seen any effects of it yet. So, we are discussing, of course, and this has to be handled with the local management of SolidCAD because they are the ones who know the business. So yes, it's happening. We are discussing growth plans and things going forward. But no, we haven't seen an effect of it yet. So, it's still to come.

Great. And also, one question regarding AI. I mean it's interesting to see your customer solutions and initiatives and so on. But if we look at the risk side, I mean, it's a big focus right now on software companies in general. So, I mean, do you see any risk of customers developing in-house software rather than buying from you? And I guess perhaps smaller add-on point solutions might see the highest risk.

Everything that is sort of, like I said, smaller point solutions where we can't add any value, they are always at risk because we need to prove for our customers that we can help them with both the software and the processes and the routines to make that happen. So, short term, we don't see the risk sort of in reported net sales. Long term, we need to always be proactive, making sure that we are helping our customers with the needs that they have. Like the examples that I have shown you today, our partners are also investing quite heavily with regards to bigger partners like Autodesk, Dassault Systemes also Esri in the U.S. So, yes. But I think the way we look at it is a continuum of what we have always been doing for the -- as a group for the last 20 years. And a good example, I mentioned Decerno there, who has done the solution for Stockholm [indiscernible]. In the '80s, they started Decerno AI already, working with neural networks. So, from that perspective, there are some capabilities. And now it's all in a connection where everything is happening with the databases, language model, et cetera. So, for us, it's still an opportunity. But we are investing. Our customers are investing, and we are all hoping that really, we'll get the benefit of better improvement going forward. But most of the benefits we've not seen yet. So, I think it's a learning process. We think that we are positioned, and I think we're still important to be the one that connect the customer demands with the software and gets the benefit out of that. So yes, it's a risk, but it's also a very big opportunity for us.

[Operator Instructions] There are no more questions at this time. So, I hand the conference back to the speakers for any closing comments.

Thank you for taking this time to listen in to our presentation and some very good questions. And with that, we would like to say thank you from Addnode Group.

Thank you.