Coor Service Management Holding AB (COOR) Earnings Call Transcript & Summary

Welcome to Coor's Q4 Presentation For 2025. [Operator Instructions] Now I will hand the conference over to President and CEO, Ola Klingenborg; and CFO and IR Director, Daniel Warnholtz. Please go ahead.

Welcome, and thank you for listening in to the Q4 report from Coor. I will start by giving you an update on the fourth quarter highlights and talk about the market conditions. I will then hand over to Daniel to present some more details around the financials before we summarize the key takeaways from the quarter and have a Q&A. So starting off with the market conditions, we continue to see a very high level of market activity in the fourth quarter. We see some varying outcomes between our different geographies. In Sweden, we signed a new contract with Huddinge Municipality, and we extended some important contracts with Hitachi Energy and Telia. The Telia contract also included Norway, where we also extended a contract with Ringnes. We also extended a contract with the Psychiatric Department of Aarhus University Hospital in Denmark. During 2025, we've taken several measures to restore the level of working capital. And I'm pleased to see that this has resulted in significant improvement in cash conversion to 99% compared to 57% for the full year of 2024. So a good improvement there. We also continue to see a high employee motivation index at 78, which is an improvement over last year, which is encouraging. We also made progress on the environmental targets. The Scope 1 and Scope 2 emissions reduced by 54% versus 2018, which is above the target of 50%. We also have reduced emissions from purchased goods and services, and this is an important milestone for us as sustainability has been an important focus area for us over the last couple of years. As separately communicated, we announced that Patrik Sjolund will assume the role as CFO at Coor in the second quarter of 2026. The Board of Directors proposed a dividend of SEK 2.5 per share for 2025, of which SEK 1 will be an extraordinary dividend. It's proposed that the dividend be distributed in 2 payments of SEK 1.5, respective SEK 1 per share. In addition, the Board of Directors intend to propose a share buyback program at the 2026 Annual General Meeting. So -- and finally, we are really looking forward to the Capital Markets Day on March 19, where a formal invite will go out later today. So with that, I hand over to Daniel to go through some of the numbers for the quarter.

Thank you, Ola. And let's start with an overview of the key business KPIs. In the fourth quarter, organic growth was 3.2%, and that comes as in previous quarters, primarily from high variable volumes in Norway, but encouragingly also in Sweden and Finland. The EBITA margin for Q4 is 5.0%, an improvement compared with last year that ended at 3.3% in Q4 2024. Q4 2024 was characterized by weak operating profit, primarily in Sweden and Denmark. Cash conversion, that is a full year number now, ended at 99%, a strong number that is above our long-term target of staying above 90% and a very clear improvement versus a weak 57% in the corresponding quarter in 2024. Leverage also last 12 months number is at 2.6 and continues to decrease as we delever. And finally, as previously reported in the Q3 report, customer satisfaction stays at a high level of 72, an improvement versus 70 last year. Then moving over to the P&L. As I mentioned, we had good organic growth in the quarter. Net sales ended at SEK 3.2 billion. That is just above last year. So while organic growth was a positive 3.2%, we had negative FX headwinds of 2.2% and hence, a net reported 1% growth. Adjusted EBITA amounted to SEK 160 million in the quarter, which gives us an adjusted EBITA margin in the quarter of 5.0%. Both EBITA in absolute and margin is an improvement compared to last year. At the end of the second quarter 2025, we announced that we are completing the changes in staff organization that we announced earlier in the year and that the effect of these changes are now gradually becoming visible in the P&L, both in central costs, but also in the segments, primarily Sweden and Denmark. Items affecting comparability during the quarter amounted to SEK 29 million and mainly comes from restructuring costs as well as some integration costs for newly started contracts in Sweden and Norway. Net income is SEK 60 million and adjusted net income when we add back amortization amounts to SEK 72 million, a significant improvement versus a weak Q4 last year at SEK 2 million. On the last 12 months numbers, which are now full year numbers for 2025, we see that net sales remains close to SEK 12.5 billion. Organic growth for the full year is 2% with negative FX headwinds of 1.7% in total, slightly higher net sales versus 2024. The full year adjusted EBITA is SEK 603 million for the full year, which gives us an EBITA margin of 4.8% for 2025 compared to 4.4% in 2024. Adjusted net income for the full year is SEK 274 million versus SEK 193 million in 2024. Moving into the segment and looking at the Q4 country by country, starting with Sweden. Organic growth was just above 4% in the quarter, primarily a result of favorable activity levels and higher variable income in our integrated facility management business and property services. Sales was actually also an all-time high on a quarterly basis in the quarter. Adjusted EBITA and margins are improving versus a weak Q4 last year. The action plan implemented during the year to streamline resource planning has helped together with the organizational changes and cost reductions implemented earlier in 2025. Coor signed during the quarter a new agreement with Huddinge Municipality and also extended contracts with Hitachi Energy and Telia and the latter contract also covers Norway. And overall, it was a good activity level in the Swedish market with reasonably high variable volumes in the quarter. Moving then to Denmark. And in the fourth quarter, sales in our Danish operations declined due to a negative organic growth of minus 5%, but also negative foreign exchange effects of 5%. This negative organic growth was largely due to ended contracts, primarily Velux in the quarter. The negative effects from the ended contracts was partially offset by higher variable volumes from other contracts. During the quarter, Topsoe chose not to extend its contract with Coor. As previously announced, we assess that the total value of the contracts that ended in Q4 or that will end in the coming quarter will be approximately SEK 300 million as previously communicated, and that also includes the estimated impact from Topsoe. Operating profit, adjusted EBITA for the quarter amounted to SEK 20 million compared to SEK 13 million last year. The operating margin was 3.0% versus 1.8% in 2024. We saw some improvement in the margin during the quarter as a result of the cost reductions made earlier. During the quarter, we extended an agreement with Aarhus University Hospital. Activity in the market remain high with a number of large contracts up for tender in the near future, both in our own portfolio and in the market in general. Moving then over to Norway. And during the fourth quarter, sales in our Norwegian operations increased by a total of 7% with organic growth of 12% and a negative foreign exchange effect of 5%. Organic growth was attributable to high variable volumes linked to maintenance stops in the Norwegian oil and gas industry. While maintenance shutdowns occur annually, the scope of the shutdowns varies from year-to-year, and we expect to see a continued normalization compared to 2025 during the coming quarters in 2026. Operating profit, adjusted EBITA for the quarter amounted to SEK 25 million versus SEK 24 million in 2024. The operating margin was 4.4% versus 4.5% in the prior period -- prior year period. Coor extended its IFM contract with Telia, which we also mentioned in the Swedish segment. The next 6 months will see the start of several new contracts in Norway, such as with Avinor for cleaning service at Oslo Gardermoen Airport and Schage Eiendom with Coor acting as a total provider of services at Skoyen Atrium, which also will be the new location of Coor's Norwegian headquarters. Starting up new contracts may have a slight negative short-term impact on the margin for the coming quarters for the Norwegian operations. And then finally, we move to Finland. And during the fourth quarter, sales declined by 2% in Finland compared with the year earlier period. However, organic growth was positive and amounted to 3%, with foreign exchange effects were negative and amounted to minus 5%. Operating profit amounted to SEK 2 million at the same level as in last year. And operating margin was also relatively unchanged at 1.1% versus 1% in the comparative period. During the quarter, we secured a medium-sized cleaning contract with Turku Technology Properties. Moving on to cash flow and the balance sheet. And during the last year, as Ola was mentioning, we saw an increase of working capital, both as a result of changing in the contract portfolio and year-end balance sheet effects, but also to a certain extent, due to ways of working. A number of measures have been taken to reduce the level of working capital in 2025. And with that, our net working capital position has been restored to a more normal level as a percentage of last 12 months net sales. As a result of the improved net working capital, our key metric, last 12 months cash conversion also improves in the quarter and has seen a steady improvement throughout 2025. And we reached now in Q4 99% compared to 57% for the full year 2024. And with that also now at a level above our target of staying at above 90%. Leverage that you see on the bottom right side of the slide decreased to 2.6 as the result of the strong cash flow and as we continue to deleverage. And with that, I hand it back over to you, Ola, to sum up the quarter.

Thank you. So summarizing, I think we see another stable quarter with some positive signs in many of our markets. And we really see a high level of market activity with a lot of contracts up for tender shifting hands. And we're particularly happy with the improvement in cash conversion, which I think is also a positive sign for us. And we are a people business. So of course, our high employee motivation index is an important metric for us, and we continue to see very strong results there. And sustainability is a very important factor for a lot of our clients. So we have to continue to push there, and we see really good progress and we keep having a strong performance there. A new CFO coming in, in Q2, we're looking forward to that. And the dividends we discussed earlier, and we think it's a good dividend that we are proposing. And then looking forward to the Capital Markets Day, where we can share more of the highlights of what we're planning to do and what we are doing, and that we hope will be interesting for all of you to listen in. So that's the summary of the quarter, and we'll hand over to a Q&A.

[Operator Instructions] The next question comes from Simon Jonsson from ABG Sundal Collier.

So first of all, I have a question on the margins and how we should think about margins in '26 compared to your targets of 5.5 given the level we have here in Q4 and some headwinds in Denmark, should we expect margins to be more flat in the first half and the improvements may be a bit back-end loaded in 2026? Or do you still think that you can see the margins closing in on the target already in the first half? Or how should we think about that?

I think we should start by recognizing that the margin improvements that we see now in Q4 is obviously a very positive sign and something we feel very happy with. Clearly, Q4 2024 was a very weak margin -- quarter. So we did expect to see a margin improvement. When we look into 2026, I think we will see a trajectory during the year. And as we have highlighted, we see that we will have some headwinds in Norway, for example, where we are starting up new contracts, but also have less -- we expect the variable volumes to normalize, stay at a good level, but normalize. And then as we have highlighted, we also expect in the coming quarter to see some pressure in Denmark. With that said, I think Coor will also benefit during 2026 with the full year effect of the cost impacts that we have done. So we will probably see a little bit weaker in the first half and slightly stronger in the second half.

All right. And then just a follow-up on -- for the segments. If we talk about the positive territory for the year. I mean, Denmark specifically, does that mean that you think that even though volumes are a bit challenging in Denmark that you still could see some margin improvements despite that? Or do you think that margin improvements in Denmark are more contingent on volumes to improve?

I think we are seeing a stronger kind of operational performance in the Danish business. So that will just as you observe, be kind of -- see if we can make that improvement outweigh the negative kind of scale effect on the business. And so far, we believe that, that could even out. But we are -- of course, that's a hard work to be done, and that is the work really for 2026 for Denmark to make sure that we're able to deliver on that. But that is the goal.

All right. And then just another one on cash flow. Of course, very nice to see cash conversion back at good levels here in '25. I think you wrote in the report that cash conversion is slightly above the target. But I mean, looking ahead here, I think you will continue to work with the working capital and so on. But do you think given that was so strong last year, do you think there's any risk that it will be lower? Or do you think that you can still maintain this kind of cash conversion for '26 and '27?

Think Coor has a long history of having a strong cash conversion, which really comes back to our business model, which is capital-light and also has a reasonably favorable working capital profile. That has not changed. I think from that point of view, the performance in Q4 2024 was a bit of an outlier. So I think you should expect that we will be able to stick to the target that we have, which is a little bit over 90%.

The next question comes from Oliver Uusitalo from Aktiespararna.

First of all, we've seen some activity in your portfolio during the second half of the year with some renewal of contracts and that sort. In terms of renegotiations, how large share is up for negotiation in 2026?

A number of our bigger contracts are up for renegotiation. I don't have the exact number here, but we always have a fair portion of our bigger contracts up for renegotiation. Now in the past, we were very dependent on some of the really big contracts. Now we have a much more diverse portfolio. So we are not that dependent on one single contract like that. But we have a number of our big contracts up for tender. So it's an exciting year for us, but we feel that we have it under control and that we are in good progress with those contracts. But we -- I don't have an exact number for that.

Okay. I see. And we saw really strong margin in Sweden this quarter. And of course, this has been a focus area for you. Will you be able to maintain this level going forward? Or are there any more levers that you might pull in order to increase margins from here? Or are you more depending on increasing volumes? Or how do you feel about the margin levels going forward?

I think volume levels going forward will depend a lot on volumes. In Q4, in September, we saw -- in Q4 in Sweden, we saw a very positive impact from the variable volumes that we had and the high activity level. And as I mentioned, it was on a quarterly basis, an all-time high in Sweden. If we can maintain a good progress on organic growth, that will help. But a lot of the savings have already materialized in Sweden. I think you should not extrapolate the margin improvements in Sweden going forward, but we are confident that we can maintain a good and profitable business in Sweden.

That's great. And in terms of market activity, I mean, you mentioned that it's quite high in both Sweden and Norway. How would you expect this mid-single-digit growth in the Swedish market?

We -- usually, we don't give kind of forward-looking statements like that. But we think that it is a clear focus area for us to focus on the organic growth. We will come back to a little bit on all the efforts that we're doing on the Capital Markets Day. But our goal is, of course, to continue to grow organically. We have our 4% to 5% target for organic growth. And that is something that we're aiming for. We haven't been able to reach that in the last couple of years, but this is definitely something that we are doing a lot of efforts to get back to those targets.

I see. That's great. And in terms of -- I mean, are you able to increase number of resources in order to pursue new contracts? Or how do you feel about that now that you might be prioritizing organic growth rather than operational efficiency?

Well, I think we will continue to work very closely on operational efficiency because clearly, the value we bring to our customers depends a lot on both quality and the cost control. So we will not let go of that. It's also true that we are trying to see how we can utilize our resources in the best possible way so that we can take advantage of organic growth when it comes up. So that is still a focus area. And we are trying to make sure that we retain the key resource that we need in order to drive organic growth.

I think also organic growth has a couple of different dimensions in our business. It's both kind of a sales team that has a lot of efforts. We have a big tender team that works with the bigger tenders. But then everyone out in the business can do their part to upsell to existing clients to offer more services. So the whole organic growth machinery has many different components, and we need to get them all working, and that's what we're pushing for. So it's not only that we have a sales team sitting centrally, but rather it's a lot of the organization that needs to gear up a little bit to achieve the organic growth that we want to achieve.

Right. Great. And my last question was regarding M&A. As your balance sheet are strengthened, and I think you mentioned that there has been a number of transactions in the market and that you might be participating in this going forward. Can you elaborate on this? What are you looking for? And what can you say about the acquisition pipeline?

First of all, yes, we have been looking at quite a few of the things that are available in the market, and we always keep an eye out for things that can add value to the business and to the shareholders. But we also remain very disciplined and make sure that it's really things that where we -- that we ensure will really create value. So yes, we have been very active on that front, I would say. Now what we're looking for, I think we will revert to that a little bit on the Capital Markets Day. But obviously, there are clear and obvious kind of add-ons that we can make that adds to our businesses, both within IFM, but also within cleaning or within property services that -- where we can have obvious synergies and so on. So it's a quite wide range of different businesses that we're looking at with slightly kind of different business logic. So we remain active. But it's also a capital allocation question. And now we are making quite a good dividend here, I think. So that will also affect a little bit our ability to make acquisitions. But as you said, our balance sheet is strengthening, and we are keeping an eye out, but we remain disciplined.

Great answers. Looking forward to meeting you in the -- during the Capital Markets Day.

The next question comes from Karl-Johan Bonnevier from DNB Carnegie.

Congratulations to another good step in backing -- to reaffirming the company back to where it historically has been. A couple of more detailed questions for me. Looking at Q4 and comparing it to Q3, the central costs stood out to some extent. So -- and you still highlight that the efficiency program is now giving -- delivering towards the full SEK 120 million. How does that square up?

That's a good observation, Karl-Johan. And I think it is really due to 2 different aspects. One is that we have moved some central functions into the Swedish segment into the group. So that has created a bit of an improvement in the margin of Sweden and a slight increase of the group costs. Group cost was also slightly higher up in the aggregate in Q4 for the group versus Q4 last year. So it's a combination of 2 elements. If we zoom out though, I think when you look at the margin improvements overall, they come to a large extent from the cost reductions that we've done, which has started to come in, in Q3 and then in Q4.

So when you look at the SEK 120 million programs, do you -- I think it earlier was communicated like a net savings when it was fully implemented. Now it sounds like you are starting new initiatives. So should we see that maybe as a gross saving with new investments coming in that would dilute that efficiency gain?

Well, I think the difficulty always when you follow up a savings program a year later is that a lot of things changes during the year. So I think we can conclude that we have done the headcount reductions that we were setting out to do. That was what was behind the SEK 120 million in full year effect that we communicated. Then obviously, we are changing also our mix, and there will be some cost increases as we take on new contracts or add capacity and sales components. Equally though, we will also be working on cost reductions on a normal basis. So when we look forward, I think what we will try to do is making sure that we can, over time, start to grow, and that will also create a bit more scale for us, which will give us a little bit more benefit from our current cost base.

Sounds very fair. And when you look at now the central costs having been around, say, SEK 130 million, SEK 135 million for the last 2 years, is that a good proxy going into '26, '27? Or is there an inflation element in the -- that we saw in Q4 that will drive that number also into '26?

I think what we have, and this is not unique for Coor, but we do have an inflationary element that people want salary increases. But in particular, also as IT becomes a bigger and bigger part of our cost structure, we are seeing some additional and higher inflation when it comes to, for example, licenses and costs for IT infrastructure and applications. That is a reality, I think, for everyone. What we are working very hard on is actually to combat that with efficiency measures. And part of the cost program that was initiated was really to combat and cost increase that we saw when we looked forward that was higher than what we felt we could tolerate. So I think if you expect that we will have a more modest growth in central costs going forward, that is probably a reasonable expectation. But that means that we need to combat and face up to an underlying cost inflation that we have in both labor and in IT in order to increase a little bit less than that.

And Daniel, on the labor kind of inflation, how well does your contracts cover that in pricing costs to push it through to the [ long-standing ] clients?

I think, in general, it has turned out over a longer period of time to be a reasonably good coverage. I think the issue is always when you have peaks in inflation, which is what we are coming out of. So we have had a period with maybe slightly higher inflation, and now we're getting back to something that is probably more in line with the longer-term trend. So I think -- overall, I think we see that, that is still, I would say, a challenge because our customers face the same cost increases and obviously are looking for ways where they can save money. So when contracts are renegotiated, there is always an element that you want to make sure that you get more. So we need to work on cost efficiency just to stand still. But there is a good element of short-term inflation protection that we need to make in order to stay competitive, we also continue to work on our cost effectiveness.

And some of our indexes are not fully covering all of the labor cost increases. And therefore, it's in the nature of our business, as Daniel says, to always try to find efficiencies and continuous improvement. And that is the nature of our business, and we just need to be really good at that as good or better than the competitors.

Sounds like the core of your operation to be fair. Looking at items affecting comparability, you have now 3 years running, you basically invested SEK 100 million in that row. And given what's happening in Denmark and what you see going forward, is that a good level also for '26? Or should we see that come down and normalize at a lower level again?

I think you should expect it to come down from the elevated levels where it's been during the last year because obviously, that has really been driven by the large cost reduction program that we initiated. Having said that, I think you should still expect that there will be some but maybe more on a normalized level of IACs both when we start up new contracts where we have external spend that we send in, I think it's also reasonable to expect that we will be a bit more active on the M&A side. And then finally, there is probably also will be some but more limited cost reductions that we may intend to do during next -- during 2026, but coming down from a very high level now in 2025.

So if I understand you right, Daniel, going forward, we should expect that line to be more, say, sales driven, if you put it like that, than maybe cost driven?

Well, I think the proportions will change at least, but there will still be also some cost reductions that we undertake.

And when you look at the working capital release during this year, obviously, last year's comparison was very strange. And I see that you now are getting close to the old historical level of having, say, a negative working capital of 8.5 to 9.5 percentage, but you are not still there. Is that opportunity to get up to that old historic level still? Or has the contract portfolio changed in any way? So the current level is more logical also going forward?

I think one needs to be cognizant that the portfolio has changed a bit. So I think it will be a little bit difficult to get fully back to where we've been. I think the level where we are now is probably a more normalized level. Maybe there are always opportunities to improve in working capital. And we know that there are some areas still that we can go after. But we are -- where we are now is probably a reasonably good reflection of what you should expect going forward.

And I guess variable volumes always have working capital to some degree, doesn't it?

That is clearly one aspect of it.

Also looking at year-end adjustment, I saw depreciation jumping quite a lot in Q4. Is that a temporary thing? Or is it a new level?

No, I think that is probably more reflecting where we stand in general. So I don't think that is temporary.

Okay. So what has changed driving that up to a new level?

I think the reason is that we have a little bit more -- during the last 1 year, we have also done more investments in our IT infrastructure, which also comes with higher depreciation.

That sounds fair. That's a question also on the competitive environment. Seeing these kind of new players consolidating the market, do you feel that, that is changing the competitive dynamics out there? Is there any trends of any of the new participants maybe underbidding to gain volumes? Or we're having, say, a market with maybe less of a good behavior going forward?

I think -- I mean, we've always been in a market, or we are in several markets. And I think we see a lot of the consolidation perhaps on the single services. And there has always been a price pressure. And we are trying to play primarily in the -- with the clients and segments and customers that appreciate quality a little bit more than only price and where we find that they value also safety, security, they value other metrics than only price. And I think that has not changed. And in those segments, I think we are -- we don't see that much of a competitive behavioral change. Having said that, we're always in a price pressure market. That is the nature of our business and has always been. And we're accustomed to that. So we don't see a structural shift now with that -- in that regard.

And one of the success factors for your company over the last couple of years is really building up the public part of the customers in the portfolio. And I guess that is normally where you have RFPs more price driven than quality driven. Do you see any change in the dynamics there? Or is it -- it seems like you are quite able to compete even in what I would call the most price-sensitive part of the market?

That is a relevant input. And today, roughly 30% of our business is with public parties. And we believe that we have a very attractive offering to that segment. If anything, we see a little bit higher than normal activity in the early tender phase when it comes to public sector.

I would also say, Karl-Johan, that it is -- public is not one segment. It's rather it's quite a few. And we are, for example, very strong in the Hospital segment where there are stronger demands of every aspect of the cleaning, including, of course, laundry services and so on, where we can be a stronger offering than a small local player, for example. So I think we try to find those segments of the public market where there's not only price as a question. Also, of course, offering national coverage, for example, we are not that many that can offer that. So we try to find those segments where there is -- where there is still not only price, but rather a strong quality and security component.

Sounds logical. Sorry for taking so many questions, but 1 or 2 on capital allocation as well, if I may. Good to see the dividend increase that you're suggesting, but I also saw the commentary about share buybacks. and maybe the extraordinary dividend being part compensating for the share buyback that hasn't been enacted during 2025, those SEK 50 million. Should we expect those to -- those SEK 50 million to happen here in Q1? Or is this a way of saying that we are now postponing this basically?

No, I think you should not expect that, that will happen between now and the AGM. What I think you should expect is that the Board is recommitting to seeing share buybacks as part of the way of returning cash to our shareholders and that they will come back with a proposal for a share buyback program for the AGM.

And when they come back with the proposal, do you think you will, say, give us some more clarity on how it will be enacted and if and when, so to say, in the way of maybe comfort zones for gearing levels and not going below a certain level or something like that. So we can understand how it will be implemented better than we have been able to historically.

I think you should expect a very customary share buyback program that is also executed once it's been decided.

Sounds good. Sounds good. And obviously, an elephant in the room as well, looking at the changes on the owner side in the company. I've never seen anything quite like it. I mean, 6 new owners totaling 28.5% being able to amass that kind of share capital, not basically being out there being keen. Have you been aware about this kind of change on the owner side? And have you had any contacts with these guys to understand the idea of what's going to happen going forward or anything?

No. We have noted, of course, that there has been this change of ownership, and we always try to communicate with all of our owners. But so far, not any dialogue. And we have -- it's more of a Board question also in any case. And we are focusing on the business. We're focusing on keeping all of our good plans that we have and making sure that we deliver on those. Otherwise, it's difficult for us to comment on ownership questions.

I fully agree to that, Ola, and can only wish you all the best of and looking forward to the Capital Markets Day.

The next question comes from Thomas Blikstad from Pareto Securities.

Just one question on Norway. I'll try to be short. Organic growth was 12%, which you said that was linked to high variable volumes, again, similar to Q3, but then the slides say that this was also unusually high. I was wondering how much was sort of extraordinary growth? Is it still roughly 50%?

I think you see still that it's a bit elevated levels. But as you can see, when you look Q-on-Q, it's starting to normalize, and we expect that normalization to also continue into now Q1 and Q2 this year. So if you look at the full 2025, I think we said that it's roughly 50% of the variable volume has been higher than normal.

Okay. And despite the sort of strong growth, margins actually declined somewhat around 10 bps year-on-year. I was wondering how we should think about the trajectory here in H1 when volumes normalize even more and that new contracts start up.

I think what is positive in our Norwegian business is that even if you strip out the variable volumes, we have a bit of an improvement during the year in the underlying margins, and that we obviously bring with us into 2026. But then as we have also been saying, at least in Q1 and Q2, we will have some headwinds from both normalization of the variable volumes, and that's maybe more impacting Q2 than Q1, and then also from the fact that we're starting up a lot of new contracts, which obviously in itself is a very positive fit, but which may have some marginal negative impact in the first half of the year.

We also see a slightly different margin profile on the variable volumes than on the underlying business. So that will also have to be taken into account. So we have a positive view on the ability to keep and improve the margins in the Norwegian business.

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

All right. Thanks, everyone, for listening in, and thanks for the listening into the Q4 report, and we'll meet you or some of you, hopefully, many of you on the Capital Markets Day. Thank you very much.

The host has ended this call. Goodbye.