Sweco AB (publ) (SWECB) Q4 FY2025 Earnings Call Transcript & Summary

Good morning, and welcome to this presentation of Sweco's Q4 and Year-end Report for 2025. Sweco's President, Asa Bergman -- and CEO, Asa Bergman; and CFO, Jan Allde, are here today to get us through the results. So with that, I hand over to you, Asa.

Welcome, everyone, to Sweco's Q4 presentation. Before we present the results for the fourth quarter and the year, let me give you a quick overview of Sweco. Sweco is Europe's leading architecture and engineering consultancy with operations in 8 geographical business areas across 15 markets in Europe. We are a well-diversified business operating across 3 different segments with a good balance of private and public clients. The foundation for Sweco's long-term success is our mix of competencies spread across 23,000 experts, our focus on organic and acquired growth as well as our efficient and decentralized operating model. With a strong financial track record and financial position, we are focused on continuing our growth journey and build on Sweco's success. With this introduction, let me start the presentation with a summary of 2025. 2025 was another successful year for Sweco. Despite the challenging macroeconomic environment and mixed market situation, we continue to deliver profitable growth and further strengthen our position as a leading European architecture and engineering consultancy. The results proved the strength of our strategy and operating model, and the commitment across vehicle to drive continuous improvements, find new business opportunities and transform societies together with the clients. Last year, net sales increased to over SEK 31.5 billion with a solid organic growth rate of 4% and acquisitions adding another 2%. A strict focus on pricing, efficiency and costs resulted in an EBITA improvement of 12% and further improvement of our EBITA margin. We also accelerated our M&A activity, announcing a total of 13 new acquisitions throughout the year. Our financial position remains strong, which provides us with great flexibility to continue to act on opportunities in the market. Finally, the Board of Directors proposed a dividend of SEK 3.70 per share. Altogether, 2025 was another good year for Sweco, and we entered 2026 from a strong platform. Before we end the summary of 2025, let me share some of the key achievements. Looking back at 2025 versus 2024, I would like to emphasize that we have delivered on our strategic priorities. One of the key achievements has been our accelerated M&A activity. We announced 13 new acquisitions in 2025 adding more than SEK 2 billion in annual net sales and a total of more than 1,500 new experts to Sweco. We have also continued to deliver price expansion while executing on our efficiency measures and cost control with clear progress, resulting in improvements in our EBITA margin. Streamlining parts of the organization and keeping a strong client focus has also resulted in further improvements in our billing ratio, and this is the result of hard work across all levels of Sweco, and we are committed to continue this journey. With this summary of 2025, let's dive then into the fourth quarter results. In Q4, Sweco delivered a solid result in a mixed market. Net sales increased by 6% to SEK 8.5 billion, and the organic growth rate was 5%, EBITA amounted to SEK 979 million, an increase of 7% adjusted for calendar effects with a margin of 11.5%. The positive development was driven by higher average fees, FTE growth and higher billing ratio. Taken together, we sustained our positive operational momentum and ended the year with a solid fourth quarter. Now let us go into more detail. In Q4, 7 out of 8 business areas reported positive organic growth and we navigated efficiently in a mixed market, maintaining a stable order backlog. The positive operational trend continues with 6 business areas reporting double-digit margins. Belgium demonstrated a strong quarter with margin expansion and Germany, Central Europe was the largest contributor in the quarter, benefiting mainly from positive project adjustments. We also saw continued improvements in the U.K. and in Norway. As I mentioned earlier, our focus on efficiency also resulted in further improvements of our billing ratio, with a ratio of 74.8% in the quarter. Overall, I'm pleased to see that we make consistent progress across our business areas and deliver on our priorities. Let's turn then to the market overview. Demand for Sweco services was broadly consistent with previous quarters, with some variations between segments and markets. Demand remained good in energy, infrastructure, water, environment and the increased demand in security and defense persists. Commercial buildings and Real Estate segments remained weak, while demand remained on higher levels in the Public Buildings segment. While there are small differences in the market situation from quarter-to-quarter, we have seen some trends shaping the market during the year. In the Energy segment, demand is underpinned by substantial investments as Europe strengthened its energy resilience and redesigns its energy systems and Sweco's capabilities and local footprint mean we are closely involved in many of these transition-driven projects. Across Europe, security and defense have moved higher on the political agenda with countries upgrading capabilities, buildings and critical infrastructure. Sweco is well positioned to support this shift through a long experience across several areas that are crucial to this ramp-up. We are also seeing accelerated adoption of AI driving business opportunities for Sweco. AI is driving both the improvement of Sweco services, integration of AI solutions in client projects and rising investments in data centers to support Europe's need for data power. We see the accelerated development in AI as an opportunity to maximize value for our clients. With that, I will welcome our CFO, Jan Allde, to walk you through the numbers. Welcome, Jan.

Thank you, Asa. Net sales was SEK 8.5 billion, which represents a growth of 6% versus last year. The organic growth rate was 5% adjusted for calendar effects. On top of the organic growth, we had acquired growth of 4%, which was offset by a negative FX effect of minus 4% due to the strong development of the Swedish krona. We saw the small positive calendar effect of 1 more working hour in Q4 versus last year. EBITA increased 7% or SEK 65 million to SEK 979 million and the EBIT margin increased to 11.5%. Cash flow was strong in Q4, leading to a net debt-to-EBITA ratio of 0.4x at year-end '25, same as last year. Let's look at the net sales. So overall, the organic growth was 5% in Q4, primarily driven by higher average fees and positive project adjustments. Higher number of FTEs and improved billing ratio also contributed to the organic growth. From a BA perspective, we saw organic growth in 7 out of our 8 BAs. Germany, Central Europe had the strongest organic growth rate at 16% driven by positive project adjustments, higher average fees and increased number of FTEs. Norway also reported good organic growth rate of 7% and the other BAs reported organic growth rate between 2% and 5%, except for Denmark, that was flat due to lower revenues from subconsultants. EBITA -- so EBITA increased by SEK 65 million or 7% versus last year adjusted for the calendar effect and the EBITA margin increased to 11.5% versus 11.1% last year. Overall, the EBITA improvement was driven by higher average fees, positive project adjustments, improved billing ratio and FTE growth, while personnel expenses had a negative impact. From a BA perspective, 6 out of 8 BAs reported double-digit margins and the largest EBITA improvement was reported by Germany and Central Europe, U.K., Belgium, Norway and Finland. The margin in Sweden was impacted by integration and restructuring costs of SEK 43 million, and excluding these costs, the margin was approximately on par with last year. Netherlands reported somewhat lower margin, primarily related to higher OpEx as a consequence of the high M&A activity level in 2025. Now let's look at EBITA bridge then by BA. So the result in Sweden was impacted by SEK 35 million of costs related to the accelerated integration activities in Projektengagemang and restructuring cost of SEK 8 million. Excluding these costs, Sweden improved their EBITA by SEK 23 million, driven by higher average fees and higher billing ratio. Norway and especially Belgium delivered strong EBITA improvements primarily driven by higher average fees and it was also good to see that the U.K. is continuing its profitability improvement. Germany and Central Europe had a positive effect on net sales and EBITA of SEK 49 million related to a onetime correction issue stemming from the ERP migration in 2024. Excluding this correction, EBITA increased by 19% in Germany and Central Europe, driven by positive project adjustments, and higher average fees. The group-wide costs increased by -- increased by SEK 26 million versus last year, mainly due to costs related to M&A transactions and periodization effects. With regards to the calendar effect in the quarter, we had a small positive effect of 1 more working hour compared to last year. However, as this positive calendar effect was to be realized in the month of December, with 8 more working hours, a month with many holidays, we estimate the calendar effect in the quarter as insignificant. So to summarize, the reported results included both some positive and some negative onetime items, which in total was roughly neutral to the results, which means that the reported earnings gives a good view of the strong underlying performance in the quarter. Then we look at the financial position. Cash flow in Q4 was strong, driven by a seasonal reduction in working capital, resulting in a net debt position of SEK 1.4 billion at the end of the year. So for the full year '25, cash flow from operating activities amounted to SEK 4 billion. M&A cash flows was SEK 1.075 billion and dividend paid was SEK 1.187 billion. That means that we ended the year with a net debt-to-EBITA ratio of 0.4, same as last year. Hence, our leverage is well below our target and Sweco remains financially very strong to pursue an active M&A agenda. So then let's look at the dividend for 2025. The Board of Directors proposes a dividend of SEK 3.70 for 2025, which represent an increase of 12% versus 2024 and a payout ratio of 60%, which is well in line with the company's historical dividend growth and its dividend policy of paying at least half of profit after tax to the shareholders while maintaining a sound capital structure. Now if we look at the longer-term financial performance of Sweco, we can see that the net sales growth shows a CAGR of 11%, and EBITA growth of 13% CAGR for the last 10 years. This solid long-term profitability growth shows the strength of our strategy and our operating model. Finally, a reminder of a calendar effect for '26. The expected total number of working hours for '26 is expected to be 7 hours more than '25. However, in Q1 '26, we expect 5 hours less than the same quarter in 2025. So by that, I hand back to you, Asa.

Thank you, Jan. Acquisitions are one of Sweco's key growth drivers. During the quarter, we have acquired 4 new companies, Fimpec Group in Finland, assar architects in Belgium, and VHGM and MuConsult in the Netherlands. In total, these acquisitions will add around 600 experts at Sweco and strengthen our offering in key segments such as hydrogen, architecture, geothermal and mobility consulting. The fourth quarter ended a year with, as I mentioned earlier, accelerated M&A activity. Over the course of 2025, we have made 13 acquisitions that reinforce our presence in the key markets and priority segments in accordance with our M&A strategy. We have a good mix across markets and segments as well as a good mix of niche acquisitions and larger acquisitions. One of the key components in our strategy is to have an offering combining the expertise of architects and engineers. And during the year, we have strengthened our architecture capabilities in Sweden, in the Netherlands and Belgium. And in Belgium, we are now the largest architecture agency. In Finland, we have strengthened our offering in energy and are now one of the leading players in the energy segment. Altogether, these acquisitions added more than 1,500 experts and more than SEK 2 billion in annual net sales. With our M&A strategy, strong pipeline and proven model for integration, we will remain focused on new opportunities going forward. Clients projects won during the quarter highlights Sweco's role in future-proofing societies and industries. We extended our long-term collaboration with Swedish energy company, Vattenfall. In a new framework agreement, Sweco will deliver technical consultancy services across wind, hydro, thermal and nuclear power. In the quarter, we were also awarded a multidisciplinary engineering project in Norway to support improved water quality in the local water courses and the Oslofjord. In the Netherlands, Sweco won a framework agreement with the Flemish public authority for waterways to upgrade the 16-kilometer Roeselare�-Leie Canal which transports 4 million tonnes of goods annually. Finally, our architects delivered award-winning design for a part of Germany's largest subway project. With that, I will conclude with our key priorities and focus areas going forward. To summarize, 2025 was another successful year for Sweco. Net sales exceeded SEK 31.5 billion. EBITA amounted to SEK 3.3 billion, and we delivered a solid EBITA margin of 10.5%. During the year, we demonstrated the strength of our strategy and operating model by continuing to improve margins and efficiency, raising our average fees and increasing our billing ratio. As we enter 2026, we do so with a strong market position and strong financial position and clear strategic priorities. We will remain focused on capturing business opportunities as Europe invest in competitiveness and resilience. At the same time, we will continue our efforts in efficiency and pricing to further improve profitability, while maintaining an active and disciplined M&A agenda with efficient integration. All in all, we have a strong platform, and we look forward to continuing our transformation of the society together with our clients. Thank you.

Thank you, Asa and Jan, and the time has come to open up for questions, and you can ask them directly through the phone line or through the chat function. So Sandra, please, if you could give us the instructions.

[Operator Instructions] We will now take the first question, coming from the line of Fredrik Lithell from Handelsbanken.

Congrats to a good ending to the year. I had a question on the positive project adjustments you had -- you had that in Finland, Denmark and Germany. If you could sort of put a number on that would be interesting to hear. And also, if the ERP correction in Germany, is that the same thing as a positive project adjustment? Or is that a totally different thing? So that would be interesting to clarify a little bit.

Yes. So let's start then with the ERP correction. So this is a correction that relates back to the migration of the ERP system in Germany in 2024, it involved an acquired company that at the same time, was converting from German GAAP to IFRS causing this issue. So on the project adjustments, project adjustments are, I would say, a normal part of our daily operations. And I wouldn't see it as any, let's say, unusual. It do provide some fluctuations, of course. But overall, I would say it's simply a normal part of a project business.

Okay. But you can't give us a number on it. I mean do you feel it's a sort of normal part?

Yes. Again, I think it's -- if you assess the operational performance of the business that we conduct, I think you have to include project adjustments in simple -- as normal part of the operations.

And I think, I mean, adding to that, if you look at the result of Germany, taking out the SEK 49 million, you see a strong improvement, and part of that is project -- positive project adjustments. And that is part of business as usual for us.

Okay. That's clarifying. And if I could also then ask a little bit your order backlog. I think also you said it was around flat? Or is it up? Or can you sort of talk a little about the order backlog and how you see it when you enter 2026 would also be interesting.

No, I would say that if I look at the project won in the quarter and the tender activity that we have had, we are in a good position. We are -- have orders received ratio on good levels. So the order backlog is -- I mean, it's stable or actually we see that we have a good order backlog. So there is no change compared with previous quarters.

We will now take the next question from the line of Dan Heimer from SEB. .

Two questions from my side. Starting on the first one, the integration costs here of SEK 35 million related to Projektengagemang, could we see more now in 2026? Or is this sort of the large chunk you took now in Q4?

Yes, so the integration cost that was taken in PE here in Q4, this is really the result that we accelerated the integration costs. And this really stems from a reduction of administrative overhead costs that's really not needed in the combined new entity, so to say. And I would say this is the last piece in the integration efforts, and that means that we are now well on track with the integration plan in Projektengagemang. So -- and we, of course, expect gradually to see the synergies coming out during '26.

Understood, very clear. And a question on fees as well. You highlight positive development here in Q4. Can you give some sort of feeling on what sort of increases you see right now? Are we sort of at the normal 2%, 3%? And do you see any changes compared to previous quarters throughout 2025?

I mean we -- as you know, we focus heavily on making sure that we project by project, contract by contract, distribute the right prices, and also making sure that we -- because the price increases is -- there's 2 components to it in the mix. It's both how we price ourselves on the market and how we execute our projects. So we do that with quality. So I mean, we have said it quarter-by-quarter that we focus on expanding our prices. And I mean, if you look at the EBITA improvements, the main part comes from price increases even if we, of course, have the element of the billing ratio and the FTE growth in that mix as well. But I mean you can expect that we will focus on that going forward as well.

Yes. Very clear. Maybe a final one, if I may. I mean, as you highlighted, you had a very active M&A year this year or 2025. How do you feel about 2026? I mean do you need some time to digest, given that you've done quite a few sizable builds, both in Sweden, but also in other markets as well? Or yes, will you continue to -- on this way into 2026 as well?

I mean our plans -- and as I said before, we have an M&A strategy in place in most of our business areas. And then we have an active pipeline which you see the result of during 2025. So our focus is to continue. If we will digest is, of course, depending on what kind of cases we will have ahead of us. But I mean if we get opportunities, we will take the opportunities and buy companies and secure that we can in a qualitative way, integrate them. So I think it's more related to if we get the opportunities or not. We have a good integration process in place. We have good capabilities and knowledge of how to work and integrate with this and at the same time, keeping focus on business as usual, so we don't lose track of that as well. But it's a fair and good question, Dan.

Yes. And a very strong balance sheet, of course, still. So yes, will be interesting. I think that was all from my side.

We will now take the next question from the line of Tom Guinchard from Pareto Securities.

Question on the billing ratios here going into 2026. We've seen quite strong development over the past year. Just wondering if we're going to see a dilution through the recent acquisitions that we've seen or if you think you can manage the sort of headline numbers here despite quite an active M&A agenda throughout '25 and your thoughts on sort of underlying billing ratio organically?

Yes. I mean, we continue to work on further improving the billing ratio. That's part of what we do on a daily basis and also to drive further efficiency improvement programs. And of course, as we work to integrate the acquired companies, that is, of course, part of the, let's say, game plan to also drive billing improvements of the acquired entities that we've done in '25. So we simply will continue to work on this topic and drive further improvements.

But we don't see sort of a technical drop in reported billing ratio going into '26 as a result of the acquisitions. Just so we don't read the headline figures wrong here going into the following quarters.

No, I think you should see -- I mean, we have already integrated most of the companies or actually all of them into our business, meaning in the KPIs for Q4. You already see the effects of our acquired companies in the billing ratio numbers. So part of the integration now and onwards is to create value from increasing efficiency in those both companies and implement the Sweco model. And part of Sweco model is, of course, to make sure that we increase efficiency if we have a dilution of the billing ratio linked to those companies. It's not for -- I mean, not all companies we buy has lower billing ratio, but some of them. So we implement the Sweco model and then, of course, work with the contracts and trying to expand together as we move into 2026.

Perfect. And just a follow-up on Dan's question in terms of M&A going into '26, '27. Any specific regions that you're targeting now in the sort of midterm? You've spoken a lot about the DACH region and Benelux historically?

Yes. And I mean, as I said before, and sorry for repeating myself, it's -- we try to look at all our geographies at the same time and making sure that we have a strategy in place with we -- the combination of architects and engineers is the headline. And then we are looking for niche competencies, expertise by expertise. And of course, we're also looking for scale. So it depends on what we get opportunities to buy going into 2026. But it's more a business area by business area to make sure that we roll up this broad portfolio of services that -- where we get traction growth-wise and where we see the growth is coming in the next years. So it depends on which business areas you're looking at. I mean the overall trends of Europe is saying something about what we're looking for because that is where the growth will come.

We will now take the next question from the line of Johan Lonnqvist Sunden from DNB Carnegie.

A couple from my side. Firstly, a nitty-gritty question. It's on the group cost level that was up versus Q4 last year, any color what drove that uptick that we should be aware of?

Yes, Johan. So the higher cost in group coming in the quarter versus last year. I quickly mentioned that during the introduction here, it's partly M&A integration costs that we decided to take on a group level. And secondly, we had a [indiscernible] effect in Q4 related to our captive insurance company that sort of say, came into Q4. And those [indiscernible] really I would say Q2, Q3, Q4, but for the full year, it's correct.

And then going back to the German, Central Europe business, been quite impressive margin development over the last few quarters. Just so we don't push up our expectations too high. What is a reasonable run rate expectation for the German, Central Europe business and margin network going forward? Because there's been quite a few one-offs that has had positive the impact of the margins during this year.

You can start.

Yes, I can start. So of course, looking at Germany, I would say, excluding this onetime year, let's say, correction related to the ERP, I think it's a sensible first thing to do. As I said earlier, I think the other, let's say, normal product adjustment is part of the business. But of course, it does give you some fluctuations in the profitability in the quarter, and we've had some positive project adjustment coming through Q3, Q4. So I think a good way to look at that is to look at the German profitability maybe over a longer time period, rolling 12 months, full year. I think at least that provides a better basis for comparison. .

Nothing to add.

So rolling 12 months, adjusting for the ERP thing should be pretty decent, should be manageable?

Yes, at least as a basis for, let's say, understanding the performance in '25. Yes.

Great. And then another a little bit nitty-gritty question, it's more on the kind of differences between the cash flow and the P&L. I note that CapEx levels has come up, maybe both '24 and '25, and this has been a bit higher than your kind of normal depreciation levels. Anything to highlight here why CapEx levels have been, say, SEK 90 million above what you depreciate in the P&L?

I would say, Johan, there is nothing specific there that stands out. There's -- of course, as we acquire the quite large number of companies that we do, you, of course, get some fluctuations on items like that. But I'd say underlying, there's no reason to -- there's nothing that sticks out.

Great. And just a final question from my side. It's on the kind of synergy outtake from newly acquired units. Do you think that should -- how should we think about the profile of synergy outtake? Will it be front-end load or back-end loaded for '26? Or what should be the expectations there?

Well, I think it's important when you look at '25 and Sweco, acquiring 13 companies that we have done with that, of course, comes on one hand, high transaction costs. We have had transaction costs of some SEK 50 million this year. We have quite high integration costs. I mean PE now in Q4 of SEK 35 million, and then on top of that, of course, we acquired companies or some companies that comes into the group at a lower margin than the group average. So overall, of course, it has, let's say, it's burdening, let's say, the company this year, and we expect, of course, then to gradually get the synergies from those acquisitions going forward. On the other hand, we intend to keep up this momentum in M&A. So yes.

I think it's important to add, I mean, if you look historical wise, the 2024 was a weak transactional year market-wise, but also for us. And that, of course, also comes into play here. When we accelerated the agenda for this year, and you get lots of transaction and integration costs, as Jan is referring to. But I mean, we -- of course, we expect some more costs coming in Q1 when it comes to integration. But -- we also expect, as we said before, really to see the value creation as we move into 2026, and also this decision to take a more accelerated integration approach when it comes to PE when you have those kind of opportunities when you well plan and you can execute that faster, is exactly how we should play things because I think it's important to remember when you buy consultancy services, you buy people's willingness to stay and perform. So it means that the faster you can move, the better because you create security and understanding how this will affect the individual and the business that you're buying, but also your existing business. So fast integration is also part of the recipe for success.

And Johan, maybe to add. I mean there's kind of 2 synergies from a cost point of view. One is that you can combine the administrative, let's say, activities and those actions you can take fairly fast, then the other is the co-location of offices and such. And of course, that takes a little bit longer to execute depending on the length of the lease contracts and so forth.

Okay. But the administrative part should at least be able to be crystallized fairly quickly or beginning of '26 at least, given you're taking out those costs now?

Correct.

We will now take the next question from the line of Johan Dahl from Danske Bank.

A few questions. Firstly, on Sweden, being a bit -- looking at the results here for the fourth quarter and adjusting for the one-offs in Sweden, margins down slightly, I think organic growth for the full year well below the group average. I was just thinking if you focus on Sweden with the changes also in management happening there, what sort of levers from a group level are you aiming to pull here? And what sort of initiatives can you envisage for Sweden to improve financial performance going forward? I appreciate its early developing that management agenda, but just in your view, would be interesting to hear.

Yes, maybe I can comment. I mean, if we start with this cost, of course, you need to take out that extra cost for the PE integration for Sweden and also the transactional cost that has burdened 2025. And -- but I mean, you're right, you could expect more and the largest business areas is Sweden. So of course, I expect that and the full mandate for the new business area President Fredrik Wallner, is to make sure that we continue to stay attractive and strengthen our market position in Sweden and also implement efficiency measures as we move along. So I mean, it's the normal recipe of profitable growth from the position that we have. I mean, the portfolio of the Swedish business, we are really well positioned. We're strong in architecture, and we have a widespread of different engineering capacity, so we are well positioned in all the areas that I refer to is growing on the Swedish market.

Got you. And sorry to repeat this on your acquisitions. But just in terms of -- I mean, the massive amount of acquisitions you made last year, and just looking at the specific cost-out actions, i.e., charges, redundancies, lease closures, et cetera. How far will those actions that you've already taken in '25 take you to sort of sort of approach at least some sort of group average on margins? I appreciate the Sweco model and all that is a somewhat longer perspective. But in terms of cost out actions, what sort of delta is that on '25 earnings?

Yes. As I said, I mean, there are certain actions that we can act on quickly and everything from integrating them into our ERP systems, making sure that we have the right overhead structure, things like that and that, speed and integration is super important for us and something we execute, I would say, normally within the first 6 months, and we can start to see impact of -- and then the, say, the more co-location of offices, driving billing ratio improvements and things like that, of course, takes a little bit longer time. I would say, 1 to 2 years.

I appreciate that.

And when you look at -- but can I just add, Johan. I think if you look at the companies that we have bought, we have bought them over the year. And of course, the first phase is as Jan referring to, is that we take actions with the synergies linked to overcapacity, mainly on staff functions. And then we start to co-locate. And in some cases, we have already done parts of that. So of course, now when we're talking about the biggest swings we're talking about Projektengagemang and Fimpec and assar mainly and the small ones that we did in Q4 that those actions will be a bit dragged into the beginning of 2025. But then we have another synergy package, which we don't talk that much about, but that is the business synergies. So we have already started to work together, but the full potential value creation when it comes to that synergy, of course, that takes a longer time. So office leases and co-locations will be into 2025 in parts of the cases and PE, especially and then also, of course, the business synergies that we see ahead.

All right. Let's leave it at that. Final question, just on the calendar effects. I think you referred to 7 extra hours, '26 versus '25. I'm just wondering is that -- I think the labor agreement in Sweden, '26 awarding 1 extra holiday. But those 7 hours, is that the net realizable effect for Sweco? Or should we sort of deduct that sort of change in labor market agreements?

No, that should be included in that calculation and also that's, of course, partly why you see an impact in the first quarter, a negative impact in Q1.

[Operator Instructions] We will now take the next question from the line of Julia Sundvall from ABG SC.

Just one question from my side. I would like to come back to the ERP system correction. Is this revenue only for '24 that you take now? Or is it from others as well?

Yes. So this goes back to, I would say, partly 2023, but mostly 2024, yes.

And do you have a more detailed split on that or just mostly '24?

No, I think that's what we can say right now. .

Thank you. There are no more questions at this time on the telephone. I would like to hand back over for the webcast questions.

Thank you. And we have a couple of questions from the webcast. And -- they are from Edward Donahue, [indiscernible], and I will move from the M&A now to AI. So the question is with the market fixation on AI, could you give some color on how Sweco uses AI tools internally and how clients see AI in existing services offered by Sweco. How do we use it in our services? How do we work internally? .

Okay. So we have worked with AI for quite a long time, and we are distributing AI solutions across Sweco. We have 3 different parts: digitize the core; creating client value; and ensuring that we capture new business opportunities. So beginning of 2023, we built a sandbox for ChatGPT in Sweco, to make sure that everyone in Sweco uses the AI technology. With that in combination with all the different applications and new ways of working that we have added to this platform but also we work with innovation within our design business to make sure that we become more and more efficient. So we use all the new technology to innovate and implement and look at the consequences to make sure that we price ourselves right that can expand, and we understand what kind of expertise we need around that. And that is already ongoing. We have some cases when it comes to creating client value where we sell AI solutions for our clients. So that is happening right now. We are really trying to leaning forward and making sure that we constantly evolve and making sure that we try test, as I said, and develop new tools all the time across Sweco. We also worked with our data market internally to make sure that we can utilize the right data and create value for our client out of that data market. But as you all know, this landscape moves fast. So today's technology is something and next month's technology is something else. So it's a continuous work that we have set up some years ago and that we're following really closely. So to secure we are competitive to secure that we are relevant to secure that we bring efficiency into the system and that we also can price ourselves right in this landscape. I hope that answers your question.

And we touched lengthy on our M&A, but I'll ask this question anyway to clarify. So the question is from the same participant. You stated that the billing ratio of Q4 reflects the M&A companies. Are these on average lower, so the Q4 is a base to build on. Would you see an acceleration for 2026 versus -- or sorry, versus '25 based on the M&A vintage of '24? Jan, I think this is for you.

Yes. I mean, it's always a mix. You have some companies coming in with strong billing ratio. There are some other companies coming in with lower billing ratios. And secondly, some of the companies came into the group here in late 2025. I mean Fimpec was -- came in, in December, for example. So it's a bit of a mix. But I would say excluding those, the underlying billing ratio has been making a continuous progress here during the year. And yes, of course, if you compare Q4 with Q4 of '24, that's where we really started to improve the billing ratio. So of course, in a way, you can say we have tougher comparables now this quarter versus last year. But still, we continue to drive a higher billing ratio. So maybe not super clear, but clear enough.

Thank you. We have no further questions. I want to thank you for joining us this morning and for your questions. And I also want to take the opportunity to thank Asa and Jan and to inform you of our Annual General Meeting that takes place on the 22nd of April and we will release our Q1 report on the 28th of April. With that, I'll wish you all a nice day.

Thank you.

Thank you.