Atlas Copco AB (OTC:ATLKY) Q4 2025 Earnings Call Transcript

Atlas Copco AB (OTC:ATLKY) Q4 2025 Earnings Call Transcript January 27, 2026

Atlas Copco AB misses on earnings expectations. Reported EPS is $0.14 EPS, expectations were $0.15.

Operator: Welcome to the Atlas Copco Q4 2025 Report Presentation. [Operator Instructions] Now I will hand the conference over to CFO, Peter Kinnart. Please go ahead.

Peter Kinnart: Thank you, operator, and a very warm welcome to all of you attending this quarterly earnings call for the fourth quarter 2025. Before I hand over to Vagner to start the actual presentation, I will already now, as usual, remind you that when the Q&A session starts to just ask one question at a time. Please keep disciplined, so everybody has an opportunity to ask their most important question once we get through the first queue. Of course, you can line up again for a second question afterwards, and we’ll be happy to answer that. But that being said, no further ado, I will hand over to Vagner Rego to guide us through the presentation.

Vagner Rego: Thank you, Peter, and welcome to this conference call. So first, we had in the first picture, a wafer, just to remind you that we are exposed to the CapEx that is relevant for the wafer production. Then if you go to the first slide with a summary of the fourth quarter of 2025, first, we had a good organic order growth, driven by industrial compressors that went somewhat up. But not only, I think, also Gas and Process compressors, also had delivered a very good quarter, and solid growth as well in vacuum equipment, I would say, including semi equipment. On the other hand, we had weaker demand for industrial assembly and vision solution followed by weaker demand on power and flow equipment, where we will go a little bit more in details later on.

Once again, it was very good to see that our service divisions continue to deliver a very good result and we are quite happy about that. Revenues on the other hand was unchanged, but we have a quite high level in 2024 as well. I think the level was not bad and followed by a lower operating profit, mainly driven by negative currency effect where Peter will come back with more details, followed by negative effect coming from the tariffs and also from acquisitions. In the quarter as well, due to the low demand in industrial assembly system that is connected to the automotive business, we also decided to have — to further adapt the organization of Industrial Technique, and we have booked a provision to make sure we keep at a good profit level.

Cash flow were solid, and we continue to work on our acquisition pipeline. We have acquired 8 companies in Q4. So when it looks to the financials, I think we can see for the group, 4% organic growth that we are happy, driven by 2 divisions. Once again, organically, it was unchanged in revenue. When it comes to profit margin, we delivered 20.5% in terms of adjusted profit margin. And we have booked this provision of SEK 261 million to adapt the organization in Industrial Technique. So basic earnings per share, SEK 1.36, and strong cash flow, still good return on capital employed. If we then look to the summary of the year, and I would not spend too much time here, but we had overall a mixed demand with unchanged basically in terms of orders received and revenues.

Q&A Session

It was quite similar with some segments improving, some segments going down, but it was a flat year with quite a lot of challenges and headwinds in the profitability, I would say, and the good thing our strategy in our service divisions continue to deliver good profit and good growth that we are quite happy. And we closed the year with 29 acquisitions. And once again, Peter will come back with more details about our ordinary and extra ordinary dividend proposal. So it — once again, if we go to the full year financials, like I mentioned, already, it was unchanged, more — 1% organic growth in orders, 1% organic decline. But of course, we had the acquisitions that came. On top of the organic growth, quite a lot of currency headwind in our results.

And with the bottom line of 20.3%, if you adjust for the restructuring costs that we have done mainly in Industrial Technique and Vacuum Technique, the profitability, the adjusted operating margin was 20.7%, still solid cash flow and return on capital employed. If we then continue with our results working — looking more geographically around the world, what has happened. If I started with Asia, we had, in the quarter, 13% growth. That was a quite good development, mainly in Compressor Technique and Vacuum Technique. I would say that was driven this — driving this result. So we end up the quarter with 13%. When it comes to Europe, I think we were quite positive. Happy to see 10% growth in Europe. Basically, all the divisions had positive growth.

I think the only exception was Industrial Technique that was flat. So all in all, considering the situation of automotive, I think we were happy with what we saw in Europe, but it’s also fair to say the comparison base was lower, but very good to see. In North America, we see 8% growth. And there, the acquisition of NTE has quite a big impact. If you exclude that, still positive growth of 3%. We see a little bit more challenging environment in South America with a flat development in Q4 and also challenging in Africa, Middle East, but it’s also fair to say, especially on the Middle East, 2024 was a great year. So I think the level is good, but the comparison base is quite challenging. Then if we go to the next slide on the sales bridge, then you see the currency headwind that we have had in Q4 amounting 11%.

So that was continued headwind coming from currency. I think the structural changes that are mainly acquisition had a quite good development in orders and revenues. Of course, that will later on generate an impact in the profitability as well. But I think the level of the acquisitions are quite good. I mean we have done some acquisitions like NTE that’s quite sizable. Then that means that we had an organic growth of 4% and unchanged organically in revenues. And we end up the year with 2% on acquisitions and a total currency headwind of 6%. If we then go to the orders received per BA, you see that very nice to see Compressor Technique developing with plus 7% organic growth. Very good to see Vacuum Technique now plus 13% organic growth, with good contribution from many divisions within Vacuum Technique.

Power Technique, a little bit more challenging, but I will come back later when I talk about Power Technique. And Industrial Technique, minus 1%. Considering the environment, I think it was also a good achievement, although we don’t have organic growth that we’d like to, but considering the overall environment, I think it was a good achievement in terms of orders received. Now going more into details of the business areas. We can see Compressor Technique with 7% organic growth, driven by industrial compressors that were up. And there, we see a little bit more on larger compressors than only smaller compressors in terms of growth, but both with good development. Strong Gas and Process compressors, but again, it’s also fair to say Q4 2024 was also a challenging quarter.

So for Gas and Process, so they had a low comparison. The service, like I mentioned, continued to grow. We continue to grow with a good profitability. We’re quite happy with the development of service in all business areas. Revenue continued to increase, 3% organic growth. We have a good order book in Compressor Technique that will allow us to continue to deliver good revenue or organic revenue growth, so considering the order book. Profitability was in a good level, 24.3%, still a good level if you consider there was impact coming from acquisition, sales mix and the trade tariffs. So I think we are quite happy with the development of Compressor Technique. And also, we continue to innovate delivering new products. Here is just an example of a nitrogen system that is dedicated for laser cutting applications.

So completely tailored for this type of application. So if we then move to Vacuum Technique, we saw good order growth of 13%, notable growth for semi equipment. And there, I think it’s also fair to say that the comparison was quite low in Q4 2024. So — and then we saw — that’s why we mentioned notable growth, but it was a low comparison. But anyhow, it’s good to see the environment and it’s good to see growth in semi equipment. Solid growth as well in industrial and scientific vacuum, and growth in the service. Basically, I think it was a good development in all the divisions of Vacuum Technique. We still have the challenge with the order book. So revenues were 3% down. I think we still have to overcome that challenge. And operating margin was at 19.2%, so negatively affected by currency and dilution from acquisitions.

So they also continue to develop the new products and a new compact product for the semiconductor this vertical booster that are dedicated for semiconductor was also released. In the Capital Markets Day, you also saw some other innovation, and here, we continue to come with innovation in Vacuum Technique. When it comes to Industrial Technique, then we saw order decline of 1%, basically driven by automotive because when we look to the general industry, we had a good development, also is where we focus to find some new growth and I think still quite a lot of transformation that can be done in the general industry, and that’s where we focus. Service orders essentially unchanged and revenues, they also have challenges with the order book and the revenues were — went down 3% organically.

The adjusted profitability was 19.8%. We want to highlight here the underlying profitability because the profit was — the profitability was 15.9%, of course, affected by the SEK 261 million in provision for the restructuring cost. We still continue to invest in innovation even in a tough environment that we have now, we continue to release, and we continue to combine the solutions we have with the vision technology that we have also in the portfolio. So I think also here, continue very nice innovation. So if we then move to Power Technique, we had an order drop of 6%. And I think it’s also fair to say that we had a little bit more than normal cancellations because we had an order book that was a bit too old with old prices, and we decided to take actions on those orders, either the customer would have to take those machines or we will not carry on the orders with old prices.

So it was a little bit proactive from our side when it comes to this, let’s say, slightly higher than normal orders, but still would be negative but not as much as 6%. Service business continued to grow, and we saw some challenges in the quarter in our rental business that all we know also that drove the revenue down 4%, and the operating profit was at 16%, affected by currency, but also by lower utilization of our rental fleet. And I think that’s the level of profitability that we are not happy with. Definitely, we’ll take some actions to drive the profitability back from the levels we want to have. Anyhow, they continue to innovate. Now you know we have invested in several pump assets, more connect — this one is more connected to dewatering.

So we have a new product that can be used now by our distributors but also by our own rental companies because with the acquisition of NTE, we also have now a rental company in U.S., rental company in Australia, rental company in Brazil, dedicated for pumps, and we are also supporting them with our own products. So if we then move to the next slide, you see then the profitability, the [ EBITA ] at 21.4% in the quarter and the profit of, if you don’t adjust for the restructuring cost, 19.8%. But then perhaps this time now to pass to you, Peter, that you continue to explain our profit.

Peter Kinnart: Yes. Thank you, Vagner. Net financial items, slightly negative, a little bit higher than last year, mostly because of somewhat higher financial exchange rate difference and lower interest income in the company. But we also expect it would be probably on a similar level going forward in the next quarter. Then the income tax expense, which is on the low side, I would say, if we take the effective tax rate of 20.5%, that’s definitely a low number. We are benefiting from all the activities we do around our innovation and the tax relief that we can get there. But we also had quite a couple of positive one-offs throughout the fourth quarter. So that is why we have this low effective tax rate. Then going forward, when we think over the next quarter, then this low effective tax rate is not maintainable because these one-offs that we benefited from will not repeat themselves, and therefore, we expect the tax rate for the first quarter to be at around 22.5% that is currently our best estimate.

If I move then on to Slide #14, where we can dig a little bit deeper into the profit bridge. There’s quite a few comments here to be made, how we get from 21.8% to 19.8%. There’s a minor impact from the share-based LTI programs, as you can see. We had items affecting comparability of SEK 220 million in the bridge. It’s a combination of quite many things. Vagner already mentioned the restructuring costs this quarter of SEK 261 million in Industrial Technique business area. And basically, the difference between those SEK 261 million and the SEK 220 million are a list of a number of items that we corrected for last year leading up to the SEK 220 million and diluting the margin obviously somewhat. Also the acquisition dilute the margin in a similar way as the items affecting comparability.

We are in the first year of the acquisition here. And of course, there’s a lot of integration costs, while the synergies are not fully maturing yet. And that is the reason why we see that lower profitability on the revenue within the acquisitions. Then I guess one item that is requiring the most explanation here is then the currency effect, which has been quite negative, both on the top line as well as on the bottom line. And in fact, if I summarize it fairly simply, I would say we have translation effects, transaction effects, and we have the revaluations of the balance sheet items. And the first 2 items, translation and transaction effect in terms of margin basically compensate each other. One is slightly positive from a margin point of view, the other one is slightly negative from a margin point of view, and they basically end up to 0.

So you could say that the entire difference that we see here is caused by the revaluation of the balance sheet items. And there, I would like to remind you that last year, in the same quarter, we had a huge revaluation positive impact in the income statement, which was mostly linked to Vacuum Technique at the time, also partly to Compressor Technique, but mostly to Vacuum Technique and led at the time to a very positive currency effect, which, of course, now in the bridge creates the opposite effect because we will — we have not repeated the same positive currency revaluation in the balance sheet items. And that is also why you see later on in the next page, the very high currency impact on Vacuum Technique specifically. Then when we then look at the organic development here, I think despite a negative development of the top line, we are actually seeing a positive development on the bottom line.

And of course, that is more explained if I go to the next slide, 36 (sic) [ 15 ], if I take it business area by business area as there are quite a number of different positive aspects that add up to this number. So if we take it business area by business area, then we can start with Compressor Technique. Acquisitions dilutive across all the business areas, in fact, somewhat more, somewhat less depending on the specific business area, but basically all dilutive, generating positive profitability, but not as much as we are used to within the respective business areas, so dilutive effect across the 4 business areas. The currency impact for Compressor Technique is even though negative in absolute terms, in relative terms, is quite mild. And then we see a margin organically that is quite in line, slightly higher, but only marginally higher than what we are used to in Q4 2024.

And that leads us to the 24.3% result of Compressor Technique, which I think we continue to consider as a good and healthy level for Compressor Technique to perform. So here, you could say despite also tariff impact and despite acquisitions, we maintain a good level there. On the Vacuum Technique side, the main detractor by far is the currency, which has a huge impact due to the fact that we had this huge positive last year, which we don’t repeat this year. In fact, revaluations across all business areas, but also on the group as a total is actually quite limited this quarter, basically not a value to be mentioned in the bigger scheme of things. It was mostly the effect of last year that basically created this negative currency effect in the bridge.

Otherwise, also the acquisitions were dilutive. We also didn’t have the items affecting comparability this year that we had last year, which was a one-off that we benefited from at the time. The positive news I would like to add on Vacuum Technique is the strong development of the margin also here, negative development on the top line. We just heard from Vagner how the organic growth Vacuum Technique on the revenues has developed. But operating profit, on the other hand, is positive. And this is thanks to basically the effect that materializes from all the efforts in the business area to restructure, to reorganize, to cut costs in order to adjust the size of the suit to the size of the body, and that’s how we end up with the 19.2% here. On Industrial Technique, 19.4% to 15.9%.

Obviously, the restructuring cost is a big item. Vagner mentioned SEK 261 million this year. Last year, in the same quarter, we also did a round of restructuring for about SEK 134 million, so the net is SEK 127 million, having a dilutive effect on the margin this year still. Acquisitions were, in this case, not adding too much from a dilution point of view, but the currency also there had a bigger impact. Although in this case, not so much due to the revaluation items, a bit more related to the transaction effect. But in the end, a bit negative on the margin. And then finally, I would say, from the bottom line perspective also here, a negative development of the top line, given the difficult climate in the industry, but no negative impact on the bottom line.

So that is also positive that we see that the negative impact doesn’t immediately pull down the margin. And of course, with the restructuring we are doing now, we expect to continue to create savings that will support the organic development of the business area. And then last in the row, Power Technique. Here, we dropped the margin from 17.8% to 16.0%, as Vagner already implied, not the level that we are absolutely pleased with. Acquisitions have a moderate dilutive effect here. The currency is also a bit negative, but also organically, we are not seeing a positive development. And here, it’s mostly the utilization of the rental fleet as well as continued investments in A&M that we are doing within the business area. We are thinking of, for example, building up the customer centers for the industrial flow business.

We’re also thinking about having dedicated salespeople for the portable power and flow business, for example, and also continued investments that we started up in upgrading our ERP platforms across the different divisions that are creating quite a bit of cost investments that are necessary for the future, but with the current business climate, of course, a bit in conflict with the top line development. When we then look at the foreign exchange development going forward, I would say that we are not at the end of the negative development of the currencies. Both on the top line as well as on the bottom line, we foresee still a quite negative development and estimate that, on the bottom line, we would see an effect of at least around SEK 1 billion negative impact from currencies in the first quarter 2026.

Then I would move to Slide #16 to briefly comment on the balance sheet. In fact, not so much to comment. On the one hand, of course, we’ve seen currency effects pulling down many of the values, but at the same time, we also see some organic improvements such as in the inventories, for example, which will also be noticeable in the cash flow. And we also see the increase of the rental equipment and the intangible assets, which is both, in fact, mostly linked to the acquisitions we recently added. NTE was already mentioned, that, of course, increased the fleet as well as the intangible assets. I think on the balance — on the liability side and equity side, there is not so much to mention, I think, to save time, let’s say. If we then move on to the cash flow development, we think that the SEK 6.8 billion cash flow that we generated throughout the last quarter of 2025 remains solid, but of course, as you can see at a lower level than last year.

The main reason for this is, I would say, two things. On the one hand, the change in working capital, which actually is still positive with SEK 650 million, but last year was even much more positive with SEK 2.3 billion. And the second item that, of course, influences the cash flow negatively here is then the lower operating cash surplus, which goes hand-in-hand, I would say, with the operating profit development that we have seen. And those are the 2 main items that basically pulled down the cash flow compared to last year. And then finally, maybe just to point out that for the year, we concluded with SEK 26.8 billion, SEK 11.6 billion, let’s say, SEK 12 billion of which was used to finance our acquisitions, and 2/3 of those were actually taking place in the last quarter with SEK 8 billion.

So with that, I conclude my comments on the financial statements and give back to Vagner to comment on the near-term outlook.

Vagner Rego: Thank you, Peter. As you know, the near-term outlook is not a guidance for the orders received. It’s just how we see the sequential development of our customer activity level. But then, we still continue to have a mixed picture. If I qualified a little bit more this mixed picture, on the positive side, we see a bit more vivid and active semiconductor market when we speak to our customers. And that does not mean that we will see orders coming in Q1, but there are more interactions ongoing with our customers. We also know that this is hard for us to predict because it’s a key account business, decisions can take quite fast. So in talking about quite large amounts. So it’s difficult to predict if this — we will see some reaction in the Q1 orders received.

But there are more activities, let’s say, I wouldn’t say more activity, but perhaps more interactions with our customers. So on the [ less ] positive side, we still see challenges in automotive, especially in Industrial Technique. And that’s the reason why we also have decided to further adjust the organization. So there it’s a more challenging environment. And then when we look to the Industrial segment, and we talk about industrial pumps, industrial compressors, general industry for Industrial Technique, I think we still see hesitance that is still a challenging environment, full of uncertainties. We have seen how the year has started and how many development so far, and we are still in January. So — and that’s why — with this mixed picture, that’s why if we combine all this, we believe that the overall demand for the group remains at the current level.

So moving back to you, Peter, then.

Peter Kinnart: Yes, I will just round off this presentation by informing you about the proposal that the Board has made to bring to the Annual General Meeting of Shareholders. And the intention is that a proposal will be made to offer ordinary dividend of SEK 3 per share, topped up by an additional distribution to the shareholders of SEK 2 per share, adding up to a total of SEK 5, and that SEK 5 will be paid in two equal installments, one in the course of April and one later in the year in October. So I think with that, we are at the end of the presentation. And before giving the floor to all of you asking your questions, I just want to remind you, please stick to one person — one question at a time so everybody has an opportunity to raise their questions. Thank you.

Operator: [Operator Instructions] The next question comes from Alex Jones from BofA.

Alexander Jones: Maybe I can follow up on Vacuum Technique. And it would be really helpful if you could expand a little bit on the comments you made with regards to the outlook, especially thinking about Q4, how much of that acceleration in semis orders was easy comps, given you said you’re not necessarily expecting that acceleration in conversations to feed through in Q1? And that acceleration in conversations, is there any difference between different geographies, thinking about China compared to the rest of Asia compared to the Americas? That would be very helpful.

Vagner Rego: Yes. So definitely, we see — if we look to Q4, it was indeed lower comps. I think Q4 2024, it was not a great year in terms of — great quarter in terms of orders received for Vacuum. But anyhow, there is always a little bit of seasonality, but I think we are happy with the development of the orders in the semiconductor, although we had low comps. But going forward, we see a bit more interaction with our customers. It doesn’t mean that we — like I said, we will see the orders in Q1, but we get more questions, when we say just to qualify a little bit when say more interactions, more vivid and active let’s say, activity. What we mean, we get now more questions, are you prepared to increase volumes? And I think that’s more what we hear these type of discussions.

And again — and we haven’t seen. We cannot say that the orders will come in Q1, but there are more discussions on that line. But that is more — the majority of the production of chips are coming from Asia. That means there are a lot of interactions in that region overall.

Operator: The next question comes from John Kim from Deutsche Bank.

John-B Kim: Following up on Alex’ question, can you give us a little bit of color on the Q4 order intake as to whether this is going into newer facilities? Or is it refreshing or expanding production at existing fabs for your semiconductor clients?

Vagner Rego: I think it’s always a combination of both. But depending on the players, I think they don’t need to build new fabs. They have different strategies. Some they don’t need to build new fabs. They have a space where they can populate with more equipment. I would say, we have seen more that and there are also players that are building new fabs to populate later. So I think there is both, some that was built in the past and now are populating — are being populated and there are semi players where they have — they can rearrange the current facility to increase production and then we got some good orders in Q4.

Operator: The next question comes from Rory Smith from Oxcap.

Rory Smith: It’s Rory from Oxcap. It’s just on the order intake in Compressor Technique. I think you called out significant increase in Gas and Process from several different customer segments. Really keen to just know what those segments were in a bit more detail, if that’s possible.

Vagner Rego: Yes. There are several market segments that performed very well. Sometimes we get a little bit more orders from LNG, for instance, because the nature of the business when they decided to take orders — to place orders, you talk about 10 ships or 20 ships, which was not the case. We got a couple of orders for LNG. But we also had orders for gas processing equipment. I think we still see quite a lot of opportunity around gas processing, fuel gas boosters that goes together with gas turbines. If you want to generate — if you want to have a gas-fired power plant, you have the turbine and the turbine needs fewer gas booster. We got some orders from that. Also, air separation units was also okay and a little bit for chemical and petrochemical. It was quite balanced, I would say, this quarter more than previous quarters, I would say.

Rory Smith: Could I just squeeze in a quick follow-up then on that? What percentage was Gas and Process of the Q4 orders versus industrial in Q4 in Compressor Technique?

Vagner Rego: I think we don’t disclose that figure on divisional level. Over time, it has been around 10% of the Compressor Technique business area.

Operator: The next question comes from Klas Bergelind from Citi.

Klas Bergelind: So I just had a question on the larger industrial compressor orders. They are up year-over-year against an easy comp, but some debate today around that they’re down quarter-on-quarter. But isn’t that just seasonality, i.e., down fourth over third, at least according to my model. You don’t see any underlying weakness, right, Vagner, on the larger side in compressors. I think you said last quarter, in October, that orders started to come back in Europe, but that China was still weak. I’m just keen to understand the quarter-on-quarter underlying trends on the larger side?

Vagner Rego: I think it’s still challenging in China, I would say, giving a little bit more color. I think we were positive about Europe and happy, to be honest. And we saw a little bit less growth in North America, but still positive development if that can help you a little bit more.

Operator: The next question comes from Sebastian Kuenne from RBC Capital.

Sebastian Kuenne: Regarding compressor business again, could you tell us a little bit about the market and pricing situation in the U.S., specifically for the compressors that you have to import from Belgium? And given that you have local competition like Ingersoll, who can maybe outbid you on pricing, maybe you can give a bit more color on the situation there.

Vagner Rego: Thank you for the question. Yes, indeed, I think we do have the tariffs. But it’s fair to say not everything that we sell in the U.S. is important. We also have local production. I don’t disclose the number of how much is local, but there is quite a good portion. We are increasing the content of local production. That will come step by step. But it’s fair to say that the main driver is price, and we are increasing our list price. And it’s a balance act because we also want to keep or even increase our market share. So I think that is the balance we do now while we increase list price of different product lines, we also keep fighting to increase our market, not even to maintain, but to increase our market share. We do have the impact like Peter had already mentioned, but I’m quite happy with the development, to be honest, on the market share.

Not all the product lines are doing well, but some are even increasing the market share. That was quite encouraging to see under such a tough situation we can further increase. And when it comes to competition, difficult for me to talk about any competitor, but many of them also have a lot of important items as well.

Operator: The next question comes from Max Yates from Morgan Stanley.

Max Yates: Just my question was on your exposure within the vacuum business. Obviously, over the past few years, you’ve kind of expanded in China, you’ve built up a facility in the U.S. And I guess essentially, my question is, when we look last year, your business kind of underperformed wafer fab equipment spending. And I guess what I’d like to understand is, given we’re seeing kind of disproportionate price increases across memory, maybe some of the customers like Intel and maybe their CapEx is growing slower than the overall kind of pie. So just trying to really understand kind of any nuances in your exposure? And any reason when you look today at your kind of key accounts and your exposures to them as to why you would outperform or underperform wafer fab equipment spending as we go into 2026 in your vacuum business?

Vagner Rego: Yes. I think we have explained in the Capital Markets Day. Perhaps it’s good to go back to that meeting where we said that the WFE now have different components and the components that is correlated to advanced packaging is growing quite fast because of AI. And that creates a bit of imbalance between if you want to compare the vacuum result with WFE. On top of that, when you go to lower nodes, you have some different process steps that are not exposed to vacuum. I think then that definitely creates a little bit of imbalance. I think when it comes to the CapEx that is important for us, all the CapEx utilized for the production of wafer, I think that is the CapEx that we should consider. I think it’s not always available, but that is the one that can define if we are performing well or not.

And we feel very comfortable with our performance or with our product portfolio today and going forward. Going back again to the Capital Markets Day, we have shown a new EUV system that we have released beginning of 2025. I think we’re very well positioned there. We also have shown a new platform for the semi market that we call Ganymede that we are introducing step by step that is quite relevant for us. I think that is the most important because that will allow us to stay competitive in these markets, even delivering more value for our customers. I think that is the most important, in my opinion.

Operator: The next question comes from Daniela Costa from Goldman Sachs.

Daniela Costa: I wanted to ask you a little bit to talk through sort of the restructuring and how you view that going forward? I believe at the CMD, you’ve mentioned that the actions were mostly done and the benefits would sort of come. So do you expect the headwinds on margin and on cash that we’ve had in ’25 from restructuring to maybe more normalized or be significantly lower going forward? Where do you stand in that process?

Vagner Rego: I think, Daniela, we will continue to monitor the situation. I think it’s difficult to say. If we feel the need that we need to adapt here and there, I think we will do. We’re still harvesting — I think Peter when he was presenting the bridge, I think he also mentioned that we already harvest that Q4 was a good example in ITBA and in Industrial Technique and Vacuum Technique where they did benefit. But we still need to do a little bit more in Industrial Technique because of the outlook. And again, we will continue to monitor. Of course, these restructuring costs that we have just booked in Q4, we have benefited slightly in Q4. So — and that will come step by step in 2026.

Operator: The next question comes from Vlad Sergievskii from Barclays.

Vladimir Sergievskiy: Could you provide outlook for your compressor business for Q1 or near term similar to what you have done for Vacuum and for Industrial Technique just directionally following a healthy 7% growth last quarter, of course?

Vagner Rego: I think what we mentioned, Vlad, is that the demand will stay — the activity level will stay flat. I think that is valid for Compressor Technique as well that is exposed to several industries. I mean, I think it’s — you see that the market still has some uncertainty. Globally, there might be positives here and there. But if I look to China, the demand is still challenging. You don’t have triggers from the consumer demand. Some pockets of growth here and there, but the underlying demand is not as strong as it used to be. So I think it’s the — that’s why I think you should consider what we have said that the activity level will remain the same.

Operator: The next question comes from Andreas Koski from BNP Paribas.

Andreas Koski: Could you give us an idea of what impact the tariffs had on the margin in the quarter? And if you still expect to be able to cover that by pricing, rerouting, et cetera, in 2026?

Peter Kinnart: Yes. Thank you, Andreas, for your question. When we look at the current quarter, I think last time, at the end of Q3, we said that the third quarter only had a partial impact from the changes in the tariffs like 232, et cetera, so that we haven’t seen the full impact yet. While at the same time, we were, of course, implementing a number of mitigating actions. And I would say that over Q4, the impact of the tariffs was basically similar as what we saw in Q3. And so that even though the impact in absolute terms was maybe higher, considering it was a full quarter, but on the other hand, the mitigating actions also partly took effect. That being said, we also admit, let’s say, that competitive situation in the market is, of course, there.

Demand is not always as vibrant in some areas. And as a result, of course, everybody fights for the orders, us included. And like Vagner already indicated as well, we are not willing to let go our market share. So I would say, in a nutshell, the result is that we are not fully able at this point in time to compensate for the tariffs, that the effect was similar as what we had seen in Q3 from a margin point of view. But that we expect to continue to work hard to mitigate through price increases, through logistic flows or assembly in the U.S., for example, other type of activities. And that this combination of all these activities over the next several quarters should ultimately lead to being able to compensate for the tariffs. But at this point in time, we are not fully able to do so.

Andreas Koski: But it’s only a 1/10 of a percentage point or so that the impact is. It’s not….

Peter Kinnart: Well, I don’t give an exact number because only measuring it is already quite a challenge to see all the different aspects of it. But I mean it’s definitely less than 1% on the margin.

Operator: The next question comes from Phil Buller from JPMorgan.

Jeremy Caspar: Phil had to jump on to the other line. It’s Jeremy from JP. On the topic of capital returns, it’s good to see the special dividend when operating cash was a little bit lower year-on-year. I’m wondering, is there anything we should or should not infer from this? I mean, on M&A, maybe the pipeline is a bit lower in 2026 and maybe you should see capital surplus? Or is it just a reflection of growing confidence on end markets improving, i.e., cash should be better this year?

Peter Kinnart: No, I don’t think anybody needs to read too much into this. I think it’s not the first time that we have this kind of extraordinary or additional distribution, even though we did it in a kind of a different shape or form in the past, but now this is in this way. It doesn’t have any impact with regard to our acquisition pipeline or whether we have or have not any good projects in the pipeline. I think when it comes to acquisitions, the key is always, is this the right fit for the company for the growth of the future to create value for the shareholders. And I think even with the additional capital distribution, I think we still have quite sufficient firepower to acquire both small, but also bigger targets should we feel that they are the right fit for the group.

Operator: The next question comes from Anders Idborg from ABG Sundal Collier.

Anders Idborg: Just a question on the Vacuum margin. The way I interpret you, Peter, is that the 19.2% that you have now, that’s a pretty clean margin and representative of the current basically interest — sorry, currency rates, et cetera. How should we think about the drop through when volumes start to come through as they probably do in 2026, given the footprint optimizations that we’ve done? That’s the question, yes.

Peter Kinnart: Yes. Thank you, Anders, for your question. As always, very difficult to give a very precise answer to this. What we have said when we discussed the different restructuring measures that we have taken with the business area was that we were targeting mostly indirect functions, try to limit as much as possible the impact — try to prune a little bit, let’s say, the management structure to become more efficient. And that over time, should, of course, when volume comes back, generate leverage from a margin point of view. Of course, once the volume goes up, we do expect that we will need to increase maybe some variable costs in line with the volume increase. I mean that’s only normal. But how much exactly the leverage effect will be is hard to say at this point in time.

It will depend a lot on what kind of volume growth we might be able to harvest. But that is definitely the idea with the actions we have taken to create leverage on the margin once the volume kicks in again.

Operator: The next question comes from Rizk Maidi from Jefferies.

Rizk Maidi: I just wanted to double-click on the North American order growth. I think you said it was 8%, but only plus 3% ex acquisition. It doesn’t feel that it’s a high number given the amount of pricing that you need to put through there. Just perhaps if you could just double-click on this, especially on Compressor and Industrial Technique. Are you guys not pushing pricing as much? Or are the volumes quite weak in the region?

Vagner Rego: Thank you for the question, Rizk. If you take there are different colors, of course, we have been performing very well in compressors. I mean that is the component of price indeed. We saw there, perhaps, I think, to give you a little bit more color, the Gas and Process business was more flattish in North America that might help you, while Industrial Compressors in general was positive. So in Industrial Technique, there, we have a little bit more headwinds in Q4, but I must say as well that 2025, North America was a great year for Industrial Technique. I mean we had quite a lot of [ project ]. It was good development. And Q4 was weaker, definitely there. And I mentioned about portable that we had some cancellations was mostly related to North America.

So some orders that we — all the orders from large rental companies that were in our books for some time, and they were not taking the equipment, we decided to cancel these orders because the price was a bit behind what we would like to. So — and I think when you combine that, you have the 3% growth.

Operator: The next question comes from John Kim from Deutsche Bank.

John-B Kim: Sorry, my question was asked.

Vagner Rego: Okay. Thank you, John. And we have one last question.

Operator: The next question comes from Sebastian Kuenne from RBC Capital.

Sebastian Kuenne: Just on Power Technique. I think you mentioned earlier that you’re not happy with the rental rates and the uptake on orders in North America. Did I hear you correctly that you mentioned that you may need to have further adjustments there for capacity? Or did I understand that wrong and we discussed that earlier?

Vagner Rego: Yes. But maybe to give you a little bit more color. I think the main problem is in rental. I think Peter already mentioned. The rental utilization was a little bit lower than what we would like to. And we had lower activity level in Europe and Asia for the rental business, and that’s where we will concentrate our efforts. But it’s not only about restructuring, it’s also about activities, finding new customers because we had some traditional customers that — where the demand is not there today, and we have to repurpose the fleet and do some sales activity to bend the trends.

Sebastian Kuenne: So higher operating cost for some time to find new customers?

Vagner Rego: Yes. I think when it comes to Power Technique, if we feel the need to adjust, we will adjust, I think. But we will concentrate the efforts on the rental business for the time being.

Peter Kinnart: Okay. Thank you, Sebastian for that last question. The time is unfortunately up. But of course, if you have any further follow-up questions, our IR department will be very glad to assist you in providing any further clarifications. With that, I would like to thank you all for attending the call and wish you a great rest of the day. Thank you very much. Bye-bye.