Annual and sustainability report 2025

Stabilised demand

Revenue increased to MSEK 9,551 (9,333) in 2025, representing growth of 2.3 per cent. There was a continued slowdown at the beginning of the year but demand stabilised during the second half. The weak economic situation continued to affect most industry segments in all of our countries. The exceptions to this, which saw more positive development, were oil and gas in Norway and the manufacturing industry in Finland.

Organic growth for the year was -2.2 per cent. Organic growth improved as demand stabilised, turning slightly positive during the final quarter of the year.

In Sweden, the bankruptcy of Northvolt and unusually large orders from the Swedish Armed Forces in 2024 affected the figures in comparison. The reduction in sales to small and medium-sized companies slowed in 2025, following a weak comparison year. Norway was boosted by the strong oil and gas segment and had less of a reduction in organic sales compared with Sweden. Finland recovered following a difficult 2024 and achieved positive organic growth. This was also helped by the strong trend in the manufacturing industry.

Our investments in our offering and sales are clearly delivering results and we returned to organic growth during the fourth quarter. If demand continues to stabilise, there are good opportunities for us to achieve the target of more than 5 per cent organic growth in the future. In 2025, however, it was acquisitions that drove the Group’s growth. Completed acquisitions contributed revenue of approximately MSEK 280 with good profitability.

Currency effects for the full year amounted to -1.7 per cent, as a result of changes in the NOK and EUR exchange rates.

Improved profits

Adjusted EBITA for 2025 amounted to MSEK 615 (601) and the adjusted EBITA margin was 6.4 per cent (6.4).

After a relatively long period with a negative profit trend as a result of the market decline, the trend was broken with positive profit in the third quarter, followed by further improvement in the fourth quarter. The improvement is mainly due to a combination of cost-cutting measures of MSEK 100, which had a gradual effect during the second half of the year, improved gross margin, acquisitions and stabilised demand.

More effective sales work and improved profitability in Finland remain priority areas for achieving the target of an adjusted EBITA margin of more than 10 per cent for the Group.

Integrated business with scalable platform

The integrated business is at the heart of Alligo’s business model. Since the merger of Swedol and Tools in 2020 and the formation of Alligo, we have built a Nordic platform with shared logistics, IT, financing, legal structure, pricing system and range. This platform is used to operate the integrated business of the Swedol and Tools chains in an effective manner that provides scalability and a stable foundation for profitable growth. The final piece of the jigsaw was put in place with the implementation of our Group-wide ERP system in Norway in February.

We are always developing Alligo, both internally and through acquisitions which are then integrated. Towards the end of 2025, the new Nordic Operations function was established, among other things to coordinate sales support activities. The country organisations continue to operate as before, but Alligo will be able to pursue joint initiatives and share knowledge between the countries more effectively. The new function includes the development of the previously established Nordic concepts for the construction and manufacturing industries. Nordic Operations represents the next step towards becoming a truly Nordic organisation.

As previously announced, we are implementing a major restructuring of the Tools business in Finland. The project’s activities include a review of the store network, driving traffic to stores and improving profitability from large industrial customers. To strengthen leadership and implementation, a new country manager for the Finnish operations was appointed at the end of the year. We are also carrying out a review of the organisational structure, in view of the fact that two larger customer relationships are set to end. These relationships ending will have a negative impact in the short term, but it also represents an opportunity to establish a healthier business structure if we are able to attract more small and medium-sized customers. Today, the stores are to too great an extent structured to serve a limited number of large customers, where our sales margins are generally low. The aim is for the Tools business in Finland to have the right conditions in place and to be able to achieve lasting profitable growth.

Non-integrated businesses an important complement

Over time, we have supplemented the integrated business with non-integrated businesses within strategically important product and technology areas. Through a series of acquisitions, we have become the leader in Sweden within areas such as product media, welding and batteries.

Together, the non-integrated businesses account for around 20 per cent of revenue in highly profitable product areas. This has been a key factor in generating growth and improving profit. We see further development potential in both existing and new product areas, which along with the integrated business will create the conditions for profitable growth in the Nordic region.

Targeted sustainability work

Being the industry leader in sustainability is one of our strategic objectives and this must be evident in everything we do. Sustainability is vital for our competitiveness and a key factor in decision-making throughout the organisation. It is pleasing to see that we have improved outcomes for almost all of our sustainability targets. The exception is reduced customer satisfaction in Norway, which is due to disruption resulting from the relocation of logistics operations to Vestby. The major issues were dealt with during the first half of 2025 and the focus since then has been on forward-looking work to maintain high-quality delivery to our customers in 2026.

In February 2026, Alligo was awarded Platinum by EcoVadis, one of the world’s leading platforms for corporate sustainability assessments. Platinum is the highest level and places Alligo in the top 1 per cent of all evaluated companies worldwide. This award acknowledges the excellent sustainability work we have done over a long period and also shows that we have made further progress during the past year.

Great emphasis is placed on sustainability in the development of products and services. A prime example of this is the ReCare service, which was launched during the first quarter. ReCare is a full-service solution for workwear that includes laundry, repair, reuse and recycling. The service demonstrates how we can make a positive contribution to the climate and environment while at the same time strengthening our offering in an area that is important to many customers.

A key milestone during the year was the validation of the climate targets that we submitted to the Science Based Targets initiative (SBTi) in 2024. Our adopted climate targets mean there is no uncertainty about what we need to do and we can focus on pursuing targeted work to achieve these targets.

Strong position for growth

We leave 2025 behind us in a strong position for the future. Alligo’s financial strength has enabled key investments and acquisitions during a period of a deeper market decline than has been seen for a long time. The positive effects are evident in our ability to continue to grow when the economy is weak. Several quality acquisitions in 2024 were followed by Alligo’s largest acquisition to date in the form of Svenska Batterilagret and three new acquisitions within product media during 2025. During the year, this increased leverage, defined as operating net debt in relation to adjusted EBITDA, excluding IFRS 16, to just above the target of below 3 times. Thanks to strong cash flow and a good profit trend, the fourth quarter reduced the debt ratio to 2.5, meaning we are achieving our financial target. The aim is to reduce the debt ratio further, which will gradually be achieved if the positive profit trend is maintained.

The global situation of economic recession and an uncertain geopolitical situation has become the new normal to an extent. This makes it impossible to predict the future, but we are cautiously optimistic of a definitive economic recovery. When it comes, Alligo is ready to hit the accelerator. At the same time, I feel confident that since 2020 we have built a fundamentally strong company that is able to navigate successfully both recession and an uncertain global situation. Now that the strongest decline is behind us, Alligo has good opportunities for profitable organic growth, as demonstrated during the latter part of the year.

I am proud of the work we have done together. It has been challenging at times, involving everything from the integration of two equally large businesses and organisational changes to the relocation of logistics centres in both Sweden and Norway. We need to resolve the issues in the Finnish Tools business, and work is ongoing to achieve more efficient warehousing. There are always things to do and Alligo, like all businesses, needs to continue to develop if it is to remain at the forefront, but significant steps to build the company have been completed. I am convinced that Alligo is well-equipped to achieve new successes and profitable growth under a new CEO in 2026.

For this year and for my time at Alligo, I would like to thank all colleagues, partners and customers who have been with us along the way and who have made the building of Alligo possible.

Tyresö, April 2026