Key messages and Q&A on Year-end Report 2025

General and market environment

• Market sentiment remains stable: The market remains stable market, with early signs of recovery.
• Mixed regional trends
  • In Sweden, growth was driven by project orders for the defence industry.
  • In Norway, reduced market activity was observed, primarily driven by the oil and gas sector.
  • In Finland, the recovery from a weak 2024 continued.

Revenue, sales and operating profit

• Revenue increased to 2.7 % to MSEK 2,660 (2,589), driven by acquisitions (+4.3%), while organic growth was 0.5 %.
• Profitability improvement: Adjusted EBITA increased to MSEK 239 (214), with a margin of 9.0 % (8.3%), supported by stronger gross margin, continued cost savings and the positive effects of ongoing investments and acquisitions.
• Margin drivers: Favourable customer mix, stronger sales and assortment management, and lower USD based purchasing costs. improved the profitability across all countries.

Financial position and refinancing

• Improved cash flow: Operating cash flow strengthened thanks to higher EBITA and reduced inventory levels.
• Debt ratio below target level 3x EBITDA: The strong cash flow and positive profit trend reduced the ratio of net operational liabilities to adjusted EBITDA from 3.1 in Q3 to 2.5 in Q4.
• Refinancing: In February 2026, the business was refinanced and the credit facility with Handelsbanken was increased by MSEK 500 to a total of MSEK 3,100.

FAQ on Year-end Report 2025

Q1. Could you describe the main drivers behind profitability and margin development in 2025?

Alligo’s profitability and margin improvement in 2025 is driven by higher volumes, effective cost adjustments, and a stronger gross margin. Organic growth remained modest but turned positive in Q4, supported by stabilising demand. Growth in Sweden was boosted by defence-related project orders, while Finland continued its recovery from a weak 2024. Norway saw reduced activity, mainly within oil and gas. Acquisitions further strengthened earnings, and a small positive effect came from a lower USD exchange rate, which reduced purchasing costs from Asia.‑related project orders, while Finland continued its recovery from a weak 2024. Norway saw reduced activity, mainly within oil and gas. Acquisitions further strengthened earnings, and a small positive effect came from a lower USD exchange rate, which reduced purchasing costs from Asia

Q2. How would you describe the market development during Q4?

Demand stabilised during Q4, enabling organic growth. We are also seeing early signs of an upturn in the economy. If demand remains stable, Alligo will have good opportunities for organic growth and a positive profit trend in 2026.

Q3. Gross margin strengthened during the quarter, supported by FX and customer mix. How sustainable are these improvements and how much additional tailwind do you expect from currency movements in 2026?

The gross margin improved thanks to favourable mix, stronger sales and assortment management, and lower USD based purchasing costs. Only a smaller part stems from FX, but the lower dollar has reduced Asian sourcing costs. With professional purchasing and a rising share of own brands and SME customers, these improvements are expected to continue. FX tailwinds should have increasingly greater impact during 2026.‑based purchasing costs. Only a smaller part stems from FX, but the lower dollar has reduced Asian sourcing costs.

Q4. How are customer purchasing behaviours evolving, and how is the SME segment developing?

Customers continue to prioritise essential purchases, with stable store traffic but smaller basket sizes and fewer add-on purchases. This cautious behaviour remains, even in categories with higher season-driven demand. At the same time, SME customers provide a more stable and profitable base, as they are less sensitive to economic fluctuations. The groundwork laid during the year is now supporting a stronger customer mix and future organic growth.‑on purchases. This cautious behaviour remains, even in categories with higher season‑driven demand. At the same time, SME customers provide a more stable and profitable base, as they are less sensitive to economic fluctuations. The groundwork laid during the year is now supporting a stronger customer mix and future organic growth.

Q5. How has winter weather affected demand?

The colder winter led to a clear increase in demand for winter-related products, with some categories such as starter batteries rising by 40–50 per cent. Customers needed these items to keep operations running, and the strong volumes reflect the immediate impact of the weather. However, the cautious purchasing behaviour seen throughout the year remained. Even when customers visited stores to buy winter essentials, they did not broaden their purchases or add complementary items as they typically would in stronger market conditions‑related products, with some categories such as start batteries rising by 40–50 per cent. Customers needed these items to keep operations running, and the strong volumes reflect the immediate impact of the weather. However, the cautious purchasing behaviour seen throughout the year remained. Even when customers visited stores to buy winter essentials, they did not broaden their purchases or add complementary items as they typically would in stronger market conditions

Q6. What’s the market outlook for 2026?

Alligo expects a stable macro environment to support continued organic growth in 2026. A strong financial position, improved profitability and higher capital efficiency will help further reduce indebtedness, supported by the new refinancing agreement. With stabilising customer demand, Alligo sees good conditions to progress toward its financial targets. Key priorities for 2026 include strengthening sales, marketing, acquisitions and renewed efforts in TOOLS Finland.