Year-end report January–December 2025

Year-end report January–December 2025

A year of future investments in a challenging market

October 1–December 31, 2025

• Net sales decreased -3 percent to SEK 4,512 M (4,650). Organic growth was 0 percent. Currency effects had a negative impact of 3 percent on net sales.
• EBIT amounted to SEK 103 M (127) and the EBIT margin to 2.2 percent (2.7). EBIT was impacted by items affecting comparability of SEK -62 M (-62).
• Adjusted EBIT amounted to SEK 165 M (189) and the adjusted EBIT margin to 3.6 percent (4.0).
• Earnings per share, before and after dilution, amounted to SEK -0.19 (-0.07).
• Cash flow from operating activities amounted to SEK 209 M (213).

January 1–December 31, 2025

• Net sales decreased marginally to SEK 18,014 M (18,046). Organic growth was -1 percent. Currency effects had a negative impact of 2 percent on net sales while acquisitions had a positive impact.
• EBIT amounted to SEK 500 M (902) and the EBIT margin to 2.7 percent (4.9). EBIT was impacted by items affecting comparability of SEK -287 M (-189).
• Adjusted EBIT amounted to SEK 787 M (1,091) and the adjusted EBIT margin to 4.3 percent (5.9).
• Earnings per share, before and after dilution, amounted to SEK 0.64 (7.74).
• Cash flow from operating activities amounted to SEK 1,013 M (1,376).
• Net debt in relation to EBITDA¹⁾ increased to a multiple of 4.0 compared with 2.1 at the beginning of the year as a result of the earnings decline during the year.
• The Board proposes that no dividend be paid for 2025.

Significant events after the end of the period

• No significant events occurred.

1) EBITDA excluding IFRS 16 calculated on a rolling 12-month basis for the Jan–Dec period.

CEO comment

A year of future investments in a challenging market

The fourth quarter marked the end of a year with major warehouse investments for the future, cost savings and new growth initiatives. At the same time, competition intensified in the market where many car owners postponed repairs, which contributed to a decline in our sales and profit during 2025. With several of the major projects now behind us, we are better positioned in 2026 to focus on increased sales and profitability.

The automotive aftermarket continued to evolve in 2025. A generally weak economic climate contributed to more consumers feeling uncertain about the future. Part of the pattern was that many car owners increasingly only engaged workshops to perform the most essential repairs, which contributed to tougher competition for consumers. At the same time, the trend of buying spare parts online gained momentum, which overall resulted in continued price pressure in the market.

The fourth quarter
For MEKO, the situation resulted in reduced sales in the first half of the year, which we worked to offset in the third quarter by, for example by adjusting prices. Market conditions were unchanged in the typically weaker fourth quarter and we reported zero growth, in line with the corresponding period in 2024.

In the fourth quarter, organic growth was reported in the business areas for Finland, Poland/the Baltics and Denmark, while negative figures were noted for Sweden/Norway and Sørensen og Balchen. The latter business area was impacted by temporary supply effects resulting from the move to the new central warehouse in Oslo. Overall, our earnings were negatively impacted, with an adjusted EBIT margin of 3.6 percent (4.0) in the period.

A year of investments and executing plans
We can summarize 2025 as a resource-intensive year of investments. Several of the actions we have taken have been key elements of the “Building a stronger MEKO” program, launched at the end of 2023 with the aim of strengthening our long-term position and profitability:

• New central warehouses. As planned, we constructed the new automated central warehouses in Norway and Denmark in parallel, and upgraded the existing warehouse in Finland. In addition, we relocated to a central warehouse in Poland that is almost twice the size.
  
• More Group-wide suppliers for better contracts. As planned, we continued to grow the share of suppliers serving all business areas, with the aim of securing better terms and conditions. During the year, the share of purchases from Group-wide suppliers rose from 62 to 67 percent.
  
• ERP system launched. We commenced the roll-out of our new ERP system, with Poland becoming the first country in the Group to use the system. Among other objectives, the aim is that this system will eventually facilitate increased synergies and serve as a cornerstone of our new, more robust logistics system.
  
• Continued savings. During the year, the number of full-time positions decreased by about 500. The reduction was a consequence of several initiatives, including warehouse automation, integration of the acquired Elit Polska operations and the savings program launched in July.
  
• Several growth initiatives
  In 2025, we also initiated efforts to boost our long-term sales. We increased our focus on own-brand products, including establishing the “Every part matters” concept in all markets to serve more customers who demand spare parts in lower price segments. A tire initiative was launched as part of a strategic partnership with Goodyear, with tire sales increasing by 12 percent in 2025. A commercial vehicle initiative was also launched. Another initiative was the expansion of our E-com platform Mekster from Sweden and Norway to Finland and Denmark, to meet demand from customers seeking a strong local online offering.

A financially weaker year
Overall, 2025 marked an operationally intensive year, but it was financially weaker than 2024. Organic growth was -1 percent, compared to 4 percent in the preceding year. The adjusted EBIT margin was 4.3 percent (5.9), and at the end of the year, the debt/equity ratio was 4.0 as a consequence of the earnings trend. Including items affecting comparability, the ratio was 3.5. This level is above our target range of between 2.0 and 3.0, but still within the terms of our loan covenants. Our focus is now fully on reducing debt.

Considering the outcome for 2025, the Board of Directors proposes that no dividend will be paid for 2025, in line with the dividend policy.

2026 – a year with fewer projects and a solid strategy
We have now entered 2026, which is also partly a new phase. We will continue to fine-tune the technology and work methods in our new warehouses, and persist with our growth initiatives. Above all, with the most demanding phases of the warehouse projects now behind us, we are better positioned to focus on increased growth and profitability than in 2025.

Fundamentally, we have a strategy that is well adapted to the transformation the aftermarket is undergoing: We will always strive to improve our business, help workshops become stronger, offer the most customer-friendly services to car owners and grow sustainably.

But we will also continue to work flexibly and adapt to changing conditions to execute our strategy. Our new initiatives are grounded in this approach. For example, we will continue to invest in our extensive branch and warehouse network at the same time as we strengthen our online presence. We will also continue to develop our own product range while offering the established brands customers expect.

The goal is the same: MEKO will always be the most comprehensive partner for everyone who drives, repairs and maintains cars – even when the playing field changes.

Pehr Oscarson
President and CEO