Thank you, and good morning. Welcome to CTT's quarterly earnings call.

With me today is Markus Berg, our CFO, and we will present the Q4 financial results and outlook going forward. Starting with the highlights in the quarter, we signed agreement with Boeing Business Jets according to MOU that we signed in October.

In '25, the installed base of humidifiers in service on A350s and Boeing 787s grew with 10%. Looking at the financial performance in short, comparing the same quarter last year, net sales decreased 31% to 57 million.

It adjusted for FX impact of 10 million, the decrease was 18% or 15 million. EBIT dropped to 7 million compared to 34.

FX impacted -13 million. The EBIT margin was 12% versus 41.

If adjusting for the temporary FX effects, 14%. As earlier announced, we have initiated cost savings counteracting a lower dollar rate and improving the EBIT margin.

Fully implemented, EBIT margin improved with 200 bps. Earnings per share decreased to 0.45 versus 1.93 SEK.

CTT generated weak operating cash flow with -5 million compared to 16 million due to that almost all quarterly revenue in December with payment due in Q1. Bridging net sales from the same quarter last year, OEM added 4 million, counteracted by a 3 million decrease in private jet.

Aftermarket sales decreased 27 million due to inventory buildup and distributors in Q4 '24 and inventory reductions in Q4 '25. If adjusting for the inventory reductions in Q4 '25, CTT sales would have been 10 million higher.

This had a significant negative impact on mix and earnings. A breakdown of total sales shows that aftermarket sales accounted for 61% and 34% came from system sales.

Order intake was 65 million compared to 81. Backlog in the quarter ended at 131 million compared to 48.

I now hand over to Markus for more detailed financials.

Thanks, Henrik, and good morning. Starting with the EBIT bridge, compared with last year, EBIT decreased 27 million to 7 million, impact 13 million in FX, 12 million due to lower volumes, and 5 million from negative sales mix.

Currency effects remain the wild card that is hard to predict, with major impact on CTT sales and earnings. Even though CTT has all loans in dollar and implemented cost savings that will have full impact in the first half of '26, it's not enough to compensate for the sharp decline in the price of USD/SEK.

Currency contributed to a lower margin, but it's also due to depressed volumes. Volume growth and cost control will gradually drive the margin upwards to 25% or above.

Let's move on and look at the cash flow. Weak operating cash flow of -5 million compared 16 million last year, affected by low EBITDA and customer payments being pushed to first half of '26.

Strong operating cash flow in the second half of '25, same level as EBITDA. Let's continue by looking at the net debt.

Net debt amounted to 9 million compared -25 million in Q4 last year. Cash closed at 27 million.

In addition, CTT has 58 million in available credit facilities. Equity ratio at 74%, same level as last year.

Return on capital employed 15%. We expect to improve our financial position going forward, driven by strong cash flow, pushing down net debt to negative.

Let's move on and look at the year-to-date numbers. If looking at full year '25, net sales decreased 12%, currency adjusted -5%.

Good that system sales increased 15 million in private jet, 13 in OEM, and 3 million in retrofit. Aftermarket sales were though down 67 million.

The difference between the years was amplified by inventory buildup in '24 and inventory reduction in '25, and 20 million difference in revenue from IP spares due to exceptionally strong demand in '24. If adjusting for distributors inventory reduction, CTT sales should have been 32 million higher, reflecting underlying deliveries without any impact from inventories.

Continuing with the EBIT bridge for the full year, compared with last year, EBIT decreased 65 million to 48, impacted 32 million by FX, 12 million due to lower volumes, and 24 million from negative sales mix. Let me repeat that volume growth and cost control will gradually drive the margin upwards to 25% or above.

Let's move on and look at the proposed dividend. The Board of Directors proposes an ordinary dividend of SEK 2.4 per share, in total 30 million or 78% of net earnings, same level as last year.

I will now switch focus to sustainability. CTT continues on its journey to develop our sustainability efforts.

I would like to particularly highlight five achievements during '25. First, certification according to ISO 14001 and 45001.

Second, circular project for recycling of pads for end customer. Third, strategic sustainability goals and activities per material area is set.

Four, training in new sustainability policy and code of conduct conducted for all employees. Finally, new sustainability report that is inspired by CSRD.

During the year, we have also improved the results for several of our strategic sustainability goals. I would especially like to highlight the result for the Great Place to Work survey, which has increased to 85 from 80, a great level as a total average, and a proof of that CTT is a great employer.

I will now hand back to Henrik for the outlook.

Thanks, Markus. If looking into '26, I can conclude that the headwind from inventory at distributors will end.

The first quarter, we forecast higher sales quarter on quarter in US dollar, driven by gradually better correlation between CTT's aftermarket sales and underlying airline demand. We also forecast more OEM deliveries.

In private jet, we expect another weak quarter. The outlook for '26 is significantly higher volumes in OEM and improvement in the aftermarket business.

I start with aftermarket outlook. The underlying aftermarket shows stable but low-digit growth in '25, reflecting slow increase in the number of systems installed in '24.

CTT sales figures were overshadowed by inventories at distributors. CTT gained from inventory buildup at distributors in '23 and '24, and we suffered from inventory reductions in '25.

Net sales in '25 amounted to 167 million. If pairing with underlying demand, CTT would have had 32 million additional sales.

In other words, inventory-adjusted aftermarket sales were 199 million. At the beginning of '26, inventory levels at the distributors are better balanced.

This will underpin a rebound in sales when deliveries gradually mirror actually end-market demand. In addition, the population of humidifiers, Airbus A350 and Boeing 787, has increased by 10% in '25.

All other things equal, this means higher revenue in US dollar compared to '25. The outlook for CTT's OEM business is strong, given successful aircraft ramp-up by Airbus and Boeing.

Deliveries will pick up significantly from Q1 '26, with Boeing as the front-runner. CTT's growth pace primarily depends on Airbus and Boeing's ability to scale production and deliver widebody aircraft.

More newbuilt aircraft will drive CTT's OEM sales. Boeing 787 is now on rate eight aircraft per month compared to five aircraft per month in Q1 '25, and Boeing is targeting 10 aircraft per month later this year.

In addition, CTT aims for even higher growth rates by improving shipset content. CTT will in '26 start to recognize sales impact from higher A350 selection rates.

In addition to line-fitting the flight deck humidifier, A350 operators to a greater degree now select humidifiers for crew rest and business class. This will gradually result in higher average shipset value on newbuilt A350s.

In private jet, the first half of '26 looks weak, with no planned kit deliveries. During the first two quarters, revenues are expected to come mainly from development projects.

Airbus Corporate Jets, front-running by promoting humidification for ACJ320, the ACJ220, and the ACJ330. We have several sales prospects in the second half of '26.

Boeing Business Jets includes humidification as a baseline configuration. First BBJ 737 MAX kit system is under development.

We have several VIP opportunities with deliveries towards the end of '26 and in the beginning of '27. If they develop as planned, we should be able to increase this year's sales despite the weak start.

This picture is from Greenpoint Technologies. We are together developing cabin humidification to be installed in four BBJ 787s.

During the quarter, the cabin system for the BBJ 787-8 was delivered, and the pre-study of the design for the three BBJ 787-9s was finalized. During the first half of '26, the development will be finalized and the systems delivered.

In addition, this is a good example when VIP projects function as proof of concept for cabin humidification at commercial applications. The 787-9 fleet is a big opportunity for cabin humidification, both line and retrofits.

We are still targeting to enter the large cabin business jet market, a 100 million SEK opportunity per year in first sales. As stated before, we need to be endorsed and included in the offerings by the OEMs.

We continue to address Bombardier Global, Dassault Falcon, and Gulfstream. Not yet there, but I can conclude solid progress in our discussions with Bombardier together with Liebherr.

In '25, we broke a three-year losing streak with zero anti-condensation retrofit deliveries. We started to deliver the first Jet2.com system in Q3, and another 25 out of the 146 are scheduled for deliveries until end '28.

We need additional orders, and we need to obtain availability to install the system in new aircraft. Together with Jet2, Jet2.com, and other airlines, we try to convince Airbus that it should be possible to install our Cair system in new aircraft before delivery, either as line-fit or provisioning for post-delivery modification.

As part of this effort, we also have trial systems with major low-cost carrier in six A321s. I don't expect to close another big retrofit deal in the first half of '26.

To summarize, OEM deliveries will take off in Q1 '26, driven by higher aircraft production rates, indicating steep ramp-up in our deliveries in '26. Private jet are established on a higher net sales baseline, but the first half of '26 will be slow.

Sales pipe is strong, and revenue should trend higher. Aftermarket sales in '26 expected to be higher than '25.

Higher sales will gradually improve EBIT margins in '26. I now hand over for Q&A.

Thank you. Good morning.

A couple of questions. The first one if I start on the smaller side of the business, but my impression when you had the Q3 call, for example, regarding VIP and private jet opportunities was that both the ACJ business opportunities, but also some other areas would potentially improve into Q4 and Q1.

I'm just curious if this is related to what you've talked about before that the private jet side of Airbus, for example, they don't have enough available production slots or if there's anything else that has impacted the timing of such deliveries?

Good morning, Karl, and thanks for the question. I think ACJ has a great pipeline and they're doing really good on the market.

There is, as you indicate, some shortage of aircraft available from their production line. ACJ is more or less as we forecasted.

BBJ is actually picking up now after a couple of years where it's been a little bit slow. I think the market is more or less as expected it to be.

All right. Understood.

More about kind of visibility here on the aftermarket channel, appreciate the comments you give here both during the presentation and in the actual report. Now when you actually quantify the impact of the inventory effects, what actions have you taken in order to gain better visibility of just how this has impacted you and how you can try to mitigate such effects in the future?

Aftermarket visibility is key to CTT, and the last couple of years we have actually worked very hard to increase our visibility. I think we have now reached a stage where we actually are in the position to talk about effects of inventory, which we have not done in the past.

That is, of course, because we have worked with our supply chain to have better visibility, better predict and forecast sales to the end customer, better forecast and predict what inventory levels our distributors should have. As we talked about before, we have more than one distributor.

One may be fourth running on visibility, but we are doing steps with the other ones as well to increase this visibility. Of course, one thing for us having a more stable business is to avoid inventory buildup at our distributors and try to balance this during '26 so that they sell as much as we sell.

Understood. Has anything changed on the timeline from kind of higher production rates at the OEMs to deliveries from you and actual booking of revenues?

I believe previously you've talked about three to six months, if I'm not mistaken.

No, I don't think anything has changed. I think what changed during '25 was that Boeing was actually hitting all their milestones.

They increased the rate from five to seven, exactly as they predicted going into that year. They also went up to eight now beginning of this year, just as they predicted.

Just comparing five last year in Q1 to eight per month in Q1 '26 is a big increase. As the selection rates on the 787s are very high and very stable, and we saw that during last year as well.

What we see with Airbus is that they are gradually increasing a little bit not as transparent as Boeing on what rates they are. We have now finally concluded the switch around in the supply chain, we're now moving up as Tier 2 on the A350 program, which means that we will during the year gradually have better visibility.

We hope that we then can confirm that the higher selection rates will drive our sales even higher in OEM on top of the rate increases.

Understood. The comments there on the aftermarket side with the growth in the installed base, and you said that the inventory situation is now better balanced.

Does that mean that we should start to think about a kind of mirroring of growth for you on the aftermarket side with the installed base already now at the start of the year, or is there still a bit more to do on the inventory side before we see this happening?

As I wrote in the CEO comments, we say that the inventories are better balanced, that doesn't mean that they are perfect. Gradually during the year, we will see that they are perfectly balanced, and then we should have a mirror effect of distributor sales to the airlines.

That would mirror our sales, and that would gradually come into play here in the beginning of '26.

All right. I have a few more questions, but I'll get back in line first.

Thanks.

All right. Hello again.

On the comments there on the profitability, when you talk about cost actions and higher volumes expected to lead to a margin improvement towards 25% and onwards, just curious given the high uncertainty of the currency, does that assume current prevailing spot rates, or are you using any kind of different currency level when you think about how to reach that 25%?

Hello, Karl. I will take that one.

As and as I said, currency effects will remain something that is really hard to predict. We have calculated with an exchange rate a little bit below 9, a little bit lower than today's level.

We are not doing any forecast for the exchange rates ourselves. We are looking at the banks' forecast and use that forecast in our forecasts.

Understood. Just to confirm here, it's not really like you're in a position to be worried about it, but the payments that you've talked about, we've had this situation before in a quarter here or so, the payment of deliveries, is that something you expect can be recouped already in Q1, most of it?

Most of it in Q1. Some payments will come in the second quarter.

It's always you have to look at cash flow in a longer perspective. If you look at, for instance, the second half of '25, you can see that we have a really strong cash flow in the same level as EBITDA.

One separate quarter can always be a little bit weak, but in the long run we will have good cash flow.

Understood. Then perhaps coming back to you, Henrik, one on the Boeing 777X.

I believe there was some news out just one or two days ago about potentially starting test flight productions and so on again. Can you just remind us how you think about when CTT will start to deliver more material deliveries for the 777X?

I know you've in the past have delivered some some prototypes or demos, if I use a my wording.

Sure. I'll do that.

What Boeing has stated is that the 777X will enter into service in the beginning of '27. I actually heard some Boeing representative talk about that the certification would be done end of this year, but they stuck to the in-service date for '27.

They also stepped up the flight testing to another level. They have different levels, which I don't really exactly know, but it indicates that they are moving on with their flight tests and making progress.

They seem to be quite confident. For us at CTT, the most important thing is that the production is actually running and has been running for the full '25, and I think it started actually in '24.

These are the aircraft that will be delivered to customers in '27. Production is running.

Yes, you are right. We have delivered prototypes, but we have also delivered production systems, certified production systems, which we did already in '23, if I'm not mistaken.

Of course, these systems will go into the new production aircraft. We have to see what kind of production rates, which airlines are taking the first aircraft, and we hope to restart our deliveries end of this year or beginning of next year.

A long answer, but I hope it was an answer to your question.

Absolutely. Then yeah, I was just writing down what you said here.

On the A350 here, previously you've talked about the kind of average shipset content per aircraft that you expect this to be closer to, if I'm not mistaken, two per aircraft going into '26. In the comments there, you talked about how the higher average shipset content will help you.

Has anything changed here? Is it still that we should think about roughly two units per aircraft for '26 deliveries, or could it be less or more?

No, I would say nothing has changed, and we can see that that is correct.

All right. That was all from my side.

Thank you.

Thank you, Karl. I just will go back to the inventory levels and just to reconfirm, our distributors have inventory that are balanced now going into Q1.

If I said something else, that was not my intention. Inventories are balanced, and we will see that this affects our sales starting in Q1 '26.

We have one question from the chat to Henrik regarding PMA. Is there any correlation between aftermarket sales declining and the launch some years ago of competing PMA?

Could you give some granularity on the issue?

Sure. We saw the PMA entering the market in '22.

We have previously talked about that the market experience on PMAs is that there's usually a 80 to 20, 80 for OEM and 20 for PMA. I would say that has been quite stable since we first saw the PMAs entering the market in '22.

We closely track our market share, and I could say that we are in that range of the market average 80/20, or even a little bit better. I would say that there is, of course, a loss of market share, but that has not changed during the last couple of years since we saw this competition.

Actually no to your question, that's not why we see declining sales. We see that we have this effect for a long time, and we see that our sales to the airlines have actually increased during '25, even if CTT has a lower sales to our distributors due to this inventory effects that are now balanced.

Then we don't have any more questions in the queue and or on the web, let's move on and summarize this earnings call. Before closing, I will take the opportunity to summarize.

In '25, we had headwinds from FX and transitory effects in the aftermarket. In '26, FX will remain a joker, but we do know that the inventory effects will end.

'26 will be better, driven by system sales, primarily in OEM, and higher aftermarket sales. Thanks for listening.