Thank you very much. Good afternoon, everyone, and thank you for joining us today.

With me, as usual, I have Joakim Laurén, CFO, located in Malmö. I myself am sitting in Västerås today.

The agenda is the same as usual. I will start by giving a general business update, and after that, Joakim will walk you through some more details on the financials, and I will finish off with some concluding notes and our outlook.

After that, we will open up for Q&A. All right, let's dive right into it.

We have now delivered three consecutive quarters of strong order intake growth, which is increasingly translated into sales growth and also improved profitability. Order intake up 24%, or 15% adjusted for acquisitions and currency effects.

We see a broad-based order booking across both business entities and across most of our key segments. On the sales side, we did achieve a record sales level of 682 million, that's 22% up year on year, whereof 10% organic and currency adjusted, and the book-to-bill for the quarter ended up at 1.02.

The profitability improved despite continued investments in various growth initiatives, and also despite, as we will see, some non-recurring costs in Westermo. EBITA grew by 30% to 84 million Swedish kronor, lifting the margin then from 12 to 12.4 compared to 11.6 last year.

On the free cash flow side, we had a bit of a challenging quarter. We achieved 40 million SEK, and the main reason for working capital increase was actually that we had a lot of invoicing towards the end of the quarter, which, of course, affected this.

Somewhat elevated safety inventory as well, but the main effect was actually the accounts receivable. On the inventory side, you are all aware about the memory circuit supply situation, which remains extremely strained, and we are putting a lot of effort in the whole company on securing supply.

That's really our number one priority right now to make sure that we can deliver to our customers, and, of course, also as much as we can, offsetting the cost increases that we are seeing through price adjustments towards our customers. When it comes to defense, this is still a small segment for us, but strategically important.

It's developing according to plan in both business entities, although, of course, from a low starting point. We are doing some targeted investments in both business entities, especially adding a couple of sales people with a background from the defense industry, and we are also have also tested some of our products against military standards so that we can, with confidence go to these customers and talk about what we can do to support them.

That's working out according to plan. As we all know, the geopolitical uncertainty is still there.

I feel the organization is focused on, what we can influence, focusing on profitable growth and building on recent years' significant investments. All right, let's then move into the Westermo business entity.

In Westermo, we delivered record sales and a strong order intake despite a temporarily weaker train market. The energy and trackside segments grew nicely.

There were no major project orders in the quarter, and I think most of you are aware that our train business is relatively volatile between quarters, it doesn't mean that the demand as such has lowered. It's just that in this particular quarter, the order bookings were somewhat lower than in our record-high Q1 quarter.

Energy is actually becoming a major growth driver within Westermo, very much supported by the Welotec acquisition. Sales up 28%, or 9% organically, that's a record-high level for Westermo.

I'm pleased to see that we are starting to convert the high order bookings from the last quarters into sales now. Book-to-bill actually at 1, exactly at 1 for the quarter.

EBITA grew by 22%, 15.3% margin. It's a little bit lower than what we would expect from Westermo with this kind of nice top line, but we did absorb around 8 million Swedish kronor of non-recurring cost items in the quarter, and that those cost items relates to strategy work and some business improvement projects that we have been running in the quarter.

As I mentioned, Welotec continues to develop very strongly, contributing to both growth and profitability. One thing worth mentioning in Westermo, which is not in the slide, is that we also achieved on the sustainability side an EcoVadis platinum status, moving from silver to platinum, and that is thanks to all the hard work that has been done in the business entity to move that area forward, and this is something that our customers actually care about, we are happy about that.

If you look at the graph there to the right, you can see that the order intake pace is well above the sales graph, which is, of course, positive, and year to date, we see a healthy order growth and also a sales growth, so that's so far, good. All right, let's then move into the Beijer Electronics business entity.

I'm very pleased to see that the long-term transformation work in Beijer Electronics is actually now starting to translate into increased stability, sales growth, and also higher margins, and that is very, very good to see, because the team has been working really hard for a long time now without really seeing clear results, but now we're starting to see the tangible results as well. Order intake up 22%, driven mainly by the energy and marine segments.

Sales grew 11%, book-to-bill 1.05 in the quarter. As we mentioned in the report, we have established and formalized energy as a focus segment, and that is really because we already have strong positions with key customers in this area, we have a good product fit, and also we see a growing customer demand.

We are working in areas such as data centers, EV charging, carbon capturing, and so on. It makes a lot of sense for us to actually formalize energy as a focus segment in Beijer Electronics as well.

The higher sales level lifted the EBITA significantly, and the margin improved to 12.3% from 9.5% in the previous year. That the team is working hard on the launch of the new X3 platform, and that is also proceeding according to plan.

We are seeing high interest from customers in this new modern platform. We see still a lot of new customers ordering this product, which is very promising, and the migration of existing customers from the X2 series to X3 is also proceeding according to plan.

What is not mentioned here, but we mention it in the report, is that the R&D spend in Beijer Electronics is also now normalizing according to plan as we have launched X3 last year. All right, with that, I hand over to you, Joakim, for the financials.

Thank you very much, Jenny, and I will take you through some more details on the financial side. I will start with the volume development, and as Jenny pointed out, really good order quarter, third in a row on the higher or stronger levels, of the 24% growth compared to last year, 15 is then organic, 11 comes from the acquisition of Welotec, and a smaller portion of FX.

If we look at year to date, we are at +33%, or organically 23, really good numbers for the first half of the year. Sales, as Jenny pointed out, it's all-time high for Ependion as a group and also actually for Westermo.

+22%, organically then 10% in the quarter, of then Welotec is adding then the 12 to the 22. Year to date, 16 in total, of what organically is +6.

If we look at sequentially compared to Q1, obviously the orders is somewhat lower, and as Jenny pointed out, the main reason is really that the train segments that we know is bumpy came in at somewhat lower levels in this quarter compared to the really strong levels in Q1. That's the reason for the sequential downtick.

Sales increased 14% if we compare Q2 to Q1. If we look then at profit, the EBITA raised 30% to 84 million for the quarter, and if we look at profitability, we saw almost 1%, or 0.8 percentage points improvement from the 11.6 to 12.4 for Q2.

Also here in terms of sequential, we basically came in on the same kind of level that we saw in Q1, and the reasons is really within Westermo and the non-recurring cost items that Jenny just mentioned. If we look then at the total income statement, we can conclude that the EBIT increased with 24% in the quarter.

The net profit increased with 50% to 45 million for the quarter, and if we look at the first half of the year, we are up 38%, it's quite big numbers here. We do want to point out that in the quarter, we had some total negative currency impacts of -2.4 million of what translational transactions, or transactional differences is most of that negative impact.

If we then move forward, let's look at cash flow. 40 million in the quarter to be compared to the 68.

Jenny also earlier pointed out that the reason for the somewhat lower is that we still sit with relatively high inventory levels related to safety levels that has been increased due to the constraints in the memory market, you could say, for supplying components to our manufacturing. Also the major impact is actually the accounts receivables that came in relatively high due to phasing on towards the later part of the quarter.

The net debt/EBITDA covenant is moving downwards as improving levels. We came in just below 1.2, which is then emphasizing that we have solid balance sheet and some financial muscles to continue our M&A agenda.

That completes the financials, back to you, Jenny.

Thank you for that, Joakim. To conclude, I think that after a couple of challenging years in 2024 and 2025, what we are seeing now with a little bit of a stronger market is that these results confirm the strategic direction that we have chosen, that is actually working, despite the fact that we still see geopolitical and macroeconomic uncertainty.

We see a higher activity level across our customer base now compared to 25 and especially 24, which is, of course, good. It's not extremely high, it's important to point that out, but it's on a healthy and good level, so that's great.

As I mentioned before, we are very focused on capitalizing on the investments that we have done in recent years, and I'm talking about, of course, the establishment in India for Westermo, the big investment that we have done in the X3 platform, the acquisition of Welotec, and so on. Of course, there's much more to be done there, and we are really focusing on making that happen.

Over the medium and long term, we are confident in that we can continue our profitable growth towards our financial targets, and we see that there is structural growth in our target segments driven by, as we have talked a lot about, electrification, sustainability, and so on, and we are well positioned as a group to actually take advantage of that growth. Looking then at our financial targets, they remain the same.

Our medium-term ambition is to deliver an organic growth level of at least 10% per year. In quarter two, we are there, to say, in this specific quarter with an adjusted growth of 10%, while the order growth was 15%.

This gives us somewhat confidence that the underlying demand environment remains relatively supportive and we are targeting to reach that level. In terms of profitability, EBITA margin of at least 15%, that target remains.

We reached 12.4% now, up from 11.6 last year. As we mentioned, a key contributor to this is actually Beijer Electronics' improved margin, which really demonstrates that the transformation is working, and, of course, both business entities need to contribute in order to reach this target, so that's encouraging to see that we are at least moving in the right direction there.

Finally, the outlook, then. We feel that we are operating, as I mentioned, in attractive markets that has a solid underlying growth, we feel the medium-term prospects for us to achieve both our growth and profitability targets are good.

However, in the short term, geopolitical and economic uncertainty persists, but in general, we are positive about the outlook for 2026. That concludes our presentation, and we will now move into the Q&A section.

Hi, Jenny. Hi, Joakim.

Can you hear me?

Yes.

Yes.

Yes, let's I've got a number of questions. Let's start with maybe the train segment where you talk about some weakness.

I'm just curious to hear about the demand side and maybe underlying, because we talked last quarter and the quarter before about financing for the project maybe starting to ease up and that you see these projects starting to come through. I'm just curious if any of this has changed or if it's simply a normal bulkiness of orders that you're seeing.

Yeah. I can answer that question.

I think it's more of a normal bumpiness in the order pattern. We do see we are, of course, following the development of our key customers in the train segment, and there we have a couple of big customers, of course, and they are doing quite well.

They have high order bookings, they have high order stocks that they need to deliver on in the coming years. I think it's more of a natural variation than anything else.

The underlying growth is stable. We see the India market being very, very active, which will, of course, also contribute here.

I think overall, the demand is good.

Yeah. Excellent.

Then my next question is on Welotec, if you can talk a little bit about the progress of the cross-selling between the old energy segment and Welotec.

Yeah.

Yeah.

I think what we are seeing, and that is, of course, very positive, is that Welotec is really working as a catalyst, to say, in our energy activities, because with the previous portfolio that Westermo alone had, we had to kick out competitors that were already incumbents with our customers, and that is quite tough to do and it takes a lot of time. With the Welotec offering, I think that we can open up different doors, to say, with these customers, and their offering is somewhat more unique, if you like, in terms of what customers are looking for right now when they are modernizing their grids, when they are digitalizing their substations, and so on.

Welotec's offering is spot on and fit very well into those conversations. I really feel that the combined offering and Welotec acting as a door opener and as a catalyst, that seems to be working well, actually.

We have a lot of joint customer visits and exhibitions and so on and so forth. Far, good.

When you talk about energy going particularly well, is it mainly the Welotec driving that right now or is it both and kind of the old portfolio, if you call it that, is kind of catching up?

I think that the main growth driver right now is actually the Welotec business, for sure, but again, complemented very nicely by the Westermo already existing offering.

Yeah. That on energy in the Beijer Electronics side where you put that as a focus segment, is that that was part of the you break that out from the other segment, is that correct?

Yeah.

How big is it?

The change that we did, actually a couple of years ago, we had energy as a key segment in Beijer Electronics, but the last few years, the focus has been on marine, on manufacturing, and on what we called rugged applications. Now we have seen that a lot of the growth pockets that we can see in the market are actually within what you could qualify as energy applications.

Power solutions for data centers, for example, is one of those. EV charging, different types of carbon capturing projects, and so on and so forth.

That's why those are, of course, also rugged applications, but we do feel that energy is a better label, to say, on this business, because that's really what it is, and that's why we decided to make this change.

Okay. It's basically the entire rugged segment which turns into energy segment?

Not really, because there are rugged applications also within marine, for example, especially, somewhat in manufacturing, but in particular also in marine. The rugged theme kind of goes across the segments, you can say.

Going forward, that will be rugged also in defense.

Yes, correct.

Okay. Then in also continuing on Beijer Electronics, the manufacturing side, do you see any light in the tunnel?

Is it turning up?

The simple answer is no. It's pretty much moving sideways.

It's not improving very much, but it's not deteriorating either, it's pretty much moving sideways. Of course, a lot of that business is in Europe, and the manufacturing industry in Europe is not very maybe not so healthy right now.

No, I think it's the same situation as we have seen before.

Okay. Then if you could give us some details on the X3, I think you've previously given us what kind of how many orders and how much has been kind of new customers, etc., if you could just shed some light on that.

You are right, and we decided that we cannot continue to give numbers forever, but the pace is looking good. We have more than 300 customers now that have ordered X3, and we still see the same trend that around 20% of these are actually customers that are new to us or that have not ordered anything from us in the last couple of years.

I think that the pace is good. It's going according to plan.

We don't want to push customers too hard to move from X2 to X3. We want them to do it in their own pace, to say, but, yeah, so far, I think it's moving ahead as we had planned.

Okay. Then finally, just a household question, the extraordinary cost in Westermo, you might have said this and I might have missed it, but what is that extraordinary cost?

It's a number of items, but the key ones are actually related to a strategy review project that we have done in the quarter together with a couple of, let's say, business improvements projects that have been driving some cost as well.

Okay. All right.

Perfect. Thank you very much.

Thank you, Markus.

Thank you.

Hi. Perfect.

Can you hear me?

Yes. Hi, Daniel.

Yes, great.

Hey, Daniel.

Hi. Joakim, you always say this all starts with the order intake, this bodes well for the future.

Talking about the orders and the order book, the conversion time in the order books, we have gotten used to certain times historically. It changed somewhat in Beijer Electronics in Q1, and now we have strong orders once again, and then we have maybe less orders in Westermo on the train side than normally.

What should we expect of the conversion cycle? Is there a longer order conversion cycle than normally in Beijer Electronics, and is it perhaps shorter in Westermo this time around?

When we start with Beijer Electronics, obviously, if you compare the order bookings in Q1 and the invoicing in Q2, there is a somewhat longer conversion rate for some of the orders. That is correct.

In general, I wouldn't say that is the case, but for certain of the volumes or the order bookings that we saw in Q1, that has been like that. In terms of Westermo, I would say that we normally talk about a 6-to-12-months conversion in Westermo, and this is again general.

The fact that we've had lower bookings in this quarter compared to Q1, again, it's normal within the train segment that we see the bumpiness as we talked about earlier, and that is not something that indicates that we have a larger change in the horizon. When it comes to the train side, we have a longer perspective.

It's within the range of 6 to 12 months, I would say in general for the train side, it's more towards the 12 than the 6.

Cool. Should I interpret that as that the orders in Q1 in Beijer Electronics was more lengthy than the orders we see now in Q2 that perhaps will convert slightly faster?

I would say so.

Great. Then just a last question from my side, this was the last quarter where we have Welotec reported separately, and it's been really convenient to have it that way.

What can we bring with us for the future on the growth rates? What's a reasonable growth rate for that unit?

Has it been something that been extra strong this year when we've seen them in numbers, or is this what you would say a rather reasonable pace for the future as well?

When we acquired Welotec, we informed about that they have seen a good growth pace over time that was impressive. Of course, there are, as we just discussed, some really good synergies working together with Westermo and Welotec, and that is adding on to the growth.

We are happy with the development. We see that Welotec is or the energy segment is growing at a really high pace, and we expect that to continue when it comes to Welotec.

We will not show or report the details for Welotec moving forward. That we will not be, because it's becoming more and more an integrated part of Westermo, and you need to keep track on the energy segments within Westermo to really understand how the development goes.

We have a starting point now after this year, I will hold on to Welotec contra the other energy as long as I can, and then it would be impossible naturally, but for now. Great.

Nothing special and it could even be a pace that is increased from time to time in the future then, given the synergies with on the sales side.

That is what we're hoping for.

Okay. Perfect.

Thank you so much. I'll get back in line.

Thanks.

Thank you.

Okay. Hello, and congrats on solid numbers.

Hi, Henrik.

You hear me now? Hi.

Yeah.

We do. Hey, Henrik.

Great. All of it.

Hey. First off, regarding the issue with sourcing of critical components, do you see any easing or is it well basically the same situation as earlier this year?

Let's start there.

Yeah. No, we don't see any improvement.

The situation is still somewhat strained and but we do see that the price increase pace, especially on memory chips, has decreased a little bit compared to end of 2025, beginning of 2026. That is at least good, but the situation remains challenging, I would say, and we are monitoring and handling it very very closely and carefully.

Yeah. Okay.

Then also regarding your price adjustments, according well, as a consequence of this, is it could let's say how fast can you implement it, and is it fairly easy, to speak, to do it?

It's never easy to implement cost increases or price increases, but it depends a little bit on the businesses. In Beijer Electronics, we have been quite successfully implementing price increases related to this.

There we have a shorter order horizon, to say, which makes it a little bit easier in that respect. In Westermo, we have more of very big customer contracts that need negotiating and so on, so that makes it a little bit more tricky, but we are putting a lot of effort in doing it there as well.

The Welotec business has been very successful in passing on cost increases to customers because it's memories are such a big part of an industrial computer, if you like, there it's very natural that to do that, and customers very well understand the situation. It's a little bit of a mixed picture, but we are definitely focusing on getting the cost increases covered from customers.

Yeah.

I have one question for you, Joakim, I guess. Net net finance, -13 this quarter.

Maybe you split it up somewhere in the report, but I couldn't find it. How much is interest and how much is other?

Oh, yeah.

That is not a number that I have in my head, but normally the interest part is relatively stable as there's not a lot of movements, and that is related then to the debt that we have to the financial institutes. The other or the movements in general, that is related to FX movements and revaluations, and so I would say that is the reason why you see changes in between the quarters.

The split, I don't have right now.

Yeah. Okay.

Then on Westermo and this strategic review, is it I don't know if there's something you already want to share with us in terms of conclusions, but maybe not, then you'd probably write about it. I'm just interested to hear, should we expect that you will present some changes in the near future, or is this more an internal exercise, if you will, that you're doing?

That's for you, Jenny.

Yeah. Good question.

It's not a major strategic change, to say. It's more a pressure testing of our existing strategy and some adjustments as to where we should be putting our efforts.

It's nothing major. I would assume that we will talk about it a little bit more in Q3.

We have just concluded it, and we are about to communicate to the organization now after the summer period, and so on. We will probably mention it, but there's nothing dramatic in that update, actually.

Yeah. I understand.

Then I'm also curious about India and how big your operations is there in India. Could you give us any numbers on approximate sales levels on a running basis or annual or something like that, and also if you could say something about your targets for India, like the next couple of years?

Normally we are not giving such details. It's still relatively small.

It's a manufacturing entity. The market is really big.

There's good opportunities, and we have talked about both the rail side and the energy side. There's good potential and good growth potentials, and we are started up well.

What more can we say, Jenny? No,

I think it's fair to say that, of course, this is still in a scale-up, in an investment phase, to say, even though business is growing nicely. We are acquiring on average two new customers a month so far this year, it's we are well received, to say, on the India market, and it's, of course, both about leveraging on the existing relationships that we have with the big global rolling stock manufacturers, but also, of course, creating relationships and businesses with a lot of local manufacturers, which are increasingly gaining ground in India as the Indian government is really focusing on building up local competence and so on.

I think we are off to a good start in India. It's so it's a very, very fast-growing market, lots of things happening, and we are building our organization as we go along, and we are increasingly moving more and more products to be manufactured locally in India.

Stepwise step by step, we are building the team and the business there.

Yeah. Thank you.

That was all for me.

Okay. Thank you, Henrik

good.

Yes, there doesn't seem to be any written questions as far as I can see.

No, there's

no

written questions, so...

With that, we will conclude this call, and thank you all for listening in.

Thank you, all.