Hello and welcome, everyone, to this Q1 presentation Inission. My name is Henric Axelsson and I'm an analyst at ABG Sundal Collier, and I'm here to moderate the Q&A that will take place after Fredrik presentation.

If at any point during the presentation you think of any questions, please type them in the chat and I will read them out later. Anyone in the audience here live that has a question, feel free to put your hand up, and after the presentation, someone will hand you a mic to ask your question.

With that, I'd say, please go ahead,

Fredrik. Thanks very much, Henric.

Welcome to our annual meeting and our Q1 presentation. My name is Fredrik Berghel and I'm one of two founders and one of two principal owners of this company.

Me and Olle, as we have said, we started this company 19 years ago and we are still both active, myself as CEO and Olle as chairman. Today, I would recap, I will recap 2025, both what we have been up to, very, very brief, and also the financials 2025.

I will go through today's published or late evening yesterday published Q1 report. I will also talk to you a little bit about what we are actually doing apart from the numbers.

What are we up to, both in Inission EMS and Inission Power. I will tell you a little bit about our acquisition strategy, something about our financial targets, and then we round off with a Q&A together with Henric.

Last year, we had a challenging first half year. All in all, we ended up having a turnover revenue of 2.2 billion, including Selteka.

There is a small growth there, but including Selteka and also a little bit of Axxell revenue of 106 million, it was actually an organic decrease with 50 million or 2.3%. The slow start of the year and also Inission Power being loss-making last year brought down the EBITDA result.

If we go further down in the P&L, our earnings per share was also affected as we have talked about, the high valuation of the Axxell acquisition when we finalized that in November, which has affected the result per share with the total result of about 20 million. All in all, as I said, net sales 2.2 billion, and EBITDA amounting to 111 million, which makes up 5% margin.

Looking at this picture, I think I said it last quarter also, it sort of illustrates the total market, overheated market '22 and '23. All in all, I think '25, both turnover and profit, perhaps sort of are in line with a normal, should have been in line with the normal growth.

If we extrapolate from pre-COVID, I don't think '25 necessarily was as bad as it looks like. What have we been doing then during the year?

We have greeted a new MD, welcoming Onrox, Mattias Neumann. He has quite a bit of industrial experience, and he also directly comes from Kongsberg, previous Rolls-Royce.

Kongsberg also happens to be one of our largest customers, so, we are happy about that. Also last year, we we leveled, we changed the listing at Nasdaq from from First North to the main market, which was internally a huge project.

Anyhow, we came through this project, in my meaning, being a a more robust and sustainable and we have a lot of the formalities in place in a totally different way, because the demands and the requirements from the main list are quite different and on totally higher level compared to compared to First North. We also had the inauguration of our Inission Tunis factory.

We also moved in Borås from our old location into a brand new factory that was actually rebuilt totally for us, where we have set up a very good production flow. Unfortunately, we don't have too much production there now, but from from appearance point of view, this is, Mattias is normally saying, this is our most beautiful factory if there is such a contest.

We also made an acquisition last year. We acquired a super-duper fine company in in Kaunas, Lithuania, called Selteka UAB.

They they have a little bit different profile perhaps compared to our other Northern European factories, a little bit higher volume, close to even even consumer products running there, with very efficient flow set up in that factory. We brought in new customers, but we have also brought in sort of a level of of production where we perhaps want to be in in all of our factories.

We also welcomed a new managing director for our Tunis operation, Ali Bel, and he also have extensive industrial background and have been in charge of quite quite large operations in Tunis. We also have applied and been approved as member of SOFF.

SOFF is an association for Swedish companies involved in in defence and security industry. We think it's important in the days now with defence industry really booming, because then we can be in their context together with these people and learn a lot.

We also in November acquired the the last remaining 49.9 share of Axxell, as I said. Axxell doing quite well, and and the the value of Axxell was higher when we actually closed the deal there in November compared to our previous analysis, meaning that we we made a book loss, it's a bit technical, but made a bit of loss there as I just explained earlier.

Just showing a few nice pictures from last year, being in Verkstadarna in Stockholm. We had a delegation there in Tunis together with ambassador, cutting ribbons.

We did the same in Borås, and opening this, had a very nice grand opening of our totally new premises there together with customers, suppliers, and board of directors. That that much about last year, then we're coming over to to Q1 2026.

Reported sales increased 37.4% to 664 million. However, adjusted for Selteka, 53 million, the organic growth was 26.3%.

Including in that quite high growth, I want to explain that 20 million of this was pure material sales to one of our biggest customer, which perhaps we we always want to sell also manufacturing services included, but it's a risk thing also to hand over material that is not used. Customer now are are required to take over.

We we That material sales also affected the EBITDA margin with a 0.2%, nothing dramatic, but still. If we're looking into the Q numbers here, and a high level of explanation here, these 127 organic new million, we also have reduced cost from our cost-cutting programme in in Inission Power, former Enedo, contributed to the higher higher profit.

We had similar material share actually compared to last year. All in all, this this came out as 70 turnover minus direct material, I call that net added value, come out 70 million higher.

We also have costs 41 million higher. That builds up these 46.7 EBITDA, which is actually an improvement then from last year with 26.7 million, which comes out at that 7.0% EBITDA margin.

Then also with low, quite low financial cost. Last year, we had high financial cost due to currency losses; this year, we have some currency gains.

All in all, there is big difference there between the quarters when it comes to to to the the financial cost. All of that builds up to this 1.5 krona per share.

Just to to explain a little bit about also We talk about that we are cutting costs and then you say, oh, 40 million higher in cost there. How that how does that tie together then?

Then one have to remember, out of this 41 extra, 30 is coming from from Selteka. All in all, these extra 35 million now like-for-like costed us 11 million to run, meaning that we have quite a nice fall-through there.

A lot of the extra revenue become net added value, is falling all the way down to to EBIT level. Also cash flow, I want to highlight.

We had good cash flow in the in the quarter, 43.6 million, quite low increase of our net working capital, 15 million only, compared to the the cash flow before change in net working capital, 58.6, makes up this 43, almost 44 million, which I think is good. Looking at year-over-year, it comes out quite dramatic, but if you look this, but looking at the quarters in sequence, then you can all see here that both revenue and profit is sort of build up gradually.

From our best knowledge from what we have now from order intake and also when we are talking with our customer, we we think this indicates that we should be able to run on this invoicing speed or sales speed. Also with the current cost structure, we are strong believer of that we should be able to maintain this profit level, given that that the sales speed can be there also all together.

Then, looking at LTM numbers, now 2.35 billion, which is quite step up from from 2025 then. Also the earnings, quite decent step up, 138 million.

Actually, as some colleagues said in the in the in the industry, when we are doing so well now in sales, I I actually had hoped for even even better sort of gearing on this extra volume, but still. Some news from the quarter.

We have a new MD in in what we call Inission Syd, meaning Borås and Malmö, Torkel Skoglösa. It's so funny, he actually owns a lot of forest, skoglösa, but it is another story.

He has industrial experience from Trelleborg and Sandvik, and especially interesting is his his experience from Nolato. Nolato is also a contract manufacturer, but in the plastic industry, we think he is a good figure to take care of of Inission Syd.

Inission Power, we have name changed Inission Enedo, Enedo to Inission Power. They received a very interesting cabinet order for for a cabinet-based DC battery charging system to a European defence customer as we have announced.

A little bit of breakthrough there, and in my thinking, going from a component PSU and LED driver supplier, I think maybe the future for Inission Power will be exactly deals like this, steering over more to be a system provider, where we can actually engineer out totally unique solutions for each and every customer. Then we are not really competing with the huge giants that are in this power supply industry, these big Taiwanese ones, because from cost point of view, we will not able to compete with them.

If we scale it down and if we do custom-made projects, hopefully, this could be the future for the company. We have also a new managing director in our Tallinn operation, Kaarel Vaik.

He is coming from He's got industrial experience, part-process. He comes from HansaMatrix in in Tallinn.

Yes, to current trading, looking at business areas separately, and then starting with business area Inission EMS. Very good sales compared to last years, but then we also, those of you that were here last year, remember that we had quite a bit of push out last year.

We had some PCB problems in Norway, we had some customer that that actually delayed their orders, we were starting last week, last year quite slow. We have good comparison numbers, but still, we have a good sales there.

The EBITDA margin recovering with these improved sales. Then, as I said earlier, EBITDA margin could have been even a little bit higher than this 7.5% with 0.3 percentage units not having this material sales.

Then we had some extra costs for covering for for a backlog that we had created, especially in in Inission Syd. We have good hopes for the future there.

Looking into what we now then call Inission Power, OEM, they also shipped quite a bit higher volumes compared to last year, 15% higher. There we had the cost-cutting programme and it's clearly seen now.

This higher contribution, together with the cost-cutting programme, we are back in black there. Also, also for Inission Power, given given our order taken, order taking and the cost structure, we we feel quite confident that we should be able to to maintain this.

Then I had to put in this slide, never done it before, but since we have been doing so well the last year, I wanted to show the share price development. Then I know here in the audience, there are shareholders that have been with us since we started.

Then this is 660% increase from where we started, compared to OMX then, 70, that is actually has to fall 173% during the same time. That was all about the numbers.

That was all about things that we have been up to 2025 and Q1 this year. Then over to to what are we actually doing then, some some explanation about what what we are up to.

For today, as explained, our our company is divided into business areas. We have Inission EMS, Inission Classic someone calls it, and then we have Inission Power.

I will I will explain what these two business areas are doing a little bit more in detail. First, the company history.

Inission as a company is very much a acquisition story. Me and Olle, we have been since 19 years being adding on companies to this structure, roughly one per year.

It's quite often you you you you overestimate what you can do in short term, but you also often underestimate what you can do in long terms, and I think perhaps this is a little bit like that. We are both, me and Olle, we are both strong believers in the value-driven company, and we are constantly pushing out this message to our continuously educate in all the way from our board of directors to the to the operators in our factories, these common values that is that is really for for the all of the Inission employees.

I think really one good example when this comes in best, that is when we have daily steering meetings early in the morning in the factory and these things are talked about. Sustainability, of course, extremely important.

However, maybe sustainability and what we think about sustainability, because we have been working that for a long time, where we have lined up the sustainability goals together with our business goals. Big portion of that type of work last year was spent on EU compliance, CSRD.

That was last year, but also in the beginning of this year. Now we are, we have this sustainability report according to that directive.

Inission EMS, we are a leading supplier of manufacturing services foremost within electronics, but we also have resources for sheet metal fabrication and design. As for today, we are about 1,200 employees, and this business area is organized in in 10 companies with 12 factories.

We do everything from product development, we have own engineering resources for that, industrialization, build prototypes for our customer, and then, of course, manufacturing. Manufacturing is the big bulk in this dot set.

90, perhaps even 95% of the revenue would be active manufacturing services. If we look at the sales split per geography, this picture has been looking a little bit different.

Sweden has been almost half, Sweden has been shrinking in the new group, and Norway is increasing. Finland, somewhere in between, but I think the whole group has been increasing also.

Finland has been comparatively the same the same size there, I think we are shifting over and our Norwegian plants or Norwegian companies, they are doing quite well. Looking at the segments, we can also see the movements there.

Since last year, this that is '25 numbers compared to compared to '24 numbers. As you all know, defence is increasing very rapidly around us.

We we don't have any of those customer where the end product explodes, we don't do that, but we do a lot of other defence-related things. As you can see here, we have been going from a small number, 7 to 12% defence.

We also have a, what I can say, fantastic customer customer portfolio. 37 key accounts building up 72% of our revenue.

We don't have a big dependence. We have our our largest customer here is actually 9%, and there it used to be ABB, but Kongsberg has passed ABB now as our largest customer.

We also do a lot of box build, important to know. Box build is is an enabler for us to provide more services to the customer.

Then just a couple of customer examples. Halcom, defence customer, they are doing communication equipment and EW equipment, extremely extremely high demands on reliability and, of course, extreme rough environment for these electronics.

We also have an industrial customer, Epiroc, old Atlas, making equipment for mines. Same goes here, having an industrial company's requirement on efficiency and OTD is extremely important, but also the environment for these electronics in a mine, of course, also very quite extreme.

Coming over to Inission Power, in difference to Inission EMS, which is contract manufacturing services, Inission Power is a product company. They have their own products, their own IPRs, OEM company.

They are designing their own products, and and and the the history is telecom-related back in Finland in the days. They have shifted over from telecom being too fierce competition, being the scale is totally different, acquiring a company in in Italy, Powernet, and then later acquiring a similar type of industrial power supply company in Finland called Powernet.

Out of these two companies, they've created Enedo, and what we now then have transferred the name to to Inission Power. If if Inission EMS is quite a Nordic company, Inission Power is much more a multinational company having a lot of EU customer, US.

We have big, our biggest customer for both Inission Power Italy and Inission Power Finland have their biggest customer in US. Here you also see that the split on product level: 65% of what they're doing is power supply, and then we do these DC systems that I have talked about, and a shrinking, but still important and big portion of what they're doing is is LED drivers.

Out of these three, LED drivers is really where the competition is the hardest. Looking at the segment here, quite stable since last year.

There are not not so so much movements really. Then just a couple of examples.

They do this for a US customer called Daktronics, these enormous LED screens or LED screens with the numerous of power supply units are needed to power up this type of of big LED screens. Here, of course, reliability, you don't want to this because if one of our power supplies goes down, it comes out as a black dot there, and that is that just can't happen.

Reliability is extremely important for that customer. In Finland, we do more system sales, and here we do for trains.

This We do battery charging, DC systems for trains to even if the train get loses the currency from the top, it should be able to communicate, it should be able to be light there, this sort of a backup systems. That is what we typically provide for for train installations.

That was Inission EMS, Inission Power, and then a few words about our acquisition strategy. We we normally buy customers.

We have this idea about geography, but what we really buy when we acquire a company, that is customers. That is when we do our due diligence, if it's called, that is really to try to understand if we like the customer group, because it's everything it's going to be judged at the end of the day by the customer.

If we have successful and good customer, we will ourselves have a good journey, of course. Financial stability, financial potential, and then also not least, of course, management culture, how how are these people performing.

Normally, that is not an issue, because most of the companies that we come through, they are they are driven by the owner or the family. Normally, it's really down to earth people that we meet there, it's very seldom that we find something find something strange.

Talking about the two business areas here, we are so far only focusing our acquisition on on the EMS side. We will hopefully, later on, start also on Inission Power, but that will be for later.

In our acquisition model, we also have this idea of when we do the due diligence, that we also identify improvement things, and then when the acquisition is done, we can start implement these improvements sort of from from day one, more or less. As I said earlier, our latest acquisition was this company in in Kaunas, Lithuania, Selteka.

Last year, about 16 million euro turnover, making 8-9% EBITDA, with 230 employees, and, yeah, really really nice company. Normally, there are synergies.

They shouldn't be overdramatized, but there are. We can we can do better together on on sourcing.

We almost always implement quite directly our IT platform. We financial structure we put together.

We also, of course, implement our KPI structures and things like that. Then we try cross-sales, cross-selling.

Here we clearly already have done a handful of quotations from Finland from this from Selteka as I talked about, because they are they they are competitive in price. We are positive to this industry.

Growth is there, underlying growth is clearly higher than than GDP growth. It's a good market to be in, all in all.

There are these megatrends driving this: electronics being an enabler for a lot of our industrial customers. We have this shift from near-sourcing, we have robotization and automatization, we have machines talking to other machines, and all of this is driving the need for industrial electronics.

The last portion here now in my presentation, that is our our financial goals, targets. To to explain, before I go into that, I want to explain what we have been doing in the history.

Here you can see that we have been growing since we became public 2015. We have been growing quite rapidly, 23%, and we have been reasonably stable in our earnings.

If we exclude Inission Power, the earnings is even more stable. We are doing 7%.

A good year, 8; and a bad year, 5 or 6, but extremely stable. Even when the doing thing is a lot, we don't earn that much more; and if we do produce less, we don't lose out that very much more either.

Quite stable. Here, and with that as a base, we have the the target for this year to to actually have a sales between 2.3 and 2.5 billion.

As I said earlier there, talking about our order book and the start of the year sort of indicates perhaps the higher higher end of this interval, 2.3 to 2.5, closer to the 2.5 then. Also the margin, we have an idea of our target is that EBITDA margin should be about 6%.

Then EMS portion is more profitable compared to Inission Power. We also have a capital structure target, net debt/EBITDA, not being below 1, and maybe you could say, oh, why should you have a floor there?

It's part We shouldn't have We shouldn't be overconsolidated. That hasn't been our problem historically, though, but now we have introduced a a floor, which I think is indicates good thing.

Then we should be below 2.5. Our covenant with the bank is 3, but being able to borrow money from the bank, we should be below 2.5, otherwise we have no room to play with that.

We also have this dividend policy that we want to distribute to our shareholders 30% of the of the earnings after tax. Long-term targets: growth, 15% growth means that we will double our size in 5 years, which we actually historically never have failed.

We we have sort of always been running faster than that. One one portion of that we're going to lift our earnings, that is actually that we're going to slow down.

One portion of the strategy, we're going to slow down the acquisition speed. Acquire high quality, a little bit less.

Out of this 15 growth, 10% organically and 5% for acquisition, that is the strategy for the future. Then also the other items, I talked about here, megatrends will help us with the market.

Then Well, it was lucky that I was done there, because that was my last picture. Now it

just clicked out. It's plugged in.

I guess we can just move on to the Q&A.

Yes.

Excellent. All right.

Like I said, if anyone is listening in the webcast has a question, please just type it in the chat and I will read it out. If anyone in the audience has a question, just raise your hand and someone will give you a microphone.

While you have a think about that, I thought I'd start with a question of my own, if that is. You still have a

pretty

strong book-to-bill, it's 1.05. It's also encouraging to see this growth.

Is there anything that stands out in this quarter when we look at the order intake versus this quarter than the demand that we can expect going forward?

No, I would say, of course, varied a little bit over the month. If there is something to add there, Inission Power is slightly stronger still, and has been the last two quarters.

No, we have been reasonably stable, Q3, Q4, 1.1-ish, and we are still there now also in Q1, yes. No, quite stable.

Yeah.

Very good. What you saw on sales growth, you mentioned in the report three areas that were really driving growth a little bit more than others.

You mentioned defence, of course, and data centres, and also quantum computing. Maybe walk us through your exposure to these sectors, and how much of your growth you think is driven by a higher demand to see in these areas?

I presented this customer Halcom here, and they are doing well and they are a little bit project-oriented and they have been doing in high speed now. We had quite a bit of deliveries to Halcom all the way from last half year, last the second half last year, but also starting this year.

That is, but we also have other defence customer that we have hopes for for the future, Kongsberg not the least. We are doing some business with KDA, the defence division within Kongsberg, so far more a little bit of trial orders in in in Røros.

We have a decent business there, but also now we have got trial orders from Halden, and so there we have hopes to deliver more to Kongsberg within defence. When it comes to this really special with computers, we we we have two very interesting customers in Finland, both actually delivering to this quantum computers, and and that industry is also absolutely growth there.

One of our, used to, I just said it earlier, one that used to be our biggest customer, ABB, they are sitting in a perfect storm there when it comes to these data centres. They are providing a lot of of infrastructure for that, and ABB is our second biggest customer.

All

right. Maybe specifically on Enedo or now Inission Power, you saw strong growth of 19%, I think, a book-to-bill of 1.3, still slight growth, margin of now over 3%.

Given all this, would you say that there is room for additional sales growth acceleration throughout the year, and should that enable further margin expansion from this level?

Putting it like this: since we come in 2021, first as half owner and then a couple of years later as the main owner, and now 100% owner, this has been a survival period. We have been cutting costs to make sure that everything will come in line with or expenses in line with incomes.

Now we really think that we have stabilized the situation, and now we have focused over from these fire-fighting activities to actually more strategic, long term. Out of all the products Inission Power, where do we focus?

Systems. That is the board of the company's conclusion, we should go into system, let drivers, let go.

PSUs, we have really good products, but perhaps we shouldn't overdo that either, we should steer over that. We have a fantastic set of customers, and a lot what you see now coming back, that is actually the same customer base coming out of this post-COVID or whatever we call it, a happier, better economy.

Now it's a matter for Inission Power to find new customers, to actually start new growth with totally new customers, and we are positioned, we should be able to do that, perhaps not this year, because sales cycles in the industry is very long, but now we can start actually pinpointing things and work steadily in some really business.

Right. Very good.

Moving on to some questions from the chat then. What would you say are the most important drivers for getting closer to the 9% margin target that you have for the longer term?

What did you say?

What do you think are the main drivers for getting closer to the 9% margin target that you have for the longer term?

The best thing is organic growth. Organic growth, when we grow organically, that is fantastic for earnings, because we have, like I talked about earlier, we have this fall now that is what is happening.

That is the strongest thing. Then I'm always referring to what we have to do in this industry, because we have companies doing fine, and we have companies doing double-digit, and it's a matter of adjusting the 12 wheels normally I say.

When we are in a stable position, we can tune these wheels, and then we should be able to do this nice. Then also you have to have respect for the history.

We haven't been there yet as a group. When we had one of the directors of one of our big colleagues in the industry said, "Yeah, but you always seem to relax that some factory is falling out of the pattern."

And, "I know, but not everybody's doing well, then we shouldn't have this problem." We are there, we have to lift the lowest level.

That is one ambition of all of our companies. Then, really the answer, we have to be more disciplined and more careful about acquisitions.

We should do Axxell and we should do Selteka, we shouldn't perhaps do too much Enedo, because that maybe it's not more difficult than myself and my board of directors are more disciplined at making extremely high limits.

All right. The 2% margin targets that you have for this year or the targets of having 6% margin target with 7% for EMS and 2% for OEM, that implies that profitability will be weaker in the rest of the year than in Q1 here.

What's behind that?

We invented this early this year, and, of course, we want to have our financial targets for our ambitions. We want them to be bottom.

We don't want us to see that perhaps that is something we achieve. It should be interpreted as lowest level where it should be.

That is really our ambition. They have all the chance in the world to do better than that, absolutely.

On this group level, considering the strong start to the year in Q1, would it be fair to say that the guidance for the full year might be on the conservative end?

Yes, they are That is how I look at it also, but we start there, and then we set that, and then we improve the target for the goals for next year. That is how I think about it.

You wrote a bit in the report about Tunis factory, about your trying to attract new customers to move their production there. Can you tell us a bit more about how that's going?

Yes, we're not having substantial business there yet, but we have actually two deals now. We have one trial order and now we have won another also trial orders.

If we are successful with these trial orders, we should be able to ramp up the business. Again, as I said earlier here, it's long term and lead times in this industry are long.

From the first call until we have a decent business ongoing, 2 years. We have to be patient and we have to work steadily, but there are opportunities.

There are already calling. We have customers and customer visits going there, and we have that as a rule.

They don't make a call if they don't bother about going to Tunis and look at our factory, because the factory standard there is same same as anywhere in Europe. We have a fantastic, nice-looking factory with good potential, they have to go there to show that they are interested, and then we quote.

We will get there.

All right. Do we have any questions in the room maybe?

No, you all seem perfectly satisfied with the presentation. Very good.

All right. In that case, I think there are no more questions in the chat either, and we're just about out of time.

I think I'll hand over back to you, Fredrik, for any final remarks.

Thank you, Henric, and thank you all in the audience here that have listened, and also all that we have on the web. With that, thank you very much.