Thank you for joining W5 Solutions' presentation of Q4 and full year 2025 results. I'm joined by our CEO, Evelina Hedskog, who will take us through the key highlights and financial performance during the quarter as well as the full year.

After the end of the presentation, we will conclude with a Q&A moderated by me. The chat is now open, please feel free to submit your questions at any time during the presentation, and we will address them one by one.

With that, the floor is yours, Evelina.

Thank you very much, Hanna. Welcome, everyone, to this presentation.

I will kick off by giving a brief introduction to W5 as a company, and then we will move on to the numbers after that. At W5, our vision is to become the leading global provider of sustainable defense technology, and our mission, what we do at work every day, is to deliver cutting-edge solutions to empower own and allied forces.

That's what we do. When we talk about sustainable defense technology, what do we mean?

To us, we see this in four different perspectives. First and foremost, it's about defending democracy.

Our products and services should support the defense of free, open, and democratic societies. Why is this?

It's because that we need this democratic societies in order to have sustainable development. Second perspective is responsibility by design.

Our products are always engineered for long life and resource efficiency. Thirdly, we care about people and partners.

We strive to have safe, inclusive workspaces and responsible supply chains. The fourth perspective is to be guided by standards and regulations.

We always strive to have certified compliance across every delivery. These are the aspects that we think of when we talk about sustainable defense technology.

W5 in brief then, the business is divided into three business areas: Integration, Training, and Power. I will dig a bit deeper into them in a bit.

Our operation sites are spread across Sweden, Norway, and Finland, and our headquarter is in Stockholm. Right now, we are around 220 employees in the group.

If we look at our customers and the markets where we find them, the customer base is a mix between defense agencies and other defense industry. It's a bit of a 50/50 split between them.

They are primarily based in the Nordics and in Western Europe. We are listed on Nasdaq First North since 2021.

A couple of years ago, we announced our long-term financial targets, and we say that by the end of 2027, we want to have a turnover of 1 billion SEK, and we want a profitability of 10%. How to get there?

What's the strategy? It's a combination between organic and acquired growth, put it simply.

The aim is to have at least 20% organic growth every year, and then add on acquired growth to that in order to reach this billion SEK. As of today, we can see that the growth from '24 to '25 was 27%, we're definitely moving in the right direction there.

We're also working continuously with M&A, and looking for the right target out there. Hopefully, we could add on to this growing turnover with also acquired growth.

That's the strategy. That's how we plan to get there.

I said before three business areas, and together they have seven product areas. We're still quite a small company, and you can wonder, why do we have such a broad product portfolio?

This comes from the fact that when W5 Solutions was founded in 2018, it was a merger between three companies. After that, we have acquired four more businesses.

That gives us the broad product portfolio that we have today. If we start by looking into business area Integration, where Gunilla Stomberg is head of business area, we have two product areas there: systems integration and shelters.

Within systems integration, we have systems integration services, but we also have products such as special purpose harnesses and intercom solutions. Shelters, that's where we design and build really high-end customized container modules for the military customer.

Product focusing on mobility and scalability. That in short is business area Integration.

Moving on to business area Training, headed by Thoralf Johannesson, here we also have two product areas: live fire training defense and security, and the equivalent for sports and hunting. These two product areas are, as you can tell, also divided into customer segments.

Within the two, we have a, I would say, full-range portfolio of any type of hardware or software that you would need on either your shooting range or for more tactical training out in the field. There are definitely commonalities between the product portfolio in these two product areas, but the route-to-market is different.

That's what constitutes the Training business area. The third one is Power, where we have Tobias Thewonsson [Thewonsson?]

as head of business area. Tobias has three product areas within his business area.

First one is batteries and chargers. We come from a history of being experts in battery chargers for the military customer, have now also moved into battery manufacturing.

On the genset side, we are specialized in both generic power supply for military units, but also more tailored solutions for specific systems. It could be a tailored power supply for, for example, a sensor or a certain weapon system.

Last but not least, simulation, where we have our expertise within the hardware. As you can see here in the picture, it's a tank simulator, but we do different types of hardware all the way down to, for example, joysticks for cockpits.

That was a very short run-through of what we do in W5. Now, moving on to the numbers.

Of course, this is a very happy moment for me as CEO to be standing here and show arrows pointing in the right direction all over. We've had a fantastic last quarter of 2025, and that also gives us a really, really good result for the full year 2025.

We see extreme margins in this quarter, and that has to do with the fact that we more than doubled the turnover compared to the average quarter for the rest of the year. That has a result on bottom line due to economies of scale.

Also, the product mix in this quarter is, I would say, with a focus on deliveries from our Training business area, and we will look at that a bit later. Within Training, we have revenue recognition as point in time.

We recognize the revenue when we deliver, and we had a lot of deliveries this last quarter. That is also contributing to an extremely good margin in this last quarter of the year.

Moving on to the segments then, and a bit more in-depth quarter four numbers for them. As you can tell, then Integration and Power keep on winning business.

Training was a bit slower on the order intake side. Instead, they were outperforming the others in terms of net sales, as we just talked about.

As I said, for Training, it's point in time when it comes to revenue recognition, and for Integration and Power, it's more percentage of completion, which might give them a more stable net sales over time. I think the most important to highlight in this slide is, however, the profitability in Power.

We've talked a lot about the entire group, and especially business area Power having a top-line problem, which has resulted in a negative profitability earlier. Now when we see Power gaining momentum, starting to turn the order backlog into deliveries and getting top line up, we also see that they start being profitable.

I think this is really something that is positive going forward now. If we dive into the order backlog and have a short look at the book-to-bill, you can tell by the pie chart to the left that the absolute majority of what we now have in the order backlog is to be delivered this year.

Of course, what we want our sales department to focus on now is also to keep on building backlog for the years to come. Related to the 20% organic growth that we think we can manage, or that we should manage every year, at least 20%, to reach our long-term financial targets, as you can tell, the book-to-bill for 2025 was 1.5.

Of course, also for deliveries after 2026, but it gives you at least a bit of a feeling of the growth that we are facing now going forward. A bit more in-depth then on the order intake and backlog.

Order intake for the full year was 730 million SEK, and when we closed 2025, we had 566 million in the backlog. Orders won during the year was more or less evenly distributed, almost 200 for Integration up to 314 for Power, Training somewhere in between.

We do see that the backlog is different for the different business areas, and this has to do with the different business models. Training has a much shorter order-to-delivery cycle compared to, for example, Power, that can have larger contracts ranging over multiple years.

The nature of the deliveries are a bit different between the three, and I think that's also reflected in the backlog. However, I think it's important to emphasize that, if we look in the pipeline, we see equal interest for all three business areas.

This slide is to show a little bit the seasonal variations that we see within the defense sector. Quarter two and quarter four are normally strong.

For us this year, quarter four was exceptional. As you can see, it is the seasonal variation that we expect as well.

A bit extreme this year, but we've had a good quarter two and quarter four more or less every year historically as well. Diving into the P&L also for the segments.

For the group, we had a total net sales of 492 million SEK this year, and that gives us a 27% growth, as we talked about earlier. That's fantastic, but I think what's even better is that we ended up with 38 million SEK in EBIT, and that gives us almost 8% on bottom line.

As you remember, 10% is what we're aiming for, also here we're taking really a step in the right direction. Net sales more or less comparable between the three.

On the profitability side, Integration is doing extremely well, Training is doing as expected, Power is struggling on the full year. This is really due to the turnover was too low in the first half of the year.

Before summer, we managed to win a number of big contracts, and I would say since August, it's been full speed ahead down in Älmhult, where Power resides. As we could see in the quarter four numbers, it is showing a result also on bottom line.

This year negative numbers for Power, but it's not anything that we would expect going forward. To summarize, both for the quarter and for the full year, we have strong results, and they are really in line with the long-term targets that we have.

Net sales is record high, profitability in absolute numbers are also record high. We are now using our organization to its full extent.

In short, we are progressing according to plan, and that feels really, really good. Looking ahead now, we need to really focus on sustainable and profitable growth.

It's fantastic to have this huge interest in what we do and a huge influx of orders, but it comes with a big responsibility, and we need to make sure that we deliver on time and with quality to our customers, and we at same time need to take care of our employees. It's good challenges that we see ahead, but it's still challenges that we will have to handle.

In that then, working proactively to prepare for these increased order volumes that we see coming. Last but not least, the backlog, of course, if we ramp up production and deliver on our contracts, we need to backfill the backlog.

Making sure that we work continuously with our sales organization and keep on having as good backlog as we have now, or even better, is key in keeping stability and visibility in operations going forward. With that, I give the word to you, Hanna.

Thank you, Evelina, for that presentation. It's time for a Q&A session now.

Yes. We have received several questions through the chat, and I will read them out in turn.

The first question I have, you mentioned earlier, it's about that the demand remains strong between the product areas and you also secured several contracts during Q4. Could you elaborate on the new integration contract and what that means?

We had a big contract for systems integration services in the last quarter. What's new there is the fact that this is really a I would say integrated solution where we combine a lot of third-party products into a system really.

That system is then physically integrated onto a platform. We're doing both the design and the actual physical integration of that system onto the platform, and that is not a scope that we've seen earlier in that business.

It's really exciting, and we think that might be something we want to do more in the future.

Thank you. Next question, we have a few to go through.

How do you expect the cost base to develop during 2026?

The cost base, I think as we're growing, it is, of course, important to keep track of the indirect costs and keep, I would say, the overhead as slim as possible. Of course, in many of the contracts that we have, they stretch over a long time and so on, and it's always a challenge to make sure that the direct costs in a project are according to what we might have calculated maybe years before and so on.

If we look at the supply chain, I don't think we see any increases, and in terms of, again, the indirect costs, it's about making smart choices and keeping track over time.

Looking at our products and segments, you mentioned this before, but if you just can develop the answer a bit, what products and segments do you see the most demand for?

All of them. Yeah.

No, it's a valid question, and I think in that question, many people are wondering, okay, should you really be doing all of this? To start with the first question, yes, we see an increased demand for all product areas, but you can't swap one for the other, it's not that if we focus less on one, we can do more in another.

That has to do with the organization that we have and the history, as I explained. We come from many different organizations from the start that has now formed the W5 family.

As of now, we see demand in all product areas, and the plan is to just make the best out of that demand for each product area.

That was a clear and good answer, I would say. We keep on digging down here.

How much production capacity do you have? It's two questions.

Can you grow top line 20% in 2026 without any increase of production facilities?

Facility-wise, we are very lucky. We're spread out and, I would say, more or less all our sites have had some sort of increase in square meters over the last year.

I think there is potential to slowly grow each site as well during next year. No, we don't need to move sites in any way to reach that 20% the coming year.

After 2026, that might be different, but as of this year, we feel comfortable where we are, and in many sites, we can sort of grow a little bit step by step. That's facility-wise, but organizational-wise, we will need more resources, and we have loads of ads out there, of course, to find the right people.

I'm very happy to see that there are a lot of applicants for the jobs that we announce, I think we should be able to find the right people. We definitely need to grow the head count this year to deliver on our promise.

Yes. Next question, it starts off with congratulations on a very strong quarter.

Thank you.

Yeah. To reach your 2027 targets, again assuming 20% to 30% organic growth in 2026 and 2027, as you talked about, could you update on your M&A pipeline, the status?

Yes. The M&A status.

As I've said earlier, we really ramped up the M&A agenda as of, well, this time last year. For a year now, we have been focused in finding the right targets and pursuing them.

We are not the only ones doing that in the defense market right now. It's quite hard competition.

We are looking at targets in the Nordics. We are looking at targets that has an absolute majority of their customers in defense.

There are some sort of redlines in terms of where a target is what we're looking for or not. Of course, size-wise, it's also important to find something that we could bring into the organization as it is today.

We keep on working on that. Again, we're not the only one looking for acquisitions in defense right now, but we are comfortable with the fact that for a seller who wants a buyer who understands the market, has a good network, have a lot of established customers, etc., etc., then we might be their new home.

Again, we're working actively with it, but so far no payoff, but I'm sure we will get there.

Thank you. Moving on, looking at the cash flow, the operating cash flow, the question is, for the full year, you delivered solid EBIT, but negative operating cash flow due to working capital.

How should we think about working capital requirements as you scale towards your 2026 and 2027 targets?

No, this will always be a problem. It will be a challenge for us as for many other companies growing and also working in an industry where it's very rare that you have prepayments and so on.

It will always be sort of a capital tie-up in one way or another. It's always about working with your contract, making sure you minimize that.

Of course, now going forward, if we can get the stable profitability, that will, of course, help as well. We come from two years of red numbers, and that's not helping when you're also tying capital in order to be able to deliver later on.

It will continue to be a challenge, and we're doing our best to mitigate this risk.

Yeah. Looking at next question, operational readiness and delivery, the question is, you delivered roughly 40% of full year sales in Q4, which places significant strain on the organization.

It's been, yeah, a strong quarter with high deliveries, definitely. How are you working to ease such pressure on the organization?

You talked about it a bit before about—

No, I think to some extent, you have to live with the fact that you have these seasonal changes, and it will always be higher pressure before summer and before Christmas. It's also important to remember that it is a little bit about how we recognize revenue as well, as I talked about in the beginning.

When the final delivery comes for a point in time, it peaks the turnover, but we could have been working on that for quite some time before we get to the point where we have the delivery. That said, I'm extremely proud of how the organization took on this challenge because we knew that we had a lot of orders to deliver in quarter four, and I received so many questions where people asked me, will you really be able to do this?

I said, of course we will. Probably sounding a bit more sure than I was.

I'm so pleased and proud that we managed to do this, because it's, of course, about delivering the results to our shareholders and so on, but it is actually also, even more important, the fact that what we do matters, and the products that we deliver to our customers, they need them now. They can't wait.

Again, very proud that we managed to do this. Yeah.

Thank you. Yes, we have one more question here.

When all three segments are contributing from start in 2026, how should we think about the margin expansion this year, 2026?

If we speak in general terms, I've said all along that we have a top-line problem more than a profitability problem. I think when we get top line up, it will be easier to also get profitability.

Now we had an extraordinary fourth quarter, and if we look at the full year, I don't think we can expect such a fourth quarter also this year. That would be unheard of.

If we think that we will, of course, have the seasonal variation, but maybe a bit lower, what would the total look like? Difficult to say.

When we make our calculations and so on, of course, we're always striving towards the 10% that we have as our long-term financial targets. At the same time, we sit with some framework agreements that date back a number of years, where we might have lower margins.

It is still a mix, and it takes time to change this. It feels like we're going in the right direction.

As a guess, I think profitability-wise, if we can keep up with the 8% that we have this year, I would be very happy, because again, we also facing growth here. If we're able to grow and keep the profitability we had this year in terms of percentage, I think that would be wonderful.

Thank you. Sounds very exciting going forward.

It is.

Yeah. I see that time is running out, and it's time for a wrap-up.

Before we do that, is there any final remarks from your side, Evelina?

Again, I just want to emphasize how proud I am about all the people at W5 being able to deliver this result, because it didn't come easy, and it has been a long time coming. Two years ago, we had a really weak backlog.

It's really been a journey to get to where we are today, it feels fantastic to be able to present this result. That said, it's just the beginning, here we go.

2026 will be really, really exciting.

Exciting. Thank you, Evelina.

Thank you all for listening in. If you have any further questions, please feel free to reach out to us, and we hope to see you next time when we release our Q1 report for 2026.

It's on the 7th May. Until then, I wish you a great day and take care.