Vaisala Oyj

Hello, and welcome to Vaisala's first quarter audio cast and conference call. I'm Nina Alaluopa from Vaisala's Investor Relations, and today here with me are President and CEO Kai Östämö and CFO Heli Lindfors. First, Kai and Heli will present Vaisala's first quarter key highlights and financials, and then we will continue with the Q&A.

So let's start. Kai. Thank you, Nina, and welcome everybody from my side. This is Kai Östämö. So when we look at the first quarter for Vaisala, I would characterize it this way. It was a very good, strong start of the year, especially driven by industrial measurements driving the results. So if we start from net sales, in constant currency, the net sales growth for the company was 7%. in reported currency that converts to 1%. And orders received similarly, if we take the constant currency first, it's 10% growth year on year, and in reported currency, 5%. When you interpret the results, this time actually the difference, as you can notice, between the reported currency and the constant currency, are particularly big remembering that a year ago first quarter euro and dollar and remedy but if i take the dollar as an example was in parity whereas when we look at today or during the first quarter the euro rate euro dollar rate was 1.17 1.18 so a significant difference between the two we expect this to obviously uh difference start to uh get smaller now during the the second quarter as the big change really happened during the end of first quarter in second quarter last year in in the current exchange rates back to the the numbers so so order as i said orders received on a very good level, and that led in the order book, ending order book actually being on a higher level at the ending order book that we had at the end of last year, so three months ago. This also converted into a good level of profitability, whether we look at on gross margin or EBITDA level. Another maybe a highlight on the year, was ex-weather, which continued on the double-digit growth in constant currencies, the growth rate being 12% year-on-year. Now, before I go into kind of more detail into the numbers and dive into the quarter itself, a couple of highlights on the new products launches for growing areas supporting the strategy of the company. Lots of good stuff is happening in the company, a lot of exciting things, and I've just picked a few here to highlight the type of things and type of innovations that we are doing. The Origo family on the left side on the screen, what it is is a modular platform and transmitters for very precise indoor monitoring, and this is – super critical in a couple of things. The modularity makes it obviously kind of flexible and quick to adapt to different applications. But furthermore, and maybe even more importantly, it also allows cost-effective solutions, which may be important in kind of big volume places like data centers. The DMT-153 in the middle, this is a measurement probe for ultra-dry processes. And examples here are the lithium-ion battery manufacturing and even more so the coming solid-state battery manufacturing. This is really further advancing our technological advantage over our competitors. and gives us a good basis, and it's a good example of our strategy driving the technology and creating the world's leading, most accurate, most reliable measurement equipment. And very importantly, somewhat differently on the right, is Vaisala Care, which is a renewed service offering for a weather side. You may recall we launched the Vaisala Circular for our probes in industrial measurements some months ago. This is a similar kind of an effort to really productize clearly the service offering that we are driving, which makes it much, much easier for our salespeople to communicate the value to our customers and even more importantly, for our customers to understand the value proposition and value for their operations. And this is an example of very important milestones and steps. How do we drive one of our strategic initiatives, which is driving the services business and its share in our overall business portfolio? Then, just a reminder that we now report financial information in three businesses. We now report this as of January 1st, 2026, industrial measurements, ex-weather, and weather, energy, and environment. So, we've split what we used to call weather and environment business area into two parts. This is on a back of strong growth on ex-weather over the past four or so years, now representing roughly 10% of the revenues of the company, and our intent here is to give you and our investors and our shareholders much better insight and much more granular information on something which starts to be a meaningful part of our business mix, being XWeather. Then I'll hand over to Heli to go through the financials.

Thank you, Kai, and good afternoon from my side as well. If we then look at a bit more detail to the financials, as Kai already mentioned, our orders increased 5% year-on-year, 10% in constant currencies, really driven by the industrial measurement, 17% growth in constant currencies. This did boost our order book, being 6% above the level of 2025. And the net sales, on the other hand, they were mainly flat in reported currencies, but of course 7% in constant currencies. And here the positive side is that we could see the growth in our growth areas of industrial measurements and X-weather. The gross margin then returned actually to the same level as it was a year ago. We had three slightly lower quarters in between. And this was really coming from the kind of mixed effect as well as scaling, as well as kind of lower tariffs than for the one and a half. months in the first quarter, so many kind of impacts to it. On the EBITDA side, we maintained strong profitability, 15.1%, same to last year. Our costs were fairly flat at plus 1.7%. Our cash conversion was 100%, so it continues strong as normal. If we look at the industrial measurements then a little bit more in detail, if looking at the kind of orders received increase and net sales increase that were both very strong in constant currencies, really driven by EMEA and APAC as well as kind of the industrial and power markets. Americas was not bad. They were also growing strongly, but not as strong as EMEA and APAC was. The cross-margin, similar to the Vaisala level, this was also on the same level as last year after a few lower quarters. Here, definitely, the scaling, the growth had an impact on this area. On the EBITDA, then, increase in net sales and relatively low operating expenses actually contributed to the unusually high level of EBITDA margin. On the ex-weather side, then... We continue the double-digit growth in constant currencies. Here we must remember that the ex-weather, about 60% of sales comes in USD, and then we have other currencies, and in addition to that 60%, and actually only minority comes in euro, so the impact in this business is most material of our businesses of the kind of strong euro. If you look at it, the growth was really coming from the insurance industry as well as the sales to developer and API customers. Gross margin was at the same level with last year. EBITDA slightly lower. This is mainly due to the fact that the first quarter of last year was exceptionally high, the comparison period. So it was the first. quarter we integrated the new businesses we acquired in Q4, so it had some one-off cases during the first quarter of 2025. Last but not least, the weather, energy and environment side. Orders received, we did see some increase in demand for the meteorology and aviation. The renewable energy continued on a low level. and the sales did decrease slightly. This is also on the back of kind of last year's lower order intake. It's now visible in the kind of slightly lower net sales. The gross margin was still close to previous year's level. The EBITDA did take a slight decrease due to the lower sales. The OPEX did also decrease. That was the kind of result of the cost controls measures we implemented last year. Cash flow continued at a good level. As already mentioned, the cash conversion was 1, and the free cash flow generated in the first quarter was 17 million euros. If we then look at the kind of income statement as such, we have gone through already most of these. If we look at after the operating result, what happened, you can see that the financial income and expenses was – quite much less than last year. The main reasons for that is that we are less levered, as well as the volatility on the currencies have been less, so the FX results have not been burdening the result in the same way as last year. And that then did result to the kind of earnings per share increasing to 38 euro cents. If you look at our strong financial position, this has been the same heading in the slide I at least as long as I have been here, and the positive side on this one, that we are again net-debt-free, so we are in a net cash position of 3.7 million euros. This was the financials. What would you like to say about the market and business outlook?