Norbit Asa

Good morning and welcome to Norbit's Q2 and H1 2026 presentation. Today we have the pleasure of presenting another record quarter for Norbit. This is rewarding and we're grateful for the continued trust placed in us by professional customers around the globe. What makes today an even better day at work is that we also have the opportunity to present our ambitions towards 2030. It's really a privilege to be part of a team with a development-oriented mindset. It's people who are eager to aim higher, continuously improve, and contribute where it matters. So, after we walked you through both the Q2 and H1 presentation, as well as the ambitions towards 2030, we will open the floor for questions. As said, Q2 came in as a new record quarter for Norbit. We have a 22% growth towards Q2 2025. EBIT in the quarter ended at 205 million NOK representing 25% EBIT margin. In the quarter it's been paid out also the dividend decided upon by the annual shareholders meeting with five Norwegian kroner per share was paid out in May. For the first half year, which also is a record, we have 1.5 billion NOx in revenues, which is a 30% growth from first half 2025. with an EBIT margin of 23%. This gives us an EBIT of 361. In addition, during the quarter, we've been awarded several good contracts that we will also comment on later in the presentation. Give you a brief update from the different segments. So in the oceans segment, we've recorded revenues of 236 millions. That's very much at par with last year, Q1. and the EBIT margin is on 33% in the quarter. For the first half, it's a decrease of 7% for this segment and on the revenues for 440 million with the EBIT margin of 30%. gives a quite flat comparison to the year before. We've included also in this presentation, as in previous presentations, I'm not making lots of comments on this. In the post-closing of the quarter, we've also completed the acquisition of Waterlinked. This is a strong strategic fit for us. It's a tailored technology in a very carefully selected application. I think that Asa Asa We see this both as an extension on the product portfolio, but also on our ability to fuel even more based on organic investments in R&D. It's a good team on board also in this company. Connectivity in the second quarter, it was 250 million NOX in revenues, very much driven by increase on the deliveries of our newest technology. product in the segment the GNSS onboard units it's an EBIT margin on 27% giving 66 million NOX in EBIT for the first half we've recorded 461 million NOX in revenues which is an increase of 46% compared to the year before The EBIT margin is declined in the quarter from the year before when it was 31%. It's now recorded 27%. As commented on, the growth is very much driven, as you see here in the product, vertical satellite-based tolling. That's where you have the GNSS onboard unit. The mentioned product in the quarter we was awarded a contract for 155 million NOX for delivery second half this year. And in July, so after closing of the quarter, we announced another contract on 325 million NOX. scheduled for deliveries to start end of the fourth quarter this year and the majority to take place during 2027. Final segment, product innovation and realization. It's been very satisfying growth in this segment during the last period. So it's up 25% compared to Q2 2025. with 367 million NOX recorded in revenues. And the EBIT margin has improved further from 20% up to 2022. For the first half, we've delivered north of 700 million Norwegian kroner in revenues. That's an increase from 454. And the EBIT margin is for the first half 21% compared to the 18 we had the same period last year. As you will see here, a lot of the growth is driven by increased demand and supply towards clients in the defense and security sector. That mentioned, we've in the quarter announced that we've been awarded a contract of 225 million for contract manufacturing, and most of that to be delivered second half this year. So with that, I'll leave the floor to Per-Christian to give you some more details on the financial figures.

Thank you, Per-Rigen. I will spend some minutes walking you through the financial highlights of the quarter. The second quarter showed solid activity across our segments, resulting in record results delivered. In short, revenues were up 22% from the corresponding period of 2025, despite continued foreign exchange headwinds. The EBIT margin came in at 25%. We continued to increase our working capital efficiency where cash flow conversion was 108% in the quarter, leading us to reporting a 48% pre-tax return on capital employed for the quarter. revenues came in at 831.6 million kroner in a quarter, an increase of 26% from the corresponding quarter of 2025 in constant currency. Gross margin was 52%, down from 55%, primarily driven by lower realized margins in connectivity, as I will elaborate more on in a minute. Operating profit was 205.2 million, translating into a margin of 25%. This compares to 174.2 million and a margin of 25% reported in the second quarter of 2025. Net income from the period was 157.1 million, translating into an earnings per share of 245 kroner compared to 206 kroner in the second quarter of 2025. In the second quarter, Oceans delivered revenues in line with the level reported in the second quarter of 2025. Oceans revenues are predominantly dollar and euro based, and revenue growth in constant currency was 5%. Looking at the first half of 2026, Oceans revenues were down 7% compared to the first half of 2025. While in constant currency, revenues were in line with the corresponding period of last year. The currency-adjusted revenue development must be seen in light of a strong first half of 2025 and a slow rental market so far in 2026. In the first six months of 2025, Oceans recognized approximately 60 million kroner in sonar sales towards rental companies. This compares to less than 5 million this year. The soft rental market was compensated by solid demand for sonars across the broader market. Profitability-wise, the gross margin remained on par with that of the second quarter of 2025, while operating costs were a tad higher in this year's second quarter, leading to an EBIT margin of 33% and a nominal EBIT of $79 million. Connectivity reported an increase in revenues of 47% year-over-year and 54% in constant currency. The increase was explained by additional deliveries of the GNSS onboard unit to TOLF Europe. Gross margin fell 9 percentage points. The development was primarily attributed to a substantial increase in memory chip prices, components that are used in the development of the GNSS onboard unit. A depreciation of the euro against the Norwegian kroner also had a negative weight on margins. Coupled with higher operating costs, this led to an EBIT margin declining to 27%, compared to 32% in the same quarter of 2025. The EBIT result was 66.3 million. PIR posted 25% revenue growth driven by the defence and security sector, while the gross margin was largely on par with that of the same quarter of 2025. Payroll expenses increased on additional hires to support the higher activity level. Other operating expenses rose on higher electricity costs, service maintenance, as well as additional allocated costs. The EBIT result was 81.7 million, and the margin was 22%, up from 20% in the second quarter of 2025. Next, balance sheet and financial position. Property, plant and equipment, including rights of use assets, increased 30.3 million in the quarter, driven by the expansion of our SMT lines. Intangible assets rose 13.5 million, explained by R&D investments, partly offset by amortization. Trade receivables increased 135.5 million in the quarter, primarily explained by sequential revenue growth and inter-quarter effects with significant sales in June. Inventories and trade payables were broadly in line with the level reported at the end of March, while other current liabilities rose 153.2 million, primarily explained by prepayments from customers. Net interest-bearing debt, excluding lease liabilities, stood at 340 million at the end of June, an increase from 204.2 million at the end of March, following a 319.5 million dividend payment, partly offset by strong cash flow generation in the quarter. Our equity ratio was 43% at quarter end, down from 50% end of first quarter on the mentioned dividend paid. On 1st of July, we completed the acquisition of Waterlinked. As part of the acquisition, we entered into a new 350 million kroner term loan to finance that acquisition. At the end of the quarter, our net interest bearing debt to EBITDA ratio stood at 0.7 times, up from 0.5 times at the end of March. Including the Waterlinked transaction, the pro forma ratio would be 1.1 at the end of June. Asa Asa Asa Asa Asa Lastly, cash flow from the quarter. Cash flow from operations was strong at 275.2 million, explained by an EBITDA of 253.7 million, a net decrease of 55.1 million in working capital. partly offset by 33.6 million in taxes paid. We invested 55.8 million in the quarter, mainly explained by 36.1 million in R&D investments and 19.9 million in investments in machinery and equipment. The investment level for the full year is expected to be approximately 120 million for R&D investments and 110 million in fixed assets, both numbers excluding Waterlinked. Cash outflow from financing activities was 309 million in the quarter, primarily explained by a 319.5 million dividend pay. I will then leave the floor back to Per Yrgen, who will give you the outlook section.

Thank you. So looking into the outlook, we've I have a view today that based on the current outlook, we expect a full year revenue in the range of 2.5 to 3.1 billion. And then the revenue contribution coming from Waterlink is excluded. So that will be an addition to that. The EBIT margin we expect to be in the range between 20 and 23%. for the more short-term outlook as a start before diving into the 2030 ambitions, so going from the short to the much longer. So Oceans has started out the third quarter strong, despite that this quarter normally is slower. So we target revenues in the range of 230 to 260 millions in third quarter. And again, this is excluding Waterlink, which is part of the oceans segment. So that will be on top of that. for the third quarter in connectivity we expect to deliver between 150 and 160 million in revenues and there is a small in-between orders break of the manufacturing of the GNSS onboard unit which will ramp up again in the fourth quarter In PIR, we target revenues in the range of 240 to 260 millions in the third quarter. And this is a little bit lower deliveries on the defense and security sectors compared to the previous quarter. That concludes the Q2 and H1 presentation and moves us towards the part we have more room to affect. H1 and Q2 is history, 2030 is the future. We'll give first a quick updated introduction to Norbit and the segments, the ambition plan itself, some market drivers, strategic positions and ambitions, and at the end we'll walk you through also financial and capital allocation framework. Since 2010 until today, including the just given outlook, we have an annual CAGR of 30%. And since we became stock listed in 2019, our EBIT margins have improved significantly. prior to that we were focusing on EBITDA margins but learned in the meeting with professional investors that it matters also what you have on the final bottom line so that's why we changed For Norbit, it's been important to shape and maintain a corporate culture. We strongly believe that a group of people that has some kind of the same way of believing and acting increases your ability to reach your ambitions. our core ideology remains the same as it's been for many, many years. And characteristics in this, call it culture or ideology, is that we explore more. This has to do with being very much opportunity driven. One of the most important things for us in the past as well as going forward is to focus on recruiting and refining top talents. The best people delivers the best results. We're very opportunity driven and entrepreneurial and in the company we work hard to maintain and safeguard a commercial spirit. We're a technology company that do a lot to tailor new technology, prioritizing what to make is done market-driven. We don't want to make some cool tech that's only fun for us being engineers. We like to make something that matters, that someone really can use. And in parallel with this, the growth strategy also needs to be tailored, not on a group level, not on a segment level, but on each individual product. The numbers we've shown for the first half year also reassures me that being diversified is a smart move. First half, one of our strong pillars, Oceanus, has been quite flat. Still, we deliver a satisfying growth on the total growth. and having uncorrelated business verticals with different drivers is helpful. So looking on these numbers, some products, some segments have had challenges some years, but then being diversified, you're able to continue to grow. Since 2012, 2010, 2012, we've been working with four year strategy periods. That works for Norbit. Having a longer vision, We believe that the sense of urgency will not be there. If you should deliver on an ambition within four years, you need to start now. If you have a shorter view, maybe you don't have time to do the proper investments and preparation. So four years works for us. In March 2019, we launched a plan prior to the IPO and I think we delivered that fairly well. In August 2021, we announced our 2024 plan. We were able to deliver on that one year early. Current plan prior to this is a 2027 plan. We're now in 2026, and we see we're reaching over 2027 targets one year earlier. That's why we're now presenting over 2030. Yeah. So ambition is a growth from, so looking from 2025, 2.5 billion going to 2030 delivers 6 billion. That's an annual revenue cover of 19%. And this ambition is built based on plans broken down or built up in each of the existing segments. And we have an ambition when it comes to EBIT margin to be in the range of 20 to 25%. We'll give you some more flavor to what's underneath. This is, as the previous plans, organic revenue ambitions. Any inorganic is an add-on to our ambition. We will continue to work to find good targets for inorganic growth to accelerate the growth further. Looking into some drivers, starting a little bit in the oceans domain. This is oceans at the brief. Oceans is by far the most global part of our business. I think last year we delivered sonars and other sensors to around 70 different countries around the globe. You see we have included a geography split. Oceans is very much specialized in advanced acoustics technology. underwater acoustics. And we have a wide range of applications. And as you can see, we have multi-beam sonars. It's sonars for surveillance. It's so-called side-scan sonars. Now, after the acquisition of Waterlink, we have also Doppler velocity loggers. Some sub-bottom profilers after the acquisition of Inomar. and also this 3D sonars is added into our portfolio as part of the Waterlinked acquisition. It's a very diversified client base. As I said, it's geographically widespread. It's across many different industries, dredging, construction, research, scientific, offshore energy, defense, governmental, survey companies. We've included a grouping of revenues. As you see, we've been challenged, what's your defense share? When we report, we have a security sector, which is more narrow. we have then added now what what is defense so this is deliveries to any defense related player even if it's a civil application it's used for or if it's a military application so so that's a new new split We see strong and increasing demand for oceans mapping and insight. I think we've said before that 70% of the globe is covered by water and it's a single digit percent that has been explored. Asa It's also, as we see it, expanded offshore infrastructure and operations offshore, which will need sensors for mapping, monitoring and surveillance. So why should Norbit and the oceans part be relevant for these drivers or vice versa? We believe to have very good domain knowledge and ability to utilize this domain knowledge. We understand the clients so that we can create products that matters. We have a quite broad and established sales and distribution platform. It's very global asset in this segment. Being as vertically integrated as we are, I think our turnaround time to act from opportunity arises until we have been able to design, industrialize and produce is strong. strategic priorities within Oceans to reach our 2030 ambition is to continue to strengthen our position as an independent sensor provider. This means that with all these products, we will have more of those. And we strongly believe that being an independent technology partner for all those making new kind of products, underwater and surfaced sea drones is valued by a lot of clients instead of thinking that we should go upwards in the value chain and start to be one of them. So the 2030 ambition is built on continuing to keep that position and continue to broaden the product offering. and as we've shown in this segment we will do selected M&A to expand and also relevant for expansion of market access So the ambition in Oceans, this is built from different products in different markets with different clients. We've been working a lot involving all the commercial skilled people we have in Oceans. dialogue also with the R&D capabilities and we've landed that our ambition is to deliver in the range of 2 billion NOx for oceans in 2030. And then I'll go to connectivity. Connectivity is, as we've said, a player delivering secure wireless communication technology. We've been able to build a strong position as an independent technology supplier to European blue chip customers. In addition to the different onboard units, satellite-based tolling, tachograph enforcement, these very tolling-related technologies, we also have decades of experience doing other kinds of radio frequency and microwave technology-based solutions. We have naval antenna systems, radar components, and air navigation systems and monitors as part of the product portfolio and as part of our technology toolbox. As I explained on the oceans part, the vertically integrated business model is also important for connectivity. Being able to do design for high-volume manufacturing while doing design of the high-volume robotized assembly lines is a strong advantage. Most of the contracts in this domain, at least the tolling part, is very much structured as frame agreements. You look on the geographical split, this is European business as of today. and it's as you see also a lot the vast majority is related to tolling going forward we think there is lots of good opportunities to broaden The market drivers we have identified is this transition towards usage-based mobility models. The GNSS onboard unit is an example of that. Pay per driven kilometer and not pay based on, as we have in the Norwegian autopass system, gantry-based for sections. We see a strong increased demand for technology made in Europe. And it's an increasing demand for secure and resilient connectivity. That's where we really believe that this radio frequency and microwave experience and skills matters. So the enablers... We have a position as a strong technology partner with this mentioned BlueShip clients. We have very strong customer references, deep competence across different wireless technology domains, and the capabilities of doing scalable industrial solutions priorities how to reach over 2030 ambition will further expand to build on this position as a technology partner for the existing customer base will broaden into selected adjacent connectivity markets. We used the word in the past to go beyond traffic. And we'll also continue to explore more for M&A that could further fuel this expansion. Ambition in oceans is to deliver 1.5 billion NOC in revenues 2030. This represents 20% CAGR for the period. final segment product innovation and realization also a very European business we do contract manufacturing act as an EMS and we do R&D services Both towards high demanding clients. We're best at competing when it's not so easy to make what we're challenged to do. we're offering R&D services and the full range of what you can expect from an EMS I think we have some advantages compared to pure EMS given that we're also a technology company with a very broad R&D team that can support, and I think also for some clients, our customer empathy becomes more relevant, given that we are out in some end markets ourselves, also with proprietary technology, so that we understand their challenges quite well. In this vertical also, in addition to getting economy of scale and getting a benchmark of our own capacities, it also gives us a good diversification. Both the segment as such, but also adding different things into the segment. A lot of contracts are for this also structured as frame agreements. Going forward, you probably will hear us talk more about Norbit, your scaling partner when made in Europe matters. So that's part of the strategy. We have identified as drivers growing defense and security demand in all over the globe and especially in Europe and increased demand for Made in Europe and also this digitalization across industries. We think that the latest period where we've shown our ability to really scale That's an enabler itself. We see potential clients that are very much in a hurry. They need someone that could support them to scale fast. Then these references is an enabler. the R&D and the industrialization capacities, and having a Norwegian manufacturing base itself, we identify as an enabler. So how to reach PIR's 2030 ambitions? We continue to be cherry picking. We have to do targeted client acquisitions. We'd like to broaden industry focus. we've commented on earlier that during the last period the customer concentration in this vertical is higher than it was and we therefore also work to broaden the industry focus And M&A could be relevant also in this vertical. To the numbers, 2030 ambition around 2.5 billion in revenues. That's 18% CAGR. With that, I'll leave the floor back to P. Christian to give us some on the financial and capital allocation framework for the 2030 ambitions.