Nimbus Group AB (Publ)

Good morning, everyone. This is Johan Indan speaking. Welcome to the Nimbus Group report for the first quarter. Together with me in the room here, I have Christian Johansson, who's joining as the CFO. And Christian, this is our first quarter that we report together. Welcome to Nimbus. I'm happy to have you on my side. And maybe you should say just a word to introduce yourself.

Yeah, thank you, Johan. And good morning, everyone. It feels very good to get this opportunity to be part of your Nimbus management team, Johan, and this fantastic Powerboat group, even if it is for a limited period of being an interim. Short about myself, I'm a professional. I've worked more than 30 years, primarily enlisted in national industrial companies such as ABB, Volvo and SKF. But during the last years, also in private equity and family-owned businesses. And mostly I've had the CFO role, but sometimes also acted in

other management capacities excellent christian i'm happy to have you on my side now let's get to the core of the presentation which is of course our results for the first quarter we continue operating in a soft market it's characterized by the turbulence that we see in in global politics and it drives a cautious behavior by our dealers and by retail customers We see how this primarily influences the order book for commercial sales, which has been reduced. On the other hand, we see that our retail sales keep their order book on a good level. So I will come back to the order book just in short. For sales, we reduced by 14% as compared to first quarter 2025 and landed on 257 million SEK. Gross profit reduced to 13 million SEK as compared to 37 for the corresponding quarter last year. The reduction in gross profit is primarily volume driven, but also we see under absorption in the factory. So we are not covering the direct cost structure for our operations. In the finance section later on, Christian will break down the gross profit for you and give you some more detail. The reductions we've done on the operational expenses, which we have reported earlier in the quarters, they continue to give us a benefit, but they are not sufficient to balance the EBITDA level. So we're coming in at minus 30 million SEK as compared to minus 13 last year. And as noted in my CEO letter as part of the quarterly report, this is far from satisfactory and we continue pushing hard on our initiatives to turn the trend for the group. One of the most important areas of focus is, of course, our cash flow. And we see that the discipline we have put in reducing networking capital at the same time as sales is reducing is paying off. And we have a relative improvement between the quarters of 98 million SEC in operating cash flow, where we came in at minus 29 for first quarter 2026, as compared to minus 127 in 2025 and as you know if you have followed the group for a while quarter one is the quarter where we build inventory for sales in quarter two so being able to to manage our cash flow in this way is a good uh improvement of our balance of the business finally available cash and of quarter is uh at the level of 191 million sec as compared to 237 last year Now, let's look at the quarter trends over the last 24 months. We know that we are operating in a negative sales trend over the last 24 months. Out of the sales drop, North America contributes to the largest portion. And if you look at the sales I just reported for the quarter, the 43 million sec drop, was represented by 40 million SEC in North America. So North America stands out when it comes to the reduction of sales that we see over time, as well as for the last quarter. For the EBITDA, we see 2025 that was characterized both by our business in Bella, Finland, which was closed by the end of the year and by Edgewater. And as we reported for fourth quarter, they constitute the absolute majority of the losses. But we're still in a negative sales trend, which we see on the rolling 12 for the EBITDA. For operating cash flow, as I mentioned, we saw a relative improvement for quarter one, and we are in a positive trend when it comes to reducing our networking capital. And as mentioned, I'm happy with the discipline of the company. Now there is more to do. We are on the same relative terms of networking capital to sales. And Christian will give you a deeper view of that later. So there's more to do, but I'm happy with the progress on the cash flow. Going to the order book, I've already mentioned that we see global uncertainty. We see that through the reports of many companies, how this affects sales. When it comes to our order book, we see a reduced order intake for the first quarter as we have delivered the order book. Part of the order book during the first quarter, we see that order intake for our commercial sales, that is our business towards dealers, who in turn sells to retail customers. is reducing and we see a cautious behavior out in the market, not only by retail customers, but also by dealers. So risk management is on the dealer agenda and we see that the order intake is slower. On the other hand, for our retail sales, we see that we are holding up the order book and we are holding up our sales and i'm really proud to see how the retail organization is performing in this tough market environment keeping volumes fairly stable over the last years if we then come to some market highlights in a market like this which is tough it's hard earned There is nothing else you can do, so to say, than to be very active out in the front line with customers in order to chase every sale. So some of the things we're doing, we are or have been in the last weeks launching a Your Waters campaign for the Nimbus brand. We see that the global turbulence also affects people's pattern when it comes to vacation. We expect a short staycation trend. People will stay closer to home for their vacations. And we expect that that could have a positive influence on voting. We see that we are in the midst of the spring show season. We have had Helsinki, we have had Stockholm, we had Southampton over the weekend and we continue now through Europe with start of season activities. In North America, where we have our challenges, as you've seen on the sales side, we have started what we call a feel-the-difference tour across key markets. This tour is together with dealers, where we send our team in North America together with dealers. They make VIP invites for boat testing on the water, and this will continue now for a number of years. weekends coming now. We're starting actually last week and that will commence over the next months. So it's all about activating the customers. For a highlight, we've also delivered now and sold our 18th 495 fly. As you know, it's been on the market now for one and a half year. So during 18 months, we have produced and sold 18 boats. And I'm really happy to see that we are also now starting to move some volume in North America. We mentioned earlier in Q4 that we launched the 495 fly in Fort Lauderdale. The unit which was presented in Fort Lauderdale is now retail sold and there are three new units coming across to North America. We hope to continue the good success, not the successor, but the complement, the 495 Coupe, which we start to deliver in early 2027. And then finally, on the European season opening, a very important boat show coming this weekend. It's the Palma Boat Show, which kicks off the Mediterranean season. Now, back to our performance. I already mentioned that we are not happy with the performance in the group. I've covered that in the last quarter as well. And we have a group of initiatives that we've already started. I promised in earlier quarters that I would come back to one or two of those in each of the reports. And to just summarize which the five initiatives are, I will then take you through a couple of deep dives. First of all, we have our Nimbus brand in the Nimbus group. That's our flagship. That's a large portion and our premium brand in the group. And we are now doubling down on strengthening the Nimbus brand. The Home Waters campaign is part of that, but there is more things coming on, making sure that we make the most of this fantastic brand with a strong history and legacy. We're working hard to turn the trend in North America, specific focus on Edgewater. And I will give you a bit of a deep dive on what we're doing in Edgewater. We are improving our commercial capacity and performance. We already, during Q4, launched a new organization. We are adapting the way we work with our dealers to get them closer to us. And we're also looking to add a few specific competencies to increase our commercial performance. We're expanding our business in work boats and defense was reported during Q4. And of course, this is spearheaded by our MSNB 200 boats towards the Swedish defense. And we're improving our operational excellence and cost efficiency. So a couple of notes on first of all, then turning the trend in North America. So Edgewater, we talk about Edgewater, we wanted to give you just a touch of what is Edgewater as a brand and where are they operating. So Edgewater competes in the saltwater sport fish segment, typically called center consoles, and it's the largest boating segment in North America when it comes to larger boats. It's a very specific sport fish vessel, typically used around the Florida coast, but also across North America. Segment is highly competitive, attractive, and market volume has reduced significantly from 2023 to 2025, which is then part of the period where we have owned Edgewater and we are chasing them lower to get the business in balance and actions we are taking them to improve the results. We have made a capacity reduction in Edgewater in early January 2026 that is executed. We are reducing and have been reducing the overhead expenses. If you compare last first quarter, first quarter 2025 to this year, we have made a significant reduction in the overhead. We are overseeing... Being the product range, so the number of product offered, we're looking at the product cost and we're doing the price review to make sure we get the cross profit right for the business. And then the marine market is also about renewal. You need to show new product and you need to be on the trends. So we have launched the Edgewater 250cc during the autumn, which is the first new product launch since 2020. Results so far, if we look at both cash flow and operating results from PACE in Q4 2025 to Q1 2026, we have seen an improvement in both cash flow and the reduced losses for the business. However, not yet sufficient to balance the business, especially when you add the fact that we are keeping or we see continued reduced sales for the business. So we are doubling down, we are looking at further actions, but also expect payoff from the already initiated actions here during the next period. Next then, second deep dive. Last quarter I reported that we see the workload and governmental segment as a strong opportunity for Nimbus Group. We have success with our MSNB 200 and we see a lot of interest around that product, but there are broader opportunities that we can capture and we have been adding resources now to the group in order to be able to address these opportunities. I got a few follow-on questions last time asking, what is your competitive angle and what gives you a competitive advantage towards the sector? And I just wanted to highlight a few things here. First of all, we have serial production capability. We are used to producing 50, 100, 150 boats, several hundred boats on a yearly basis. This segment is typically dominated by yards. who are more project-based, one or five or maybe 10 boats in series. So serial production capability gives us speed in delivery, but also a completely different cost base than you see in a yard environment. We have the technical and the project capability to run these type of projects. We're used to designing boats for demanding customers, but we're also used to doing that on a tight timeline. When we design a boat, we know that there is a factory waiting for the boat to be ready, all the parts to be purchased. And if we are late in the project, it becomes a very expensive exercise. So keeping a timely delivery is one of our core competencies, and we see that's appreciated in this segment. And finally, we're a Swedish public company with a global reach in terms of both supply chain and deliveries and distribution. So these are all attractive features towards this segment. Now, Christian, over to you to run us through some details on the numbers.

Yeah, thank you everyone. Key financial items for the quarter. Johan has already commented. The financials are somewhat a repetition, but potentially with some additional favours here. So the EBITDA results was negative 30 million. Sales and administration expenses, as you've understood, has been reduced by 6 million, or more than 12% versus the first quarter last year. But this could not then compensate for the lower gross profit. And gross profit then 13 million in the quarter and negatively impacted by lower sales volumes by about 5 million SEC versus last year. And lower margins on sales of older stockpiles and under absorption of production costs from lower production volumes impacted negatively by 18 million. While the impact of currency on the gross result this quarter was close to zero. Johan has talked about the priority of improving performance in Edgewater. Another priority for us is to sell out the remaining older stock boats. Margins on sales, it's important to note, of newly produced premium boats are at a good level and improved further in the quarter. The finance net was positive by 9 million in the quarter compared to negative 36 million last year, so an improvement by 45 million. And this is mainly coming from currency effects on intercompany balances, which were positive in the quarter of 13 million compared to negative last year of 29 million. And this quarter, the dollar, which is an important currency for us, strengthened versus the Swedish crown, while it weakened significantly in the first quarter last year. We also have lower interest expenses by 2 million contributing to the improvement. Commercial sales, you've already heard, were lower by decreased 39 million versus last year, corresponding to a decline of 11% when adjusting for the currency effects. Sales in the Nordics increased by 8 million. Europe was relatively stable with a decrease of 6 million, while sales in North America, as you've heard, decreased 40 million. And the lower commercial sales as a whole are fully explained by the weaker sales in North America. The order intake of 134 million was lower in absolute terms and declined in all regions. And as you heard and understood, we experienced a very cautious market with long sales cycles among both customers and dealers. And stock levels, as we can assess it, is, however, at historical low levels at the moment. And finally, the order book reflects the cautious market. Obviously, it was 285 million by the end of the quarter, reduced from 470 million last year, which means we presently have shorter order books than normally. On the retail sales side, the situation was overall stable. And retail sales experienced quite a normal first quarter, both when it comes to sales and to order intake. The bulk of our retail business is, as you know, in the Nordics. And this year we had a long and cold winter with a thick ice cover well into the months of March, both in Stockholm, Gothenburg and in Norway. And ice is not good for boating. So despite the late spring and the overall demanding market, the order intake and the order book by end of March was normal and at about the same level as the last two years. Sales of own branded products held up well and was 24 million the quarter versus 21 and 27 million respectively the same quarter the previous two years. Order intake of 57 million of own branded products in the quarter is also well in line with previous years and I would say a proof that our book models are attractive for the Nordic customers. And the order book of 146 million by end of the quarter is as mentioned at the normal level. Operating cash flow, you've heard, was negative 29 million in the first quarter compared to 127 million negative last year. So an improvement by 98 million. And this is, of course, encouraging and important, especially in a demanding market environment, as we are experiencing now. The first quarter in the calendar year is a low season when it comes to sales of boats. It's a high season when it comes to production ahead of the spring and the summer. This means we normally are increasing working capital in the first quarter. This year, in fact, net working capital decreased by 3 million, while it increased 89 million in the same quarter last year. 92 million improvement from less tied up working capital. We did increase inventories by 23 million, but 24 million less than last year. And lower sales and a strong focus on collecting account receivables on time made account receivables to increase only by 5 million compared to an increase by 91 million during the first quarter last year. Cash flow from operating results, interest and taxes paid were negative by 20 million in the quarter compared to a negative 26 million last year. So also here a small improvement. And cash flow for CapEx was unchanged versus last year, 12 million. In the graph to the right, we can see that the net working capital by end of the quarter is significantly lower than last year. It's 620 million compared to 740 million last year. But in relation to the last 12 months sales, we are unchanged at 47%, which means that the old capital base still is a bit too high. So further reductions of old stock boats is a priority, as we have mentioned, as well as to continue the good work collecting outstanding receivables on time. And finally, Johan has also commented that our available cash, including unused cheque limits amount to 191 million by end of the quarter, which is a satisfactory level, considering that net working capital normally is peaking at the end of the first quarter. So with those comments, back to you, Johan.

Thank you very much, Christian. I will keep it short and sweet to the end. As we've said before, we are not satisfied with the performance we have as a group at present. We have a comprehensive program to improve our performance, whilst we are still also working in a market where sales volume is reducing. Our financial targets remain. It's our star that we aim towards when we navigate, and it says that we should grow by over 10%. We should have an EBITDA margin of 10%. We should have a capital structure with no financial debt and some dividend over time. As we said, this is the star we navigate towards and we have some work to do to get there. Now, with that, we will close the presentation and move to our Q&A.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Thank you very much. We have a lot of written questions and I'll start with one on old inventory. So this is Wilmer asking how much of the inventory that you deem to be impacting margins negatively that has been sold as of now and for how long do you expect the negative impact from this category to continue?

So on the old inventory, we expect to balance that during the year. It's part of our sales plan, and our focus is to close as much of that during the first two quarters for the year.

Thank you. And the next question is regarding cost measures. Did you see close to full effect of the implemented cost measures in Q1? Or would you describe it as there are more implements to be done?

But we have seen of the actions we took last year to reduce the pace into Q1, we have seen the majority of the effect coming through. But also as presented, we see a reduced sales volume. So therefore, we contribute with a lower gross profit, which then makes us or we need to keep chasing, so to say, the reductions in order to balance the business. But the majority of the actions have taken effect in Q1.

And then there is a question regarding the MSMB 200. You have already announced that the production ramp up will start later this year. But when will the call off orders from the Swedish Armed Forces enter the order book in a material way?

So the call off enters the order book when it happens. And that's the principle that we have.

Okay. And then there's a question on how much the negative EBITDA contribution from Edgewater was in the quarter.

So we don't disclose the actual EBITDA contribution from Edgewater, but we see a gradual improvement, so to say, decrease of the negative contribution from Edgewater, as I mentioned, from quarter four into quarter three. At the same time, as mentioned, the majority of the sales drop that we have experienced as a group is North America, and the vast majority of that is Edgewater. So we see a need to continue the efforts in Edgewater, both to see the full effect of the decisions taken, and we're also monitoring if we need to take additional measures, given the fact that Edgewater sales is still reducing.

That's clear. And another question on how was the reception of the WTC 12 series? in the market?

My perception is that it's very well received. Of course, it's a sequel to the 11, where we have sold in high volume. We have done over 100 improvements to the VTC12, but it's the same whole construction. But we see a renewed interest in the product. We see that it's selling in Nordic, we see that it's selling in Europe, and we see the first units already coming over to North America. And so, Wilmer, you asked the question on the legacy stock. It's really important to introduce a new model like this to manage your price towards the market. And then, of course, we have the offer for a customer who's looking for a discount. We can refer them to the older models. So it helps us in our price management towards the market as well. Very well received.

Thank you. And then there are some questions from George at Gratitude Capital. First, he says it's great to see a comparatively strong cash flow. Do you expect inventory and working capital to develop in line with normal seasonality from here? Or do you see an extra positive effect on top of normal seasonality due to further inventory build down?

A forward-looking statement we'll not engage in, so I will not forecast the working capital, but I will, just as we said through the presentation, managing our working capital and make sure that we balance it towards the difference in sales and we keep a high discipline in this as a top priority for us. So this will be a continued strong focus area. And if I may, I think we skipped one question from Wilmer, if I may jump in. There was a question on Paragon as well, and I want to cover that. Well, it says Paragon is no longer mentioned as one of your brands in the annual report. Well, Paragon, we still own Paragon as a brand, but we don't have a production schedule and an order book for Paragon right now. So no units in the schedule. Therefore, we are not highlighting the brand right now.

Okay, and then George is asking, in general, how would you describe the differences in the market conditions and recovery in the Nordics versus rest of Europe? And do you see any differences between the Nordics and Europe in terms of geopolitical sensitivity?

Let me see here. Now we had first a question from George on the prolonged winter, right? So if I capture that one.

Yeah, okay. Then I should read that question first. You refer to... A negative impact from the prolonged winter as the weather was very cold in January and February, I guess. Why are you confident in calling out a weather effect? Can you see that improved weather as of late has had a correspondingly positive impact?

No, I would say we're not calling out weather as a reason for the market development. It's more a note on how the spring has developed. Of course, weather and how early the sun comes or when the ice breaks is important for the boating business, but it's not a cause for the way sales develop.

And then the question on the differences between Nordics and Europe when it comes to market conditions. Do you see any such?

I would say if you look at the overall sales as compared to the first quarter last year, we had a reduction of 43 million SEC, where North America was 40 million SEC. So when we see Nordics and Europe, we're actually balancing on more or less the same levels as last year. Now, we have commented that those levels are low. They are low for Nordic, they are low for Europe, but they are stable in this low environment. And we don't see any real differences between Nordics and Europe. But if you bring in our retail business, which is then in the Nordic, it's not the full Nordic business, but it's part of the Nordic business. We see that we are keeping volumes up at a higher level and we are keeping our volumes in a stronger way in the retail business where we sell towards the end customers, whereas the commercial sales business is towards dealers. So there is a difference where we sort of say control the end customer purchase. We seem to be doing better right now.

Yes. And in Q4, you had a strong water intake for Europe, while in Q1, we now see a weak water intake. Could you talk a bit more about the trends, the recent war impact and current trading or outlook that makes you confident in your evaluations?

But it's correct as the question is posted. And if I connect to my previous answer, we've seen that sales have been holding up in Nordic as well as in Europe. But we see a bit of a trend shift when it comes to order intake in the last period, specifically then from Europe. We are working very closely with our dealers right now to see through the market and understand the end customer behavior. But it seems to us when we look at the flow that Europe has taken a bit more cautious position, so to say, or customers in Europe than we see elsewhere.

Good. And then George has another question on the workboats. Thank you for the deep dive. Has the market opportunity and your view on alkene opportunity within the military and defense market developed over the previous months? Do you see a continued positive momentum there when it comes to potential expansion of the pipeline?

uh well thank you for the comment and uh yes we do as i mentioned in the q4 and i repeated here we are adding some resources to make sure we can address this segment in a in a good way and when you add resources and you spend time and you focus on an area of course you see uh you learn more and you see more opportunities so we believe we have a positive momentum when we lean forward towards the segment and then of course we will see over time what results it yields

Great. And another question on significant reductions in repayment of leases in the quarter from 8 to 10 million per quarter last year to 4 million this year. Is this related to closed down production and hence the new level going forward? Or is it mainly a timing cash flow effect?

Yeah, I would say the prime reason for this is the Bella closure, the Finnish production.

So it's a new level going forward?

Yes.

And how was the performance of Edgewater versus the rest of Nimbus in North America in the quarter?

I think I already answered this one, but just to repeat, the sales drop over the quarter or quarter as compared to first quarter 2025 was 40 million, 43 million sec, where of 40 was North America and the absolute lion's share of North America was Edgewater. So Edgewater is underperforming as compared to Nimbus in North America for the period.

And regarding old boats stock, is the main part of the old inventory in your retail operations or in the commercial operations?

The majority of it is in our commercial operations.

And then I have a couple of questions from Pekka Rantijärvi. Can you elaborate a bit more on what actions you will take to improve the decreased sales in the US and how fast you expect the actions to be reflected in the order book?

So we already in the beginning of the quarter, I think it was early January, if not January 14th, we launched some changes where we have now executed in the U.S. organization. We have a new head of our U.S. operations in place. Very experienced in dealer business. He's a floor guy, as I said it before. He's used to running dealer business. And now we are, so one of the initiatives is really to get close to our dealerships. He's made a strong tour across all our dealers where we are looking at their sales processes, how we can get closer together and the feel the difference tour. that I mentioned on the market highlights is a result of that, where we get closer to the dealers, we get a strong collaboration all the way out to the end customers. Part of the package that we launched in early January was also to drive some cost decreases and efficiencies. For example, we've moved some of the financial reporting processes home to Sweden, and we don't cover that in the US, but support from here. And there are also some additional savings we are executing there.

Okay, then there's a question on our ownership structure. I don't know if you can comment on that. But do you see any scenario where Nimbus could benefit from a more concentrated ownership or a strategic partner?

Well, that's not in my job description to comment. That's an owner's question.

Yes. And then there is a last question from Helen. Maybe you cannot answer this question, but do you plan a bigger model than Nimbus 495 in the future?

Well, we never comment our future product plans. So unfortunately, I can't comment this. But I think we should pick up, as we mentioned in the report, that we are continuing to invest in our product range. That's important, even if the market is tough and we are working to balance our business. It's very important to keep the investment level to make sure that we have fresh product coming to the market all the time.

So then I just want to thank everyone for listening in and thank you so much, Christian and Johan for presenting. And I just want to remind you that our AGM is on 19th of May and you're very welcome. And we will release our Q2 report on the 16th of July. Thank you very much.

Thank you, everyone. Thank you. Thank you.