Cavotec Group AB

Good morning and welcome to Cavitec's second quarter presentation. I am David Pogels, CEO of Cavitec, and together with me today, I have, as usual, Joakim Barqvist, Cavitec's CFO. Since we presented the report for the first quarter, we have carried out a significant change. We have successfully completed the project of relocating our headquarter and registered office from Switzerland back to Sweden. It has been an extensive project involving efforts from both banks, legal advisors and of course a great job for our internal resources. Cavitec have had its headquarters in Switzerland since 2007 and was listed on Nasdaq in Stockholm 2011. With the move, we relisted the shares of our new parent company on Nasdaq Stockholm, which took place on July the 9th. As mentioned, Cavitec was founded 50 years ago in Sweden, and over these five decades, we have built a leading global position in electrification and automation. In addition to helping our customers to improve efficiency, we also contribute to reducing emissions in, for example, ports, mines and other industrial applications, as well as the safe conditions. As you know, we report our two business segments. Our service offering is reported into the two business segments. So for the two segments, ports and maritime and industry. Starting with ports and maritime, we are providing world leading solutions for ports, ships and other marine applications. We have a unique system, for example, automated mooring, shore power, crane electrification and connection and charging systems. All these solutions contribute significantly to improved environments and working conditions in ports worldwide. Our customers include ship owners, operators, ports, terminals, port equipment, manufacturers and shipyards. Ports and Maritime is our largest segment and represents the majority of the group's sales and EBTA. The industry portion The unique selling point for our industry division is its ability to drive productivity and contribute to the customer's operational efficiency, electrification as well as occupational health and safety. The products include motorized cable and hose reels, radio remote systems, power connectors, spring driven and hose driven reels. We have customers in a wide variety of industrial sectors, such as cranes, energy processing, transportation, surface and underground mining, and tunneling. Service is, as I've already mentioned, an integrated part of our business segments. We have service engineers across the globe. They work either from our service centers or based close to our customers' premises. The service offering encompasses system integration, maintenance, sale of spare parts, inspections, refurbishments, as well as round-the-clock service level agreements. As you have seen in the report, we have been affected in the quarter by the increased uncertainty in the global environment that has led to a greater caution among our customers and is taking longer for them to take the decisions. However, we have a strong order intake in the quarter which is reflecting the strong underlying markets. I would also like to stress that we have seen no changes at all in the underlying business drivers. We see the same mega trend with the need to electrify society at the same time, which I think many people neglect. There is an increasing need globally to reduce noise levels in, for example, ports. These needs also manifest regulations and governmental requirements that affect our customers. Our offering is, of course, a perfect fit to meet those trends. We have a strong market position and a leading technology which explain our strong order intake during the quarter. We are growing both with new and existing customers and thereby expanding our installed base. The installed base is important to us because it provides an aftermarket opportunities to offer our comprehensive range of service activities. Our order intake increased 10.1% to 44.4 million euros, driven by good demand for ports and maritime products and service offerings. The order intake was largely driven by the demand for shore power in Europe. However, as I said earlier, and as you can see in the report, the increased global uncertainty has led to greater caution among our customers, which has affected our sales of goods and services with the shorter delivery terms. This naturally impacted both revenue and profitability in the quarter. Profitability was also hit by the ramp up in the preparations for the upcoming major deliveries that we will see in the second half of the year for Ports of Maritime. As you might recall, we signed significant orders in the Ports of Maritime segment late in 2024, and we will start delivering on these orders on the second half of 2025. In short, Joachim will dive deeper into the numbers, but I'll keep him out for another minute here. Key events in the quarter. I began the presentation by stating that successful change from the missile to Sweden was a major event in the quarter and a historical step for Cavitech. We have now returned to Sweden, where a vast majority of our investors are based. Not only are we getting closer to our investors, but we also expect that the move will allow us to make faster decisions, streamline our processes and become more agile. In short, it will enable us to operate more efficiently and by that also reducing cost. Well, beside the Beside the significant event we also announced a couple of important orders. Among those orders is an order for example to complete shore power systems for newly built container vessels signed with the leading global container shipping company. This order has a value of 8.1 million euros and delivers a scale to begin in the second half of 2026. We also signed a shore power order for Equans for the port of Antwerp Bruges in Belgium with a total value of approximately 1.5 million euros. I would also like to say a few words about the new products that we launched during the big trade fair in Bauma, for instance, in Munich early in April. The project has received a lot of attention from customers and when it comes to the radio remote control system, as you see on the screen, we expect to reach customers in testing for the second half of the year. I'm also excited about the new projects we are about to launch in the fall. We should have more details to present in the third quarter report about those coming launches. Finally, it's time for me to hand over for Joakim to dive deeper into the figures.

Thank you very much, David. David has already addressed that the order intake was up with 10% versus the same quarter last year. I want to also say that the backlog grew by 5.5% versus the same quarter last year, reaching 124.9 million euros. This also represents a 7.4% increase compared to the previous quarter. And this positive development clearly reflects both the continued strength of the market demand and the attractiveness of our offerings. Going over to revenue. Although the underlying markets remain strong, we've really been impacted by the increased caution among our customers, many of whom are affected by ongoing global economic uncertainty. This has led to postponed purchasing decisions, particularly for goods and services with shorter delivery time and timelines to be delivered within the year and in the quarter. This has in turn had negative effect on our revenue development this quarter, which you can see here in the graph. Revenue declined by 16.2% to 35.7 million due to weaker sales in both Portugal Maritime and the industry segments. We were also impacted slightly by currency fluctuations that had a negative impact of 0.3% during the quarter. On top of all of this, it's still important to keep in mind as a project-oriented business, our revenue can fluctuate from quarter to quarter. And additionally, a significant factor in this is that we will not begin delivering on the large port and maritime orders that we signed at the end of 2024 until the second half of 2025 at the earliest. Let's move on to EBIT. And as a result then of the lower revenue this quarter, EBIT also declined. Profitability was further impacted by reduced volumes and the ongoing ramp up efforts in preparation for the larger scale deliveries that we have planned for the second half of the year, the ports and maritime projects that David mentioned earlier here. In addition, also EBIT for both Q1 and Q2 2025 includes some adjustments related to the change of domicile to Sweden. We move over to net profit and the net profit declined and we show the loss of 1.7 million versus 1.5 million versus 0.7 million that we had positive in the same quarter last year, reflecting then the lower revenue. This is of course not satisfactory to see the break in the good trends, but we did have a plan of a weaker H1 and a stronger H2. We now hope that the economy will not impact us further in H2, but we are prepared to handle further macroeconomic uncertainty if that will be the case. Cash flow was negatively impacted also in this quarter, primarily due to the overall performance and the ongoing ramp activities for the upcoming bigger deliveries at the second half of the year. We still, though, have better cash flow year to date June than the same period last year. And our cash position is still good and we still have plenty of headroom in our credit facilities. So still feel comfortable here. Let's move over and say some more details about the ports and maritime segment. We recorded a strong order intake in this quarter. Order intake increased by 19.6% to 29.3 million. And the order backlog grew by 5%, exceeding 100 million euros. This reflects the strength of the underlying mega trends, like David spoke about earlier, and the demands in this sector. However, we are also seeing increased caution among the customers. Decision making processes are taking longer time, especially for goods and services with the shorter delivery times. This has impacted both revenue and profitability for this segment. As mentioned earlier, we're also seeing the effects of the ramp up efforts related to the larger orders scheduled for delivery starting later this year and continuing into 2026. We move over to industry then. And in the industry segment, order intake declines slightly by 4.6%, reflecting the increased caution among customers. As in other areas, more cautious market environment also weighing on revenue and profitability in the quarter. As David mentioned earlier, we've launched several new products this year, though, and we have been positive. It was very received very positively from the customers. However, due to our typically long sales cycles, we do not anticipate significant revenue contribution this year from these products. With that, I will hand back to David for some final remarks.

Okay, thank you very much Joakim. Let me just quickly summarize some key points before we open up for the questions here. We have successfully completed the relocation of our headquarter from Switzerland back to Sweden, where Cavitec was founded 50 years ago, and our investor base is located. This move will allow us to operate more efficiently and reduce costs. In the quarter, we have seen an increased global uncertainty has led to greater caution among our customers, which has affected our sales of goods and services with a shorter delivery times. This has affected our sales volume and profitability in the quarter. We are closely monitoring and developing and are prepared to take action if needed. Once again, I want to stress that we have a solid underlying markets in our business. Our underlying market remains strongly driven by the need to electrify the society and reduce noise levels in environments such as ports. This is also reinforced by the fact that our customers are facing regulations that require them to reduce their emissions and electrify their applications. For us, this creates a good opportunity since we are offering technology and have built a strong market position during our 50 years as a key supplier. Another important driver is of course our large installed base worldwide, which provides us with an untapped potential for service offering. We have an attractive offering and our investments in product development has further strengthened it with new product launches. We have recently launched the next generation of radio remotes and also the MCS manual dispenser that has been well received in the market. And we have more products in the pipeline that will be launched during the second half of the year. As I mentioned in the last quarter, we have made several important appointments to the management team and new organization in play, which makes us more agile and makes it easy for us to find synergies and efficient ways of working. With our strong customer relationship, attractive offering, dedicated employees, I remain confident in our ability to grow profitably and create value. By this, We come to the end of the presentation and we will step over to questions over the phone or by mail through the webcast.