Cavotec Group AB

Good morning and welcome to Covertech's first quarter presentation 2026. I am David Pogels, CEO of Covertech, and together with me today, as I have, as usual, Joakim Wallfist, my CFO at Covertech. I would like to start with a short introduction of Cavitech. For those of you who are not familiar with us yet, Cavitech was founded more than 50 years ago by three entrepreneurs in Sweden. Since the foundation, Cavitech has focused on delivering innovative engineered solutions that enhance safety, reliability and performance in areas such as ports and other industries where our electrical cable reels or radio remote controls are needed. Our products enable the cabotization of ports, mines and other industrial applications. As part of its global expansion, Cabotek moved to Switzerland in 2007, but last year we successfully completed the move back of our registered office back to our roots in Sweden in Stockholm. As part of the transaction, we are relisted on Nasdaq Stockholm with our new Swedish parent company. These moves bring us closer to our shareholder base in Sweden and will enable us to become more efficient in Asia. At present, we are across the globe, roughly 700 employees. As you know, we report two business segments. Our service offering is reported into those two segments. So the first segment is port and maritime, provides 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 those systems and solutions contribute significantly to improve environments and working conditions in ports worldwide. Our customers include ship owners, operators, ports and terminals, port equipment manufacturers and shipyards. Ports & Meriton is our largest segment and represents the majority of the group's sales. The other segment, industry, has a unique selling point with 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 reels, hose reels, radio remote controls, power connectors, spring driven cable and hose reels. We have customers in a wide variety of industrial sectors, such as cranes, energy, processing and transportation, surface and underground mining, as well as tundra. As mentioned before, service is an important and growing part of our offering and now stands for approximately 30% of the group's revenue. It is an integrated part of our business segment and we have service engineers across the entire globe. The service offering includes system integration, maintenance, sale of spare parts, inspections, refurbishments, as well as round-the-clock service agreements. So our underlying market remains strong, driven by the need to reduce greenhouse gas emissions, improve port environments and increase customer efficiency. This in turn is driven by the strong megatrend to electrify society that we all are aware of. At the same time, we see an increasing awareness globally to reduce noise levels in, for example, ports. The need to electrify society and improve the environments in, for example, ports also manifest in the regulations and governmental requirements that affect our customers and drive their demand for our products. Over our 50 years, we have built a strong expertise and experience in these areas, and we have a strong and attractive offering based on leading technology. This gives us the ability to grow with both new and existing customers and thereby expanding our installed base. We have been long term customer relationship where we work together with the customers to develop the best solution for their unique application. The installed base is important because it provides us the opportunity to offer our comprehensive range of service activities. As we have said before, we operate in a large market with stable underlying growth. Everyone knows that we go to more and more electrification. Around 60% of our business is in ports and maritime sectors, and 40% in the other three fall under our industry segment. Ports where the need for global trade is only increasing year after year, so electrification, safety, productivity are key. Shipping cannot really be more global, with a large installed fleet of vessels and continuous growth to meet future needs. In addition to that, the mining industry has a clear agenda to become more sustainable and automated for tomorrow's increasing need for minerals. Within industry, the mining industry accounts for around half of our business. Construction, another ground segment with high ambitions to electrification and increased efficiency. General industry, a bit everywhere from our products, can play an important role in supporting electrification, safety and automation. So, in summary, the segments where we have been operating in over the last 50 years are now more relevant than ever. In Cavitech, we have four areas for our strategic priorities. Ports and Maritime. In Ports and Maritime, we intend to keep and achieve a leading position for our core products, increase innovation in existing products and develop new products and launch them in order to complete our portfolio. We have also focused on growth strategies for prioritized product groups. Within industry, We want to grow with a more proactive approach and innovation co-developed together with our customers. To step in early with our customers to design something that really fits perfectly into their products in the long run is the way to go. We also strengthen our strategic partnerships and we have focused growth strategies for private product groups. So, services. In services, Cavitech will grow the offering and realize the full potential in service from our large installed base of Cavitech installations worldwide. Platform for acquisitions. We have and we are now creating a platform for acquisitions that can enhance our market position, strengthen our operation capabilities and drive innovation. So during the quarter, coming into a little bit of Ports of Maritime here, during the quarter we have presented several significant contracts in Ports of Maritime that demonstrates the strength of our offering. An order signed for the supply of Mormost automated vacuum mooring systems for a special application in North America. One of Ports of Maritime's largest orders ever so far, valued at approximately 30 million euros. However, we have complex products and it takes time to deliver, so the deliveries for those are planned to take place in October 27 to March 28. Our more master system increased safety, speed up ship handling, reduce emissions and help ports and marine applications to increase the capacity. With this important order, we strengthen our position as a leading supplier of automated vacuum mooring solutions in North America. We have also signed an order for shore power systems to be deployed across several ports in Southern Italy, valued at approximately 3 million euros. The system enabled crews and container and railroad ships to connect to shore power while at birth. By enabling ships to switch off their diesel generators when in port, the system will contribute to reduce harmful emissions and improve air quality. So, industry. Now we can look into some recent business wins within industry. In the beginning of the quarter, we signed another order with Australian construction and engineering company Civmec for the supply of motorized cable reels and hose wheels for Port Hedland in Western Australia, one of the world's largest iron ore export ports. Receiving another order from the same customer reflects the confidence that our customers have in Cavitex technology, proven expertise in demanding industrial environments. After the end of the quarter, we also announced a significant order with a leading engineering company in India for supply of 14 motorized cable reels, cable and hose reels. The reels are part of the customer's first product for ship unloaders and will be used for unloading bulk material such as coal and limestone from vessels to shore. The order demonstrates our ability to deliver reliable high performance solutions for very demanding industrial applications. So by this I hand over to you Joakim for more commercial comments and the financial performance in the quarter.

Thank you David and good morning everyone. We start with summarizing the quarter a bit on a higher level. And the first quarter of 2026, we had a very strong order intake, but lower revenue due to the weaker market in 2025. Order intake increased over 100% in the quarter to almost 60 million euros, and order backlog increased 30% year on year, landing on 151 million. We have now had two good quarters in a row when it comes to order intake and that's setting us up for a better continuation of 2026. Revenue decreased 15.3% to 32.8 million euros affected by the cautious approach among especially ports and maritime customers in 2025. The EBIT declined to minus 2.8 million, where Fortune Maritime contributed negatively to this, while industry was slightly lower than the same quarter last year. In light of this, we have started a cost adjustment program that was initiated already in 2025 in the connection with the relocation of the headquarters to Switzerland, from Switzerland to Sweden, and we are now increasing the speed of that program. We'll come back to that a little bit later in the presentation. So let's start then with the order intake. The order intake was set up 109% with a healthy growth in both Ports and Maritime and industry. Ports and Maritime signed, as David said, one of the largest contracts ever with a value of approximately 13 million euros or equivalent to 140 million Swedish krona. The order includes the delivery of more master automated vacuum mooring systems for special application in North America. Deliveries are planned to take place from October 2027 to March 2028. It's also good to see that the industry showed a positive order intake, mainly driven by the demand for motorized cable rig system. Order backlog increased up to 151.1 million, 30% compared to the same period last year, and almost 22% compared to the fourth quarter 2025. Revenue decreased to 32.8 million, mainly reflecting the slower order intake in portion maritime last year caused by the uncertainty in the market and following a very cautious approach by the customers in 2025. Industry had only a slight decline in revenue as the lead times are shorter and they were also less impacted by the uncertainty 2025. Geographically, we can see that the majority of sales in Q1 was EMEA with 66%. And about a quarter of the sales came from Asia Pacific and only a smaller portion, 10% from the Americas. There's a slight impact from currency minus 2.4% during the quarter. So let us move on to EBIT. As said, as a result of the lower revenue in the quarter coming from the uncertainty last year, EBIT decreased to Euro minus 2.8 and EBIT margin decreased 10.5 percentage points to minus 8.6. Ports and Maritime here contributed negatively due to the lower volumes. Industry had a positive impact on EBIT and profitability in the quarter. What we can see here is that it's been mainly January and February that pulls down the results in the quarter and we're already back on good levels according to plan in March. Now over to the net results. Net result decreased to minus 4 million and earnings per share decreased also as we can see. And in light of the result 2025, and we have intensified the scope of the cost adjustments we initiated already last year with the move to Sweden, and the cost savings measures that we are taking now, they will be fully implemented during 2026, and we'll reduce our cost base by approximately 3 million euros. Some of that effect will already come in the second half of 2026, and we will have full effect early on in 2027. The measures include, among other things, optimization of the organization structure and efficiency improvements in IT and administrative systems. The cost measures, as we said, is totaling 3 million euros and will be taken ongoing during 2026 and reported as items affecting comparability starting in the second quarter of 2026. We move over to cash flow. The operating cash flow and financial position were affected by the sales and profitability development in the quarter. We continue, though, to have a very strong focus throughout the organization on profitability and capital employed, and the cost savings measures are also aimed to improve both. Net debt amounted to 8.8 million unchanged compared to the end of 2025. And the leverage ratio, although a bit higher than previous quarter, is still at good levels at 1.58. Let us now look quickly into the two segments performance in the quarter. We start with the largest segment, ports and maritime. Order intake there increased with 243% to 41.2 million euros, mainly driven by the good demand of shore power solutions in Europe and motorized cable routes in Asia and Europe. Due to the strong increase in order intake, order backlog increased with almost 40% to 128.6 million euros and up almost 24% compared to the fourth quarter 2025. So very strong development. Revenue decreased 25.7% to Euro 16.5, reflecting the slower order intake that we could see from last year in the beginning of 2025. Currency had a negative impact of 3.1% and EBITDA decreased to minus 2.1 million. The margin also decreased to minus 12.9. What we have to remember here, obviously, is that ports and maritime has a very product driven nature. And the beginning of 2025, port and maritime got impacted quite a lot by the uncertainty in the economy. Moving over to industry, the industry segment order intake increased with 11.7% to 18.5 million euros. Growth was mainly driven by a good demand for motorized cable reels in the mining industry in Northern Europe, as well as improved service business. That said, the order backlog decreased with 6.8% to €22.5 million and revenue decreased with 1.4% to €16.3 million compared to €16.6 for the same period last year. No big impact of currency effects in the quarter. EBITDA amounted to 0.8 million compared to 1.3. Last year, the margin declined slightly with 2.5 percentage points to 5% compared to 7.5 last year. And although Q1 profitability was below last year, we believe that industry is really improving long term and that the increased customer focus and customer activity will continue to deliver good results here in this segment. We still obviously have more to be done here in the industry segment, but we're very pleased with the development and we continue to see a big market potential in industry. With that, I hand back to David for some final remarks.

Thank you Joakim. So let me just quickly summarize some key points before we open up for questions here. In summary, we are targeting good solid markets and we have taken actions to lower our cost base with approximately 3 million euro. In the first quarter, both of our divisions demonstrated a strong order intake, and among the business wins, we have announced, we have stressed the Potsdam Airtime record order intake of 13 million euros. However, our performance in the first quarter, which is normally a relatively weak quarter when it becomes the top line and profitability was impacted by the slow market development in mainly ports and maritime last year. As you know, we have long lead times on our, especially on our ports and maritime applications. We see that our markets are good driven by the strong mega trends, such as electrification, automation and regulations. At the same time, we live in a world impacted by high degree of uncertainty, which might impact our customers' decision also in 2026. In light of the continued uncertainty and the fact that we have largely product driven business with long lead times, it takes a long time to build our equipment, between order and final delivery, we have taken measures to reduce our cost base to shape a stronger Cavitech and we will be better equipped to create value as volume increases. So with this, I would like to open up for questions. You can ask questions through the telephone conference or sending us questions online.