CTT Systems AB

Welcome to the CTT Systems Q3 2025 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers, CEO Henrik Hoyer and CFO Marcus Berg. Please go ahead.

Thank you and good morning. Welcome to CTT's quarterly earnings call. We will present the Q3 financial results and the outlook going forward. Starting with some highlights. I want to highlight that we report strong system sales numbers, up 80% so far in 2025, driven mainly by private jet and OEM. In Q3, we delivered the first anti-condensation system to jet2.com of a total of 146. I'm also proud to report that we at NBAA in Las Vegas last week signed a letter of intent to extend collaboration with Boeing Business Jets, offering a cabin humidification system as baseline configuration across the BBJ Airplane portfolio. It strengthened our outlook going forward as both ACJ and BBJ now promote cabin humidification. Finally, we continue to expect the partnership with Liber Aerospace to include the new Comac C929 aircraft model. If Liber is selected to supply the ECS system, CTT will supply humidifiers and dehumidifiers to Liber. The C929 is designed with a total of six humidifiers and two dehumidifiers as standard. Development is expected to start next year. Looking at the financial performance in short, comparing the third quarter with the same quarter last year, net sales increased 29% from 57 to 74 million. At fixed exchange rates, revenues increased by 39%. FX had a 7 million negative net sales impact in the quarter. EBIT amounted to 19 million compared with 15 million. The EBIT margin was 25 versus 26. We have initiated cost savings to counteract a lower dollar rate and improve the EBIT margin. Fully implemented, an additional 200 BPS would have strengthened the EBIT margin in the quarter to 27%. Earnings per share increased to 1.15 crowns versus 0.98. CTT generated a strong operating cash flow of 33 versus 8 million. Bridging the net sales from the same quarter last year, PrivateJet added 12, OEM added 2 and Retrofit added 2 million. A breakdown of total sales shows that aftermarket sales accounted for 59% and 37% came from system sales. If we look at order intake and backlog, order intake was 48 million compared to 69. Backlog in the quarter ended at 129 million compared to 47. I now hand over to Marcus for more detailed financials.

Thanks, Henrik, and good morning. I will start with the EBIT bridge. Compared with last year, EBIT increased 4 million to 19 million, driven 15 million by higher sales volumes, offset with 5 million from negative currency effects and 5 million from negative sales mix. CTT has initiated cost reduction measures, fully implemented the EBIT margin in the third quarter would have been 27% instead of 25%. Let's move on and look at the cash flow. Strong operating cash flow at 33 million compared 8 million last year, driven by EBITDA of 20 million and plus 16 million from working capital. Operating cash flow is expected to exceed EBITDA in the second half of the year due to positive working capital. Let's continue by looking at the net debt. Net debt amounted to 2 million compared to minus 14 million in Q3 last year. Cash closed at 45 million. In addition, CDT has 57 million in available credit facilities. Equity ratio at 73%, same level as Q3 last year. Return on capital employed at 24%. We expect to improve our financial position driven by strong cash flow, pushing down net debt to negative. Let's move on and look at the year-to-date numbers. In the first three quarters, net sales decreased 5%, but increased 1% if adjusting for currency. System sales increased 29 million or 80% to 66 million. Off the market sales were down 40 million due to FX and tough comparable numbers from inventory build up in 24 and inventory reduction in 25. CTT also had a very strong spare business in 24. An important remark is that end-user demand for consumables is stable. Fact is that distributed sales to airlines increased. The situation with inventory excess is transitory. We predict that we will enter 26 with normal levels. Margins expect to improve in 26 driven by higher sales and full impact of cost reductions. I now hand back to Hendrik for the outlook.