Ependion AB

Thank you very much and welcome everybody to Appendion's Q4 report presentation. So as usual it's Joakim and myself. We are down here in Malmö today and the agenda looks the same as usual. So I will start with giving an overall business update. Then Joakim will move into the financial performance more in detail and then I will take the concluding notes and outlook and after that we will open up for questions and answers. So, looking at this quarter, well, first of all, we see that the market environment is largely unchanged compared to previous quarters in 2025. The geopolitical uncertainty remains, so that we can conclude. Nevertheless, order intake increased in the quarter by 12% and adjusted for the Velotech acquisition and negative currency effects, the increase was 4%. Vestimo had a good quarter. If you remember, we had a weak quarter in the quarter three, driven by weak order intake from the train segment. a little bit similar to last year that order intake bounced back now in this quarter so that was good to see and as we have pointed out many times order intake especially from the train segment can vary a lot from quarter to quarter Bayer Electronics showed growth adjusted for currency with three percent and the positive sign there is that the core offering which is of course part of the new strategy to be focusing on on the HMI product family that increased by 7% in currency adjusted numbers. Sales increased a little bit by 1% adjusted for acquisitions and currency. We saw a decrease by 2%. The Vestamo growth was in this quarter thanks to Velotech who had a good development. Whereas Bayer Electronics was impacted quite a lot by the phased out products that we have been talking about before compared to last year. That effect was actually some 20 million in the quarter and we didn't manage to compensate for that in this market environment. Due to the relatively weak volumes earnings came in lower at 58.3 million Swedish kronor or 10% for the group in the quarter. As we state in the headline for the report we don't normally talk so much about currency effects but in this particular quarter the effects on the pension are quite brutal and that is also why we highlight that we had a total negative currency effect of 16 million Swedish kronor in the quarter and on top of that the result in Vestimo is impacted by the amortization of excess values connected to the Velotech acquisition and that corresponds to 4.9 million Swedish krona in a negative effect investimo. We had a good free cash flow in the quarter 68 million Swedish kronor and the board proposes an increased dividend of 0.25 krona to 1.50 krona per share. I can also mention, it's not written here as a bullet, but I can also mention that we do see our gross margins strengthening and they have strengthened throughout the year actually in both business entities. So with increased volumes and without adding fixed costs, we have quite a strong operating leverage in the group now. All right, moving a little bit more into the details in the two business entities. Vestimo orders came in at plus 22%. If we adjust that for the Velotech acquisition and currency, we came in at plus 3%. As I mentioned, we do see a pretty significant sequential improvement, especially for the train and trackside segments. So that's good to see. The Velotech integration progresses very, very well. We are very pleased with the performance of Velotech as part of Estimo, and it has already generated a concrete new business with a combined offering. So that's very positive. Sales increased 6% but that was actually thanks to the acquisition of Yellowtech organically and currency adjusted at minus 6. The sales gap that we see is mainly related to less of project deliveries this quarter compared to last year. We had expected to ship a little bit more in the quarter but there were some delays as well. Again, significant currency headwind and the Velotech amortization led to a decreased profitability. So overall, we came in at 14.3% for the quarter. However, if we look beyond these two significant impacts, we do see a healthy profitability in Vestimo and as I mentioned, improved gross margins as well. We mentioned the defense industry last quarter and this quarter the board of directors actually decided to add the defense industry as a focus segment within Vestamo and we also mentioned in the report that our current business within defense represents some 30 million Swedish kronor in 2025. And we do have a couple of very good customer references in this area to actually to build upon. So we are targeting to significantly increase this business in the coming years. For Bayer Electronics, order intake at minus 5% and currency adjusted at plus 3%. We see a stable development in the marine sector and also a good growth for the rugged segment, while the manufacturing industry still remains weak. I mentioned before the HMI range increased with 7% in the quarter compared to the same quarter last year. On the sales side, we did see a decline, minus 8%, but currency adjusted basically flat. And I mentioned that last year included the 20 million Swedish kronor of phased out sales volume, which we did not manage to compensate. Profitability at the low side in the quarter 8.6%, impacted significantly by negative currency effects corresponding to 2.7 percentage points. And also, as we talked about last quarter, we see a sequential addition of amortization on the X3 development, which also negatively impacts the EBIT. But of course, despite the fact that we have decreased costs and so on, we are not satisfied with the result for the quarter. So we continue to work on that. On the positive side, very good customer response to the new X3 family. There are some 120 customers that have actually placed an order on the new X3. series as of now for evaluation mainly. And what I find really, really good is that some 20 of these are actually new customers. So this fact is very promising for the future because we are of course targeting to acquire a lot of new customers with this product family. So if we look at the volumes more in a graphical format, you can see on the left hand side the order intake ticking up quite nicely. Sales came in at 582 million Swedish kronor or 1% last year and minus 2 adjusted for currency and acquisitions. On the volume side, orders and sales volumes, the currency effects represent some six percentage points negative. Positive is that we have a book to bill at 1.10 for quarter four. So that's a significant increase in book to bill ratio. So that's good. And the backlog now stands at 1.1 billion Swedish krona.

So with that, I'll hand over to you Joakim.

Thank you very much, Jenny. So I will talk somewhat more about the numbers. so we start with the pendium we had then an order intake of 639 million in the quarter and that is actually the first time we are above 600 million for quite some long time um sales at 582 as jenny said and an ebit of 58 and an ebit percentage of 10 percent as stated by any earlier there are relatively high or high FX impact compared to last year and the amount is 16 million. Main part of that is transactional variances. The translation part is 2.9 million. So the main part then transactional and that then corresponds to 2.8 percentage points on the EBIT side. And as Jenny said, in the quarter Q4, we did the PPA for Velotech, as we informed about in the last report. And now the effects of the amortizations of the access values impacts then in Q4 that we haven't seen earlier in the year, and that is the amount is 4.9 million. Free cash flow, quite positive. 68 million, still somewhat lower than the record quarter that we actually had last year. 68 million impacted positively that we have been able to lower the working capital somewhat. So that is then a good thing. For you that look lower than the EBIT, you can notice that the tax cost is relatively low in the quarter. And the reason for that is that we have changed the legal structure in Germany now. After that we have done the Velotech acquisition and that has then provided us to get full deductibility of the interests. That meant that the net income is actually increasing compared to last year to 44 million and also the EPS, the earnings per share, increased compared to last year with 1.37. That was Vendion. Let's look at Vestamo. Here we have then the good order intake, 432 million in the quarter and sales of 368 and then EBIT of 52.7 or 14.3%. Jenny has talked about the effects of FX, so we conclude that if we adjust for the acquisition and FX, the number is 3%. Book-to-bill for Vestamu 1.17, which is then a good thing going forward. Then the profitability, as Jenny pointed out, heavily impacted by the FX, 2.7 percentage points. And also then note that the Velotech amortization is then impacting also in this quarter that we haven't seen earlier in the year. impacting them with 4.9 million. So the underlying, you could say, activities in Vestimo is still on a healthy basis compared to where we were last year. And then some final words on Velotech. Continued very well, added to the growth and also a positive profitability contribution to Estimo in the quarter. Then we have Bayer Electronics, an order intake of 208 million, sales of 215 and an EBIT of 18 or 8.6%. Also here we have an impact of the FX and adjusted for FX at plus 3%. And then you should note that last year we had some volume of orders also in the fourth quarter of the phased out products that we have talked quite a lot about, 30 million of that. And as Jenny stated earlier, the HMI business actually grew with 7% in the quarter. Book to build below 1.97 for Bayer Electronics. sales at minus eight but if we compare to fx adjust for fx sorry then we are slightly above one percent and then you should note also that in last year we had about 20 million of phased out products in in the sales volume in q4 last year so you should have that with you We are not happy with the profitability, despite that we have a solid cost control in Bayer Electronics, still on the 8.6 compared to the 8.3 last year. Also here, the negative impact of FX is hitting, it's 2.7%. And as we informed about last quarter also, now when the X3 family is fully implemented, we got additional amortizations of the capitalized R&D on the X3 that impacts about 4 million in this quarter. um when it comes to r d spend we have talked about that we will lower the r d spend over the year and and the r d spend is definitely lower now compared to last year for you who watches or look at the numbers very carefully you might know that sequentially we're somewhat higher in q4 compared to q3 but that is seasonal effect so It is coming down in line with what we have said. With that, I've finalized the financials. So over to you, Jenny.