Ferroamp AB (publ)

Hello and welcome to the Q&A report for Q1 2026. I'm Kent Jonsson, CEO of Ferro Amp. I'm joined by Jan Stensen, CFO of Ferro Amp. I will try to go through the images quickly and give room for questions at the end. For those of you who are new, very briefly. We develop our own hardware and software here in Sweden. We develop it for Swedish-European relations and with a high degree of security. This is appreciated by our customers. Vi hjälper kunderna att på ett enkelt sätt hålla nere kostnaden på bägge sina elräkningar samtidigt som man kan delta i flexibilitetsmarknaderna. Här har jag en bild idag bara kring marknadsutvecklingen. Den här är från Skatteverket. Det handlar om miljöavdrag, grönt avdrag. And it's just private people. And this is... The time is when it is desired. So you can take it with a pinch of salt and maybe look more at the trends. I have broken out Q1 from 24 and 25 to compare with the current Q1 this year. Where you can see trend-wise, you can see that the charging points are quite stable. Batteries go up and the sun goes down. I think that the sunset is a bit exaggerated, given that we had significantly more snow and ice on the roof in January and February this year than we have had in previous years. So this is still a bit exaggerated. I still think it confirms our feeling about the market that batteries go stronger and the sun goes a little weaker and charging points stable. Some highlights then. During the quarter, we have introduced our first in-depth sustainability guidance. which shows a good progress. We are very proud of the development and the report, so please take a look at it. We have also talked about that we saw a sales increase at the end of last year and it led to a production increase and it made it possible to secure funding. in order to cover this production increase proactively. And it took place in Q1. Then, in the next two pictures, I will talk about TREFAS and ESO. Let's start with TREFAS. We launched it down there at the Elmia fair in the middle of February. It was a great success, I would say. And we have seen a great demand for this product. Det här handlar om en väldigt flexibel backup-lösning där man då kan börja med att utnyttja ett stationärt batteri och sin egen solproduktion för att skapa en viss uthållighet på en, två dagar. Man kan sen komplettera med en dubbelriktad laddare från Faro Ampt som man kan använda sitt elbilsbatteri som backup och då kan man få en till två veckor And the possibility to go and refuel the car in a fast charger where there is electricity. And the third step is that you can connect a diesel generator and drive for a long time. So there is the possibility to use the backup functionality in different steps. And it is quite unique, but what really stands out and that customers and installers appreciate is that there is a soil solution in this package. Usually, when you buy a backup solution, you have to maintain your own soil and this costs somewhere Mellan 20 och 80.000 att gräva ner jord. Och bor du då på en stenig mark, kanske på en kulle, så kan du inte hitta jord alls. Så då kan du inte ens ha en backup-lösning. Men med den här lösningen så har vi en elektronisk övervakning. Så att det är väldigt enkel att installera. Och den är inkluderad också. Så det är ingen merkostnad för jordtag. Det är den här stora grejen. Vi har också lanserat en ny produkt. Vi introducerade den förra veckan och började skeppa den här nu i mitten av maj den här månaden. Den här är vi väldigt stolta över. Den är billigare, den är enklare för kunder att använda och den är enklare att installera. So this is a relatively large thing that comes in good timing when batteries have a larger demand than usual. So this is our battery control hardware. I will mention a little about the short development in our new cell channels. I have commented on them earlier. I said in February that we would see an upheaval in Ära and Älvi, and we have seen it. It was a little late, but we still saw it. And I said that we would start the sale of Vattenfall in Q2, but it was previously laid until March. So yes, some delay from Ära, some earlier from Vattenfall. And we see a clear increase. And I also said in February that the big volume effects will come in Q2. And we see that too. I'll get back to that later. Some financial highlights. Looking at the reverse, before I think it's pretty exciting. Q1 is a slightly weaker quarter for us in general. We see that our existing old cell channels have increased compared to previous years. And the new ones we just talked about have grown compared to previous quarters. Vi ser att både det gamla växer och det nya kommer till utifrån Q1-nivåerna. Jag tycker att det är lovande. Jag skrev också i rapporten att vi hade redan i slutet på april ett ordervärde, alltså beställningar fakturerat och order inne. For Q2, which was larger than the entire Q1. So in the end, Q2 had surpassed Q1's turnover. So it feels stable in Q2. The gross margin is unfortunately still not satisfactory. We know what to do and we are working on it. And just to repeat what it is, one is the product mix. It's about the fact that right now there is a high demand for batteries. So it's battery purchasable for customers who already have solar energy. Then we also still have storage out at our distributors, which will end during the year. So these two The factors make the product mix more for batteries and there we have a lower margin. So the product mix is an important part. The other part is that we will get cost-optimized products to give a better margin. The price of ESO 15 gives us a clear margin strengthening. These are the things we will work with in the future. We have a plan and we will get up in margin in the future. EBITDA, minus 9 for the quarter. A small improvement from last year. When you look at the graph, you first think of the deterioration of Q4. It is not as dramatic as it looks. It is mainly due to lower sales and gross margin. And then less active work. So I would say that there is less drama in those figures. We see that positive EBITDA requires increased sales and gross margin. At the same time as we keep the cost level. And we have said that our goal is to reach a positive EBITDA at the monthly level during the coming years. And we hold on to that goal. The cash flow. Here it is a little more complicated to explain than usual. Most of it is teaching effects. But I'll give you a short explanation. We had Fortunately, we saw a big increase in sales. We had to start production and increase it. And then we were proactive and got funding through SEB and Almi. When we then went over to a factoring solution from SEB, this led to some technical effects on 15 million, as you can see. It can be seen in the customer feedings, respectively in the factoring debts. In addition, we have on top of the operating cash flow, there are also 16 million input effects. It's about customer feedings, a little advance that we have put in from new manufacturers. And then we also have a advance to Our battery supplier. So it's the three big positions that are the one-off effects on the operational. Summa summarum 31 million is affecting and this will be reversed in the cash flow in Q2. I can also point out that if you look at the entire cash flow statement, the check credit is not included in the liquid funds, so it is unused. Here I just repeat that we keep our focus on increasing sales, increasing gross margin and keeping costs. So we keep the focus here and our development work is also identical. We stick to it. It's about integrating us with our larger partners to create more value for our partners and their customers. We develop the support and optimization services we have. And then we continue to work with next generation cost-optimized products. Now we have launched ESO 15. That was one clear sign. There will be more products in the future. So we continue to work with them. And we go to grid. Vi tror att någonting kommer att hända under det här året. Det kommer att börja lossna och vi tror att under nästa år, kanske mitten av nästa år, så kommer det här att bli en attraktiv affär. Så att vi ska vara förberedda tills det inträffar.

Ja, då tänkte jag stanna där utanför frågor.

Japp. Yes, there have been a lot of questions and I think we'll start at the end with some sales related questions. Yes. And then we start with a question here about Ara and Elvi. Can you develop what specifically slowed down the growth of Ara and Elvi during the Q1? Was it customer demand, installation capacity or other bottlenecks in the supply chain?

Unfortunately, I cannot communicate about it. From my perspective, I would not say that it is only about a shift in time. Then I do not want to speculate in what it is due to, but we do not see any cancellation or any change in the prognosis, but we see that it is a small shift.

Hur utvecklades försäljningen i de egna försäljningskanalerna under kvartalet? Såg ni någon förändring i FB-frågan eller kundbeteende kopplat till det svagare makroläget och osäkerheten kring svenska effekttariffer?

Det är svårt att säga vad orsaken var egentligen. Jag kan ju bara gissa Just like most others, certain uncertainties make people struggle with the decisions. I think that the weather affected ice and snow on the roofs in January and February. We haven't seen that in five or six years. It's also something that makes you shoot on the order, you shoot on the installation. So from our perspective, then, it will be a completed order for us. But I think it has developed well. Very pleased with the start in our existing channels. We have Vi har jobbat väldigt intensivt mot våra partners och vi ser att det ger utdelning helt enkelt. Det finns en efterfrågan på svenska produkter som är gjorda för svenska förhållanden och det här slår igenom på ett bra sätt. Så en bra utveckling.

Can you comment on the development in collaboration with Vattenfall? Is it being developed according to expectations? What importance do you think Vattenfall can bring to the sales mix in the future?

Jag kan inte ge någon prognos för Vattenfall annat än att jag tycker det är en intressant partner. Väldigt kompetent och en väldigt stor partner. Så vi ser absolut en potential. Vi tycker att det har en bra match med Vattenfall. Vi tror mycket på säkerhet. De tror mycket på säkerhet. Vi tror att det blir en bra utveckling framöver och vi tror att det kompletterar Ära och Älv i ganska bra som nya kanaler.

You mentioned during the presentation that the value of the orders for the second quarter is higher than the first quarter at the end of April.

Can you develop and clarify that? At the end of April, we looked at what we had invoiced and what was ordered for delivery. the combined value was larger than we had in Q1. We have received orders after that and will continue to receive orders. This indicates that we will land a bit north of Q1's result or turnover of 36. So a bit north of that, I can say.

You also mentioned the launch of Emergency Power for three phases. How has it gone? Does it follow the timeline?

And have you noticed anything about the demand for the product? Yes, it follows the plan and I think the demand is big, or probably bigger than what we had expected, I would say. And there I would probably want to link to the global situation. Jag fick den frågan tidigare och sa att det är svårt att se hur det har påverkat efterfrågan rent generellt. Men kring backup så ser vi en tydlig koppling till omvärldsläget. Man vill känna den tryggheten. Både att det är svenska grejer men också att det är möjligheten till olika sätt att få backup.

If we move on to the production itself, the gross margin is 18% in quarter one due to the battery mix. You mentioned that the percentage of batteries has decreased somewhat. Can you give an estimate or how quickly do you expect the product mix and the margins to normalize in the coming quarter?

I would say that I don't think they will normalize for the second half of the year. For it to become a full normalization, as you can see, the storage of our products outside the distributors must be zeroed down. So when there is a sale to our partners, then you should buy a complete package, not just batteries and battery control, but also inverters, solar system optimizers. So that has to happen first, and then a natural normalization effect also occurs when the weather is better and it is easier and easier to set solar cells, simply put. Q1 is a battery month. Our administrators focus on filling the weeks with things that don't require you to be up on the roofs.

There will be a lot of batteries. And after a long time of a large warehouse that is still decreasing, at some point we will start the entire supply chain again, as you mentioned, and ramp up production, both for existing and new products. Can you say something about how this ramp-up is going, both internally and also given challenges in the environment? Do you see any problems with deliveries, delivery times or other production problems?

Ehm, nej, inte, inte några nämnvärda skulle jag säga. Det är alltid lite utmaningar man stöter på, men inget som vi inte kunnat lösa så här långt. Så att, med det vi har sett och det vi kan se framöver så tror vi att det inte blir några störningar där som påverkar leveranserna. Ja.

Om vi då går vidare och tittar lite mer på kassaflödet som du var inne på och där har varit stora rörelser under kvartalet så upprepade du målet som ni har kommunicerat tidigare om ett positivt operativt cash flow already during the current quarter as well as positive results later this year. How can you see the connection between these two goals? That is to say, how much of the cash flow improvement as you expect in Q2 is driven by reversed moving capital effects compared to underlying profitability improvements?

Yes, for Q2, the main part reverserade effekter, skulle jag säga, när man jämför. Men förstås, en del skulle komma från förberettade resultat också, men majoriteten från reverserade effekter, skulle jag säga, från kulet.

Du kanske kan passa på där och nämna, eller återupprepa, vad det är för de kortsiktiga respektive långsiktiga finansiella mål här framöver.

The short-term goals are that we will have an operational positive cash flow during the first half of the year and that during the second half of the year we will have a positive EBITDA on a monthly basis. The long-term goals we have been waiting for, they are still there as before. And we have left them behind, given that the environment is difficult to judge. So we have to return to them in the future. When it gets a little clearer where we are on the way with the connectivity, the market, etc.

You mention the environment there, and there has been a lot happening both in Sweden and outside of Sweden's borders during 2026. Among other things, the changes that have occurred and communicated about effect tariffs in Sweden. How dependent do you assess that the medium-term growth is of Swedish effekttariffer, eller hur beroende bedömer att tillväxten är av de här svenska effekttarifferna och batteriefterfrågan specifikt? Ser du redan nu några förändringar i kundbeteende kopplat just till den här regulatoriska osäkerheten som har uppstått med det som kommunicerats?

Alltså, det är igen svårt att säga. Jag skulle nog inte säga att vi ser någon A clear effect of it. Everyone who is involved in the issue is convinced that the effect tariffs will come. It was just forced to be paused now, it came a little too soon, maybe too close to the election etc. Man kommer att införa det för att det är en väldigt logisk åtgärd. Man kanske måste göra den lite smartare men den kommer i en eller annan form. Jag tror att folk tittar, kunder tittar på en sån här investering i ett längre perspektiv än bara närmaste kvartalen. Effekterifferna är ytterligare ett tecken på att det är It is a complex market today and will become even more complex in the future. And then it is a system that should have less ramps, which can be updated as the network services and electricity tariffs change in the future. Vi tror att kunderna tänker längre än ett till två kvartal fram. Samtidigt som våra installatörer är duktiga att guida våra kunder och de ser det definitivt.

If we look outside of Sweden's borders within the EU, a lot of news has been communicated recently. The EU has started to limit the use of Chinese semiconductors in some energy projects due to cybersecurity and infrastructure reasons. Hur ser du på detta ur ett konkurrensperspektiv för Ferro Amp och ser du någon skillnad här i hur den här frågan påverkar B2B respektive B2C marknaden? Finns det någon speciell del inom marknaden som detta kommer slå mer mot eller hur ser ni det här påverkar efterfrågan generellt på den europeiska marknaden?

Jag ser att det här kommer nog att påverka but the public sector above all. Directly, I would say. Then there will be effects on the private market as well, and companies for that matter as well. And there it will take a little longer. Those who are aware of this and have realized the width of the problem, they will act immediately. Then there are a lot of people, both customers and actors, who may choose to leave this to go for something a little cheaper alternative or find another explanation model. And there I think that you have to invent clearer guidelines from politics, really. That's probably what has to be done to get a really big result, I would guess. But what I have understood from the EU's decision is that it will happen now in Europe and therefore it will happen in Sweden. So the only question that remains is whether the big effect will come at the end of this year or at the end of next year. But there will be a big effect of this, I am quite convinced of that. Because again, just as the effect tariffs will be introduced, so for the same reason here, it is very logical reasons that are introduced. And at the end of the day, the logic tends to win. So yes, it was a pretty long answer, but I think it will have an impact. And it has already had an impact, I should say. And of course it is positive for us, because it is in line with how we have invested and how we have built up our system.

It's a big and important question that will be very interesting to follow up on. If you then connect the development forward with the goals you mentioned earlier, Hur har ni räknat eller hur ser ni på vilken omsättningsnivå vi måste nå upp i för att kunna nå break even, det vill säga de här målen som vi pratar om för att nå ett positivt EBITDA mot slutet av året, givet den här produktmixen som efterfrågas?

Ja, alltså... It depends on both revenue and gross margin, of course. I wouldn't want to speculate specifically, but I think we have the potential to go up something on the gross margin and I see a pretty big potential to go up on revenue. And if we succeed with that, then we have a good chance to get to profitability on a monthly basis at the end of the year. It probably mostly depends, I would say, on whether we manage to keep up with the sales growth.

But for those who think that on the cost side and moving costs, do you see any reason or And how do you see the development of them given the quarter ahead here and given the sales increase that is expected, will they increase in the same pace or how do you see this development?

No, they will not increase in the same pace. We have built a model that is, how should I say, very scalable. So we can increase turnover quite a bit without We have a business model that works well there. If we just get the turnover up, we're good to go. And a few percent on the gross margin as well.

Then you might think, given this positive start to Q2 and an increased turnover, we shouldn't be able to reach black numbers on the EBITDA level already in Q2. Why would it take so long?

Well, that's of course where you hope and where you work for every day, but I I think it will be difficult, but of course we will do what we can. I hold on to the fact that our goal is the second half of this year.

Yes, I think we have covered most of the questions that have come in here. Do you have any final words, Kent, that you would like to add or something that we have forgotten to mention?

No, I think it is... The joy with the sales development, as we see, continues in Q2. It is a message of strength and a prerequisite to be able to make good cash flows and good results. I think we have a plan. We know what to do to get the profit margin. And can we now get a little more money out of the team of Fairtrade products? Then we will get a significantly better stability in the stock market as well. I think we still have quite a lot in place. Then, like many others, I would have wished that this had happened one or two years ago. Marknaden har varit vad den är. Vi tror marknaden kommer att bli lite bättre framöver. Nu är vi definitivt i en mycket bättre position för att kapitalisera på det. Positivt skulle jag säga.

Det låter lovande. Då får vi tacka för idag. Avsluta denna webcast.

Tack så mycket för idag.