Freemelt Holding AB (publ)

Hello and welcome to today's webcast where Freemelt will present its financial results for the second quarter of 2026. Joining us today are CEO Daniel Gidlund and CFO Martin Granlund. You are welcome to submit questions using the form located to the right of the webcast and with that I will hand over to you Daniel and Martin. Please go ahead.

Thank you. Hi everyone and thanks for joining our second quarter webcast. I walk through the highlights of the quarter, and then I'll hand over to Martin for the financials. And in the end, we will have a Q&A session as well. So let me start with the headlines from Q2. This was a quarter of high commercial activity and momentum. Order intake came in at 22.2 million, which is up 11% year on year. and we ended the period with an order book of 25.6 million. We also strengthened the balance sheet with 35 million through the TO1 warrant. And this is thanks to great contribution with more than 97% who exercise their warrants. So really a big thanks to all of our loyal shareholders who believes in what we're doing. Net sales was 9 million, which were lower year on year. And that comes down to mainly timing on machine deliveries, which is difficult to predict and forecast. And in many cases also, I think we have mentioned this before as well, we are impacted by the customers also sometimes not being ready for installation as per plan. And this is also why revenue in some cases is being delayed. But I think what matters during this quarter is that the underlying direction, the order intake and the order book, which all point in the right way. Something we highlighted also in the Q1 webcast is that the additive manufacturing is entering a new phase. For years, I mean, the demand was really about machines and prototype printing, and now it's shifting towards more qualified, advanced metal components, real production capability, and also robust regional supply chains. And we see this most clearly in fusion and defense, where geopolitics, more energy investments and the drive for regional manufacturing are reshaping this industry. And this plays directly to our strategy. As we mentioned before as well, we have built the hybrid business model. which means that we sell machines to clients such as Medtech and we offer to manufacture qualified parts for customers in areas like defense, fusion, for instance. If you take Medtech, we continue our work now during the quarter with some of the world's leading OEMs with intention to become a productivity partner by providing our industrial machine EMELT. for serial production purposes. And MedTech, as we also mentioned several times, is the segment where additive manufacturing is already well established. In defense, we're moving from more feasibility studies towards more proof of concepts, and we saw placed a follow-on order during the quarter. And after the period, we were also granted a Vinnova funding. and Infusion, we are building a strong position, especially regarding manufacturing capabilities of the material tungsten, which is extremely difficult to manufacture. And we got an order from TAE Technologies and also a new alliance, which I'll come back to in a moment. Commercially, I think the quarter was good across all three regions. If we start with the US, we took a very important step with an order from Intelus for two e-melt machines and with an option for more as well. This is our first industrial establishment in the US market, and this is a market we have worked patiently to open as well. And I think it's worth mentioning that there is an extreme focus and also tension in the US to reestablish an advanced manufacturing infrastructure for metal components in general, but specifically for aerospace, space and defense. And I think you can almost daily now hear about the low inventory levels of ammunition such as cruise missiles and the urgent need to ramp up. If you look into Intelus, they are one of these type of companies now where the U.S. government and industrial partners like Lockheed Martin and Blue Origin are funding to establish a manufacturing ecosystem in strategic areas across the country. So I think here more to come. In China, our partner Yuli placed an additional order of the industrial machine Emelt. and Europe is increasingly our gateway when it comes to fusion and where we had the most recent letter of intent with Proxima Fusion and also our Alpha Alliance membership. So all the three regions are moving in a similar kind of direction. I know that we have raised fusion several times already in other webcasts and also investor forums, but fusion still deserves this attention because this is where a lot is happening behind the scenes. If we zoom in on this quarter, we secured an order from TAE Technologies, which is a US company and also actually one of the most established private fusion companies in the world. And our focus in this collaboration is, again, tungsten components. For me, this is just another confirmation regarding our position as a company and our manufacturing capabilities of high quality tungsten components with the best material properties. After the period, we took another important step and we signed a letter of intent with one of the best funded private fusion companies, Proxima Fusion. And we also joined the Alpha Alliance, which is an industrial ecosystem set up to accelerate the next generation of fusion power plants. And lastly, regarding fusion, and I think the point I really want you to take away from this, let's call it fusion deep dive session, Our application development is scaling towards high volume manufacturing of qualified parts. And we are already bidding in tenders for tanks and components. It is still early, but the direction is clear. I mean, Fusion is moving from a prototype manufacturing to high volume manufacturing needs. And we as a company intend to be a key supplier of parts that that market will need. And this is also why we after the quarter have opened a position head of manufacturing operations really to establish the manufacturing capabilities for these extreme materials such as tungsten. So we are ready to act and deliver according to the expectations when the demand is being materialized. And before I hand over to Martin, I would like to spend a moment on defense and also Saab, as I'm really proud of the trust that Saab is demonstrating as they keep supporting Fremont in various projects and repetitive business engagements. We started our first business engagement with SAW back in 2024 and since then they have invested time and also engineering alongside us. And during the quarter we successfully transitioned from phase two into phase three in one of the ongoing projects which started back in 2024. And this of course was very well received by both parties. And I think another testament of a good collaboration was after the period where we were granted Vinnova funding for critical materials together with Saab and also other strong partners like Hitachi Energy, RISE, Linköping University, which we as a company very much is looking forward to kick off as well. So that was the commercial and also strategic picture for the quarter. So with that said, I'll hand over to Martin to take you through the financials more in detail. So Martin, please.

Thank you, Daniel. So if we start with orders and sales and top line, we had a record order intake. 22.2 million SEK in the quarter. That's up 11% year on year, leaving an order book of 25.6 million SEK. The order book is more or less flat compared to a year ago, and it represents the backlog. So basically orders received, but not yet booked in the income statement. If we turn to sales, we had 9 million of net sales in the second quarter. This represents mainly two machine deliveries, and it's down 53% compared to last year. same quarter last year and same quarter last year was as you might remember a record quarter in terms of sales. The composition was 72% machinery sales booked in the quarter compared to 76% which we've seen the last 12 months. We had 19% in aftermarket and 9% in projects and other income. If we then turn to the operating expenses, we had controlled spending in the quarter. The operating expenses were lower compared to the first quarter, but also compared to the same quarter last year. The total was 37.5 million SEK to compare with 40 million SEK in the first quarter and 46.8 million SEK in the same quarter last year. So breaking down then excluding trade goods and depreciation, we had personnel costs of 11 million, which is flat compared to last year. And we had 6.9 million in other external costs, which is sharply down compared to the same period last quarter. Turning to cash and funding we as Daniel mentioned we had proceeds from the exercise of a warrant so after the financing costs or the associated costs sorry we had 33 million coming into the bank we had an operating cash flow which was negative 40 million and it was then negatively impacted by an inventory build-up and also an increase in receivables. The total cash flow was 14.1 million SEK in the quarter which leaves Cash at Bank of 41.6 million end of June. Turning to the balance sheet, we kept investing in our patent portfolio and also in our technology, 5 million SEK in the quarter. And as I just mentioned, we also build inventory up 7.7 million compared to Q1. So that's 84% up and that's basically to meet the upcoming demand and to deliver on the order book of 25.6 million. We also have every quarter we have had goodwill depreciation of 11.9 million impacting our P&L. We only have 10.8 million SEC remaining in the balance, which means it will be completely depreciated in the third quarter. And in the fourth quarter onwards, we will see a significant positive P&L impact when this depreciation no longer affects our P&L.