Impact Coatings AB (publ)

Good morning and welcome to today's webcast from Impact Coatings. With us today is CEO Jonas Nilsson and CFO Lena Åberg, and they will present the numbers from the first quarter of 2026. We'll open up for a Q&A after the presentation, and you can type in your questions using the form located to the right. If you're calling in and would like to ask questions, please press star 9 to raise your hand and star 6 to unmute when you get the word. And with that, I leave the audience over to you, Jonas and Lena.

Hi everyone, welcome to this first quarter 2026 interim report presentation. Here is the agenda for today's webcast. We will jump directly into Q1 and what the work in Q1 has led to now in April. Our CFO Lena Åberg will take us through the financial, then summary and outlook and a Q&A session at the end. So Q1 highlights and highlights after the period. Q1 resulted in a net sales of 12.7 million SEC and EBITDA of minus 8.8 million. From a financial perspective, Q1 was not great. That's just how it is. Business development is hard ongoing work and the outcome can vary a lot from quarter to quarter. But we are clearly starting to see the work paying off. During Q1, we brought in two new customers in coating services, one in security defense and one in medical technology. We also saw continued test orders with electrolysis and fuel cell applications from existing customers. We would, of course, have liked to have more customers during the quarter, but the work we did in Q1 paid off in Q2. In early April, we added two more strategic customers, one in PEM Electrolysis and one in SOFC. Both are in early stage, but with really big potential. After the quarter, we sold an IC500 machine to Korea, We received the order on April 10 and the usual initial payment we received on April 14. The delivery of the machine is expected to be done in Q3 this year. We also continued a discussion regarding an inline coater system to our longtime customer Lindbergh, who is in the luxury segment. This is in line with the letter of intent that we announced on December 11 last year. So a few words about the machine order which we press list on April 10. This is an order within our electronics segment. The application is metallization of plastic waveguide antennas for automotive radar. The customer is HCA Wave, a Korean supplier of waveguide antennas for automotive radar sensors. And Korea is an important market with its large automotive industry. In addition to delivering the inline coater, we intend to work together with HA Wave to develop new cost-efficient metal coatings for waveguide antennas to support their customers. Automotive radar is already a multi-billion dollar market, and it's expected to see double-digit growth. Many new innovations in the automotive business come from Asia, especially when it comes to electronics and also intelligent software. In a news program Piat Moron last week, they talked about the Beijing Auto Show. Maybe some of you also listen. They said that the Beijing Auto Show is the biggest auto show in the world. The show is running until 3rd of May, so you still have time to go there. Anyway, what came out was pretty clear. A lot of intelligent self-driving cars are coming. And for that to work, cars need radars, lidars, and cameras to understand their surroundings. People are talking about at least five radar units per car, one in each corner, and one in the front. And all of those radars needs antennas. So this is what an injection molded waveguide antenna looks like. It's made from molded plastic because you need a complex structure to guide the radar signal correctly. But the plastic doesn't conduct electricity, so it needs to be metallized. Most automotive radar antennas come in two halves that are soldered together. And then the finished antenna sits in the bumper. So it's a pretty tough environment for the antenna. Therefore, you need a coating that can handle adhesion and solderability. It has to provide good antenna performance and provide corrosion resistance. This is a very good fit for us. We like advanced multilayer coatings on flat surfaces. And antennas, they are basically flat, even if they have some 3D features. If you look at the market, around 100 million vehicles are produced every year. If you multiply that by five radars per car and then by two for the antenna halves, it's a big number. We're not there yet, but this is a first machine to HA Wave, who has a strong position in the Korean automotive value chain and good connections to the Korean car brands. I mentioned that in April we took two strategic orders, one in SOFC and one in PEM Electrolysis. These are test orders, but from two very important players who are now paying customer stress. The orders are a direct result of the work we did during Q1. And now we're continuing that work, taking them from initial sampling to real volumes. SOFC stands for solid oxide fuel cells. One of the application area for them is to power data center. We have talked a lot about SOFC as our strategic focus, but that doesn't mean that we have left PEM. In our coating service center here in Linköping, we have volume production to several electrolyzer manufacturers. And in PEM electrolysis, we see a clear consolidation in the market. Some are pulling out, that means fewer players, but stronger ones. That means bigger volumes and a more stable market. That creates good opportunities for us to grow our market share. The geopolitical tension affects the short term investment willingness, but long term it highlights that there's a vulnerability in the energy system and we need to work on energy independence and energy resilience. This interest in reduced fossil fuel dependence is something good for us who work with technologies that enable flexible and local energy production. In 2025, we did a strategy pivot towards natural gas powered solid oxide fuel cells. We talked about powering data centers, and we also talked about energy resilience. SOFC can convert multiple fuels to electricity. So if there's a shortage of natural gas, you can run them on, for example, locally produced hydrogen. That hydrogen must be produced either in the same SOFC system that is running the other direction, or more likely by PEM electrolyzers. The pen fuel cell market remains in a transitional phase with China as the driving force. But also here, we expect the drive for energy resilience globally and particularly in China to speed up the deployment. So all in all, although geopolitical tensions are bad in the short term, they are creating future opportunities for us. So going back to China, as usual, Chinese New Year's falls in Q1, which leads to reduced activity in our coating service center in China. But this year, it was not just that. We also had a transition between five-year plans, which basically put the fuel cell market in a bit of a vacuum. The old subsidies expired and it wasn't until mid-March this year that things started to become clear again regarding the new subsidy program. The details are not fully defined, but the overall direction and size are. So if you're interested, you can look up the China Comprehensive Hydrogen Pilot Program. I recommend to Google on that. We believe that this program will continue to be the market driver in the Chinese fuel cell market. So let's have a look at the financials. And as said before, the numbers for the quarter could have been better, but we are clearly seeing that the work we have put in is starting to pay off, both in terms of system orders and new customers. At the same time, we have taken actions on the cost side, so we are in a better position as volume starts to come back. So with that, I turn to Lina.

Thank you, Jonas. So let's start with the Q1 summary. Total net sales amounted to 12.7 million SEK and coating services was the main contributor with 11.7 million, of which 4.8 million relates to sale of metals in inventory, part of the transition to the new metals management agreement. The order backlog at the end of the quarter was 4.5 million compared to 2.6 in Q1 2025. Aftermarket has been slow, reflecting the lower activity at many of our system customers. So 1.0 million SEC compared to 3.9 in Q1 2025. Operational costs, but excluding raw materials and supply, was 19.8 million SEC compared to 23.6 million SEC. clearly reflecting the effects of the cost saving measures implemented. And the number of FTE in the parent company has now, after the quarter, decreased approximately 42% since December 2024. So EBITDA improved to minus 8.8 million sec compared to minus 12.4. and EBIT improved to minus 11.3 million compared to minus 14.2. Closing cash balance was 18.3 million SEK and we will come back to details in that cash flow statement. If we take a little closer look at the income statement, all the amounts will be in SEK million and compared to Q1 2025. Even though net sales for the quarter increased 12.1 million, total revenue decreased to 12.6 million compared to 19.7 million. And this was mainly due to almost no change in work in progress this year, while in Q1 2025, it was 8.1 million. Gross margin, though, increased to 62% compared to 52%. And the work with further reductions in cost of goods sold continued. As I already mentioned, operational expenditures decreased and other external costs decreased to minus 4.9 million compared to minus 6.0%. mainly due to reduced consultancy fees, travel expenses and costs for consumables. And personal costs decreased to minus 12.6 million compared to minus 15.8 million. And the number of FTE for the group by the end of the quarter was 47 compared to 61 in Q1 2025. Then depreciations increased to minus 2.3 million compared to minus 1.8 following investments from previous years. We had a currency gain of 0.9 million compared to a currency loss of minus 0.8 last year. And operating loss for the quarter was minus 11.1 million compared to minus 14.2 million. And we move to the balance sheet and I will compare to the year end 2025. The low level of investments, so total fixed assets decreased from 68.6 million to 68.2 million due to depreciations. Inventory and raw materials decreased from 54.7 million to 51.0 and mainly in metal inventories. Receivable decreased by 1.2 million to 22.3 million compared to 23.5 million at the year end. An outgoing cash balance by the end of the quarter was, as mentioned, 18.3 million. Equity decreased from 154 million at the year end to 145.1 million due to the loss for the quarter. Then prepayments from the customers have decreased 4 million to 3.9 million due to invoice sales in Q1. And short-term liabilities decreased 9.5 million to 33.4 million mainly due to repayment of the 5 million short term loan in the parent company, but also due to decreased accounts payables. Looking at the cash flow statement with the comparison with Q1 2025. Cash flow from operations before changing working capital was minus 9.1 million compared to minus 11.7. And cash flow from change in working capital was minus 5.3 million compared to plus 8.5 million. And the negative cash flow effect from this year is mainly from payments of short-term liabilities, including payments of the costs connected to the rights issue of approximately 3 million, and also the decrease in customer prepayments of 4 million. So cash flow from operations was minus 14.4 million compared to minus 3.2 in Q1 2025. Cash flow from Investing activities only 0.1 million compared to minus 2.4. And cash flow from financing activities was minus 5 million this year due to the repayment of a short term loan. In total, this resulted in a negative cash flow of minus 19.3 million compared to minus 5.6. and a closing balance of 18.3 million compared to 26.3 million in Q1 2025. That was the financial update. So we go to summary and outlook.