Impact Coatings AB (publ)

Hi everyone, welcome to this presentation of the second quarter 2026 interim report. Here is the agenda for today's webcast. We will start with highlights and business momentum from Q2 and the big highlight is of course order intake of 39 million SEK. We will also give you a tour of the coating services here in Linköping showing the production. Our CFO Leon Åberg will take us through the financials of the quarter, then summary and outlook and a Q&A session at the end. The main message from the quarter is that we had a strong order intake of 39 million Swedish kronor. We received two system orders in two of our main market segments. We also increased volumes within coating services and continue to add new customers, particularly in the energy segment. Net sales increased to 9.7 million SEK, mainly driven by coating services. Overall, the quarter shows that the strategic decisions we have made in the recent years are gradually converting into customer orders and business. Impact Coatings is active in four main market segments, energy, automotive, electronics, and luxury goods. These markets may look very different, but the applications have several things in common. They require advanced coatings, often on relatively flat components, and they need efficient production at industrial volumes. During the quarter, we had good order intake in three of these four segments. Energy, electronics, and luxury goods. This demonstrates the value of having a technology platform that can serve several different industries. The fourth segment, automotive, remained somewhat quieter during the quarter and activity is still affected by the weak general development of the car industry. But we continue to work mainly with existing customers in automotive, particularly when it comes to decorative components that must be transparent to radar signals. During the quarter, we received two orders for our inline-coater IC500 system. The first order was from HA Wave, a supplier of waveguide antennas used for radars. We shipped this system in mid-July, only three months after receiving the order, and we have now also done the installation and site acceptance tests in Korea. This short delivery time was possible because of our decision to build systems based on sales forecasts and keep key components and subsystems in stock. The second order was from Lindbergh, the Danish premium eyewear company, which is now part of the Kering Eyewear Group. These two orders are good examples of how our platform can serve very different applications while using the same core technology. I talked about the HA Wave order and the Waveguide antenna market in the Q1 webcast. So let's now focus on the Lindbergh order and the luxury goods segment. Lindbergh manufactures premium titanium eyewear. Their frames are known for their design and quality. And personally, I think they look very good. Over the years, Lindbergh has purchased eight coating systems from Impact Coatings. We have several machine customers in the luxury goods segment. For example, company coating parts for watches and at our coating service center here in Linköping, we also provide decorative coatings for products such as medical earrings. Eyewear, components for watches and earrings all have one important requirement in common. The color must be exactly right. Our systems use a continuous process. This allows the customer to measure the result and adjust the process continuously to stay within very tight tolerances. Immediately when a part comes out of the machine, the color is measured and the process is tuned by the operator in real time. That is of course not possible with traditional batch coating systems. Coating services is an important part of our business, particularly in the energy segment. It generates revenue, but it also allows customers to test and qualify our coatings before moving to larger production volumes and before buying their own machines. During the quarter, One of the new strategic customers we discussed in Q1 has placed substantial coating orders and has now passed 5 million SEC. This illustrates how our customer relationships normally develop from initial testing to qualification to growing production volumes and in some cases eventually to system orders. To show you what this looks like in practice, I will now hand over to Peter, our IR Director, for a short tour of our factory downstairs. It's a bit noisy in our production, so you might need to turn up the volume to hear Peter properly.

Today I'd like to invite investors and others to a tour of our coating services facility in Linköping. My name is Peter Högfeldt and I'm the director of investor relations. And we will start the tour here in this corner of our cooking facility where we have the measurement capabilities. Here we can do flatness measurements, color measurements, thickness measurements and electrical contact resistance measurements. If we continue here, we see one of our coating machines. It's an IC500 machine that we call Bianca. And it's actually the machine that we have that has the most capabilities. It is configured for almost everything. So we do coating services for decorative applications, some metalization applications, and a lot of customer samples for a variety of applications. If we continue here in the facility, we come to the first IC2000 machine. And right now we have a colleague here, Hector, that is doing a setup. Hello, Hector. Preparing for coming cooking services. And next we see another IC2000 machine. And this machine we call Olof. We have personal names for all our systems. And on this machine we are running coating services right now for components for PEM electrolysers. And Erik, hello Erik! Here is doing unloading and loading of plates that are coated with various materials. And if we continue, we come to an IC500 plus machine. This was actually our original machine for fuel cell applications. So this machine is configured for ceramic black space for fuel cell place. And then we can see in this corner our colleagues doing visual inspection of plates when they come from washing before they go into the coating step in our production. And of course we do inspection and quality checks also for the coatings. So with that I will conclude this short tour. I hope you enjoyed it.

Thank you, Peter. So we have system orders in electronics and luxury goods and coating services, volume orders in energy. But as you saw, we are not only doing volume production of PEM electrolyzers plates here in Linköping. We also do coatings in our other business segments. Due to high level of automation in our factory in Shanghai, we run most of the customer samples here in Linköping. We have the same machine concept for all our business areas and we use the same machines from customer samples all the way up to fully robotized production lines at the customer sites. This is a competitive advantage for us. Let's leave the factory tour and have a look at our strategy. Our development during the quarter supports both our tactical and our strategic direction. Tactically, we focus on the orders and business opportunities available today across our four main market segments. Strategically, we are building a long-term position in the commercially driven solid oxide market, particularly in stationary power applications such as data centers. And now we are starting to see concrete results from this strategy. During the quarter, we added three new paying customers in solid oxide applications. Winning three customers in a new market is an important achievement. It's naturally more difficult than adding customers in a market where we already have an established position. So let us take a closer look at the new customers we have added during the quarter. In total, we added 11 new paying customers during the second quarter. Three of these were in solid oxide applications. Five were in PEM electrolysis, where we already have an established position. The initial orders from new customers are normally small. Our sales cycles are long because coatings must be tested, qualified and approved before production volumes can increase. These customers therefore make only a limited contribution to revenue today. However, they create a foundation for future coating volumes and potential system orders. The customer development during the quarter gives us confidence that our strategic focus is taking us in the right direction. So going back to PEM, PEM electrolysis for hydrogen production continues to be an important part of our energy business. During the quarter, we added five new electrolysis customers and we continue to see substantial coating services production volumes from existing customers. The international electrolysis market is consolidating. Some companies have left the market while investment is increasingly concentrated among the companies with the strongest position and the best abilities to scale. Today, most of the leading international electrolysis companies are paying customers of impact coatings. And this of course gives us a strong position as the market enters its next investment phase. We also signed a letter of intent with a South Korean company LT Metal at the end of the quarter to collaborate on the commercialization of iridium oxide coatings. This can expand our business both with existing and new customers by adding more value to each coated component and by making the qualification process easier for the end customer. With that, I will hand over to Lena who will take us through the financial results.

Thank you, Jonas. And we will start with the Q2 summary. Total net sales for the quarter amounted to 9.7 million SEK. Coating services was the main contributor with the 9.1 million. More than double sales compared to the same period last year. Aftermarket has been slow, reflecting the lower activity at many of our system customers. 0.6 million SEK compared to 2.1 million in Q2 2025. The order backlog for coating systems was 29.4 million at the end of the quarter for the two machines sold in Q2. And the order backlog for coating services was 1.7 million, the same as Q2 2025. Looking at the first half of 2026, total net sales amounted to 22.4 million compared to 16 million Coating services increased from 10 million to 20.9 million. Aftermarket decreased to 1.5 million compared to 6 million, mainly due to some sold machine upgrades made in 2025. And they were reported as after sales. Operational costs but excluding raw materials and supply was minus 40.0 million compared to minus 46.5 million, reflecting the effects from the cost saving measures implemented. EBITDA improved to minus 19.5 million in the first half compared to minus 26.3 million. and EBIT improved to minus 24.1 million compared to minus 30.1 million. Closing cash balance was 15.2 million SEK compared to 30.8, but with the larger order backlog and lower customer advance payments than last year. And we will come back to more details at the cash flow statement. If we take a closer look at the income statement for Q2 2026, all the amounts in SEC million and compared to Q2 2025. Even though net sales for the quarter increased to 9.7 million, total revenue decreased to 10.5 million compared to 14.7 million. This was mainly due to the low change in work in progress, while Q2 2025 was 6.8 million. Gross margin increased to 62% compared to 48%. Other external costs decreased slightly to minus 5.6 million compared to minus 5.7. Personal costs decreased 3 million to 12.3 million compared to minus 15.3 million. And the number of full-time equivalents for the group by the end of the quarter was 41 compared to 57 in Q2 2025. Depreciations increased to minus 2.3 million compared to minus 1.9 million. and there was a currency gain of 0.6 million compared to zero. So operating loss for the quarter was minus 13.0 million compared to minus 15.8 million. Looking at first half of 2026 compared to first half 2025, net sales, increased to 22.4 million compared to 16 million in the first half of 2025. But total revenue decreased to 23.1 million compared to 34.4 million. And again, this was mainly due to only 0.7 million in change in work in progress this year, while the same period last year was 14.9 million. Gross margin increased to 62% compared to 50%. Other external costs decreased to minus 10.5 million compared to minus 11.6, mainly due to reduced travel expenses, lower marketing costs and lower costs for consumables. Personal costs decreased to minus 24.9 million compared to minus 31.2 million, clearly reflecting the implemented cost reductions. Depreciations increased to minus 4.6 million compared to minus 3.7 million. And the currency gain was 1.6 million compared to a currency loss of minus 0.8 million. Operating loss for the first half of 2026 was minus 24.1 million compared to minus 30.1 million last year. And we move to the balance sheet and I will make the comparisons with the year end 2025. We've had low level of investments, so total fixed assets decreased from 68.6 million to 68.3 million, mainly due to depreciations. Inventory in raw materials increased to 58.2 million from 54.7 million, mainly in components. There was also an increase in work in progress to 24.6 million compared to 21.7. That's for the coming machine deliveries. Receivables increased by 1.7 million to 25.2 million compared to 23.5, mainly due to increased accounts receivables from increased sales. Outgoing cash balance by the end of the quarter was as mentioned 15.2 million compared to 37.4 by the year end at 2025. And we will come back to that in the cash flow statement. Equity decreased to 133.6 million from 154.5, mainly due to the cumulative loss for the year. Prepayments from customers decreased to 1.1 million from 7.9 million due to invoice sales in the first half of 2026. And short-term liabilities increased 13.8 million to 56.7 million, mainly due to increased accounts payables and increased prepaid revenue. Looking at the cash flow statement for the first half of 2026 and comparison with the same period in 2025. Cash flow from operations before changing working capital was minus 19.9 million SEK compared to minus 27.5 billion. Cash flow from change in working capital was positive, 3.3 million compared to 8.3 million. And the positive effect this year is mainly from increased short-term liabilities, such as accounts payables and prepaid revenue. Cash flow from operations was minus 16.7 million compared to minus 19.2 million in 2025. Cash flow from investing activities was minus 0.6 million compared to minus 4.1 due to low level of investments. Cash flow from financing activities was minus 5.0 million this year due to the repayment of a short-term loan. While financing was plus 20.5 million in the first half of 2025 due to the raising of new loans. In total, this resulted in a negative cash flow for the first half of 2026 of minus 22.3 million, of which minus 3.0 million in Q2. and compared to minus 2.8 million in the first half of 2025. A closing balance of 15.2 million SEK compared to 30.8 million by the end of Q2 2025. That was the financial updates, which means that we move on to the summary and outlook.

Thank you, Lena. So to summarize, we had strong order intake during the quarter with the business across three of our four main market segments. The two system orders demonstrate the strength and flexibility of our technology platform. At the same time, the 11 new paying customers are building the foundation for future coating volumes and potential system orders. It's particularly encouraging that three of these customers are in solid oxide applications. Winning customers in a new market takes time and this is an important indication that our SOFC strategy is starting to convert into real business. We now have a broader customer base, a clearer offering and a stronger starting point than we had one year ago. Going forward, we will continue to focus on sales and customer development. At the same time, cost control, cash flow and improved margins remain essential as we work towards long-term profitability. With that, we are ready to take your questions.

Thank you for that presentation and we will now open up for a Q&A session and as stated before you are welcome to submit questions using the form located to the right of the webcast and if you're calling and want to ask a question please press star 9 to raise your hand and star 6 to unmute your line when you have been handed the word. With that said, Lara Mohtadi from ABG, the word is yours.

Hi, Jonas and Lena. Just a couple of questions from me. Firstly, I'd like to ask a little bit on the market. If we start with Europe, you've pointed to clearer policy signals in the US and China feeding into momentum, but Europe has been a bit absent from that framing. Where would you say that Europe sits in the demand picture? Is it structurally lagging or are there Any specific policy or maybe customer catalysts you're watching for to make it permanent?

If you look specifically at the hydrogen and energy market, I would say that it's structurally lagging. But despite that, if you look at the number of new customers we have during the quarter, so we had 11 new customers during the quarter, and a substantial part of those 11 new customers They were actually in Europe. So I would say that, yeah, Europe is a bit slower, but we are making progress also in Europe.

Okay. That sounds promising. And just on sort of the competitive or your competitive position, you said that you haven't lost any recent orders to competitors, if I understood you right. What would you say is actually driving that? Is it more your technology or is it more sort of the relationships that you've built through these qualification processes?

I would say it's a combination. So first it's the technology and the fact that we can use the same machines all the way from customer samples to coating services and sell the same type of machine. That's appreciated by the customers. And the fact that we can easily make customer samples means that we can get new customers, we can start qualify them and That process is quite long to qualify a customer, and the earlier you start, the better. So this is a competitive advantage we have. Another competitive advantage is that we are starting to become one of the big players in the market, and sometimes we are referred to as the biggest player when it comes to coatings for electrolysers, And in China, when it comes to coatings of fuel cell plates, we are the biggest player. So that also helps in the customer relation.

Very clear. Thank you. And well, you've recently had two orders with one of them being delivered recently. And could we just talk a little bit about your other application areas, such as, well, the As we saw this quarter, we have three new paying customers in SOFC.

We have previously reported that we do have a collaboration with Ceres Power and the collaboration with Ceres Power is giving us access to the licensees of Ceres Power and that is of course giving us a jump start with the customers However, it's still the fact that customers, they need to do sampling. They need to test in their own stacks. They need to test everything. And typically, tests for solid oxide fuel cell stacks, they run for 5,000 hours or 10,000 hours. And if you look at 5,000 hours, that's half a year. 10,000 hours, that's one year. So it's very much driven by how much do the customers need to test. The good thing is that the customers in this market, they have standard products. So they are not project oriented. So they have their standard products. They plan the production, they plan production volumes. So when they switch from one coating method to another coating method, they will do that for all their production and all their customers and all their projects.

And these samples and tests that you just alluded to, will that generate the coating services revenues or is this something that won't contribute to your revenues?

So we always charge for samples. So even sort of the smallest test gives some small revenue. But what we see so far on the solid oxide market is that there might be a sort of going directly from sampling to machine sales, some of the customer dialogues we have, they are more like, okay, first we sample, and when the testing is done, well, then we go for a machine. Other dialogues are more that, okay, first we sample, then we will go for coating services for a short period of time, And then there will be machine sales. So the solid oxide market is more machine focused than, for example, the PEM electrolyzer market, where the customers tend to stay longer in coating services. But in both markets, the end goal for both us and the customer is to have a machine at the customer site.

Anja, just the last one from me. Your most recent orders have actually been for the IC500. I'm just wondering if this has there been a shift to maybe demand towards your IC500 versus your newer IC2000 or is it just in this case that it happened to be those machines they wanted. Where are you seeing demand? Is it for both machines or

We see demand for both type of machines and as you saw when Peter was showing you in the factory they have sort of it's a similar concept but the size is different so if we look at Lindbergh One of the main competitive advantage is that you can tune the color so you can have very tight tolerances on the color. And that means that you don't want to put too many pieces in the chamber at the same time. So a big chamber is not necessarily an advantage. So the chamber size of an IC500 is perfect for the Lindbergh application. For energy applications where you have high volumes or you have large plate size, then you tend to go for an IC2000 instead because then you need a little bit larger chamber size and use that either to put more plates in the chamber at the same time or to have large plate size like you have with electrolyzer plates. So it's not that we see a shift in demand, it's more that for the luxury goods market and for the electronics market and to some extent also for the automotive market, that is more towards IC500, where the energy market is more towards IC2000.

Okay, that was very clear. Thank you very much, Jonas and Lena.

Thank you for those questions. And moving on, we will go through some written questions. How is the search for an industrial partner progressing?

Yeah, I can answer that. So we have... Yes, you know, we announced in December that we're looking for an industrial investor and we have contracted an advisor to identify and bring in an industrial investor. So far in the process, we have been quite picky. We want an industrial investor where we see a clear Where we see clear synergies and we have got some interest. We have had some visits here to a factory in Linköping, but at this stage I cannot share any details regarding those discussions.

Moving on, we have a question about LT Metal. Will the collaboration with LTE Metal in the future mean that you will sell machines or coating services or both? And is the collaboration with LTE Metal of strategic importance? And if so, why?

So, two questions. I will start with one of them. Is it of strategic importance? Yes. We have been working with iridium oxide. for quite some time and we are one of the very few companies maybe the only one in the world that can offer iridium oxide coatings of ptls in an industrial scale of course there are research labs and universities that that can do this in in smaller scale um what What in the end determines the performance of the system is the combination of the PTL and the coating. That's why it's so important for us to work closely with the PTL suppliers. So what we can offer is a complete solution, a whole product to our customers. So we can have something that is already tested. So the combination of LT Metal PTL and our coating is already tested and we can have a data sheet and we can show that to the customer. So it's easy for the customer to buy. Overall, we have carried out testing together with customers at different locations around the world and looking specifically at Elty Metal. They are very capable and they have their own testing facilities also. So we have conducted tests both at their facilities and at other locations. So the collaboration with LT Metal is an important step in moving forward from the lab scale to commercial volumes. And it's partnerships like this that is needed to be able to supply a whole product to the market and make it easier for the customer to buy. So offering a complete solution rather than separate components. Then your next question was if this could lead to machine sales. Was that your next part of the question?

Yes. If the collaboration, does it mean you will sell machines or coating services or both?

Yeah, both, both. So as a start, we will sell a lot of samples and then the next will be to sell coating services. And the good thing with with iridium oxide coatings is that it's not a new area. It's one more layer. So today we're coating PTLs. So we take the PTLs, we make a coating on top of the PTL to reduce contact resistance and increase corrosion performance. On top of that coating that we already do today, you put the iridium oxide coating. So it's easy to implement in our current offering of coating services. Also, this will lead to machine sales in the end, and it can lead to machine sales both to the customers we have today, which is primarily sort of stack manufacturers, but it can also lead to machine sales to PTL manufacturers who want to provide a complete product to their customers if they want to provide a coated PTL. So both coating services and machine sales is possible outcome of this collaboration. Yes.

Great. Moving on, we have a financing question. Your liquid funds currently stand at approximately 15 million SEK. Could you comment on your liquidity needs in the near term and what measures you're considering to secure financing for ongoing operations and ensure sufficient funding going forward?

Yes, I can take that. Our forecast, including, for example, the order backlog and what's in the balance sheet, indicates that Yeah, it looks fine looking forward. It's manageable. But of course, as Jonas mentioned before, we have previously announced that we're continuing with the process of seeking an industrial investor, and that work continues as well. But looking at our cash flow forecasts, we see that analyzing them looks fine to us in the coming months. So, if that's an answer?

Yes. Finally, we have a question regarding waveguide antennas. Why do you choose to sell coating systems instead of keeping the coating volumes in-house when it comes to waveguide antennas?

Yeah, of course, that's a fair question. And sometimes you tend to think that if you go up the value chain, you earn a lot more money. If we go back to the previous quarterly presentation, I mentioned that around 100 million vehicles are produced each year. And if we assume five radar units per vehicle and two and ten and a half per radar, That gives a potential market of around one billion and ten and a half to be coated each year. That's a large number. And as you know, we have a push-pull strategy, which means that we work both with our direct customers and with our customer's customer. So this also includes radar system manufacturers. So we talk to radar system manufacturers that are our customer's customer. And this discussion also help us to understand expected production volume. And we get estimates from radar manufacturers. They are shared with us under non-disclosure agreements and they normally have a quite a wide range. So they should always be treated with a grain of salt. But one estimate we have received from a serious radar system manufacturer, I cannot tell which, was around 200,000 antenna halves per day. And at that level, at 200,000 antenna halves per day, machine sales is the preferred business model because that's sort of suitable for our type and our size of company to supply the machines to the company that will actually produce 200,000 antennaHalfs every day. Did that answer your question?

Yes, and that was the final question for today. So we will now conclude today's conference call. I would like to extend my sincere thanks to Jonas and Lena for the presentation, as well as everyone who submitted questions and joined today's webcast. I wish you all a pleasant day.