I-Tech AB

It is one o'clock and we welcome viewers here to the report presentation of today where you as a viewer also have the opportunity to ask questions to the management and you do that via the live chat during this broadcast. I will be keeping an eye on it. Today we are joined here on stage by iTech who has published their final and fourth quarterly report for the fiscal year of 2025 and standing beside me is Markus Jönsson who is the CEO of the company. Welcome. Thank you very much. Good afternoon. Good afternoon. You have a presentation prepared for us here today and I will simply hand over the word and come back later to ask a few questions. Thank you very much, Mike.

So a new year, new possibilities. We're here live from Stockholm today from the Investor Studios to give you the presentation of the year end report of Q4 for iTech. So before we get into the numbers, etc., I will just do a brief introduction of the company in case there are any new viewers or people that are not acquainted with iTech from the past. So essentially what iTech is and what we are doing, we are a biotech company, an ingredient provider, but our key focus market is maritime shipping. And really the problems that we are here to solve, or one of the major problems, is the question that we are posing here on the first slide. So what if one third of the full global fleet were using 36% more fuel than needed, even for one day? What would that mean in terms of costs and emissions for shipping? And that's exactly one of the key challenges that we are addressing in iTech. So our solution is targeting a problem of fouling for ships. So really the underwater surface area of the ship can get fouled of various organisms. And our solution is targeting barnacles, which is so-called hard fouling. And why are they a challenge? Well, they create a big additional drag on the ship. So it means the increased friction and increased need for power and more fuel to actually smoothly travel through the water. The barnacles are thriving in most marine environments, so all across the globe. And they are cunning little creatures in the sense that they are super gluing themselves to the surface. So they are very, very difficult to remove. and you risk damaging the coating if you try to remove them. So really the most efficient strategy is to actually prevent them from settling on the ship as well. So our solution is called Celectope, and it is actually a clever solution coming from the world of pharma. So originally it's a sedative that is used for humans and for veterinary medicine, but scientists then found out that it has the opposite effect on the barnacle larvae. It actually makes them temporarily hyperactive. So it doesn't kill or harm the target organism, but actually deter them from settling on the surface. And this really helps the ship owners then to reduce the emissions to air, but also protect our sensitive coastal marine ecosystems because biofouling on ships' hulls is today the number one vector for spreading of invasive aquatic species. So it's really important to keep our ships clean so that we protect sensitive local ecosystems. And the third thing, which is so ingenious with our solutions, is that we are also reducing the emissions to the ocean very, very significantly. It's extremely efficient. So you need a very, very small amount, which in itself then protects the environment further. So now we will come to the results. And in that case, I will hand over to CFO and head of operations, Magnus Hunell, who will take you through the numbers and see you later.

Let's go into the results and very nice to be here again talking to all of you. And as we start on this slide, I just want to give you a short overview of what happened in the company over the past years. As most of you know, we have had a very nice growth of the company. Even though we are declining a little bit this year, we're still on an average of roughly 30% since our IPO in 2018, which is very strong numbers over the seven years that these are presented. And I also want to give you an idea that when we're coming into Q4 and the full year of 2025, we are comparing to very, extremely strong sales numbers in Q4-24 and also in Q1-25, but These are very strong and we will talk a little bit about why we are not as strong today. Looking on the full year, we see that our smaller customers show a really strong growth, but we also see that the sales to our second largest customer is much lower than last year. We will go into the details later on. Talking about Q4, as I said, we're comparing with a tremendous quarter last year. We have unfortunately a decline in the net sales in Swedish krona of 33%. I think it's quite important to point out that the currency adjusted downturn is only 23%. It's still large but it's much lower and then you can see that the US currency has really impacted us. What is really nice to see for this year is that we actually improved the gross margin by 6%. We're going from 54% gross margin to 57% and that is due to mainly our operational efficiencies where we have better production processes, more producers, making sure that we have a stable production price, which means that we can also be stable towards our customers. Coming into the result, of course, we have reduced both EBITDA and EBIT, down 5% roughly on both, but they are still very strong. This shows also by the very strong cash conversion that we have in the company. For the quarter, we have an operating cash flow of almost 13 million compared to 6 million last year. On the cash side, it's growing. Our cash balance, of course, is also growing into almost 150 million. Looking into 2025 as a full year, the comparison numbers are not that dramatic. We are down 6% on the net sales. We are up 3% on volumes. We are up 2% in the currency-adjusted growth. But unfortunately, in Swedish krona again, then, we are down 6%. Also here, for the full year, we have improved the gross margin up to 57%, also for the full year. We need to point out that our largest customers, Sugoku Marine Paint, they grew by 21% this year, which is a really strong growth compared to what we show in the final end. So with this growth in gross margin, we're in Swedish krona, actually larger gross profit than we had previous years. And then we have invested a little bit more in our operational cost, which means that we lower the result a bit, but we're still on almost 30% EBITDA level. And looking into the geographical spread of our customers, which is quite important, we have emphasized before, we're coming back to the regulatory part, that Europe is a very low percentage of our sales. It's only 2% for 2025 as full year. Last year it was 3%, which means that Asia have taken yet another little bit bigger part. the ratios between the three largest markets, which is Korea, China, and Japan, has leveled out. Last year Korea was 50% of the sales and China was quite much lower. Japan has been stable over the years, but the main reason is actually the very nice growth in China and the lower sales to our second largest customers, which means that China, whose really important market moving forward with all their maintenance work, is really growing nicely and 96% in 2025 is a very strong growth. So just to summarize the financial year of 2025, we have forward momentum. We have headwinds in some parts, tailwinds in some parts, but we have a very strong margins and cash precision, 57% gross margin, 25% EBITDA. We have a diversification. Our smaller customers grow really strong. They grow by more than 100% over the year. We have our largest customers growing by 20% and the volume growth in China is 96%. Which means that we are confident for the future, but we also need to prepare for all the upcoming work. So in the proposal from the board, there is a proposed increase of the ordinary dividend. from one krona per share up to 125 but with no extra dividend for this year and I think Markus will talk a little bit more about that when he's coming back into the picture.