NCAB Group AB (publ)

Welcome to the NCAB Q1 presentation for 2026. During the questions and answers session, participants are able to ask questions by dialing star 5 on their telephone keypad. Now I will hand the conference over to the CEO Peter Crook, CFO Timothy Benjamin, and Head of Investor Relations Gunala Oman. Please go ahead.

Thank you very much and welcome everyone to our call. Today presenting primarily will be myself and my colleague Timothy Benjamin. Just for those of you who might be new to us, NCAB is the supplier of printed circuit boards, so the product you see to the left on the screen, which form the foundation in any electronic product. So our customers will mount semiconductors or microprocessors on our product And that then creates the intelligent nodes in any electronic product. And what is important to recognize is that wireless semiconductor components are standard components. The printed circuit board is uniquely designed for each and every application. NCAB is present today through 19 companies across the world. We have some 650 colleagues around the world supporting our customers, and we are dealing with some 34 factories to supply the main portion of our customers. We have no in-house manufacturing, but we have a very strong focus on securing the supplier network. So roughly 120 of our 650 colleagues are working specifically with technology and the factory management. Our focus is for printed circuit boards for demanding customers, customers with high demands in terms of quality, on-time delivery, efficiency. And we aim to supply them with zero defects, produced sustainably, and giving them the overall lowest total cost. And our aim is to be the number one PCB producer wherever we are. And we are the globally leading supplier of printed circuit boards worldwide. Our focus is also on what we call the high-mix-low-volume segment. So we are not focusing on the markets of consumer electronics or PCs or main data applications, but we're typically more applicable working with the industrial applications or medical or aerospace and defense. And typically what we see in these applications is that the The printed circuit board forms a very small part of the total bill of material for the end product. These customers that we are focusing on have very high demands on quality and performance. And given the fact that this is a small part of their bill of material and that their overall total spend on printed circuit boards is relatively limited they struggle to get good support and access from the leading factories and this is where we can support them we can bring them knowledge to help them design their product efficiently and also match them up with the best factories and where we combined our global spend in printed circuit boards we are one of the leading buyers of printed circuit boards worldwide and that gives us also an opportunity to have a margin on the services we provide What we've seen is that the global printed circuit board market is somewhere north of 80 billion US dollars worth of. And it was a market that was growing rapidly during the early parts of the pandemic, but then had a recoil in the market. We are now positive to see that now for the last one and a half years, the market has resumed growth. And we can also see that NCAB's ordering take is matching that and is accelerating its growth in 2026. So moving to our first quarter, we have a strong positive growth on top line and also positive development of our EBITDA. We can see that the market recovery and our growth in order intake that has started growing from Q2 of last year has continued to grow and has accelerated over the last four quarters. it is a very challenging market situation right now the growth in the global market is accelerated by big data center investments this is not our main market but it is creating supply chain bottlenecks for printed circuit board manufacturing worldwide we have a strong supply chain and our factory management organization can actually help to make a difference in this tough environment and help our customers still get good delivery of product uh we're also seeing from the growth in the overall global market increasing market prices and in the quarter we have also had on top of that some some project wins notably north america which further enhance our order intake in the quarter but overall we see an underlying good positive development across our segments and we can see things like defense medtech and power doing quite well whereas our sales towards the automotive industry remains somewhat muted On the EBITDA side, we again have a good positive development versus 2025. We can see we're leveraging the growth and we're offsetting quite a significant FX headwind. And our gross margins are stable versus prior year. If we take a more detailed look on the numbers, we can see our order intake is up 27% in Swedish kronor. Our organic growth in US dollars, we basically trade 90% of our business in US dollars effectively. Our organic growth in US dollars is up 43%. Book to bill is also quite positive of 1.2%. Net sales grew by 12% to 1 billion 74 million SEK, which is a growth organically in US dollars of 24%. And we can see our EBITDA reached 128 million SEK up from 100 last year and our EBITDA margin equivalent of 11.9%. We can see our gross margin up slightly but largely stable, but we are overall on the EBITDA side offsetting a negative FX impact of 27 million SEK in the quarter. Cash flow was okay at 65 million SEK versus 53 of prior year. Our working capital is up slightly, mainly driven by the high growth that we see in the business, but also the fact that lead times are longer than they were a year ago, which is creating more goods in transit. Net profit at 75 million SEC versus 52 last year and an EPS of 40 cents versus or 0.40 versus 0.28.

Over to you, Tim. Thanks, Peter. So I think you heard a little bit from Peter that our gross profit has remained fairly stable year over year, which we're happy to see a little bit over the medium term. When we look at the quarter, as you heard from Peter, up 27% in order intake, 43% in U.S. dollars, which is comparable units for us, excluding acquisitions. Positive development in all segments. We saw good development, especially in North America and East. Net sales up 12% in SEC and 24% in US dollars. These two effects contributed to a positive book-to-bill of 1.2, which you would expect with the longer lead times that we see right now, as well as some of the larger project orders that we have within the quarter. But we were happy to see a positive trend in EV charging, as well as in our aerospace and defense businesses. When we look at the EBITDA, we did see a 28% year-over-year increase going from 100 million SEC last quarter to 128 million SEC this quarter. We did have to offset quite a negative headwind coming from FX, which mainly impacts gross profits, offset a little bit on the SG&A side. These two things were offset very much by the strong growth in revenue that we saw, and they contributed to a very strong operational leverage within the quarter. And as you heard a little bit from Peter, gross margins, although a little bit down sequentially, were quite stable year-on-year.

If we look a bit closer at our different industrial segments or regional segments, Nordic had a positive order intake growth of 70% in Swedish kronor from 261 versus 222 last year. So a good organic growth in the business here of 7% in Swedish kronor and 25% in the US dollars. Good positive development here, notably in Norway. We had some earlier order placements in Q4 in some of our Nordic countries, but that was nicely offset by other growth in the segment in the quarter. Net sales grew by 21% to 271 million SEK versus 224 last year. So also here, good organic growth of 12% in Swedish kronor and 30% in USD. Here we see our EV charging business in the Nordics resuming, and we've also seen good deliveries of defense contracts that has boosted growth in the quarter. EBITDA amounted to close to 38 million SEC in the quarter, up from 24 last year. And our margin EBITDA increased to 13.9 versus 10.7. And we've seen good leverage on the net sales growth. We've also seen good positive contribution from Moods Technique that we acquired here in Q4. And these things have offset the negative effects and mixed impacts that we may have seen from larger project deliveries. If we move to our European segment, also here we see the order intake grow 8% in Swedish kronor to 537, up from 497. The organic growth is 2% in Swedish kronor, but 20% in US dollars. We see a positive trend in a number of our markets, notably Germany and Benelux, but we see some of our countries here, UK and Italy, notably impacted by their share of sales to the automotive industry. Net sales are up 2% to 508 versus 497. It's an organic decline in sales still in Swedish kronor due to the FX impact of 4%, but it's a growth in US dollars of 13% year on year. And the general recovery that we see is offset, but again, here a little bit by the negative sales to automotive industry. EBITDA increased to 57.6, up from 55.8, and the margin is largely flat at 11.3 compared to 11.2 last year. So we see some negative impact from FX, impact on the EBITDA, but at the same time, we're also getting a positive contribution from the BNB acquisition that came into the company in Q2 of last year. In North America, we've seen a very strong growth in the quarter. We're up 71% to 403 million SEC versus 236. So in US dollars, it's actually a growth of 100%. And this is supported by large project orders, some of which will have deliveries extending into 2027. But also underlying this, there's a good positive development. We see notably our sales in defense and to power segments are doing quite well. Net sales are up 24% to 233 million SEK versus 188 and 45% in US dollars. We had a little bit weaker Q1 of 25, so that number gets help from that as well in the comparison. We have positive development in defense, power, and medtech sectors, and we have seen a further decline in the share of source products from China in the quarter compared to prior year. EBITDA increased to close to 28 million SEC, up from 18, and it corresponded to an EBITDA margin of 12% versus 9.7%, and the growth here is primarily driven by the increased revenue in the quarter. And finally, looking at our East segment, we also here see a very positive development on the order intake. Order intake growing 52% in Swedish kronor to 88 million SEK over 58. And it's growth in US dollars by 77%. And we are able to capitalize on the growth in high tech and our supply base, as well as growing with NCAB's global customers. So with the challenging supply markets, we are able to go through our access to the relationship with the factories to be able to sort of support our customers better than customers who maybe in some case have been buying direct from factories. Our net sales are up 21% to 61 million, up from 50.5. And our net sales in US dollars increased by 41%. With that, our EBITDA was able to grow from 8.2 to 11.3. And it's equivalent to an EBITDA model in the quarter of 18.5 compared to 16.3 last year. And this, of course, is supported by the strong leverage from the revenue growth. Would you, Jim?

Thanks, Peter. So if we look on the financials that we have here, our return on equity up 50 basis points to 15.6 from 15.1. We expect to see that continue to tick up. Net debt to EBITDA 1.5 versus 1.6, which says that we still have quite a bit of capacity here for M&A. Equity asset ratio fairly stable year over year and net working capital up a fair amount, which you heard earlier was from the recent growth that we've had lately, along with some of the recent acquisitions, which have a higher working capital average than the standard NCAB business, as well as the longer lead times that we're seeing in the current market conditions. Available liquidity north of 1.2 billion, which again gives us good dry powder on the M&A scene. And then we have a proposal from the board of directors for 1.1 crowns per share. If we look at the pipeline side, we have a number of good conversations ongoing on the M&A side. You see recently, mid last year, we did BNB in Germany, and then in December, Multitechnik in Sweden. And with a number of good conversations ongoing, we're happy to see this continue. When we look at the recent acquisitions that we have had in the past 12 months, the two that I mentioned, we saw good and strong contributions within the quarter as we start the integration process.

So if we look ahead, I mean our company, we are glad to see that the market is starting to turn back and turning back up and our strategy remains as before. We are focused on growing our business in the printed circuit board market with a 100% focus on printed circuit boards and continuing with an asset light model whereby we use outside partners for the manufacturing. We are, however, continuing to invest in technology and our processes to be able to support our customers more efficiently, to grow our market shares and deepen the relationships with the customers we have in existing markets. We're also continuously looking to expand our business geographically, whether that is to enter completely new markets or to strengthen our footprint in existing regions. And we believe M&A is a good vehicle for us to accelerate that process. And finally, we are acting in the market where there are a high degree of fragmentation, a large number of smaller trading companies, local or regional, primarily in Europe or in North America. And we see great opportunities to consolidate this market by sort of giving these smaller companies access to the NCAV framework, our factory management organization and our purchasing power to be able to serve their existing customers better and to help them grow in the future. With that, I think we open up for questions and thank you for the presentation.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Jacob Edler from Danske Bank. Please go ahead.

Hi, Peter and Tim, and congrats on a strong report. A couple of questions from my side, starting a bit on price in the order intake. I remember in connection with the Q4 report in February, you talked about pricing for some raw materials being up around 10% at that point. We've now seen some reports on, you know, copper-clad laminates, prepreg, et cetera, having increased in the magnitude of, let's say, 15% to 25% in February and March. even some higher prices here in April. Is it fair to assume that price will be a bigger factor in Q2 orders relative to what we saw here and what was the number you saw for Q1?

Yeah, thank you for your question. I think as we said last time, we were seeing price increases expected in quarter one and sort of that led to some level of pre-buying in Q4 where customers potentially sometimes could place orders earlier. as you said, we were estimating prices to be up in the order of 10%. I think it's fair that we've seen that. I think in some cases we don't maybe see it fully come through on the order intake in Q1 because, I mean, there's a mixture here of pricing for completely new projects versus to what extent we can sort of work with our suppliers to maintain a slower introduction or lessen price increase on existing parts. But I think it's in that order of magnitude of price increase that we have seen in Q1. We are, of course, here working with our suppliers to protect our customers to the extent possible, but we are foreseeing and expecting further price increases here coming into Q2. So the price increases will probably continue here in the second quarter on the order intake side. On the revenue side, however, it's not really showing in our numbers yet. So that is part of why we have the positive book to build. And we will gradually see the prices show up in the net sales, starting maybe in Q2, but primarily in the second half.

Yeah, good. And then just a question on the North America order, 20 million US. How should we think about it? Delivery is 26 relative to 27. Able to add any flavor there?

I mean you can say there are there it's not one specific order it's actually a couple of different projects and one of these projects goes over two years and I think it's primarily where we've been involved with some research activities for particular accelerators and that has been business that we've had it's a continuation of projects that we have been doing before so we've had these kind of projects in in the last I think last two years at least where we've had project orders of around say four million uh dollars in say either q2 or q1 or sometimes split between the two uh this time we are getting this order but it's actually split over two years so i think we are here maybe seeing a four million that's going to be into 20 20 27 from from this side here okay very good and clear um just a last question on orders um i mean in q4 you quantified that roughly 10 10 11 percentage points uh points of the growth we saw in in orders in q4

What's pre-buying related? Was there an element of pre-buying here as well? I presume that lead times are continuing to creep up, as you're stating. So any pre-buying effect, so to speak, continuing here?

I think what we see is, I mean, I think we do foresee the price. We do see prices continuing up at the moment, and that is probably leading to some level of pre-buying as well. But I think we don't see pre-buying boosting our numbers in Q1, but maybe they are sort of netting out the positive pre-buy we saw in Q4 to some extent. So the net effect of pre-buying is probably pretty small because what we saw as pre-buying Q4, would actually have created a kind of a blip downwards in Q1. Now that downturn blip is probably sort of offset largely by some further pre-buy in Q1 here.

I think one of the effects that we saw in quarter four was that some of the largest customers sort of trying to get ahead of the current market conditions and the pricing increases and whatnot. So we saw that effect strongest with the large customers in quarter four. We see it now with the medium customers that are also kind of waking up to the current market conditions and the difficulty in some cases to get the orders in the future. So I think that's kind of the trend that we see is it's the large customers, medium customers, and then smaller customers.

Yeah. Good. Just two last quick questions. On the gross margin, I mean, it's a bit lower sequentially, which I guess makes a lot of sense given how fast prices are moving and you having to, I mean, there's, I guess, a lag effect created from factories pushing on prices to you, and then you have to kind of push them on to the customers. But it's fair to assume that we should see a similar theme here in Q2, so kind of the lower end of the interval of 35% to 36%, and then Eventually, as prices may stabilize, that could creep up a bit. I don't know.

Yeah, I think it's fair to assume that we could be in the current range. It's a lot of work right now with our customer trying to manage the cost increases that are happening in the market. And of course, we try to protect our customers to the extent possible during this phase. But we expect probably to be in this range where we are right now.

Good. And last question on my side. I mean, we had some defense invoicing in this quarter, and you've had a relatively sizable backlog from the last, let's say, one and a half years here. Can we expect kind of defense invoicing to continue during this year, driven from that backlog?

Yes, yes. I mean, we've been booking orders here since basically during, say, 24, 25 on the defense side, and we continue to win business in this segment. And some of these projects, it's a mixture here. Some projects are kind of short term, but they also contain a fairly high degree of projects which are longer term. So, yes, we will have deliveries of defense during the remainder of this year as well as into 27. Great.

Thank you so much for those answers.

Thank you.

The next question comes from Johnny Jin from SEB. Please go ahead.

Good morning, Peter and Timothy. I have just a few quick questions. I think the first one is on data center projects. I think that's very exciting. Can you maybe clarify how much direct data center you have today and how's the pipeline of similar data center projects going forward?

Thank you, Johnny. I'd say that we're not specifically in the data center direct application, but I think where we have been successful has been participating in projects where we are supporting the auxiliary systems. So in some of the kind of power regulation systems for the kind of data center projects. And this is business that we've started developing partly with some customers here in North America during 2025. And we've had very good business with them in Q1. And this is, of course, business we hope to be able to continue to develop going forward. So we are very happy about the big project orders we've seen here in Q1, but they are by no means hopefully our final orders for this segment.

Okay that's clear and I mean direct data center exposure is that something that you're interested at all or is that what a sort of high volume that you want to avoid or could that be a new growth pocket for you or how should you do that?

I think the main data boards themselves that is very much high volume applications so that is not our sweet spot where we can add most value But I think you have a lot of, say, infrastructure around the data center you need if it's either power distribution or it's cooling systems and all these other things that you need to make a data center work. And there is typically where you find more of our high mix low volume applications. So if we can be well positioned there, we have an opportunity to be a strong participatory in this market as well. But it's a the data center application itself is maybe not our area.

Okay, that's clear. Then one question on lead times. Can you maybe elaborate how would you think about the lead times even more and the order conversion we should expect going forward? Because there's some moving parts there at the moment.

Yeah, and I think what we have seen is, say, lead times have gradually extended. I think they are still sort of in the, say, if historically we've been in one quarter, maybe they're now more like two quarters. So we should not expect the current Q1 order intake to translate into Q2 revenue. I mean, there will be some delay in this. And of course, partly due to the fact that there is part of the order intake growth is also related to price increasing, which would also translate into later deliveries. So I'm not sure if that sort of answers your question.

Yeah, okay. Just one final quick one here on Germany. That's an important market for you and you have some upbeat comments on Germany. Could you maybe elaborate a little bit more what you're seeing in Germany now and how's the momentum developed during the quarter, so to speak?

I think what we have seen, I mean, for our business, we have gone through, say, from 23 to beginning of 25, quite as an elongated, say, repercussion from the growth in 21, 22 during the kind of COVID years. And I think what we've seen is that there's been a tremendous pile up of inventory or semi-built products, maybe not necessarily that there have been inventory or printed circuit boards, but finished products in retail or from contract manufacturers to OEMs, et cetera. I think a large part of what we have seen happen, starting in 2025 and continuing, is that that has now come out of the system. So we are now seeing not only a growing mark, but we're also seeing the growth that was already there during 2024-25, which we were seeing a discounted version of in our order intake. So I think from that, we can see our European business and our European customers coming back, and we can also see that they're growing. But I think they are, and as you see from our numbers, they're a little bit behind some of the other segments in terms of growth rate. But I think the trend is quite in the right direction.

Okay, that's clear. Thank you. That was all from me. Have a great day. Thank you very much. Thanks.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Gustav Bernebled from Nordia. Please go ahead.

Yes, good morning. It's Gustav here from Nordia. So I thought maybe just to start off with the certificate you got here for the CMMC 2.0. Can you just elaborate a bit more on what you see in terms of potential from this certificate to start off with?

I mean the aerospace and defense business that we have in LCAB is historically has been primarily in North America and in the Nordics and over the years we're now starting to sort of gradually expand our know-how of this and selling into more markets in the us we have had a strong position also from the fact that we have itar approval to use certain factories in asia also for us some of the u.s defense applications which has given us a strong position The U.S. has moved forward with their way of securing data security. CMMC2 is one important part of their new regulation that is now coming into effect. And for us, it's very positive that we are one of the first companies to have the CMMC2 accreditation, which means that we are sort of accredited to support the U.S. defense projects, which is quite nice. And there is, of course, just like we see in Europe, significant investments in this industry going on.

Okay, but in terms of, I mean, volumes, I guess that's very hard to give an exact figure of, but is it, I mean, Are you seeing less competition now, given that you are the first company to be approved and sort of can take market shares during this sort of race that we're seeing? Or what's your view?

I think it is a bit too early to say, but I think if anything, it will sort of weed out some smaller or less competent competitors. It is a market where, say, if you're even allowed to be able to look at material to quote something, you need to be accredited to be able to prove that you can handle the data that you're looking at in a secure way. So it's an important part of us being a credible supplier into this market and continuing to grow in this market. That's perfect.

And then I thought maybe can you just elaborate a bit more on the situation here where you comment you know of customers that went you previously directly through factories are now potentially coming to you is this something that you know brings up material volumes for you already now or?

I think we may see this. I think we know it's a very tough situation right now with our factories. We know our factories are more or less forced to turn away smaller customers. They need to prioritize how they handle the volume have and even the factories themselves are competing to get access to the raw material. So you really need to be working with the leading factories. So I think it's too early to say that we have seen customers coming to us. I think we've already seen some signs of that during the end of last year that customers were getting worried and looking for support from someone like us. I think it's part of the growth that we're seeing in the East segment right now, where typically You could say it's challenging for our organization in China to be successful when you have the customers and the factories close by. But I think part of the growth that we're seeing right now is that we actually have strong factory relationships. We can still get access to material, even if prices are going up. We can secure delivery to a better degree than what many are that are trying to buy directly.

That's very clear. Thanks. And on that note, the East market, I mean, given if we assume volumes are fairly stable from here on that level, I mean, how sustainable are the margins there currently?

I mean, there's always a bit of variation here in the mix. I mean, in our business in Asia, we do a very high degree of advanced engineering supporting our customers and I think that also lends to, say, margins moving a bit up and down on some of these projects. But I think we have, I think, over a long period of time been able to perform in that range of around 15% or sometimes above. I think that's fair to assume that we can continue that.

That's perfect. And just one last question here, sorry. The new customers, Sorry, the data center part of the business that you saw you received some customers during 2025. Are those new customers that appeared in 2025 and you're now seeing volumes ramp up more and more significantly in 2026?

I think this is one of those customers where we work both with an OEM as well as with a contract manufacturer. and i think that cooperation with both these parties have been going on for multiple years and then together we have worked on developing the concept for for these applications here which started taking off in in significant volumes i'd say during 25 and is continuing in here in 26. perfect thank you very very much for taking my questions here thank you

There are no more questions at this time. So I hand the conference back to the speakers for any written questions or closing comments.

Thank you very much. There's one question from Thomas Blikstad at Pareto Securities. And he says, congratulations on a strong report today. Could you break down the 40% organic order growth here in Q1? in regards to pre-buying and pricing effects. How are these two dynamics looking heading into Q2 onwards?

I'd say pre-buying is virtually nothing because you have this kind of net effect. You had some pre-buying in Q4 and yes, there is probably some pre-buying in Q1, but they are largely offsetting. So it's a little bit hard to predict exactly. It's always a bit of a guesswork to understand exactly what is a pre-order, what is just an order. But I think we don't really see that much of pre-buying. I'd say on the pricing effect, maybe we have in the order of 10% on the order intake side. And then you have some of the larger orders, which maybe are somewhere in that 10-15% impact right now. And then you have an underlying growth of some other 15% on top of that to get to the numbers we talked about.

Okay, thank you very much, Peter and Tim. And just to remind you, our AGM is coming up soon, the 7th of May. Very welcome there. And our Q2 report is on the 22nd of July. So very welcome back and thank you for today.

Thank you.