NCAB Group AB (publ)

Welcome to the NCAB Q2 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 and welcome everyone to today's quarterly report. Startinging out with NCEB as a background. We are a supplier of printed circuit boards, which are the products that you see on the left here, which form the foundation in any electronic products. So our customers are typically OEM customers or EMS companies mounting electronics and creating the intelligent modules in today's modern industrial equipment. And what is unique about our business is, of course, that the PCBs are uniquely designed for the product they go into. So there are no standard components, but we provide a lot of value both in terms of engineering support as well as in the manufacturing. NCAB, we are a company with outsourced production. We have no internal manufacturing, but work with a network of factories. And our mission is to supply PCBs for demanding customers and to do this on time with zero defects and produce sustainably at the lowest total cost. And we believe very much in being local, close to the customers where we can provide the technical and quality engineering support and commercial support to our customers. We are operating in an increasingly complex world, especially in today's environment with AI putting pressure on supply chains. And our vision is to making PCBs easy, to absorb that complexity and make life easier for our customers. Beyond the factor that we are focusing on demanding customers, we are also targeting specifically the high-mix-low-volume segment of the market. So we are not active in high-volume consumer good products like mobile phones or PC markets, as an example, but typically much more in industrial applications or medical or aerospace defense applications. And typically what we see in these applications is that The PCB is a very small portion of the total bill of material, maybe only as low as 1-2%. Yet, the demands on quality are still very, very high. And for these customers, even though our customers, in many cases, are globally leading companies, Their spend on PCBs is somewhat small, and they maybe are struggling to have enough competency to manage this commodity. But also, even if they have that, they are still not having a spend significant enough to allow them to get access to the best factories and have priority there. And this is where we can add on our value by aggregating the spend of a large number of customers. And of course, having also that spend, we also have the competency to be able to provide support. And this gives us an opportunity to provide good service with competitive pricing and yet have a decent margin for the business we provide. If we look upon the global market, we can see the global market here being represented by the green bars, and 2026 is the forecasted end number for 2026. We can see how the market has, after the pandemic years or post-pandemic years in 23-24, when the market was down, has resumed growth, and this has really been driven globally by AI applications. But we can also see NCAB's ordering take curve accelerating as well in the recent times. And this is also something we can see is influencing now our second quarter. So if we move to the key takeaways in quarter two, we have a very strong growth on top line as well as on EBITDA. We can see our order intake accelerating in this market with quite significant supply chain challenges. The investments that are currently happening in data centers for AI predominantly is creating a lot of supply chain strains for PCB manufacturing globally, both in terms of manufacturing capacity, but now more and more in the ingoing constituent materials that you need, like glass fiber yarn or laminate materials. And this is both resulting in pre-buy effects as well as price increases, which is enhancing our order intake in this quarter. But beyond those two effects, there is still a good, solid, underlying double-digit growth for us. We see good progress specifically in the focused industries, like what we do for AI as well, but predominantly also in areas like medtech or aerospace and defense. But in the quarter, we overall come up with an organic order intake growth of 58% in US dollars. If we move to net sales, also here we see strong growth on the back of previous quarters of growing order intake. So our ordering net sales growth is 25% in the quarter, and we can see all regions performing well. And beyond volume demand growing up, we can also see some effects from pricing that we saw in quarter one. And I think NCAB has a strong position in this turbulent market. We have a very resilient supply chain. strong portfolio of factories where we are a priority customer and it makes us a resilient source of supply in this challenging market. We should also remember that we still have some negative impact from FX compared to prior year. And in this quarter, we had 35 million SEC of negative impact on net sales. Also, EBITDA with the growth in net sales, we see strong improvement in EBITDA versus 2025. So leveraging well this volume growth and offsetting also the negative FX headwind that we still have. And gross margins remain stable versus prior year. Also, just at the end of the quarter, we were happy to announce another acquisition. We acquired the company BoardShark PCB in the US. This is a company based in Florida. It was started in 2026, and the focus is very much on prototyping and quick turn deliveries. Their main customer base are in areas like aerospace, but also industrial and medical sectors. In 2025, their revenue was around $70 million, and they have a very good EBITDA margin, which also contributes to NCAB's performance. It's a fairly small team. It's only five employees in the company. but like also some other US companies, they're operating with an external network of regional sales reps. And they are predominantly strong for this company in the Western part of the US, which is a very good compliment to NCAB's already strong position, where our strength historically comes more from the East Coast. So this further strengthens our position on the West in the same way that our acquisition of Phase III did in 2023. And this transaction was signed and closed on June 24th. If we then take a little bit deeper look at the figures for the quarter, we can see that the order intake overall in Swedish kronor grew by 59% to 1570 million SEK versus 985 in prior year. That is a 58% organic growth in US dollar, which is the main trading currency we have. And we also have a very strong book to bill of 1.34. Net sales grew 25% to $11.68 versus $9.34 million SEC and that represents a 24% organic growth in US dollars. EBITDA grew to $138 million SEC versus $93 and represents an EBITDA margin of 11.9%. And as mentioned, the gross margin here stayed stable versus last year and also largely versus prior quarter. In the beta, we're still offsetting a negative FX impact of 10 million SEC in this quarter. So the FX impact is reducing compared to quarter one, but still represents a negative impact. Good cash flow of 116 million SEC versus 93 in prior year. Our working capital is up and we see this partly as the The lead times are somewhat longer on the supply chains, but it's actually slightly lower than what we were in quarter one. Net profit is at 84 million sec in the quarter versus 40 last year, and EPS is 0.45 versus 0.22. With that, I give the word to you, Tim.

Thanks, Peter. And here you can see our gross margins over a longer period of time. You can see we were in the low 30s back some years ago. We invested quite a bit in having a strong supply chain and a strong engineering base. We've been able to add additional value for our customers, especially in market situations like this. And that's given us a good margin at a stable level over the past few quarters, closer to 35% in a nice stable situation. If we take a look through the order intake, you heard from Peter, around 59% up and in comparable units, US dollars, 58%. That growth is comprised of approximately 20% on the pricing side, and then around 20% pre-orders for delivery in 2027. And we see that as you heard from Peter that with this market situation, the lead times are moving out. So around 20% of the orders that we took this quarter are scheduled to be delivered in 27. Net sales up 25% to 1168 and in comparable units around 24%. That gave us a book to bill of 1.34. We also saw a positive pricing impact starting to be translated through from the backlog, from the quarter one orders. And we also saw positive trends coming through in EV charging, aerospace and defense, as well as industrial sectors, which we were happy to see positivity there. When we look at the EBITDA result, around 139 million SEC compared with 94 million SEC last year. And that's despite an additional FX, a negative impact from FX of around 10 million sec. And we also had 7.3 million sec of transactional cost per board shark, which you saw represented in the North America segment of around 7.3 million sec. So despite those two things, we had a little bit of additional help from M&A as well. So we had BNB that we acquired last year, Multitech, and now BoardShark. But the biggest driver here has been strong operational leverage on the higher volumes that have come through. So that pushed us up to an EBITDA margin of 11.9 versus 10% last year. And you heard that gross margin has been stable over the past few quarters. But with that, I hand it to you, Peter.