Nederman Holding AB (publ)

Good morning and welcome to this conference call regarding Nerman Group Q4 2025. interesting year and what we can conclude in Q4 is that we had higher orders received and a stronger business. We have during this challenging period continued to strengthen our leading position and we are working with market leadership, technical leadership, commercial leadership and operational leadership that our focus during this period. If you look at Q4 we had good organic growth if you consider it on currency neutral basis. We also had a currency neutral growth in sales and we believe that is very positive given the market conditions. We have delivered good cash flow and we have continued to invest in operations and also in R&D and these investments have provided a very solid basis for the future. We will have higher margins and better efficiency when they regain some momentum in the market.

If I look at some of the key financials now, orders received grew currency neutral in both Q4 and the full year. It's very hard. And some of you who've listened to a number of these hearings already in this year end season might be tired of hearing about currency neutral and currency effects. But it's really very important to take this into account when analysing the numbers. We sales as orders received the Q4 1.38 billion versus 1.4 slightly over 1.4 billion last year. So on the face of it, that looks like a decrease. However, organic growth was 4.7% in the quarter, currency neutral, including some of the couple of acquisitions from Euro equipped that we acquired back in March of 2025 and some from last year. leaves us at 7.3 percent unfortunately currency effect on orders received and actually on sales in the quarter was over nine percent um for the full year 5.55 uh billion was the full order intake that's growth currency neutral of 1.5 percent slightly negative organically minus 1.3 and uh still obviously for the full year a clear currency impact On the sales side, again, currency neutral growth for both Q4 and the full year. Just over 1.4 billion in sales in the fourth quarter versus a very strong Q4 of 2024. It must be pointed out 1.62 billion was very high for the narrowing group. Currency neutral, that's 1.3% up in the quarter. For the full year, 5.78 billion kroner versus 5.9 billion kroner. last year, 2024, three and a half percent up currency neutral. So we see in these market conditions and the current investment appetite that three and a half percent currency neutral growth is rather strong. Profit wise, like Sven mentioned, these investments that we've done in our operations have improved the underlying profitability. releases of new products we has boosted sales in uh for example pro uh process technologies aftermarket um adjusted the beta for the quarter four 159 million versus 185 million for quarter four 2024 that's uh that's a drop of uh 26 million 22 million currency effect in the quarter please take that into account when analyzing this that The 159 million leaves a margin of 10.6%. Earnings per share is 186, therefore, versus 249 in Q4 last year. Full year, adjusted EBITDA, 627 million versus 708. EBITDA margin, 10.8 versus 12%. And the earnings per share, 7.8 versus 983. When looking at the full year results, we had a currency impact on a beta of approximately slightly under 70 million kroner. u.s tariffs were approaching 15 million for for the group as a whole and then we did have a couple of one-offs you remember in 2024 related to a property sale and a company sale in china the sum of those is just under 100 million so when comparing 708 to 627 million for the full year please take that into account cash flow good cash flow in the fourth quarter very very good cash flow actually in q4 of 2025 not quite as good as the cash flow in the the I think that was an all-time high for one quarter cash flow in an air demand group in Q4 2024. For the full year, £382 million. Again, rather strong. This is important that we maintain a good cash flow. This has funded a lot of the investments that we've been making in our operations. We can see that on the right-hand side of this slide, that net debt has decreased over the past two quarters, although it is higher than it was 12 months ago. We've made significant investments in our operations. We've also acquired a new company and paid out a dividend during the year, of course. If we go right, try and break things down on how the business is going division by division, then send and start with extraction and filtration technology.

Yes. Extraction filtration technology Q4. We had more. large orders both in Americas and EMEA and that gave an increased order intake versus last year. We grew sales in Q4, currency neutral, we definitely improved operational efficiency and that was driving profitability and the Fulia EBITDA was up 10 million and if you would consider it the currency neutral close to 50 million which is a strong performance in a very challenging market. For the regions EMEA we had increased order receive we had major solutions orders and we are growing our aftermarket business which has been on the strategic agenda for several years. we had two very big orders in belgium for welding and one in sweden operate the nuclear industry in america we had actually double digit growth in order and sales there were several larger orders several of them came from defense and aerospace industry where we have good solutions and our um concept of clean air optimized with the energy savings and logarithmic cetera has given us some success here. Then we have the orphan APAC. One major order was secured to aerospace, a strategic and prestige order. But overall, we are not doing a very strong performance in Asia. Both orders and sales dropped significantly. Key activities during POE has been preparation to modernize the facility in Charlotte. It will further strengthen US supply chain and operational capacity. It will shorten lead times, which is one of the biggest advances, but it will also take away over time some tariffs and other challenges. Continued investment in the new innovation center in Helsingborg is ongoing and we have a fully booked innovation center for the full year 2026 and we will also see new products and solutions coming out of that. Testing and validation of current and next generation products in the innovation center is ahead of new launches.

When we look at the financials for ENFT division, orders received for the quarter, slightly irritatingly, 0.5 million below the same quarter last year, even at prevailing rates, currency neutral growth 7.9%, which is purely organic in the case of this division. Sales, 686 million, left and adjusted a beta of 96.4%. million, which is 14.1%. It's ahead of Q4 2024 in both SEC and in percentages for the full year. It beat up to up to 362 million krona from 352, as Sven mentioned, the currency neutral, that's 48 million up, the margin increasing 13 points up to 13.7%. Some more efficiency in the operations investments, for example, in the site in Helsingborg and in Markey have contributed to that. If we move on to process technology then Sven.

Yes, process technology more dependent on larger projects and have had a challenging period, but the activity picked up towards the end of last quarter. We had a currency neutral order growth of 15%. We also had some sales increase versus Q4 24. We have had some positive contribution from EuroCrip that we acquired. end of first quarter last year, and they are integrated and doing a very good job working with the rest of the Nerman team. The service business continues to perform strong. Customers are focused on maintaining compliance and ensuring the efficiency of existing installations, and this is, of course, a result of the lower willingness to take decisions on larger investments. If we look at textile and fiber, there's still a very low investment appetite and that goes for the global market as such. There is still overcapacity globally in spinning mills and also in weaving mills and that has a negative impact on our sales here. However, we are growing the service content. The order intake did, however, increase slightly in Q4, meaning that we are taking market share, especially in India, where we have a very strong organization and some neighboring countries that we supply from there. We're going to foundry and smelters. Eurequip supported an increased order intake. It's very good. addition to Spanish speaking area. We had one large aluminium order in Australia and some local production in India have enabled deliveries to several smaller foundry projects there. That is something we have tried out to get inside the tariff barriers and also shorten lead times by using our strong capacity and capability in India and increase their scope by doing under the supervision of our German expert team doing fs filter which of course is technical number for you but it's a it's a configurated large for hot air application like small foundries and cementers this is something we will continue to further develop for the region to take a position in apac Customized solutions, orders received increased. It was boosted by large ordering use from pharmaceutical industry. And again, our service and aftermarket is developing well. Key activities has been the investment in upgrading test centers, upgrading buildings in Germany, including solar panels and inefficient heating. We have continued positive trend for service and aftermarket business. And that includes our digital offerings, our continued strong demand for energy efficient fan for textile. This again, the very large energy saving that you get from newly developed high-tech fans for textile.

spinning weaving industry and we are soon selling our 1000s new replacement fan for that financials then for process technology orders received 384 million is an increase from an albeit modest 368 million in q4 last year but nevertheless currency neutral growth 15 percent um sales uh a stronger sales quarter for for the division than the earlier quarters of the year 456 million resulted in a beta of 44 million kroner 9.6 which is quite good for this division risk it's below a very strong q4 last year 11.1 that included some concluding some for this division, high margin projects then. But 9.6% is pleasing. The mix with higher levels of service business helps that. For the full year, adjusted EBITDA, 144.7 million is 8.8%. It's down from 182 million, which was 11. We move on to duct and filter technology.

Yep, duct and filter, the development during the quarter, we had a declining order intake, there were significantly fewer major projects, particularly in the US, and that has been very much linked to EV batteries, large investments that has flatten out. We have also seen that there has been the same problem as PT for large investments, larger investments in smelters, foundries, etc. And we are dependent on getting those wood industries, etc. Order activity, however, increased in EMEA. Sales was impacted negatively by lower ordering earlier in Q3. But despite the low volumes, profit margins remained solid. If you look at NordFab isolated, both orders received and sales decreased in the US, and that is the market that stands for almost 80% of division sales. Work continues on two large projects in EV battery manufacturing, which generate further follow-up orders. But as mentioned earlier, it's drying up a little bit with the EV battery market in the U.S. NordFab now is contributing to higher efficiency and profitability with delivery reliability of 99.9% during the quarter. So we are the leading and first choice when they want to have secure deliveries, quick deliveries. And we have also now, which I will mention later, started with our hub in Texas in order to further strengthen our reach in the US market. If we go to Minardi, orders received in the US increased in Q4, and that was boosted by new major orders to US steel manufacturers that are facing a revival due to the tariff protection. In EMEA, the trend remains stable. So again, the key activities have been new production and warehouse facility in Thomasville is completed and it's taken into operation. Thailand and Australia have launched new stainless steel products for the food industry and north of EMEA launched improved high vacuum vents and branch for easier installation. where our center is established in Dallas, Texas, to strengthen Nordfarm now. And Nordfarm now is our concept of being able to have next day deliveries. Amazon has spoiled people with very quick deliveries, and we are now following that trend, and we see good success in this new way of handling it. As mentioned, almost 100% delivery certainty. Nordfab EU obtained EPD certification for galvanized and stainless steel product families.

briefly on the financials for duct and filter technology orders received did drop 11 currency neutral as did sales sales of 179 million versus 229 million last year uh a beta 17.4 percent up from 16.5 percent last year okay it's down in absolute terms but this is we we see the efficiency from uh these investments we've made in uh in the operations units around this division uh this so Able to maintain good levels of profitability for the full year, 19.3% is the EBITDA, slightly down from 19.6% on obviously lower sales volumes. Monitoring and control technology then, Sven.

Yes, monitor control. The development during the quarter was that we had an increase in orders received, and that was fueled by very strong performance by Neomonitors in Asia. It's a division that has most success in the Asian market. However, the weak orders received in Q3 led to slightly lower sales in Q4. We are focusing on the service business and we continue to perform well in growing that part of the business. We are also here linking our OLISEM, the reporting system to our, especially the GASMAN project and seen success when we can package these things. Some segments Hydrogen Defence are developing well. Geographically wise, we look at EMEA. It was boringly straight. It was same basically as Q4. First portal analysis to defense customer in Germany and Switzerland has been delivered. And we have also the certification process of Orban's product line ongoing for European market. which when that will be finalized will give us access using also our Boston manufactured products for especially particle emission measurement available for the European market. In Asia, Neomont has so strong order intake, we have also come In this situation, we have more direct sales to customers. We are in more direct discussions with customers that strengthen our position. We have also increased the presence in APEC with small offices both in Korea and in Singapore. In the Americas, was the development rather weak. Few orders to public sectors, that is, customs, duty, and emergency services, educational institutions, where gas masks have had a very strong market with the portable units. However, with the financial restrictions in the public sector, we've seen a decline here. The exception is that the steel industry, as also has been seen in Menardi, is continuing to upgrade the old facilities, which has led to some new opportunities and orders. The key activities has been the launch of LG free ICL. That's a very prosaic name. Only an engineer or a PhD in engineering can come up with that very market friendly name. But it's there and it's an advanced laser gas analyzer for industrial application. The extension of Auburn's facility in Boston is completed. It was inaugurated January 21, but it was taken into use slightly earlier than that. What it means is that we have straightened the product and logistic flow, so we have now a test base and then more efficient testing operationally working in that factory as well. We have also preparations underway to improve efficiency and increase production capacity at Gasvent Finland. And we have attended some of the important shows in Asia to prove our willingness to be there and grow our market.

Financials for monitoring and control, 189 million in order intake was an increase of 10% currency neutral. Sales, 205 million is below what was a very, very strong Q4 of 2024, 241 million currency neutral. That's actually down 8%. adjusted the beta is 37 million kroner which is 18 that's an improvement in margin versus the year the full year average so we see we think or we are seeing some efficiency in the operations these investments in neo monitors and auburn starting to have an effect right away for the full year currency neutral growth was 1% positive sales 1% negative currency neutral and then adjusted a beta 129 million versus 144 in 2024 that leaves a full year margin of 16.7% to Sven our outlook yes and as for the last few years and especially this year the outlook is interesting but

The demand remains dampened in many industries. There are some areas that are better than others. We have a growing service business and a very strong digital range enable us to assert ourselves well in the current turbulent market. Following high activity in September, orders received continued to pick up in Q4, which if it continues would be very positive for development in the first half of 2026. At the same time, the market is dominated by considerable uncertainty, making it difficult to forecast a broader recovery in demand. But if it gains momentum, we are in a very good position to increase our margins. With a strong balance sheet, we are continuing to invest in operational efficiency, ongoing improvements to our offering, allowing us to continue to advance our position irrespective of the market conditions. In the world with growing insight into the damage that poor air does to people, Nerman, with its leading industrial air filtration offering, has a key role to play and good possibility for continued growth.

Financial calendar annual report will be released on the 17th of March this year. The interim report exactly a month later on the 17th of April for the Q1. Annual general meeting on the 21st of April, where we expect the AGM to approve the proposed dividend of four kroner per share. That's unchanged versus agreed. 2024 level. Q2 report will be released on the 16th of July and the Q3 report on the 21st of October this year. And with that we can open up I think for any questions that people listening may have for us.

If you wish to ask a question please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question please dial pound key 6 on your telephone keypad. The next question comes from Anna Woodstrom from DNB Carnegie. Please go ahead.

Good morning, Sen. Good morning, Matthew. Thank you. Good morning. So firstly, I just want to dive into price and volume in the order book. Given that there are some tariff effects, how should we think about volume versus price in the organic growth that we see in the orders?

um let me think that's that's that's a very good question um The currency, the tariff, if you're thinking in relation to tariffs, tariffs are not making a huge effect. The tariffs affect our costs by around five million sec per quarter, right, on approximately current, give or take on current volume. So on sales prices, they don't affect things massively. Then when it comes to when it comes to price, We're not seeing massive price movement in the market. We're very careful not to get dragged into a race to the bottom. However, we're not increasing prices significantly. So I think when you look at this organical currency neutral growth, it is growth that you're looking at there is the simple answer.

Okay, perfect. Thank you. And just to continue a bit on the tariffs, have you experienced any shifts in the customers' willingness to pay these new set of prices? Have they sort of been more keen on evaluating local opportunities or have they just sort of caused investment decisions? What's your view?

This is of course not something that you can empirically prove, but the biggest effect during this year is that the uncertainty that has been generated is that a lot of American large project has been postponed. We are talking about several hundred million PT project that has been postponed both in US and some also in Asia due to the uncertainty of what are the rules here. When it comes to other effects,

I could answer that maybe. When it comes to tariffs, we don't import an awful lot into the US. And what we do, of course, what we do is being impacted by certain parts of what we do is being impacted by this. But in the US, you have seen inflation, for example, in steel prices internally anyway. So it's not that our costs are significantly different to any competitor. and and i mean in fact we source approaching 90 percent of everything we sell in the us is sourced us anyway but we we don't think that we're a competitive disadvantage um related to these tariffs um then like you say the investment appetite is that yeah and and then you have some awkward uh sort of uh more emotional feelings that there's some

Canadian customers refused to take the product from our US factories, so we are now shipping directly from Europe, manufacturing in Europe instead. It has more to do with the emotional side of it, and that is things that are going on. So it's more that you have an uncertain world and animosity towards some. But EFT has more than 85% locally made in the U.S. Where we have some import is on MCT when it comes from Norwegian and Helsinki. But that's where we see that. Otherwise, we have basically in all regions manufacturing for the local market.

Okay, perfect. Very clear. Thank you. So then I just want to go into the margin development in EFT. So firstly, I'm very curious on the improvement that we can see here. How much of this is an effect from the improvements made in, for example, the Helsingborg site?

There are clear improvements made. If we talk operational improvements, Sven, we were talking... around 20 i think we were talking we we believe we've made operations improvements of around 20 million in total in the nft division through um through uh and and then it's very it's not exactly the same volumes that are going through but we've definitely made clear uh operations improvements we've they we've also seen a a part of the profitability boost is that we are We have seen good growth in product sales or a higher portion of product sales, which means we're filling our factory up even more with less. So there's more net demand content in everything we sell. But operations clearly, clearly helping. And 20 million is what we believe is a full year effect for 2021.

And we will continue to see effects of that. And we are now also investing further in order to, as mentioned, in the Charlotte factory, insourcing more. We will take less from our Polish factory. But the biggest advantage here will be that we are more competitive because we are shortening the lead time. This is the actions we are taking. going to use in other areas as well. And we're also looking at how can we utilize our capabilities in, for instance, Thailand, because there are free trade agreements between Thailand, India and some other areas. You have to play this game as well but generally speaking and when you mention EFT we will also say that the Neo monitors efficiency program where we have rebuilt and reorganized from a more prototype version of manufacturing to a more, when we now have got some volumes, we have also there significant improvements. Then we need some further volume. We have also four neoengagement set up in Suzhou, in China, where we now can service locally the equipment, rather than shipping them across the globe to Norway and so on. So that is also not saving so much of the cost saving, it's more attractiveness for the customers that we locally can handle their issues. It was a long answer, it was slightly outside of the... I hope that it was okay.

Yes, thank you. And just a follow up on the short term expectations, because I think you wrote something about the orders having quite a lot of solution and service in the order book for the division. Is that then perhaps a bit more of a negative effect for margins in Q1 if we just think short term?

probably not i think that i think that the okay i think this is my our assessment is that the service will out the service increase will continue to or the service reporter will continue to be high and that will encounter any shift between the products and solutions uh there that's that's the but i also remember we are doing very well in our solutions with our uh

Now I'm almost bragging, but our superior, we get better paid for our solution because this clean air optimized would include the energy safe system. It includes digital surveillance. It includes the good filters locally made. We have an attractive offer, and the reason why we get larger orders and these special orders to defense and so on is that we have proven concept. do not have to guess that it will work. We have done it. We've been there. We've done it. We got the winner's T-shirts before. And that we see, especially in sensitive areas like aerospace, defense, where we have good, strong performance.

Great. That's a perfect segue into my next question, because for several quarters, We've noticed that you mentioned large orders from defense. Do you have any sort of guess on how much of the order book or of sales that currently is towards the defense industry?

We don't we don't have a completely accurate figure on that. So I would rather not say I can I could do some I will do some research on that. We we will try to I think we will note this because it's not the first you're not the first person we've heard this question from. I think in the Q1 report, we will try to have some level of estimation there. What we should say about this defence is not in one particular region that we see this. Both Europe and the US, less so in APAC, but Europe and US is where we're seeing it. And it's different countries, some of the same suppliers, customers, sorry, BAE, we've seen them in Europe, US and the US.

And it's very much, you can say that it's the same, it's aerospace, which we've been a long-term supplier to Airbus, et cetera, that now also goes into multi-aircraft. You have vehicles where, for instance, our RoboVent company in Detroit has been utterly dependent on the local regional automotive market, which has declined significantly. But we have exchanged that by using their American favorite technology in defense for welding applications, but also in food and other areas. we have exchanged somewhat the customer base. And you understand that, what did they say? Ford company, they had $130 billion in losses last year because their investment appetite is not enormous. So we have to thank the customer base.

Great. I have a follow-up question on this. You're sort of answering it. If you notice that you have sort of gained market share within this segment or having a sort of preferred supplier position or if the growth that you're noticing is mainly from the growing of the defense industry in general?

I think the preferred supplier one you can say something we when you with these customers once you're in you are kind of you are in it's not to say there's no competition whatsoever but the likelihood of getting repeat orders is there and we have seen that where I can mention with BAE for example so it is it is happening in more than one country or more than one project so this signals that we hopefully that there is some stickiness on this on this business going forwards.

Okay, and then on the DFT edition, it stands out a bit on the organic water intake. Is this mainly from it having larger US exposure? Or what's your view of this?

They do have a large US exposure. It's around 80%, I think, US. And then they have, on top of that, they have a couple of, they were very strong in EV battery investments, which were happening late last year, and actually, sorry, late 2024, and actually in Q1 of 2025, we were receiving orders there. The other part of the market, they do have quite a large chunk of exposure to the wood industry still, a lot of which is construction related, which isn't super hot right now, but it's obviously a very, very important industry and will continue to be so. So what we've seen in duct and filter, like we mentioned, is the efficiency in the factory is clearly, clearly better, but they are lacking volume. It cannot be denied.

As you said, the margin is positive, and it's mentioned that improved production and warehousing processes in the US and Europe is a positive. Is this also a benefit from having a lower ratio of large orders, or should this scale from current levels very well when also that activity of significant large order comes back?

We have invested also in the production for the large adducting as well, so that you ought not to see a decline. If we were to get more large orders, you ought not to see a decline. And in fact, with more volume, you'll have more absorption of overheads as well. So we think this improvement is here to stay.

The improvements, the thing is, of course, we need to utilize the equipment and so on. But what you see is that we have been heavily impacted with EV batteries when we had a magnificent success over a year's period when that market grew. Now we have to do the same as we did with Oboe. We need to find new, attractive batteries. areas where we can supply. And we have to remember what we are doing is that we have in we are efficient and we are mostly used in combustible dust environment because that is a spec this is the specialty it is very clean interior in the in the ductwork and that is the importance uh here so um that's where we have so it's typically combustible dust in food, it is in EV batteries, it is in aluminium, wood, etc.

Great. Just two more questions from my side. The first one is on the Monitor and Control Technology Division that you mentioned, and you mentioned that I think in the last quarter as well. that the conversion to new technologies amongst customers is taking a bit longer than expected and connecting this also to the political uncertainty. Could you maybe expand a bit on this and if it's a type of customers that have found this trend more clearly or regions as a new app or something else?

Yeah, it's a difficult, what we see The main thing here and what has been tough is the decline in the public sectors. That has had a strong impact. What we then have to do is, of course, focus a little bit more on other sectors Again, like EFT has been doing and so on. If our current customer base are reluctant to do the investments, we need to work harder with some other areas. and and um i i think we've seen uh we are launching new products in in us in auburn where we are cooperating between neo and auburn and the combination here we we can do better We are working now with the GASMET OLSM on service and quick reporting response. It's been quite successful in this incineration business where reporting is a very important portion of it. We are building our sort of packaging it to be even more attractive, going slightly outside our current customer base.

In a controlled way. Perfect. And then my final question is on the capital expenditures, which is down year over year. um why you mentioned some initiatives in the report and so what level of catholics are you planning for during 2016 is there a difference of intangibles and intangibles

For 2026, I think the rate of product development, which is the vast chunk of our intangibles, that will continue. We're not going to ease off on product development, digital or actually new filters, et cetera. When it comes to fixed assets, what we can say on that, 2024 and 2025 were quite high years for fixed asset expenditure with a lot on a sort of longer term investments in buildings in helsingborg the one in robervent the north abducting one in the in the usa as well 2026 what are we doing on that front we're we're going to invest in the charlotte plant and to some extent but i think you can expect a drop in tangible fixed asset investments although it will still be on it historically if you went back five years on a rather high level As things are now, we would expect this to drop in 2027 a little more because we believe we will have a footprint that is there and can incorporate a manufacturing footprint that can handle significant growth without major further capex.

Great. Thank you for taking all of my questions. I'll step back in line.

Thank you. Thank you.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

We thank you for taking your time listening on this first morning and we'll be back for the Q1 report later in the year. So thank you very much, everyone.