Nederman Holding AB (publ)

Welcome to the Netterman Holding Q1 2026 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now, I will hand the conference over to speaker CEO Sven Christensen and CFO Matthew Cusick. Please go ahead.

Good morning, ladies and gentlemen, and welcome to this presentation of Q1 for Netherlands. Our headline has been resilience in the volatile market because it's been an eventual quarter again, and what we can see is that we are still strengthening our position in the world, although it remains very turbulent. The first quarter, we continued to advance the position in a very volatile market. There is high activity across all divisions. They're all having good pipelines, less good order intake. Because we had lower orders received, although the activity picked up at the latter part of Q1 and continued in here in April, and we will see what that means. We are strengthening our presence in the structurally growing industry, and by that we mean that we are entering new fields like food, farmer and life science related, et cetera, and resulting in a lower sales and EBIT or profit margin.

If I move on to some of the key financials, then, if we go on to... On orders received, as Sven mentioned, for the quarter as a whole, orders received were weaker than the very strong Q1 last year, it must be mentioned. Three of four divisions in Q1 last year are... I'll leave it at two of four divisions in Q1 last year had their record quarters for order intake. I don't want to get us into a debate on currency rates, but... Like Sven mentioned, all the activity clearly picked up, particularly during the second half of March. Negative currency impact, that's something that you and your analysts listening will have heard and will be hearing from lots of companies. It's around 9% quarter on quarter for us in Q1 this year. Orders ultimately were 1.267 billion versus just over 1.5 billion Swedish Krona Q1 last year. That's 6.7% down currency neutral, 9.2% organic. The chart that we see on this slide for orders received, you can see that basically half of the drop in ordering is currency related. On the next slide, sales. Lower than Q1 2025, I've put a comment in there in line with Q3 2025's order intake, which gives a little indication on the sort of lead times. It's not the same lead times across all four divisions, but 1.257 billion was approximately in line with Q3. Again, currency impact minus 9% also on sales. Currency-neutral order sales were down 2%, so less of a drop than on the order intake, and it's purely looking comparative-wise, organically minus 5.5. Profitability, these lower sales volumes are apparent. We did have very strong gross profit margins. Something that's quite pleasing is the increased productivity in our factories, We had rather good utilization in the factories in the ENFT division during Q1, which Sven can come back to. Unfortunately, currencies also affect profitability. Approximately 12 million kroner of the drop in EBITDA is pure currency effects, largely due to the US dollar, which was down quarter on quarter, nearly 15% compared to Q1 last year. Ultimately, what that meant was that the EBITDA for Q1 was 117 million versus 143 million last year. The EBITDA margin 9.3% versus 10.1. Earnings per share 1.31 crown versus 1.69 in Q1 last year. Cash flow from operations. Very slightly negative. It's a typical quarter one, I would say, in an Edmund. Well, typically what we see in quarter one is that we've received some orders just before the year ends and we've received down payments on those orders and we start executing on those. So the working capital development is usually less favourable in the first quarter. We are still lacking some larger orders for which we receive down payments. Once those start coming in, that will boost the cash flow from operations rather well. On the net debt front, very little movement, we could say, since the year end. Division by division, Sven. We start with ENFT.

Yeah. In fact, there are some creation technologies here where During the quarter, we had a bit low orders received, and that was mainly due to very few larger orders in America, where we could see a new hesitation to sign. However, the base business, as we call it, the traditional, the small projects, the ones that do not have to go to the boardroom, actually grew in the division. And there was a significant order intake growth for service as well, since we have, over the last few years, put much effort in growing in especially European and the North American organization to have a strong service, which also prolonged the relation with our customers. Profit margins increased versus Q1, and that is, due to operational efficiency. We have been talking about the investments we've been doing, not only in Helsingborg. We have a new factory set up in, for Oberland brand in the Detroit area. We are continuously upgrading now, and we've come back to that in Charlotte factory as well. And we had a decent capacity utilization in the factories, although there's plenty of room to grow that. But increased operational efficiency maintain our margins. And if we go to European market, we had an increase in orders received, and again, strong base business, mid-size, small mid-size solution orders. And then there were three major orders, and that was to commercial aircraft manufacturing, defense, actually naval area, and wood products. So that's what we see. If we look at America, as you have noted, the orders received Significance behind Q1, which, in all fairness, was a record year or a record quarter, but we've seen the hesitancy in U.S. markets to put the pen to the paper. One major order was, however, secured, and that was wind turbine manufacturing. Base business grew, and again, several small midsize orders, and again, service where we have focused over the last few years, as mentioned before, also in the U.S. market group. So, trials in neutral sales growth with strong service business. In Asia, lower orders received in safe-based business is also weaker, and it's a challenging market environment. Some cost cautiousness has been taken in some of the Asian properties. Key activities, we continue to launch new products. As you probably have seen, last year we spent almost 3% on R&D, and we see how that pays off. GoMax, I will not go into the detail, but it was again, we were again awarded a technological award And the reason will be how they formulate it for small technology with energy efficiency and sustainable design. Continual investment in operations in North America, we have started the further insourcing project in Charlotte for this division, and that will further lead to efficiencies our supply chain and in a further step there also more or less even less even if it's very little that comes from outside us 88 5 is local content in in this division in us we have launched new versions of the partner web shop so we continue our also our digital journey when it comes to being up to date.

When it comes to financials for ENFT division, orders received 578 million kroner in the quarter is 8.6% down, currency neutral, albeit from, like Sven mentioned, a record quarter at that time. Q2 actually exceeded that, but this was a record at the time. Sales, 592 million kroner, and an adjusted EBITDA very nearly in line with the same period last year, despite lower sales. So this is a little bit what we're talking about in terms of resilience. We've managed to keep the margin up, actually increased the margin in this division to 12.2% from 11.6% in Q1 2025. Moving on then to process technology standards.

Yes, process technology, here we have significant larger orders and projects, and it's glad to say that we actually had a water intake growth in the quarter. There were a few or several major orders secured, and again, a very strong aftermarket development there. We had strong growth, and again, we see the results of the a few years of focused activities. So, again, we got all the backlogs that increase. And if you remember, our acquisition of Neuropit, they are giving a positive contribution, both order sales and profitability. So, we are very pleased with that addition. The three parts, we start with textile and fiber. Here we see a continuous overcapacity, but also slight pickup. So maybe the textile segment has bottom out, but I will not promise that, but we'll see. But it's been a couple of years with very low demand. Again, we have the energy saving. It has a tech . All those have reached record levels. We've had 1,000 units here during the quarter. And again, we show the capability of technical leadership and new development and helping our customers to save energy in a world where energy prices are soaring. Foundry and smelters, we actually also here had organic growth in order intake. There was a very large order for copper recycling in the U.S. We had, over the few years, specialized in our technology to be and are the technology commercial leading part of recycling of metals and materials. And, again, positive impact from UACIP, continued strong activity within the recycling. However, there is a sign that they are a bit slow to take the decisions, but for a mid to long-term, recycling of metal will continue. The need of copper, the need of aluminum, we cannot have it which is the case in U.S., in Asia. In Europe, we're quite good, especially on aluminum, where we have 80 to 90% of recycled material. Customized solutions, stable development. New order in U.S. pharmaceutical industry. We are sort of moving in, as mentioned, to a little bit new territory. We have been doing it before, but we are more focused now on finding pockets of growth in this environment. We secured two projects in India, and that is geographical expansion. We are using our strong footprint in India for the textile and fiber, and from that, We are now increasing our capabilities and also taking in other areas from the division. Service business continued to grow. So again, key activities, sales of energy-efficient carbon-bladed fans for Textile Trans exceeded 1,000 units. Good milestone. We continue to invest in test center upgrades and ongoing improvement to existing product lines, again, where we show with our innovation capability and so where you can save energy and make your choice. So, again, we are far ahead of competition when it comes to technology and integration of the DFT tool solutions.

Financials for process technology, order intake was 346 million in the year, which was even at prevailing rates in growth, the currency neutral nearly 14% up. Euro equipped part of this currency neutral growth, but even organically, like Sven mentioned, we've gone up there 2.9%. Sales vary slightly down to 320, or slightly down to 321 million kroner, but adjusted to beta is increasing, 29 million kroner is 9.1%. You see there the boost from the growing service business, for example, which has the stronger margins. So 9.1% on rather modest sales figures is what we see from process technology in Q1. Duct and filter technology, then, Sven.

Yes, Dr. Filter, here we've seen, and it's very much based on the U.S. side, where the majority of the states come from, development in the quarter. We had a bit of a decrease versus the record day Q1. So the year started very slowly, but it picked up later in the quarter. And again, of course, based on this, there is very limited backlog, the sales decrease versus Q1 2025. But we do deliver solid profitability with very good factory efficiency. As you remember, we have now invested in the two parts of and fulfilled two parts of the manufacturing in Thomasville. We have automated, we have invested in new technology in both standard sizes and also in now inaugurated the XD, which is larger dimensions. And we see how that, despite the fact that the volumes are a bit slow, can maintain good gross margins. Again, of course, massive negative currency effect since most of the difference is in U.S. dollars. Northub, which is deducting, we saw increased activity in March, and that was actually giving us organic growth for the quarter as a whole. Project with battery manufacturer made a significant contribution to the order intake. And that was very much so that EV battery factories are now converted into battery factories for storage, et cetera. So we say maybe some of that business is rebouncing and coming back. EMEA orders receivables have increased slightly compared to last year's Q1. Bernardi, with his filter bags, had a very slow oil intake, but saw slight recovery in March. EMEA performed well, but it's a much smaller portion of that subdivision. Launch of BIM toolbar, US and Europe. Launch of Hydrodactyl Australia Thailand. Solar panel installation in Thomasville is providing significant reduced environmental impact, and also, The sun is shining in North Carolina significantly more than here in Helsingborg. Continued investment in tools and equipment to enhance product quality and streamline manufacturing, and as you see, we are seeing positive effect of the automation in and the significant investments we have made in manufacturing and logistics. It's not only the manufacturing. It's also the setup with now, which is giving us capability of balance and have more efficient manufacturing. We have started the project where we have the sub where we have possibility to have a shorter lead time. So we have started opening in Texas, Dallas warehouse. We are only shipping the emergency part directly. The rest we take from a warehouse. And again, we have been able to have 100% delivery accuracy despite the hike in orders in late March.

very positive for the market and we are getting new distributors who want to work with us financials for duct and filter technology all external order intake was 180 million in the quarter down from the record q1 last year 224 and that's 7.4 percent currency neutral uh Obviously, as Sven mentioned, the currency impact on this division is very high. Sales, 194 million, down from 241. Adjusted to beta, 37 million kroner is 18.9%. And we think, again, this is showing resilience. Last year Q1 was 22.1%, which is their highest quarter for this division in all of history. But 18.9%, still rather pleasing on somewhat more modest volume levels. If we then move on to final division, Sven, monitoring and control technology.

Yes. Monitoring and control, here for the quarter, we had a real decrease in orders. Revenue was also decreasing, but there were very big variations between the different . And of course, with the low sales volume, the profitability was reduced. If we look at near monitors, the total oil intake was slightly reduced, and that was due to Asia. That halted a bit in the quarter. We have seen growth in the U.S., and we have over years have seen significant growth from near monitors in the US market, where we were a very small player a few years ago, but by the investment in US office and service organization, which is now consisting of up to, if I remember correctly, 12 persons have given direct access to the petrochemical industry in the area. We also see that it leads to major orders, and we are deepening our cooperation with the large ones since we now are located with a strong service team in the neighborhood. The European orders since age grew organically, and they have stayed in demand. significantly increase the production efficiency, all of the manufacturing, real and manufacturing is going on in Oslo, and we have restructured from a small almost call it startup manufacturing site T, an electronic assembly site that is much more efficient, much more quality, and that work is continuing. Just that, the order they produced, and it was partly on a non-repeat major order, but it's also punishing the large dependence on public sectors like customs, police, universities, that is a base business, and that has impacted, especially in U.S. and Asia, where there has been reduced spending in these sectors. But we have also received new orders from new customers in Singapore and South Africa. Auburn, based outside Boston in Beverly, saw organic ordering tape growth. We could definitely see that the ordering tape picked up in March. What that means going forward, we don't know. We had slightly behind as noticed on Q1 last year, but the orders are coming back. We have reviewed and updated the product portfolio, and that continue, and we are thereby getting the permits, the et cetera, and strengthening our platform for expansion in India, China, but we're also having other activities to go outside the U.S. market that is dominant for all those products. We have added a product like PM1 laser to upgrade, and that has given a new boost in interest on the U.S. market where we have a very strong position, but we want to also grow that in Asia and in Europe. Our activities in Asia were halted, but we are restarting them. They were halted due to the difficulty to sell from U.S. to China with 100% custom tariffs, which was the case in a period. But we are now restarting those activities. Again, key activities, loss of PM laser, new technology for new applications, targeted monitoring. We have established sales offices in Greyhound, Singapore, We have continuous improvement to existing products. We are also increasing the integration between Insight and Olisam, and also here an increase in awareness with customers, and we are linking these products together. ongoing new product certifications, and that's partly what's needed to bring in larger volumes of our urban products to Europe. We're also doing preparation for capacity and efficiency investment in GASMET facility in Finland, and that is linked to and is similar to what we've been doing in urban. And in Neil.

Financials for monitoring control technology orders received were 163 million in the quarter down from the record 249 million in Q1 last year. Remember in Q1 last year we had two orders in this division that alone combined almost reached 50 million kroner but nevertheless 28.5% down currency neutrals. Sales, 168 million versus 198. That's down 8.2%. We see the impact on the margin of the volume drop on this division. Adjusted to be to 20 million kroner is 12.1% versus 18% last year. If we move on then, Sven, to the outlook.

Yes. Demand remains subdued in many sectors, but the growing service segment and the very strong digital offering mean that we are performing very well in the current and certain markets. Following a very weak start, activity picked up towards the end of the quarter, which it continues with both welfare formats in the quarters ahead of the year. The pipelines are strong, but all the intake is low. At the same time, there is considerable uncertainty in the market, very difficult to forecast broader recovery in demand. However, when that gains momentum, we are extremely well-placed to improve our profitability. With a strong balance sheet, we continue to invest in operational efficiency and in continuously improving our offering. That means that we will be able to continue to strengthen our position regardless of the market situation. But in a world where awareness of damage that poor air quality does to people is growing, Nierman with its leading offering industrial airfiltrate has an important role to play and a good opportunity to continue to grow.

Briefly on the financial calendar then, we've got our annual general meeting next Tuesday at 4pm. The interim report for Q2 is released on the 16th of July and the Q3 is released on the 21st of October. The year-end report will be released on the 12th of February next year. And with that, I think we can open up 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 from Handelsbanken. Please go ahead.

Good morning, everyone. Two questions from my side, please. To start off with, you mentioned that activity picked up towards the end of Q1. Could you give some more color on what drove that improvement in the final weeks of March and whether it was broad-based or more concentrated in terms of both divisions and regions?

I can say across the divisions it was rather widespread. Process technology is more volatile, as you know, August, so their large orders come in when the board decision happens, the large projects come in. But we did see in monitoring and control technology in ENFC and induction filter, we definitely saw a pick-up in it. So it was rather broad-ranged. Regional-wise, There's no reason that sticks out one way or the other in that case. APAC is still slower, and we think that is likely to do with what's going on. It can have something to do with what's going on in the Middle East right now.

Thank you very much. That's very clear. I know you've got approximately 5 million Swedish krona in cost going forward. Could you perhaps elaborate a little bit more on what kind of products or shipments that primarily relate to now given the past year? We have an update that we're fixing 232 on steel-based products.

Yeah, that may benefit us. And we're not doing this in order to – so that will likely benefit us somewhat, assuming we don't change anything in our production flows. On the other hand, we're also investing in the production in the U.S. in Charlotte, which will mean that slightly less is sent transatlantic. So this is still rather small impact for us. We're not changing anything strategically based on the tariff now. And we will not be in foreseeable future either.

All right.

Thank you very much. Thank you. I'll go.

The next question comes from Anna Woodstrom from DNB Carnegie. Please go ahead.

Thank you for taking my questions as well. So, firstly, I just want to ask to confirm that the number of employees is down. So could you maybe elaborate a bit on this relating to cost savings or something else?

Number of employees is largely related to production sites. It's not, there are, we have made some cost savings in APAC, but that's relatively small relative to the number of employees. relative to the number of reduction. We do have some temporary employees that fluctuate over time and at the moment obviously with less volume we are able to adjust the production capacity accordingly. But it's not a major restructuring that you're seeing there or a major

And we also have the fact that with the optimization in the different factories, you have here and there, you have two less needed because you have automated with . You have two less there and so on. So that's an ongoing process. It's not, we have not seen the need for a larger restriction.

Okay, perfect. Thank you. My second question is on how, if you maybe could give some details on how we should view the data infiltration technology margins, just given that we probably have a lot of effects, so maybe some sort of guidance on how that specific margin would look if we didn't have the spec US dollar.

Yeah, the margin in itself in percentage terms isn't massively effective for that division because the vast majority of them are also there. So there's not an awful lot that's going transatlantically. The Swedish kronor is when we translate is the main issue with that division. Margin-wise on that division, like I mentioned, we're rather pleased with the 18.9% they do, and that does show that, for example, where we've introduced these AGVs into the factories and a little more automation, we have seen a reduction in the direct labour percentages for that division, which is making, even on modest volumes, we've got rather good margins. So some volume increase ought to give even more leverage in that division.

Okay, perfect. And then also a specific question for Gasnet. Just thinking now when public spending seems to go down quite a lot, are there any specific customer segments that you sort of try to increase your sales efforts towards?

Yes, they have a handful there. but it's mainly to start more, have a broader geographical base for the existing, because that is something ongoing. They have a growing cooperation with Olisem, and hereby also increase their aftermarket capabilities in that area. So it's energy and it's APAC. that we need to further grow. But it's also a problem. We don't know what would happen in the U.S. spending, because that is a significant part of it. That has been universities, other schools. It's been customs authorities, police, and so on. Their spending has gone down dramatically over the last six months, I would say. But I think we will... I can't give you a promise that it will be a boom within a couple of weeks, but we are working very strongly to find, as we have been doing in other, if you look at the EFT, for instance, when we acquired, when we acquired Robobent, 85% of our sales were auto-related, and the downtown in that market would have given us a significant of our sales. But by using the knowledge in using applications in food-related, other areas, we have now been able to maintain the volumes there. Although, both you and I would have liked it to be icing on the cake that we grew and still had a significant output. But now we see that maybe the auto industry is starting to reinvest again. We see that there's a lot of service orders coming in, and that's the first sign that they are reopening their lines.

Okay, perfect. Two more from my side. And so, firstly, looking on the product mix that you're having in the order intake, this is something that we should be aware of in terms of, like, margin impact for the quarterback.

Not really. You could say if I say process technology, they're still doing very well on service, so that we expect their rather good margins will continue to be solid. ENFT, a little bit growing in the service business as well, so that also helps. Monitoring and control technology, one of the issues we have there and why we were a bit low is some of this public spending is on these portables, these portable units, which do have extremely good margins. So that is less solid. But I would say process technology and ENFT have got healthier margin backlogs than they had 12 months ago, albeit lower in absolute numbers.

Okay, perfect. My final question is, Yes, go ahead.

Yeah, but you could also, that can filter has also very, since we, as mentioned, we had very low portion of personnel cost. It's extremely low, and that is several percentage units down since we made the investment over the last few years. So, that means that an increase in volume or a recovering in volumes will have also, in that division, very strong impact.

Even a modest increase across the group in volumes should increase the margin quite significantly, we think.

Perfect. Just a final one. If you could tell us a bit on if you know of an impact yet from the Middle Eastern conflicts from the oil and gas customer? I mean, you mentioned one order, but that's related to this.

The impact is very hard, because the biggest impact is the hesitation and what we've seen, the hesitation to sign larger contracts, and the, it's the same as when we had what they call Liberation Day, it's not the tariffs as such, it's more the insecurity among our customers, and that means that they are sort of holding back on doing the large investments. And part of the problems in, or the overcapacity in, textile fibers related to the uncertainty also. How can you ship things over the ocean? And what is happening? And where should you invest? Should you invest in Carolina, Guatemala, or should you continue doing India and so on? So it's more the uncertainty that has an impact. Then there is, of course, potentially an issue as we had during COVID period on shipment capacity and so on, if we get the vessels back around in Hormuz Sound, Hormuz Strait, or in Suez, or wherever.

So, I didn't say... I'll try and pull out one positive out of the Iran conflict, might be, but we have, and like you said, we haven't seen it at all yet, and you may be hinting at this, Anna, if this drives investments in Oil and gas.

Petrochemicals.

Petrochemicals or anything around the world. New investments, if countries decide themselves they need to invest themselves more, that could mean a macro boost for those sort of industries, which would be good, for example, for neomonitors, gasnet in particular. We've not seen it yet, but if I'm going to pull one positive out of it, there are Like at the moment, this hesitation is the key issue for us. So, as you say, it's hesitation.

Okay. So, you have yet to see sort of actual cost increases for you that you need sort of customers that haven't.

That has been tough. There is some, of course, that will come on plastics and so on and polymers. Steel has gone up a little bit due to the energy cost and so on, and they are seeing some increase. But that is so straightforward so that you can handle and you can make a sort of business. If you go on a plane, you will see on your ticket that we have added a surplus energy costs and so on, and that's not a big issue to handle. It's more the uncertainty and the lack of volumes that is problematic.

Okay, perfect. Thank you so much. Thank you, Anna.

As a reminder, if you wish to ask a question, please dial pound key five 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.

Thank you for taking time listening to us, and we will have the annual AGM meeting on Tuesday, and we will have a short comment from that as well next week, and after that, we will be back for the second quarter in July. Thank you for taking the time.