Nolato AB (publ)

Hello and welcome to today's presentation with Nolato. Today we have Anders Bjorklund, president and CEO, and Per-Ola Holmstrom, CFO, presenting their interim report for the third quarter of 2026. We have a Q&A after the presentation, and if you're calling in and would like to ask a question, please press star 9 to raise your hand and star 6 to unmute yourself when given the word. You can also type in your questions using the form to write our broadcast. And with that said, I hand it over to you guys, and I'll be back when it's time for the Q&A. Go ahead.

Thank you, Eliott. Okay, my name is Anders Bjorklund and I am the CEO of Nolato since mid-July this year. I've been working for Nolato now for almost four years, but previously heading up the engineered solutions business area. Before joining Nolato, I was working for Sandvik and I was also part of the management team of the IPO of Alema. And together with me here today, on my right hand side, I have Per-Ola Holmstrom, the CFO of Nolato. Then turning into page number two, the summary of Nolato Group's third quarter. I would say it is a solid performance in the quarter. Our sales rose by 7% up to 2.5 billion Swedish crowns compared to 2.342 last year. If we adjust for currency and the two made acquisitions, we end up at a growth rate of 3%. What is very encouraging is that the medical solutions business area actually grows with 9%. But on the contrary, we had some headwinds in the engineering solutions business area, but I will come back to that a little bit later. We have finalized two acquisitions during the quarter and they are consolidated into our numbers as of September 1st and contributed to 56 million Swedish crowns. Our operating profit ended up at 254 million compared to 281 last year and if we adjust those numbers we ended up to 262 Q3 this year and 274 last year. Our adjusted EBITDA margin ended up at 10.5% compared to 11.7% last year. But as you know, we have invested in future growth programs in the medical area, and that has now impacted the margin for some quarters, and it has also impacted this quarter. The investments that I'm talking about is primarily related to our programs in Hungary, but also a couple of programs in the United States. The cash flow from our operating activities increased to 332 million compared to 301 and that is primarily due to less capital investments. We still have after the acquisitions strong financial positions with net liabilities compared to EBITDA of 1.0 compared to 0.5. Then turning into page number three and continue to talk about the acquisitions that we have made. We have made two strategic acquisitions during the quarter. Nolato Coltech and Nolato Unitron. If we start off with Nolato Coltech and describe them briefly. Nolato Coltech brings a business that is located in a medical cluster in Galway in Ireland. Their prime customers are within the medical area, but they are also strong in the defense area. Looking at the Unitron business, which is located in three locations, one in Holland, one in Belgium, and one in the United States, is primarily a development company, which is engaging with the customers in early concept studies. And it's a perfect fit into our offering of volume production that we have today. All together, these two acquisitions bring around 600 million crowns into the group sales. But I also would like to highlight actually that after the closure of the third quarter, 1st of October, we also finalized the divestment of our subsidiary in Romania, which has approximately 70 million crowns in sales. All these Three Transactions is a step in our portfolio optimization that we are doing to enable our strategy implementation for future growth. Going in then to page number four, which is an overview of the Nolato Group, which consists of two business areas, medical solutions and engineered solutions. If we then dig a little bit deeper into the numbers of medical solutions first. Medical solutions is operating in seven different product areas. And during this quarter, drug delivery has contributed to a good part of the growth of the business area. But we also see some good growth in the IVD area. in the cardiology area, but we also see a good growth actually in the pharma packaging area. Going into page number six then, we look into the medical solutions performance during the quarter, and I must say that I'm very satisfied with the growth rate of the quarter for medical. The sales rose by 12%, amounting to 1.469 million SEK compared to 1.311 last year. If we adjust it for currency and the two made acquisitions, it is still a growth of full 9%, which is very encouraging. As we talked about earlier, the drug delivery supported good in this area, but also some other segments contributed well. If we look into the EBITDA margin for the medical solutions it ended up at 11.3 compared to 12.1 and that is due to earlier talked about these programs that we have and also some headwinds in material costs. I really would like to emphasize that I'm very pleased with the strengthening of our offering through our two made acquisitions in the quarter. It is actually two very important building blocks in our way to become more of a complete global solution provider into the medical industry. Unitron will actually enable us to deliver a complete medical product and a complete medical product solution with both electromechanical devices and manufacturing of complete products. Looking into the second business area, engineered solutions, at page number seven. Engineered solutions is operating in five different product areas. And what is really encouraging during this quarter is that our material business grows significantly. The share of the total sales for materials is now up to 23% compared to 18% last year. We also see growth in the other business area, but that is mainly driven by the acquisition of Nolato Coldtech in Ireland. We see good contribution in growth from the consumer electronics. On the contrary, we see some strong headwinds in the automotive area. where the sales of automotive has now dropped down to 17% compared to 22% last year for the automotive sector and now actually automotive is only 7% of the total group sales. Turning into page number eight and looking into the engineered solutions more in detail. The total sales amounted to 1040 million Swedish crowns compared to 1035, which is actually adjusted for currency and acquisition a decrease of 3%. But it is a very strong performance from the team within the materials business, which now has an impressive increase of 27% in the quarter. And it is actually all three areas where they are operating that is contributing to this growth. It is the aerospace, it is the automotive, and it is the telecom segments. The consumer electronics segment, we have stable volumes. In the hygiene segment, we have some lower volumes, and they are affected with continued inventory adjustments. But we also see a sequential improvement for the volumes in the quarter. Looking at the automotive area, we saw a sharp decline with lower demand. It is primarily related to model changes among our customers. But I must say that we also are mitigating our cost to protect the margin in a good way here. The EBITDA margin ended up at 10.8% compared to 11% last year. I also here would like to actually highlight the divestment that we did at the first day of quarter four of our Romanian company. It is a step towards focusing engineered solutions into strategic selected segments that we have pinpointed. So by that, I hand over to you, Per-Ola.

Good morning, Per-Ola Holmstrom, CFO and Group Financial Highlights on page nine. Net sales was 2.5 billion, which is 3% organic growth excluding currency and acquisition. The adjusted EBITDA margin was 10.5% compared to 11.7% last year. The negative gap in margin mainly affected and explained by ramp up of larger projects within medical and remaining raw material lag and also automotive volumes and model changes at customers. The effective tax rate is normalized to around 23%. Cash flow from operating activities is favorable, being 332 millions compared to 301. And net investments excluding the acquisitions made was 191 million, which is similar to Q3 last year. CAPEX for the full year 2026 is expected to be 600 to 650 millions in line with the estimation we made after Q2. Last year, 2025, it was 788 million. So a low number this year is expected as planned. The net financial liabilities in relation to EBITDA, even after paid out dividend in Q2 and two acquisitions in Q3, still on a low level, 1.0 in relation to EBITDA. and a sustained strong financial position for further investments and acquisitions.