PowerCell Sweden AB (publ)

Welcome to the PowerCell Group Q3 2025 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 the CEO, Richard Berkling, and CFO, Anders Döring. Please go ahead.

Good morning and a warm welcome to this quarter three report on what is a very busy day on the Stockholm Stock Exchange with a lot of companies making their presentations. So we're extremely happy to see that many joining us at PowerZone. So we have closed quarter three and we are quite happy with the outcome. Previously, in quarter one and quarter two, we reported with the headlines of steady pace through rough waters in quarter one, which actually gave a good description on how quarter one played out. Quarter two had the headline steady pace through improving waters, really showing that we saw improvement in the market. And now the third quarter, what it's describing the headline is the steady growth and solid margins, which actually described the company quite well where we are at the moment. We saw a good growth in Q3 compared to 2024, up 90% compared to last year. Year to date, it's up over 50%, which is quite encouraging. Gross margin is starting to continue to improve. although not on record levels, but we have talked about this before, that we see volatility over the quarters. Also encouraging to see that the ruling 12 months revenue remained over 400 million SEK, which is the top line momentum we want to have in the company. Also encouraging that we protected the EBITDA in a way that we're still positive overall. So, can you hear me now? Hello, can you hear me? Yes. Go ahead, please. I was kicked out for some reason. So, continued positive EBITDA on rolling 12 months, also very encouraging. This is one of the focus areas we had for PowerCell, I would say, since the beginning. We need to show a break-even level also in the early stage of this technology shift, so this is quite interesting. Anders will go more into details on this. We managed to leverage on the fixed cost base and drive growth and then despite having a slightly lower quarterly volume. So we're really happy with this progress that we can now show. Also some orders in quarter three, although I would have expected or hoped for more, but it's also quite volatile in this market. What is encouraging is that we continue to see more OEM orders in the marine sector where we now broke into the bulk carrier segment with the world's first bulk carrier to GMI Rederi in Norway. So quite encouraging to see how the quarter was playing out. What we are in is a time of very focused execution where we also see then quite good tangible process. I would say that the middle section here where we talk about the operational resilience is what is most important to me. We managed to provide a positive EBTA on rolling 12 months because we are now in delivery mode. We are now actually tomorrow shipping the final shipment to our large Italian marine OEM. which means that we have completed deliveries of all those orders. And now in quarter four, we are ramping up the final production assembly and we'll complete delivery to Torhouten up in northern Norway with a large two times 6.4 megawatt ferry installation, which means that we have now actually managed to build a company that is industrially stable. Starting production as we did in April this year is always something that you need to ramp up and industrial stability doesn't come for free. So the fact that the organization has been able to pull this off, deliver high quality on time or even before time is something that is a very important quality mark for Powercell. So the focus execution is something that I think that we should talk more about at Paracel. Quite often we talk about growth and we talk about the innovation of the company, but being an industrially credible partner is something that is going to win the orders going forward, because with the OEMs that are placing the trust in new technology, they also need to place the trust in a very, very stable partner. So this is something that we're quite happy to be able to provide and also report. And we also see, as we said, repeat the demand around the marine system 225 that we introduced last year in June. And that has been a very strong commercial success based on the fact that it is world leading when it comes to performance, when it comes to energy density and when it comes to the value it creates. for the customers that put this into operation. And then for Powercell, once again, the operational resilience that we were able to start production and work on productivity, efficiency, protecting the gross margin, which is extremely important for Powercell going forward. So the combination of this is something that I'm quite happy to be able to report. With this I would like to hand over to Anders on the numbers and then I will come back and talk more about the outlook and how this connects into the broader context.

Thank you Richard. I will take the opportunity to just run through the numbers. I think these numbers after having listened to Richard are in a way that of course the 19% growth is something to notice. I remember us saying in the beginning of this year, and even at the quarter four report last year, that we would find some more stabilization between quarters. And I think the third quarter is another evidence for that the more even, let's say turnover in each quarter is there to stay for the future. Gross margin is slightly up, that is, I mean, to the volumes we have and to the product mix we have when we sell, the variation of six percentage in a single quarter is not for us anything that is unexpected. It's more important to look at it when we get to the accumulated numbers and understand why the changes are there. ebitda i think it goes without saying that we are happy with only being at minus two given that we have taken five million in provisions for the reorganization that we have announced and i think the the uh the burning platform and that what everyone is more concerned about uh listening to us today is the operating cash flow uh i think we have been quite explicit in the report uh describing what has happened in the first three quarters this year i think um that having listened also to now Richard saying that we're in final deliveries of uh immediately one of our larger orders ever and then continuing final deliveries on the second one everyone can understand what that will do to cash flow as we progress into the future quarters of this year and the beginning of next year so we go on to the accumulated numbers and We look at this point basically on the gross margin. Everyone recognized from the second quarter that we had a a large deal with Bosch that brought in a lot of gross margin to us given the fact that we were selling IP and of course for the remainder of this year we will still see a on an accumulated level a very high gross margin based on that deal that is a level that if I would guide anyone on this thing may not be contained over the near future we hopefully get back there later on but short term in each quarter, that level will not be maintained. I think it's important to also see that if we look at Richard mentioned operational leverage, you can claim a lot of things about what different things derives from. But one thing is for certain that given the turnover we had last year, given the turnover this year, and the change excluding for all unusual items in the different accumulated book numbers are about 88 million kronor. And that for us feels very strong, acknowledging that at least half of it done when you make comparison derives from the deal we made in Q2 with Bosch. But still, it's a very impressive, for us at least, change in how we manage profitability and earnings in the company. And as I mentioned, and as I've highlighted to the right in this picture, background being given and everything that we feel completely comfortable about is that we have passed a lot of what has been described as the reason for building up working capital. And we also come to a stage where we can see that we are delivering and what follows with that. So moving on to the next one is basically saying that we feel comfortable having a stable path. We grow 30% plus in our industry. If we went back five years, I guess that would be viewed as very humble. If you flip it around and say that if this is an industrial company in an earlier stage of the market, it's a number that I feel that we are very comfortable with. And also that we have brought on rolling 12 base EBDA to a positive number of 21. And that makes us feel comfortable for the future as well. Having said so, I will leave it back to Richard for the continuation of the presentation.