Good morning and welcome to today's webcast from Impact Coatings. With us today is CEO Jonas Nilsson and CFO Lena Åberg, and they will present the numbers from the first quarter, 2026. We'll open up for a Q&A after the presentation, and you can type in your questions using the form located to the right. If you're calling in and would like to ask questions, please press star 9 to raise your hand and star 6 to unmute when you get the word.
And with that, I leave the audience over to you, Jonas and Lena. hi everyone welcome to this first quarter 2026 interim report presentation here is the agenda for today's webcast we will jump directly into q1 and what the work in q1 has led to now in april our cfo lena oberg will take us through the financial then summer in outlook and a q a session at the end. So Q1 highlights and highlights after the period. Q1 resulted in a net sales of 12.7 million sec and EBITDA of minus 8.8 million. From a financial perspective Q1 was not great that's just how it is business development is hard ongoing work and the outcome can vary a lot from quarter to quarter but we are clearly starting to see the work paying off during q1 we brought in two new customers in coating services one in security defense and one in medical technology we also saw continued test orders with electrolysis and fuel cell applications from existing customers we would of course have liked to have more customers during the quarter but the work we did in q1 paid off in q2 in early april we added two more strategic customers one in pem electrolysis and one in SOFC. Both are in early stage but with really big potential. After the quarter we sold an IC500 machine to Korea. We received the order on April 10 and the usual initial payment we received on April 14. The delivery of the machine is expected to be done in Q3 this year. We also continued a discussion regarding an inline coater system to our long-time customer Lindbergh who is in the luxury segment. This is in line with the letter of intent that we announced on December 11 last year. So a few words about the machine order which we press released on April 10. This is an order within our electronic segment. The application is metalization of plastic waveguide antennas for automotive radar. The customer is HJ-WAVE, a Korean supplier of waveguide antennas for automotive radar sensors. And Korea is an important market with its large automotive industry. In addition to delivering the inline coater we intend to work together with hc wave to develop new cost efficient metal coatings for waveguide antennas to support their customers automotive radar is already a multi-billion dollar market and it's expected to see double digit growth many new innovations in the automotive business come from asia especially when it comes to electronics and also intelligence software in a news program piet moron last week they talked about the Beijing auto show maybe some of you also listen they said that the Beijing auto show is the biggest auto show in the world the show is running until 3rd of may so you still have time to go there anyway what came out was pretty clear a lot of intelligent self-driving cars are coming and for that to work cars need radars lidars and cameras to understand their surroundings people are talking about at least five radar units per car one in each corner and one in the front and all of those radars needs antennas. So this is what an injection molded waveguide antenna looks like. It's made from molded plastic because you need a complex structure to guide the radar signal correctly. But the plastic doesn't conduct electricity so it needs to be metallized. Most automotive radar antennas come in two halves that are soldered together and then the finished antenna sits in bumper so it's a pretty tough environment for the antenna therefore you need a coating that can handle adhesion and solubility it has to provide good antenna performance and provide corrosion resistance this is a very good fit for us we like advanced multi-layer coatings on flat surfaces And antennas, they are basically flat, even if they have some 3D features. If you look at the market, around 100 million vehicles are produced every year. If you multiply that by 5 radars per car, and then by 2 for the antenna halves, it's a big number. we're not there yet but this is a first machine to HA Wave who has a strong position in the Korean automotive value chain and good connections to the Korean car brands I mentioned that in April we took two strategic orders one in Sofc and one in PEM electrolysis these are test orders but from two very important players who are now paying customers to us. The orders are a direct result of the work we did during Q1 and now we're continuing that work taking them from initial sampling to real volumes. SOFC stands for solid oxide fuel cells. One of the application area for them is to power data center. We have talked a lot about SOFC as our strategic focus but that doesn't mean that we have left PEM. In our coding service center here in Linköping we have volume production to several electrolyzer manufacturers and in PEM electrolysis we see a clear consolidation in the market. Some are pulling out, that means fewer players, but stronger ones. That means bigger volumes and a more stable market. That creates good opportunities for us to grow our market share. The geopolitical tension affects the short-term investment willingness, but long-term it highlights that there's a vulnerability in the energy system and we need to work on energy independence and energy resilience. This interest in reduced fossil fuel dependence is something good for us who work with technologies that enable flexible and local energy production. in 25 we did a strategy pivot towards natural gas powered solid oxide fuel cells we talked about powering data centers and we also talked about energy resilience SOFC can convert multiple fuels to electricity so if there's a shortage of natural gas you can run them on for example locally produced hydrogen that hydrogen must be produced either in the same sofc system that is run in the other direction or more likely by pem electrolyzers the pem fuel cell market remains in a transitional phase with china's the driving force but also here we expect the drive for energy resilience globally, and particularly in China, to speed up the deployment. So all in all, although geopolitical tensions are bad in the short term, they are creating future opportunities for us. So going back to China, as usual, Chinese New Year's falls in Q1, which leads to reduced activity in our coating service center in China. but this year it was not just that we also had a transition between five-year plans which basically put the fuel cell market in a bit of a vacuum the old subsidies expired and it wasn't until mid-march this year that things started to become clear again regarding the new subsidy program the details are not fully defined but the overall direction and size are so if you're interested you can look at the china comprehensive hydrogen pilot program i recommend to google on that we believe that this program will continue to be the market driver in the chinese pem fuel cell market so let's have a look at the financials and as said before the numbers for the quarter could have been better but we are clearly seeing that the work we have put in is starting to pay off both in terms of system orders and new customers at the same time we have taken actions
on the cost side so we are in a better position as volume starts to come back so with that i turn to lina thank you oh let's start with the q1 summary um total net sales amounted to 12.7 million sec and coating services was the main contributor with 11.7 million of which 4.8 million relates to sale of metals in inventory part of the transition to the new metals management agreement the order backlog at the end of the quarter was 4.5 million compared to 2.6 in q1 2025 aftermarket has been slow reflecting the lower activity at many of our system customers So 1.0 million sec compared to 3.9 in Q1 2025. Operational costs, but excluding raw materials and supply, was 19.8 million sec compared to 23.6 million, clearly reflecting the effects of the cost-saving measures implemented. And the number of FTE in the parent company has now, after the quarter decreased approximately 42% since December 2024. So EBITDA improved to minus 8.8 million SEC compared to minus 12.4 and EBIT improved to minus 11.3 million compared to minus 14.2. Closing cash balance was 18.3 million SEC and we will come back to details in that cash flow statement. If we take a little closer look at the income statement, all the amounts will be in SEC million and compared to Q1 2025. Even though net sales for the quarter increased to 12.1 million total revenue decreased to 12.6 million compared to 19.7 million and this was mainly due to almost no change in work in progress this year while in q1 2025 it was 8.1 million gross margin though increased to 62 percent compared to 52 percent and the work with further reductions in cost of goods sold continue as i already mentioned operational expenditures decreased and other external costs decreased to minus 4.9 million compared to minus 6.0 mainly due to reduced consultancy fees travel expenses and costs for consumables and personal costs decreased to minus 12.6 million compared to minus 15.8 million and the number of FTE for the group by the end of the quarter was 47 compared to 61 in Q1 2025 then depreciations increased to minus 2.3 million compared to minus 1.8 following investments from previous years we had a currency gain of 0.9 million compared to a currency loss of minus 0.8 last year and operating loss for the quarter was minus 11.1 million compared to minus 14.2 million and we moved to the balance sheet and I will compare it to the year end 2025 The low level of investments, so total fixed assets, decreased from 68.6 million to 68.2 million due to depreciations. Inventory and raw materials decreased from 54.7 million to 51.0, and mainly in metal inventories. receivable decreased by 1.2 million to 22.3 million compared to 23.5 million at the year end an outgoing cash balance by the end of the quarter was as mentioned 18.3 million equity decreased from 154 million at the year end to 145.1 million due to the loss for the quarter then prepayments from the customers have decreased 4 million to 3.9 million due to invoice sales in q1 and short-term liabilities decrease 9.5 million to 33.4 million mainly due to repayment of the 5 million short-term loan in the parent company but also due to decreased accounts payables looking at the cash flow statement with the comparison with q1 2025 cash flow from operations before changing working capital was minus 9.1 million compared to minus 11.7 and cash flow from from change in working capital was minus 5.3 million compared to plus 8.5 million and the negative cash flow effect from this year is mainly from payments of short-term liabilities including payments of the costs connected to the rights issue of approximately 3 million and also the decrease in customer prepayments of 4 million so cash flow from operations was minus 14.4 million compared to minus 3.2 in q1 2025 cash flow from investing activities only 0.1 million compared to minus 2.4 and cash flow from financing activities was minus 5 million this year due to the repayment of a short-term loan in total this resulted in a negative cash flow of minus 19.3 million compared to minus 5.6 and a closing balance of 18.3 million compared to 26.3 million in q1 2025.
that was the financial update so we go to summary and outlook thank you lena so q1 was not a strong quarter from a financial perspective that's clear but what we are seeing now is that the work we have been doing is starting to convert into business we are adding new customers we are getting test orders and we are starting to see system orders coming through and that's the key our business is built step by step from test orders to coating services to volumes and finally to systems and with the sampling orders we have got we can confirm that SOFC is the right long-term strategy but with that said we don't stop working with PEM with antennas and with our other segments at the same time we have continued to adjust the cost base so we are in a better position as volumes are coming back so while the numbers in this quarter are not where we want them to be we do see a clearer path forward now than we did a few quarters ago and with that we open up for questions.
Thank you for this presentation Jonas and Lena. We open up for Lara from ABG. Can you please unmute your phone by typing star six? Welcome Lara.
Hi, thank you. Lara from ABG. Just a couple of questions from my end.
Firstly, in your report and also in your presentation you mentioned that coating services orders have been delayed a bit was this customer specific or would you say it was broader and would you say that activity has normalized now in q2 so far no this was customer specific and it's it's not it's not due to lack of need of coatings it's due to delays in the supply in in the plates and ptls to coat so there has been some some delays in in the supply chain so we have not get got the raw material in time which means that that some of the orders have been delayed you can also see that we we do have an order backlog for for coaching services when when we go out of quarter one so so it's it's not it's not due to to lack of interest okay very clear thank you and another one on your metals agreement that you previously released in december you um announced that the new metal agreement would reduce working capital needs by around 30 million kronos um and well in q1 you wrote that the positive one-off of 4.8 million was it was like as accelerating that transition so basically my question is how much of this 30 million has been realized so far and what's the expected timeline for the remainder yeah you can regard the 30 million like like a frame that that can be used and and with a transition now uh with the expedited transition from from the old agreement to to to the new agreement uh we we have uh better we we can uh apply that that new agreement uh more rapidly so what we have is we have a supplier that keeps metal in stock for us and we also have 90 days invoice of metals from from that supplier which we can use if if we want to of course everything comes with a cost so so there's no free lunch so this this is It's something that we can use when we want to use it, but we don't have to use it and we don't have to take the cost. So it's basically a month to month decision how much of that we are using.
Thank you. And you obviously highlight solid oxide as a key long term opportunity. but as you know the development cycles are long so what's sort of a realistic timeline for the first system order here often do you have any customers that have come quite a long way along the line or what should we expect yeah we do have several paying customers in in in the area of SOFC and as reported now after the quarter we took one very important strategic customer in in this area
and and we can also say that that the collaboration we have with with service power is is good in in this respect uh if you look at at service power they they they publicly announce who are the licensees and this collaboration it it gives a success to to their licensees so we are making progress but at the same time it's very hard to say exactly when will be the first system order thank you also you mentioned the Chinese Hydrogen pilot program that was announced in march have you seen any sort of tangible pickup here in customer dialogues or maybe in the pipeline since the announcement was it still too early would you say we we have seen in in the customer dialogues we have seen a clear difference so before it was announced uh everyone was was waiting and uh everyone thought that well china is going to continue in in the same way as before uh but without this pilot program uh our customers
didn't really know now they know that okay it will continue uh we haven't really seen that in in in production volumes we have seen it in in in some smaller orders and we have definitely seen it in in the customer dialogues okay thank you and just the last one from me aftermarket seems to drop quite a bit this quarter and of course this reflects low system customer activity and but do you think with maybe the the machine order you announced after this after q1 and the broad install base do you sort of think that aftermarket will recover and what
what can we see would you say that the current running rate is maybe the new normal or should we expect in this segment i i i expect it to to recover and there's a correlation between in aftermarket services and how much our customers are are producing uh if we look for china for example we saw that in q1 we had lower activity in in our coating service center it was not only the chinese new year it was also this this vacuum between policies uh all our machine customers they experienced the same uh they experienced the same chinese new year but they also experienced this this vacuum so the activity was low at our customer sites and if the customers are not fully utilizing the machines fully using our machines then of course the need for aftermarket services is is lower from my end thank you very much thank you laura um we have a couple of questions from the audience as well first question how do you get a collaboration with an industrial player once again how do you get a collaboration with an industrial player are you referring to the press release in December that that we that we are planning to bring in yeah I think the question this year yes yes we we are so so we are planning to to bring in an industrial investor during this year as we press released in in in december uh of course from an operational perspective the the focus is on on customers and and orders that that's our primary focus uh but with that said yes uh we are we are progressing according to what we press released in in december for example we have um we have contracted an an advisor for for bringing in a strategic investor so yes that's progressing thank you the hydrogen sector is often cited as a growth engine however the global adoption of fuel cell technology has faced some headwinds recently how do we impact coating navigate this yeah if you if you look in in a broader perspective Some years ago, some five years ago, people thought that passenger vehicles would be powered by fuel cells and not by batteries. The battery technology has improved a lot and also the adoption of batteries has improved. so so no one really believes that that passenger vehicles will be on on a sort of big scale power by by hydrogen but what we see is that uh trucks lorries buses uh heavy transports uh they they need our other power sources so so we we see traction there uh we see if you if you look at short perspective uh china is is sort of the big market for for fuel cells and uh last year we increased a lot in our coating service center so we doubled so in in 25 uh we doubled the production of fuel cell plates uh in our coating service center in china compared to the year before 24. now this quarter has been slow and we believe it's it's due to this this vacuum between between policies uh so we believe that it it will continue to to to be the driver the Chinese market will be the driver for for fuel cells but with with that said I mean um we announced our strategy pivot uh towards SOFC uh and and a big difference between PEM fuel cells for for passenger vehicles and sofc is that pen fuel cells that's that's mainly driven at the moment by subsidies now we know that the subsidies will continue but sofc market it's it has a commercial driving force so so the the strategy pivot was from from a subsidy driven market to more commercially driven market But with that said, we don't stop our activities in the pan fuel cell market. We continue to do that, but we believe that the growth will be in SOFC. Long answer, but I think it's your question.
Yeah, thank you, Jonas. One last question here from Finvair. What specific operational milestones must be hit to reach a break-even point without requiring further external financing or capital injections?
Yeah, sell machine. It's simple. We need to sell machines. Coating services is not enough, so we need to sell machines. And the machine order we took now in April is a good start. We do have the letter of intent with Lindbergh also, so that's also good. But we believe that we will sell machines in all our segments during the year.
Thank you both Jonas and Lena, and I leave now the final words for you from Impact Coating.
So, I would like to thank you for listening to this quarterly presentation. And especially I would like to thank our shareholders who participated in the rights issue in December. So, thank you.
