Operator
Hello and welcome to today's webcast where Impact Coatings will present its financial results for a second quarter of 2026. Joining us today are CEO Jonas Nilsson and CFO Lena Åberg. At the end of the call we will have a Q&A, so you are welcome to submit questions using the form located to the right of the webcast.
If you are calling in and want to ask a question, please press star 9 to raise your hand and star 6 to unmute your line when you have been handed the word with that said i will have hand it over to you jonas and lena please go ahead hi everyone welcome to this presentation of the second quarter 2026 interim report here is the agenda for today's webcast we will start with highlights and business momentum from Q2 and the big highlight is of course order intake of 39 million sec. We will also give you a tour of the coating services here in Linköping showing the production. Our CFO Ian Aarberg will take us through the financials of the quarter then summary and outlook and a Q&A session at the end. the main message from the quarter is that we had a strong order intake of 39 million swedish kronor we received two system orders in two of our main market segments we also increased volumes within coding services and continue to add new customers particularly in the energy segment net sales increased to 9.7 million sec mainly driven by coating services overall the quarter shows that the strategic decisions we have made in the recent years are gradually converting into customer orders and business impact coatings is active in four main market segments energy automotive electronics and lecture goods these markets may look very different but the applications have several things in common they require advanced coatings often on relatively flat components and they need efficient production at industrial volumes during the quarter we had good order intake in three of these four segments energy electronics and luxury goods this demonstrates the value of having a technology platform that can serve several different industries the fourth segment automotive remains somewhat quieter during a quarter and activity is still affected by the weak general development of the car industry but we continue to work mainly with existing customers in automotive particularly when it comes to decorative components that must be transparent to radar signals during the quarter we received two orders for our inline coder ic500 system the first order was from HAWAVE, a supplier of waveguide antennas used for radars. We shipped this system in mid-July, only three months after receiving the order, and we have now also done the installation and site acceptance tests in Korea. This short delivery time was possible because of our decision to build systems based on sales forecasts and keep key components and subsystems in stock. The second order was from Lindbergh the danish premium eyewear company which is now part of the caring eyewear group these two orders are good examples of how our platform can serve very different applications while using the same core technology i talked about the ha wave order and the waveguide antenna market in the q1 webcast so let's now focus on the Lindbergh order and the luxury goods segment Lindbergh manufactures premium titanium eyewear. Their frames are known for their design and quality and personally I think they look very good. Over the years Lindbergh has purchased eight coating systems from Impact Coatings. We have several machine customers in the luxury goods segments for example company coating parts for watches and at our coating service center here in Linköping we also provide decorative coatings for products such as medical earrings eyewear components for watches and earrings all have one important requirement in common the color must be exactly right. Our systems use a continuous process. This allows the customer to measure the result and adjust the process continuously to stay within very tight tolerances. Immediately when a part comes out of the machine, the color is measured and the process is tuned by the operator in real time. That is of course not possible with traditional batch coating systems. Coating services is an important part of our business particularly in the energy segment. It generates revenue but it also allows customers to test and qualify our coatings before moving to larger production volumes and before buying their own machines during the quarter one of the new strategic customers we discussed in q1 has placed substantial coating orders and has now passed 5 million sec this illustrates how our customer relationships normally develop from initial testing to qualification to growing production volumes and in some cases eventually to system orders. To show you what this looks like in practice I will now hand over to Peter our IR director for a short tour of our factory downstairs. It's a bit noisy in our production so you might need to turn and up the volume to hear Peter properly.
Okay, today I'd like to invite the investors and others to a tour of our coaching services facility in Linköping. My name is Peter Högfeldt and I'm the director of Investor Relations. And we will start the tour here in this corner of our coaching facility where we have the measurement capabilities. Here we can do flatness measurements, color measurements, thickness measurements, and electrical contact resistance measurements. If we continue here, we see one of our coding machines. It's an IC500 machine that we call the Bianca. And it's actually the machine that we have that has the most capabilities. It is configured here for almost everything. So we do cooking services for decorative applications, some materialization applications, and a lot of customer samples for a variety of applications. If we continue here in the facility, we come to the first IC2000 machine. Right now we have a colleague here, Hector, that is doing a setup. Hello Hector. Preparing for coming cooking services and next we see another IC2000 machine and this machine we have personal names for all our assistants and on this machine we are running cooking services right now for components for PEM electrolyzers and Eric hello Eric Here is doing unloading and loading of plates that are coated with various materials. If we continue, we come to an IC500 Plus machine. This was actually our original machine for fuel cell applications. This machine is configured for ceramic black spaces for fuel cell plates. You can see in this corner our colleagues doing visual inspection of plates when they come from washing before they go into the loading step in our production. And of course we do inspection and quality checks also for the loading.
So with that I will conclude this short tour, I hope you enjoyed it. thank you Peter so we have system orders in electronics and lecture goods and coating services volume orders in energy but as you saw we are not only doing volume production of PEM electrolyzers plates here in Linköping we also do coatings in our other business segments and due to high level of automation in our factory in Shanghai we run most of the customer samples here in Linköping. We have the same machine concept for all our business areas and we use the same machines from customer samples all the way up to fully robotized production lines at customer sites this is a competitive advantage for us let's leave the factory tour and have a look at our strategy our development during the quarter supports both our tactical and our strategic direction tactically we focus on the orders and business opportunities available today across us our four main market segments strategically we are building a long-term position in the commercially driven solid oxide market particularly in stationary power applications such as data centers and now we are starting to see concrete results from this strategy during the quarter we added three new paying customers in solid oxide applications winning three customers in a new market is an important achievement it's naturally more difficult than adding customers in a market where we already have an established position so let us take a closer look at the new customers we have added during the quarter in total we added 11 new paying customers during the second quarter three of these were in solid oxide applications five were in pem electrolysis where we already have an established position the initial orders from new customers are normally small our sales cycles are long because coatings must be tested qualified and approved before production volumes can increase these customers therefore make only limited contribution to revenue today however they create a foundation for future coating volumes and potential system orders The customer development during the quarter gives us confidence that our strategic focus is taking us in the right direction. So going back to PEM, PEM electrolysis for hydrogen production continues to be an important part of our energy business. During the quarter we added five new electrolysis customers and we continue to see substantial coating services production volumes from existing customers. The international electrolysis market is consolidating. Some companies have left the market while investment is increasingly concentrated among the companies with the strongest position and the best abilities to scale. Today most of the leading international electrolysis companies are paying customers of impact coatings and this of course gives us a strong position as the market enters its next investment phase we also signed a letter of intent with the south korean company lt metal at the end of the quarter to collaborate on the commercialization of iridium oxide coatings this can expand our business both with existing and new customers by adding more value to each coated component and by making the qualification process
easier for the end customer with that i will hand over to lena who will take us through the financial results thank you jonas and we will start with the q2 summary total net sales for the quarter amounted to 9.7 million sec and coating services was the main contributor with the 9.1 million more than double sales compared to the same period last year aftermarket has been slow reflecting the lower activity at many of our system customers 0.6 million sec compared to 2.1 million in q2 2025 the order backlog for coating systems was 29.4 million at the end of the quarter for the two machines sold in q2 and the order backlog for coating services was 1.7 million the same as q2 25 looking at the first half of 2026 total net sales amounted to 22.4 million compared to 16 million and coating services increased from 10 million to 20.9 million aftermarket decreased to 1.5 million compared to 6 million mainly due to some sold machine upgrades made in 2025 and they were reported as after sales operational Additional costs, but excluding raw materials and supply, was minus 40.0 million compared to minus 46.5 million, reflecting the effects from the cost-saving measures implemented. EBITDA improved to minus 19.5 million in the first half compared to minus 26.3 million, and EBIT improved to minus 24.1 million compared to minus 30.1 million closing cash balance was 15.2 million sec compared to 30.8 but with the larger order backlog and lower customer advanced payments than last year and we will come back to more details at the cash flow statement if we take a closer look at the income statement for q2 2026 all the amounts in sec million and compared to q2 2025 even though net sales for the quarter increased to 9.7 million total revenue decreased to 10.5 million compared to 14.7 million this was mainly due to the Low change in work in progress, while Q2 2025 was 6.8 million. Gross margin increased to 62 percent compared to 48 percent. Other external costs decreased slightly to minus 5.6 million compared to minus 5.7. personal costs decreased 3 million to minus to 12.3 million compared to minus 15.3 million and the number of full-time equivalents for the group by the end of the quarter was 41 compared to 57 in Q2 25. Depreciations increased to minus 2.3 million compared to minus 1.9 million and there was a currency gain of 0.6 million compared to zero. So operating loss for the quarter was minus 13.0 million compared to minus 15.8 million. Looking at first half of 2026 compared to first half 2025 uh net sales uh increased to 22.4 million compared to 16 million in the first half of 2025 but total revenue decreased to 23.1 million compared to 34.4 million and again this was mainly due to only 0.7 million in change in work in progress this year while the same period last year was 14.9 million gross margin increased to 62 percent compared to 50 percent and other external costs decreased to minus 10.5 million compared to minus 11.6 mainly due to reduced travel expenses lower marketing costs and lower costs for consumables personal costs decreased to minus 24.9 million compared to minus 31.2 million clearly reflecting the implemented cost reductions depreciations increased to minus 4.6 million compared to minus 3.7 million and the currency gain was 1.6 million compared to a currency loss of minus 0.8 million operating loss for the first half of 2026 was minus 24.1 million compared to minus 30.1 million last year and we move to the balance sheet and i will make the comparisons with the year-end 2025 We've had low level of investments, so total fixed assets decreased from 68.6 million to 68.3 million, mainly due to depreciations. Inventory in raw materials increased to 58.2 million from 54.7 million, mainly in components. There was also an increase in work in progress to 24.6 million compared to 21.7 for that's for the coming machine deliveries. Receivables increased by 1.7 million to 25.2 million compared to 23.5, mainly due to increased accounts receivables from increased sales. Outgoing cash balance by the end of the quarter was, as mentioned, 15.2 million compared to 37.4 by the year end at 2025. And we will come back to that in the cash flow statement. equity decreased to 133.6 million from 154.5 mainly due to the cumulative loss for the year prepayments from customers decreased to 1.1 million from 7.9 million due to invoice sales in the first half of 2026 and short-term liabilities increased 13.8 million to 56.7 million mainly due to increased accounts payables and increased prepaid revenue looking at the cash flow statement for the first half of 2026 and comparison with the same period in 2025. cash flow from operations before changing working capital was minus 19.9 million sec compared to minus 27.5 million cash flow from change in working capital was positive 3.3 million compared to 8.3 million and the positive effect this year is mainly from increased short-term liabilities such as accounts payables and prepaid revenue cash flow from operations was minus 16.7 million compared to minus 19.2 million in 2025 cash flow from investing activities was minus 0.6 million compared to minus 4.1 due to low level of investments cash flow from financing activities was minus 5.0 million this year due to the repayment of a short-term loan while financing was plus 20.5 million in the first half of 2025 due to the raising of new loans in total this resulted in a negative cash flow for the first half of 2026 of minus 22.3 million of which minus 3.0 million in q2 and compared to minus 2.8 million in the first half of 2025 and a closing balance of 15.2 million sec compared to 30.8 million by the end of q2 2025 that was the financial updates which means that we move on to the summary and outlook thank you lena so to summarize we had strong
order intake during the quarter with the business across three of our four main market segments the two system orders demonstrate the strength and flexibility of our technology platform at the same time the 11 new paying customers are building the foundation for future coding volumes and potential system orders it's particularly encouraging that three of these customers are in solid oxide applications winning customers in a new market takes time and this is an important indication that our sofc strategy is starting to convert into real business we now have a broader customer base a clearer offering and a stronger starting point than we had one year ago going forward we will continue to focus on sales and customer development at the same time cost control cash flow and improved margins remain essential as we work towards long-term profitability with that we are ready to take your questions thank you for that presentation and we will now open up for a q a session and as stated before you are welcome
to submit questions using the form located to the right of the webcast and if you're calling and want to ask a question please press star 9 to raise your hand and star 6 to unmute your line when you have been handed the word with that said lara mohtadi from abg the word is yours hi jonas and lena um just a couple of questions from me uh firstly i'd like to ask a little bit around on the market um if we start with europe uh you've pointed to clearer policy signals in the us and china feeding into momentum but europe has been a bit absent from that framing
and when would you say that Europe sits in the demand picture is it structurally lagging or are there any specific policy or maybe customer catalysts you're watching for to make it turn if if you look specifically at the hydrogen and energy market I I would say that it's it's structurally lagging uh but despite that uh if you look at the number of new customers we have during the quarter so we had 11 new customers uh during the quarter and a substantial part of of those 11 new customers uh they they were actually in europe so so um i would say that that yeah
europe is is a bit slower uh but we are making progress also in europe sounds promising and just uh on sort of the competitive or your competitive position you said that you haven't lost any recent orders to competitors if i understood you right uh what would you say is actually driving that is it more the your technology or is it more sort of the or the relationships that you've built through these qualification processes i i would say it's it's combination so so first it's it's the technology and the fact that we can use the same machines
all the way from customer samples to coating services and and sell the same type of machine that's appreciated by by the customers and the fact that we can easily make customer samples means that we can we can get new customers we can start qualify them and um that process is quite long to qualify a customer and the earlier you start uh the the better so so this is an and competitive advantage we have another competitive advantage is that we we are starting to to become uh one of the uh big players in the market and and sometimes we are referred to as
as the biggest player when it comes to coatings for electrolyzers and in china when it comes to to coatings of fuel cell plates we we are the biggest player so that also helps in in the customer relation thank you and um well you have uh recently had um two orders with one of them being delivered recently um and um if could we just talk a little bit about your other application areas such as well the or fofc which you've recently started to actually you think that
that will contribute to orders when do you think you'll get an order from fofc yeah so as we saw this quarter we have three new paying customers in sofc we have previously reported that we do have a collaboration with service power and the collaboration with service power is giving us access to to the licensees of service power and and that is of course giving us a a jump start with with the customers however it's still the fact that customers they need to do sampling they need to test in their own stacks they need to test everything and typically tests for solid oxide fuel cell stacks they run for 5 000 hours or 10 000 hours and if you look at 5 000 hours that's that's half a year 10 000 hours that's that's one year so it's it's very much driven by how much do the customers need to test the good thing is that the customers in in in this market they have standard products so they are not project oriented so they have their standard products they plan the production they plan production volumes so when they switch from from one coating method to another coating method they will do that for all their production and all their customers and all their projects. And these samples and tests that you just alluded to will that generate the coating services revenues or is this something that won't contribute to your revenues so we always charge for for samples so so even even sort of the the smallest test gives some some small revenue but what we see so far on the solid oxide market is that there might might be uh sort of going directly from sampling to machine sales uh some some of the customer dialogues we have they are more like okay first we sample and when the testing is done well then we go for a machine other dialogues are more that okay first we sample then we will go for coating services for a short period of time and then uh there will be machine salsa so it's uh the solid oxide market is more uh machine focused than for example the electric the pem electrolyzer market where the customers tend to stay longer in coating services but in in both market that the the end the end goal for for both us and the customer is is to to have a machine at
the customer site yeah very clear and just the last one from me um your most recent orders um have actually been for the ic500 and i'm just wondering if this has there been a shift to maybe demand towards your IC500 versus your newer IC2000 or is it just in this case that it happened to be those machines they wanted and where are you seeing demand is it for both machines or specific more for the IC500 we see demand for both type of machines and as you saw
when when peter was showing you in in the factory they they have sort of it's it's a similar concept but the size is is different so if we look at at linberg one one of the main competitive advantage is that you can tune the color so you can have very very tight tolerances on on the color and that means that you you don't want to put too many pieces in the chamber at the same time so a a big chamber is not necessarily an an advantage so the the chamber size of an ic 500 is is perfect for for the Lindbergh application for energy applications uh where you have high volumes or you have large plate size yeah then you tend to go for an IC2000 instead because then you need a little bit larger chamber size and use that either to put more plates in the chamber at the same time or to to have large plate size like like you have with electrolyzer plates so it's it's it's not that we see a shift in in in demand it's more that for for the um lecture goods market and for the electronics market and to some extent also for the automotive market that is more towards ic 500 where the energy market is more towards ic2000 that was very clear thank you very much thank you for those questions and moving on we will go through some written questions uh how is the search for an industrial partner progressing yeah i can i can answer that so we have um yes you know we we announced in december that that we're looking for an industrial investor and we have contracted an advisor to identify and bring in an industrial investor. So far in the process, we have been quite picky. We want an industrial investor where we see a clear, where we see clear synergies. And we have got some interest. We have had some visits here to a factory in Linköping.
Operator
But at this stage, I cannot share any details regarding those discussions moving on we have a question about lt metal will the collaboration with lt metal in the future mean that you will sell machines or coating services or both and is the collaboration with lt metal of strategy strategic importance and if so why so uh two two questions so i will start with with one of them so so is it a strategic importance uh yes
uh we have been working with iridium oxide for quite some time and we are one of the very few companies maybe the only one in the world that can offer iridium oxide coatings of ptls in an uh industrial scale uh of course there are research labs and universities that that can do this in in smaller scale um what what in the end determines the performance of the system is the combination of the ptl and the coating that's why it's so important for us to work closely with the pto suppliers so what we can offer is a complete solution a whole product to our customers so we can have something that is already tested so the combination of lt metal ptl and our coating is already tested and we can have a data sheet and we can show that to the customer so it's easy for for the customer to to buy and overall we we have carried out testing together with customers at different locations around the world and looking specifically at lt metal they are very capable and they have their own testing facilities also so we have conducted tests both at their facilities and and at other locations so the collaboration with lt metal is an important step in moving forward from from the lab scale to commercial volumes um and and it's it's partnerships like this that is needed to to be able to to supply a whole product to the market and make it easier for the customer to buy um so offering a complete solution rather than separate components then your your next question was if this could lead to machine sales was that that your next part of the question uh yes if the partner the collaboration does it mean you will sell machines or coating services or both yeah both both so so as a start we will sell a lot of samples and then the next will be to sell coating services and and the good thing with with um with iridium oxide coatings is that it's it's not a new area it's one more layer so today we're coating ptls so so we take the ptls we make a coating on top of the ptl to reduce contact resistance and and increase corrosion performance on top of that coating that we already do today you put the iridium oxide coating so it's it's easy to implement in in our current offering of of coating services also this will lead to machine sales in in the end and it can lead to machine sales both to to the customers we have today which is primarily sort of stack manufacturers but it it can also lead to machine sales to ptl manufacturers who want to provide a complete product to to their customers uh they if they want to provide a coated ptl so both coating services and machine sales is is possible outcome of this collaboration yes great moving on
Operator
we have a financing question your liquid funds currently stand at approximately 15 million sec could you comment on your liquidity needs in the near term and what measures you are considering to secure financing for ongoing operations and ensure sufficient funding going forward yes i can take that um our forecast um including for example the order backlog and what's in the balance sheet indicates that uh yeah it looks fine looking forward it's manageable um so
but of course as jonas mentioned before we have uh previously announced that we continuing with the process of seeking an industrial investor and that work continue as well but looking at our cash flow forecasts we see that analyzing them looks fine to us in the coming coming months so so if that's an answer yes finally we have a question regarding waveguide antennas why do you choose to sell coating systems instead of keeping the coating volumes in-house when
it comes to waveguide antennas yeah of course that's a fair question uh and and sometimes you you tend to think that if you go up the value chain you you earn a lot of more money if we go back to the previous quarterly presentation i mentioned that around 100 million vehicles are produced each year and if we assume five radar units per vehicle and two and ten and a half per reader that gives a potential market of around one billion and ten and a half to be coated each year uh that that's a large number and as you know we have a push-pull strategy which means that we work both with our direct customers and with our customers customer so this also include radar system manufacturers so we talk to radar system manufacturers that are the our customers customer and this discussion also help us to understand expected production volume and we get estimates from radar manufacturers they are shared with us under non-disclosure agreements and they normally have a quite a wide range so they should always be treated with a grain of salt but one estimate we have received from a serious radar system manufacturer I cannot until which um was around uh 200 000 antenna halves per day and at that level at 200 000 antenna halves per day machine sales is the preferred business model because that's that's a sort of suitable for for our type and our size of company to supply the machines to the company that will actually produce 200 000 antenna halves every day did that answer your question yes and that was the final question for today so we will now conclude today's conference call
Operator
i would like to extend my sincere thanks to jonas and lena for the presentation as well as everyone to who submitted questions and joined today's webcast I wish you all a pleasant day.
