GENERAL OCEANS ASA (GENO) May 2026 Capital Markets Day Transcript

Welcome, everybody, to the quarterly presentation for General Orsons for the first quarter of 2026. My name is Atlee Lorman, and with me here today I have our CFO, Anton van Heerden, who's going to be going through the financial portion of this thing. I'm going to cover first some of the operational portions of the company, and then we'll afterwards have some questions and answers both here from the audience and from you who are online. so I'll go ahead and sort of start talking about how the first quarter went for the company we'll start with some operational highlights and I think we will start just with going through the crude numbers as we see it sort of at a glance the performance of the different entities at the first quarter overall revenue was 327 million the backlog is 546 the gross profit was 220 million and the gross margin was 67% we'll get back to the comparison numbers later on the adjusted EBIT a was 59 million and the margin on the EBIT a was 18% if you're looking at some of the more detailed underlying structures we will see that in the segmentation the robotic segment was about 25% of the overall revenue in the first quarter whereas the sensor segment was about 75% as you all know this is the first quarterly presentation for general lessons we went or listed on the also stock exchange in March 26 of March this year so we're only about a month and a half into the process of establishing ourselves after the IPO. The division in the terms of the different countries that are contributing to the revenue, it's still heavily dominated to be a European company, about 65%. And then we have about 20% in Asia, which constitute primarily China, Japan, Korea, and Australia. And then we have about 20% in the US and Canada, which are the dominant portions of America. So there's very little revenue coming out of South America, for example. In terms of the events that happened right after the first quarter, we did do a successful acquisition in April of a company in the U.S. called MRV. I'm going to get back to some of the details there. It's basically a company that produces vertical profilers and that are located on the West Coast and the central areas of the United States. And that happened in April of 2026. We'll look a little bit at the quarterly numbers to give you a sense of the evolution of the revenue base and the profitability of the company. So in the first quarter, if we compare with the first quarter in 2025, the revenue was 345 versus in 2025 versus 327. So it's a slight decrease. The gross margins went up from 62% to 67%, and the adjusted EBITDA margin went down 1%, but it's still within the frame of what we have said to the market before we entered into the IPO, which is about 18% to 20%. So as you see in the evolution here, I would say sort of overall, the picture is that the first quarter confirms the strengthening of the overall operational setting of the company that we saw in 2025. So in some ways, you can really read this as an adjustment, or not an adjustment, but as a continuation of a process where we saw this fairly large jump from 2024 to 2025, and we are continuing on the trend of 2025. So there's really no big red flags or anything particular that happened in this first quarter. It really was part of what we think of as a natural evolution. We're going to come back to some of the details there. Anton's going to talk about some of the FX effects and other sort of operational issues. So on the revenue analysis, if we first look at the verticals that we operate in, basically the application areas, we will see there's a strengthening in the fence. Went up from in the 90 area up into 125, and that is a reflection of the deliveries on some of the orders that we got in 25. but it's also, generally speaking, clearly a large amount of activity in that area. And we can get back to that if we want to know more about the defense sector. But it's a pretty clear interest in that area, although it might be a little different than most people think. But we can get back to that if there are questions surrounding defense. In the construction area, there is reduced revenue. some of that comes from a change in the amount of backlog that was being built down in in 25 so 25 was very strong in the sensor segment because the backlog from 24 was built down if you're looking at the backlog evolution in 26 is actually very steady so there's a little bit of reflection of things that are happening in the segment but there's also sort of several financial mathematical elements to it that makes it a little less radical than it may look like when you're looking at the screen here. In the science bit, there is generally a steady revenue stream, although it's not—there's too much quarterly variations to really take too much information out of those numbers at this stage. So I'd be careful to making a large interpretation. but obviously especially in the US there is there is changes in how the administration looks at science and its importance in society and some of that actually also is getting reflected into other countries so there is a little bit of uncertainty exactly where science is going but overall we're not particularly concerned yet and we see more of a steady revenue stream more so than any significant decline. If we go back and look at the segments, we would say that in the first quarter of 26, we're seeing a reflection of a very similar trend that we saw from the last quarter in 25, which is that the robotic segment is increasing in revenue, not at the expense of the sensors, but compared to the sensors which are more steady, we would say that the robotics is increasing, and we're clearly seeing a lot of interest in robotic contribution into the defense sector, particularly. On the MRV acquisition, we're obviously very enthusiastic when something new is happening, and MRV is a very nice contribution to the overall structure of General Ocean's. MRV, the abbreviation is not being used much, but originally it was Marine Robotics vehicles but so this is this is a company that goes into the robotics segments of general oceans its core function is to serve what is called vertical profilers or floats into the national Argo program and the Argo program is a program where these instruments are going up and down in the water column and collecting physical parameters like temperature and salinity which is sort of the core descriptive physical parameters of the ocean and this data sets especially close to the surface is delivered to the national meteorological organizations so that our weather forecasting is actually using a lot of data so the ocean data that's being implemented into into weather forecasting partially is coming from this Argo program which is an international program that's funded by at least 20 different countries around the world and Norway is amongst them so this is this is an international collaboration that has a fairly steadily increasing budget. And there is competition in this segment. There are three or four actually different contributors of which MRV is about the same size as the other one. So it's fairly equal competition in that segment. So the company has about 22 people. They're divided in two areas. There is production in Chicago, and then there's development and sales coming out of Seattle so those that also contributes to the overall structure of General Orson in the United States which previously have offices in San Diego and Boston or Newburyport north of Boston and now we also have Seattle and Chicago which means that the only place that General Orson's is not present right now is in Houston which is one of our ambitions for the rest of the year the budgeted revenue is about 13 million dollars and the implementation process has started we are looking at the company in the context of the larger general oceans ambitions and on the side of the sales this is a company that is uniquely American so it had is sourcing in the United States and it has only sales in the United States and so general oceans ambition is to help them through specifically the Nortec sales organization help them get a better penetration also in the national market. On the sales network obviously Nortec is already then contributing in that area looking at sort of the fundamental parameters like pricing, penetration abilities and things like that. So it's a it's a very active ongoing effort and on the production side we're also looking at international sourcing of the components that they buy. So it's a very interesting acquisition fits really well into the science application area as well as the robotics segment. So as you can see there's not a one-to-one between the segmentation and the application areas. You can have robotics in science, you can have robotics in defense, and you can have vice versa. So there's a lot of different combinations going on. Back to the segment portion of it. So Nortec, Tritec, Klein, Aras Aqua, we're not reporting on these companies individually. We're reporting only as a segment. The hypothesis this year is that part of the reduction in revenue comes from the foreign exchange effects the FX effects at some of it also comes from what we see as slightly reduction in the optimism in some of the marine construction areas where people are not as bullish about especially wind as they were before so I think other companies within this space is also reported that they see a reduction in the commitment of the leasing companies to buy into a very strong accretive or to a strong evolution of this particular segment so it's more of a steady process we see. Obviously, leasing companies typically buy for the purpose of increased activity, so it has a very sort of quick and immediate effect. But we're not seeing any long-term strong reduction in the activity at this point. We're just not seeing the increase in activity that we have saw in 2025, where people were very, very bullish about the increase, both in wind at the same time as there was a significant oil and gas activity. on the robotic segment it's been a healthy order intake at the same time as some of the large orders have been delivered there's a large backlog and MRV actually comes in with their own backlog I think their backlog is about 10 months so they will also then continue to contribute to the evolution of the backlog as we start reporting for the second quarter which we will see in know in a few months so on the outlook side we are still where we were before the IPO we anticipated revenues in 2026 of about 1.5 billion knock that's a 15 percent up from 2025 and we have not changed our forecast or our the way we work with respect to our intent of reaching those goals and on the central level, sort of speaking from the headquarter perspective, our focus is now after the IOPO gone back into M&A activities. So there are several companies being courted or being spoken to and the discussions are ongoing. We are working on access to new markets, which means in our case opening offices and new geographies, trying to access areas that we haven't really been very strong before. We are also improving our connections to the defense contractors. The reality of the defense world is that small companies like General Orson still need larger companies to work with in order to penetrate that market because there's a lot of noise in the defense segment, generally speaking. A lot of VC money coming in, a lot of optimism, but the reality is that the big contracts are still going to the large defense contractors. So it is in reality the association with the large contractors that will make smaller companies like General Orson's successful in that particular segment. So we're working hard on that and there's a big conference actually coming up this week that we are going to be attending and working to talk to the relevant people. And then on the software side we did announce during the IPO process that we had opened up an office here in Oslo where we were establishing a software group that was going to be serving the different operating companies. The group is now expanded, there are about six people right now, and they're turning out to become a little bit of an AI center for the group. So they're both working AI for the purpose of informing the operating companies about how they can improve their way of working on a daily basis. But there are also some very interesting experiments going on where we're looking at AI as a tool for product development, which is a new thing meaning that we are writing software firmware even doing electronics and even mechanical design based upon AI models and obviously there that's we are looking at that with quite a bit of excitement because it means an enormous reduction in workload if we actually can successfully apply that so so we're looking forward to seeing what those results are going to be and hopefully when we speak the next time in the second quarter we'll be able to report back on what has happened there thank you and I'll leave it that there, and then we'll go back to talking about some of the numbers. Anton?

Thank you, Adler. Good morning, everyone. I'll be presenting the financial side of the business. Operational highlights. We've seen this slide before. I just want to highlight, I will be speaking a bit more about seasonality in the group, and a bit about the FX effect we've observed in Q1 2026. As you can see, we have an upward trend quarter by quarter, but there is some lumpiness in the quarters, between the quarters, but I'll come back to both of these subjects in later slides. Our cash flow evolution, we started a quarter at 340 million NOC, where we generated some cash in the quarter, we repaid our debt, we changed our USD and pound loan to a NOC loan, drew a bit down to help pay the IPO fees and in April we paid back all debt in the group from the proceeds from the IPO and also we had a dividend in Q1 of 20 million and with 500 million proceeds from the IPO we ended at 840 million cash in the bank at the end of Q1 2026. The slide is to illustrate our working capital evolution. We gave guidance that our targets are between 15 and 20 percent networking capital of LTM revenue 12 months. As you can see even though networking capital has gone up in monetary values as a percentage of LTM we are stable at 16 percent roughly. So very pleased to this performance and fiscal discipline we've had with our networking capital. This slide is about our order backlog. As you can see our order backlog was 573 in Q1 2025 and reduced to 546 million in Q1 2026. Even though there's a reduction in total backlog, if you look at the light blue columns our actual backlog has increased. The light blue column is the delivery in the current fiscal year. So we've got started in Q1 2025 with a backlog for delivery in 2025 of 472 million and our current backlog for 2026 at the end of Q1 is 509 million. So we have a strong backlog going into the rest of the year. The evolution of the backlog between Q1 2025 and Q1 2026, we can see the robotics segment backlog has increased significantly. That is mainly driven by defense contracts we secured in 2025, carried over into 2026. Talking a bit more about our actual financials, our revenue, Our total revenue has decreased from $345 million to $327 million, and our gross margin has increased from 62% to 67%. The increase in gross margin has to do with our product mix being different in Q1-2026 compared to Q1-2025. Our adjusted EBITDA has decreased from 1% from 19% to 18%, but that's within our guidance of 18% to 20%. with our very long-term group target being 20%. Coming back to the FX effect, of course, as a group, international group, we have FX effects. And with the political upheavals, we've seen the dollar decreased by 12% on quarter to quarter and pound decreased by 6% quarter to quarter. The monetary effects is, in our case, actually a reporting where we converted from currency into NOC. And from a management point of view, the USD and GBP effect was that our revenue for Q1 2026 was 23 million NOC lower on a like-for-like basis. So if you use the 2025 average FX rate and apply the 2026, our 2026 revenue would have been 23 million higher, basically on par with what we have reported for Q1 2025. Having said that, the entities which convert from local currency, for instance, NOC from GBP and from dollars, will have an effect on the bottom line with current pressure with the FX movements. We are monitoring it, and we will take action as required going forward. Included in the results of Q1 2026 under other operating expenses is 6 million transaction fees for the IPO. Just if you're wondering why that is higher than the previous quarter. Overall, FTEs comparable. comparable. We were 334 FTEs in Q1 2025 and in Q1 2026 we are 380. Just so you can compare the movements between the quarters on the payroll as well. Other than that, steady performance for us for Q1 on average. Profit and loss by segment. In the census segment, revenue has decreased from from 321 million to 260 million. There's, of course, the FX effect in that. The FX effect in the census is 15 million on the reporting side. And also, we mentioned that we had a backlog carryover in 2025. As you remember from the previous slide, you could see Q1 2025 being quite a strong quarter for us. The gross margin, stable-ish at 61% versus 63%. And our gross EBITDA margin has decreased from 24% to 16%. That's the effect of our revenue reducing compared to our overheads. We are monitoring it. We don't think this is a long term downward trend and we report more on this in the next quarter to see if we can see a trend happening on that side. In the robotics segment, the revenues increased from 25 million to 73 million. The FX effect in the robotics segment was 8 million NOC on the reporting side. But the increase is not just that. We delivered our backlog. We secured in 2025 into 2026. And robotics is expected to continue on this trend for the rest of the year. Gross margin increased from 64% to 78%. That's the product mix as well. And EBITDA from a negative 27% to a positive 40%. That's the segment side. reporting on the balance sheet looking at our fixed asset side the longer term our capex for the quarter is 19 million versus 35 million in the previous comparative quarter it's lumpy it's nothing to read into that that's normal for us going forward our guidance of 3-4% of long term revenue capex still stands of notes is that we invested 10 million in a company called renko it's a company in the states it's an early investment we will probably we committed to invest some more during the year up to another three million on a call down basis regarding the evolution of the networking capital we've already covered in the previous slide so i'll skip that looking at long-term debt side as mentioned before we converted our USD and pound and USD and pound loans into NOC and we repaid the loan in April and the evolution in the equity is driven by our IPO looking at some of the appendixes for some additional information this is about debt covenants as mentioned before debts been paid back in April and we adhere to all covenants I can move on from this slide. Our shareholder overview, we do have a live listing which updates on a daily basis on our website for up-to-date shareholder listing. Not much to say on this one either. Seasonal trends, this is a lot of questions pre-IPO. We didn't release any of our seasonal trend results at that stage since we were moving reporting tools and we wanted to make sure what we report was accurate. In this slide, you can see we have 23, 24, and 25 revenue numbers by quarter. If you look at the percentage, the percentage is the percentage of the quarter to the full year results in the current year. As you can see, it's slightly lumpy from year to year, but if you look at the three-year average, it's very stable in that we have an average for Q1 of 23, 24%, and the same applies to Q2 and 3, while we have for Q4 an uptick as a normally a strong quarter at 29%. So I hope that will help the analysts with our forecasting and their predictions. Let's move back a slide again. If you take our Q1 2026 as a percentage of our forecasted revenue 1.5 billion we'll hit 23% which is in line of our previous quarters so we are aligned on the IPO we gave some indicative targets this slide is a copy of what we presented before there is no change we are still predicting to achieve these results of 1.5 billion for the year of course we have challenges but we will not change our target at this stage we are now entering the Q&A section

we will have some questions from the floor and then we'll also have a look at see who's asked us online questions A couple of questions on the growth growth was somewhat weaker now in the first quarters can you just say what you kind of expect in terms of organic constant currency growth for the remainder of the year do you expect that to improve in the other quarters given that you reiterated your full year guidance?

Well, I mean, there's no... Since the overall goal is about the same, right? The underlying assumptions that we made before the IPO about the organic growth versus the M&A growth is about the same. The acquisition of MRV happened, as we predicted, right after the IPO. And so their contribution will probably be sort of the order of 80, 90 million. And then you can kind of do the calculations about what is the residual portion of it. But as we said before, we're still maintaining our 1.5 billion growth goal. And then what element of that is going to be organic, which one is going to end up being the FX effect, and how you're going to look at that is going to be somewhat of a calculation that depends on what happens on the FX side in reality. But I think organic growth right now is compensating for FX effects in a way, right? So if you said 6% FXFX over the crash of the year, for example, took away the 80 million, you get about 120 million out of 150 plus 6%, which would give you about 12-13%. So that's sort of a very quick calculation. So we're not seeing your changes in reality.

And on Klein and SRS, which is now delivering on pretty large contract backlogs, Do you expect that revenues in those two to be at the same level in Q2 or higher or lower? Can you give some indication on that?

My anticipation is that in that segment, we will see about the same deliveries in Q2 as we were doing in Q1.

And lastly, on the gross margin was pretty strong this quarter. Do you expect that to persist for the remainder of the year? Or can you give some color on what you expect for the gross margin?

I can I'm not going to talk about the whole year but for the next quarter which is where we have visibility right now it's going to be very similar thank you I'll read one of the questions how would you describe the current market conditions well it's a complex picture because there are so many elements to the market conditions it is a you know defense is maybe what fascinates me the most because the we know there's a lot of activity but it's it's also sort of a case where in the end a lot of the money goes to very traditional funding whereas we are sort of you know we're not directly in the defense sector in the sense that we make things that go boom we we make things that support the defense sector in different areas and and we see a lot of interest from we still see a lot of interest from VC companies that are funding new defense contractors with large amounts of money. But of course, who is actually going to get the contracts in the end is always a question. But there's a lot of threats of large orders in the defense sector, especially for navigation purposes. So the picture there is still uncertain in the long term in terms of what affect the smaller companies, or how much other defense increases will end up with the smaller companies. I think that's really the parameter that we don't know yet. On the science side, things are evolving. Going geographically, expansion, no really big trends to see. Traditionally, it's a fairly slow increase year on year. And we're seeing the same kind of thing going on forward. So there's nothing. The question of science is more about adapting to what the scientists want to do, more so than the overall market, which is still steadily sort of moving upwards. And on the operational side and the marine construction, marine operations segment, it's going to be, since some of the money is coming in the lumpy structure from leasing companies, it's going to be a little bit difficult to know exactly what the annual trends are. based upon one quarter. So I think we're going to have to come back to you a little bit later on and talk more about if there are sort of underlying trends or if it's really just quarterly lumpiness that we're seeing. Long answer to a short question.

In line with that. Any newly won awards upcoming tenders for SRS and CLI?

They are both working on large orders in both in the United States and internationally. That's all I can say about it at this stage. Okay.

To do the robotic segment again, the strong gross margin in the robotic segment suggests that SRS gross margin has increased substantially. Is this a general price increase or is it solely related to the contract one in 2025?

The traditional margins in the robotic segments have always been quite high. And yes, it is related to the contracts that were won. But they had that kind of margins also a long time ago before. So SRS is a special case because it went through a process where it lost significant orders back in 22, 23, and the company had to be rebuilt. So in terms of increase in margin, they went from negative margins to positive. So obviously, it was a nice increase. But it actually is an expression of what typical margins are in that particular segment. So as long as they have large contracts to deliver on, This is not atypical for a robotic company. Thank you.

Two questions. They sort of overlap, so I'm going to read them both. Are leasing companies becoming more constructive on the offshore energy market following the development in the Middle East? I think it's probably supposed to be conservative, maybe. And then following on from that, how much of renews do leasing companies typically constitute of the marine infrastructure exposure?

They typically are very heavily tilted towards the first quarter, because their CapEx decisions are made in November, December, and then the orders are happening in January. So leasing companies' impact on revenue, and I think that was referenced in another company's presentation some time ago, is primarily in the first quarter. And we'll see in the rest of the quarters, they will have less of an impact. So it is a lumpiness problem, more so than anything else. They will obviously review their CAPEX continuously. And since it was not very strong now in the first quarter, it may end up in Q2, Q3, Q4. It's really hard to predict in advance.

Okay, the next question is directed at me, but I'll read it out. Can you quantify the FX effect in the quarter? I'll reiterate the FX effect numbers I'm going to quantify is the reporting FX where we convert the pound dollar into NOC. So quarter to quarter using the 2025 FX rates our quarter's revenue would have been higher 23 million on a revenue basis in 2026. On a segment basis the sensors would have been higher 15 million and robotics would have been higher 8 million. That is on a reporting basis, not on the operational. We do have FX contracts for operational cash flows and so on. So we haven't quantified that. We only looked at our reporting side in this quantification. Okay. Let's see. There's one more question. How do you expect organic revenue growth in constant currency to develop for the remainder of the year. Do you expect gross margins to remain at the current levels going forward? Or were they positively impacted by the one-off product mix effects in the quarter?

Well, the delivery of the contracts in the defense sector is ongoing. So there really is I don't expect any significant changes in the gross margins in quarter two. We'll see a little bit in Q3, Q4. But for Q2 predictions, I would give it sort of the same level. And in terms of what was the other question? It was the constant currency. Constant currency. I don't know exactly what that means. But I think about this in terms of volume, sort of volume growth. And so obviously for volume purposes, there's been, it's always complicated, right? Because when you're looking at the total revenue number and the increase and decrease, is a function of FX, for sure. It's also about price increases. And then there's sort of underlying volume trends and mixed trends as well. So it's a pretty complicated picture. But I think the fact that we're maintaining an overall goal of 1.5 billion with the headwind from FX suggests that the underlying organic growth is still doing That's my kind of big message, I think, from the report today.

A new question came in, what are the main factors General Oceans contribute to the acquired companies in order to make them grow and succeed?

What we're trying to accomplish, I think, is that sometimes we're, it's always, you know, when you're running an international set of companies, it's always difficult to know what you intend to do and actually what the effect is. But obviously, we are focusing on operational success within each individual company. If they have problems, technical and things like that, we will put resources or add resources from our national organizations to help people fix those things. We're looking at best practices by transferring people back and forth and looking at sort of how the work is happening. We are very knowledgeable as a group about how you put together a proper sales and marketing system. So we're adding those type of effects to individual companies, both in terms of resources, but also, again, about best practices. There's also an effect across the group of the fact that people are getting more attention because they're part of a group, so there's like an automatic sort of spillover effect. We're looking at the procurement side of it, experiences in international procurement, specifically procuring from China, who are the best vendors, who are the people that you want to talk to, et cetera, et cetera. So there's crossover effects there. And then there is a certain amount of alignment from the central organization in terms of people and making sure that we have the right people in the right place. So there are significant effects, I would say, even though they usually take a long time to show up in the P&O.

Thank you. That was the last question.

Very good. Well, with that, thank you very much for your attention, and we'll see you again in three months.