Welcome to our webcast, where we present the results for the first quarter of 2026. Next to me is the company's CFO, Anders Engelsen, who is going to take us through the financial details of the quarter. My name is Margrethe Haugen, and I'm the CEO of Goodtech. Let me start with a brief summary of the key highlights from the first quarter. In Q1 2026, Goodtech continued to deliver solid operational performance with improved profitability, despite a revenue mix that was less procurement-heavy than last year. Net operating revenue after external project costs increased to 141 million NOC, corresponding to 3% organic growth compared to Q1 2025. Profitability, however, improved significantly. EBITDA increased to 20 million NOC, with a margin expanding to 14.4% from 11.1% in the same period last year. EBIT A increased to 14.8 million, corresponding to a margin of 10.5, up from 7% in the same quarter last year. This clearly demonstrates the positive effects of better project mix, strong execution and disciplined cost control. From a people perspective, the organization remains stable and healthy. The number of employees remains at the same level with 309. The sick leave was reduced to 3.4% and we once again reported zero absence injuries. Finally, the order intake in the quarter amounted to $148 million and order backlog ended at $312 million NOC. Overall, quarter one shows continued progress on our strategic priorities, earnings quality, disciplined execution and a strong financial position.
Let me start with the financial performance in the first quarter. Starting with total revenue, Q1 2026 came in at $172.2 million, which is 12% lower than in Q1 last year. This decline is entirely driven by the project mix in the quarter. Compared to Q1 last year, we had a significantly lower share of procurement-heavy projects, and external project costs were reduced from $53.4 million to $30.8 million this year. As a result, total revenue comes down. It's also worth highlighting that aftermarket and service revenue accounted for 17% of total revenue in a quarter. This continues to support earnings quality and stability and is fully in line with our strategic focus on lifecycle services. Looking at net operating revenue after external project costs, this increased 3% year-on-year from $136.8 million to $141.4 million. This growth was driven by strong project execution across the organization and good utilization of our personnel. In other words, while reported revenue declined, the underlying value creation in our core business continued to grow. Turning to profitability, EBITDA increased by $5.2 million year-on-year with a margin expanding from 7% to 10.5%. This margin improvement reflects both higher operational efficiency and a more favourable cost structure. Personnel expenses increased from $101.8 million to $106.9 million, corresponding to a 5% increase. This reflects general wage growth and is fully in line with expectations. At the same time, other operating expenses decreased materially from $19.8 million to $14.2 million, a reduction of 28%. A large part of this year-on-year reduction is explained by $3 million related to discontinued operations, including the absence of losses recorded in the prior year of $2 million and a $1 million settlement received in the current quarter. The remaining improvement reflects continued cost discipline and reduced use of external services across the organization. Overall, Q1 demonstrates strong project execution that continues to translate into higher margins and improved earnings quality moving on to order intake and backlog order intake in the quarter amounted to 148 million which is 29 million lower than in q1 last year this resulted in a book to bill ratio of 0.9 for the quarter the order intake was well diversified and driven by renewal of framework agreements expansions of ongoing projects and a number of small to medium-sized projects across the industries we serve. Importantly, we continue to see good activity levels in our core markets. Water backlog at the end of the quarter stood at 312 million compared to 340 million at the same time last year. The backlog now contains a lower share of large procurement-heavy projects than in previous years due to investment decisions for the largest projects are taking longer than usual, partly due to geopolitical uncertainty. In response, we are focusing on increasing the number of early phase studies, feed work and front-end engineering with international clients, which strengthens both customer relationships and future project conversion. During the quarter, we announced a contract with Antec Biogas in Norway, with an estimated value of between 15 and 20 million. This project covers automation and control systems for a new biogas facility and builds on a successful pre-project phase. Strategically, this contract demonstrates our ability to scale OT architectures alongside customers with growth ambitions. Finally, let me comment on the balance sheet and cash position. Goodtech continues to have a very strong and robust capital structure. Total assets at the end of Q1 amounted to $514.1 million and total equity increased to $293.8 million. This corresponds to an equity ratio of 57%, up from 54% at year-end 2025 and 51% in Q1 last year. Cash and cash equivalents ended the quarter at $110.8 million. This is lower than at year-end, driven by a seasonal increase in working capital. Specifically, accounts receivable increased by $25.4 million during the quarter, reflecting timing effects in project building and payments. Net cash flow from operating activities was negative at $17.2 million in Q1, mainly due to this net working capital build-up rather than the underlying profitability. Non-current assets decreased slightly to $263 million, primarily due to lower right-of-use assets and deferred tax assets. Long-term liabilities, largely lease liabilities, remain stable at around 45 million since year-end 2025. Importantly, Goodtech has no interest-bearing debt as of 31st of March 2026. Combined with a strong equity and solid liquidity, this provides significant financial flexibility moving forward, both to support organic growth and to pursue strategic opportunities if they arise.
This slide puts our recent performance into a long-term strategic context. Over the past four years, Gutek has fundamentally reshaped its portfolio and operating model by strengthening the core business and exiting non-core activities. We have divested businesses with non- or lower strategic fit or profitability potential, including mechanical manufacturing, in-house fabrication, environmental solutions and water and waste treatment. At the same time, we have selectively invested in capabilities that do strengthen our position as a system integrator within automation, digitalization and process industries. Strategic acquisitions such as Avanti Engineering and Scala Flytna has added expertise within automation, vision technology and process engineering and software, and it has provided us with extended competence and presence in new geographies. This strategic repositioning is reflected in the financial development shown on the slide. Rolling 12-month net operating revenue has increased steadily, while EBIT margins have improved materially, moving from negative territory to high single-digit levels during 2025. Large and complex projects delivered over the period such as industrial digitalization for Arca Solutions, the Retech Rare Element plant and major projects for Wacker Chemicals and Orkla Health illustrate the type of work we now prioritize. Technically demanding value-added projects where a good tech score is to increase the industrial competitiveness looking ahead good tech intend to continue the journey of increasing shareholder value the foundation is solid and we will continue to improve utilization through solid project execution and larger lower risk projects the industry needs to increase its competitiveness and good tech do contribute on a pilot studies projects that move into epc and system delivery projects with a favorable risk profile. This is where we can apply standardized delivery models and are disciplined project execution. Improved resource planning and higher utilization directly support margin expansion. As project size and standardization increase, we see clear scale benefits. Higher utilization reduces unit cost, improved execution predictability, and supports strong cash conversion over time. Following this, an increase in service, aftermarket and Applied AI. We are systematically growing the share of service and maintenance agreements following project delivery. Managed services and lifecycle support create recurring revenue streams with attractive margins. At the same time, Applied AI is used as a practical tool in engineering, delivery and asset optimization. not as speculative technology, but as a driver of efficiency and margin improvement. Finally, we also see opportunities to scale beyond the current core. This includes geography expansions, entry into selected new verticals, and growth in digital offerings. Importantly, this will be pursued in capital-efficient manner, leveraging existing competencies rather than large balance sheet-heavy investments. Together, these levers support stronger earnings stability, higher earnings quality and sustained earnings growth over time. To conclude, Q1 2026 was characterized by solid operational performance and strong profitability. Looking ahead, our focus remains unchanged. We will continue to prioritize operational excellence and discipline project execution. We expect a growing emphasis on aftermarket and lifecycle services to gradually increase the share of recurring, higher margin revenue. While the current backlog contains fewer large procurement-heavy projects than in 2025, overall activity levels remain solid. At the same time, large opportunities in the pipeline continue to be characterized by long decision processes. Our diversified industry exposure across energy, manufacturing, process industries and infrastructure provides resilience in this environment. So in summary, even if there are some geopolitical challenges impacting the decision processes of larger projects, GUTEC enters the remainder of 2026 with a strong financial position, improved earnings quality and a clear strategic direction.
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