Hello and welcome everyone to Inission's Q2 2026 earnings call. My name is Henric Hintze. I am an Equity Analyst at ABG Sundal Collier, covering Inission. I am here to moderate today's call. We will start with a presentation by Fredrik Berghel, the CEO of Inission, and then move on to a Q&A session. If at any point during the presentation you have any questions, please type them into the Q&A chat and I will read them out for Fredrik to answer them at the end. With that, I hand it over to you, Fredrik. Please go ahead. Thank you very much, Henric, and good morning to everyone. Thank you for listening in. Welcome all to this Inission Q2 presentation. My name is Fredrik Berghel. I am one of two co-founders and also one of two principal owners of Inission. Myself and Olle Hulteberg, we started this company 19 years ago, and we are still both active. I am the CEO of the company, and Olle is the Chairman. For new listeners, I would like to mention that these days or since a couple of years back, Inission is organized in two business areas: Inission EMS or Inission Classic and Inission Power, formerly Enedo. I will go through the financial performance. I will mention the few highlights for the quarter. I will also revert to our financial targets and comments where we are vis-à-vis those. As Henric said, we will end this presentation with a Q&A session. All in all, we had a really good quarter. Reported sales increased 18.7% to SEK 635 million, where Selteka was contributing with SEK 61 million, which gives an organic growth of 7.4%. A high-level explanation of the Q2 result, net added value, invoicing minus direct material, increased with SEK 66 million due to, of course, higher volume, but also better material share, SEK 53.5 million vis-à-vis SEK 56.3 million last year. Cost level with another factory and also running with higher volumes, cost level increased SEK 49 million, including personnel, other costs, and also depreciations, gives an EBITDA of SEK 41 million, which is SEK 16.8 million higher than last year. This gives an EBITDA margin in the quarter to 6.4%, which is 1.9% higher than last year. We had a similar financial net, SEK 4.7 million compared to last year, SEK 4.5 million, including currency profit of SEK 0.4 million. This all in all gives an earning per share at SEK 1.3 SEK, which is then SEK 0.7 higher than last year or also more than doubled. Year-on-year, as the last picture shows, is quite dramatic. If we look at the quarters in sequence, then we can see that volumes have step by step increased and profitability have followed up with increased volume. All of this have happened gradually. Our best guess now for the future, judging from order intake and also talking with all of our customer, is that this sort of new speed, SEK 210, SEK 220 per month, that is the speed we should be able to maintain during the second half of this year. So that then would indicate that we will end up in the higher end of our interval that we have given as a financial target of SEK 2.3 billion-SEK 2.5 billion. Also with the current cost structure, this indicates that we should be able to maintain the profit level that we have now. If we zoom out a bit and look a little bit more of a long-term development, we now have a last 12-month sales of SEK 2.5 billion, and we earn SEK 151 million EBITDA. That performance is well in line with our target. I also think that this indicates that we can actually do even better with the profit margin if we can maintain this organic growth. I think also this graph really illustrate the EMS market in general, where it was really booming 2022 and 2023. Then we have had a sort of a hangover, especially 2024, but also 2025. I think now, 2026, we will be back on track and showing sort of the underlying growth in the industry. If we look at the business areas in separate, all in all, I think Inission EMS did a really good quarter. Turnover up 18.9% compared to last year, amounting to SEK 546 million. This gives an organic growth of 7.4% if we adjust for the Selteka contribution in the quarter. EBIT amounts to SEK 36.4 million vis-à-vis SEK 28.8 million last year, and this gives a margin of 6.7% versus 6.3%. This is, of course, slightly below our target of 7%, but for the first half year we are at 7.2% and the volumes for the autumn look stable, so I think we should be able to maintain more EBIT margin level above 7%. Going over to Inission Power, now name changed from Enedo. I will revert to that. We are shipping clearly higher volume compared to last quarter, 18%, ending up then with SEK 89 million in sales, and all of that is organic. Organic growth, we always know that that is really helpful for our margin. So this higher volume, we have the same gross margin, we have cost discipline. All of this have done that the profitability have improved dramatically. So the EBITDA for the quarter became SEK 3.8 million compared to SEK -4.7 million last year, or measured as a margin, 4.3%. Compared to last year, Inission Power are now a focused product company. Interestingly, Inission Tunis, which were their old factory, now moved over to the EMS business area. They are also profitable. So I think this splitting between the product company and production has been really successful. Volumes for autumn looks promising, so we should even be able to do more second half of the year compared to first half of the year at Inission Power. If we have a look at the main items for the quarter, we name changed Enedo to Inission Power during the quarter, mainly for the reason for showing to the surroundings that we are one company and we work together. Also from a branding perspective, it is of course a lot cheaper to maintain one brand, Inission. It has been well-received at Enedo, old Enedo or now Inission Power customer. They feel that now it manifests that Enedo or Inission Power now belong to this bigger group, creates stability, creates trust. So I think it was a smart move. We have also bought back, or not bought back, we have acquired the minority stake of the former founder and owner of Simpro in Norway. When we acquired that company, Olav Sigurd, he wanted to keep a stake in his company, and the Norwegian company has been really growing over these years. Now we have agreed on buying those shares back for SEK 5 million partly. Half of that we pay with Inission shares and half of that we pay in cash. Also, Inission Løkken, they have started up a very interesting cooperation with a collaborative robot company, flexible collaborative robot company. We will work together now in a real factory environment. We will benefit from having the last newest technology there, and they will benefit from actually having a, not a lab environment, but a real factory environment. We are also really happy to announce, we have announced during the quarter that we have the first, no, not the first, but we have added one, because our factory now in Inission Tunis, it is mainly Inission Power factory. Now we have brought in the first substantial contract there. Starting small, but we have all the possibilities to grow that further. It is a Danish customer within the energy sector. We are really pleased that we see the first small steps of converting Inission Tunis to a, you can call it a normal EMS factory. As a base for our financial targets, I like to show the historical performance where we have outperformed the market in growth. Either way you measure, we have been growing quite rapidly, and our EBITDA has been 5%-ish, stable 5%-ish except for 2021 when we consolidated Enedo or Inission Power was fully consolidated. After now the second turnaround of Inission Power, we are back on 6%-ish, EBITDA margin, even though Inission Power is still diluting margin for us. Looking at EMS alone, extremely stable. If we have a good year, we earn a little bit more. If we have a bad year as 2024, for example, we earn just slightly less. Now we are on this running 12 month and we are on 7% in EBITDA margin. From this base, we really think we step by step, I will revert to that, but we really think step by step that we will be able to improve from that level. Mentioning our target for this year or what we think is going to happen, I already have said this 2.3%-2.5%. Thinking from where we are, LTM at 2.5% already, we think we will end up in the higher end of that region. Profitability, we also think we should target EMS above or around 7% and so far, Inission Power has shown that they can earn more than 2%, so we think we are well on track there. We also have an order book now for the autumn that we feel confident with. Given our LTM at 6.1% and H1 at 6.6%, we feel confident that we should reach the margin target. When it comes to our capital structure, we are now at 2.1% net debt over EBITDA. I feel also confident with that. When it comes to the more midterm, three, four years down the road, we really want and we really have the ambition to close the gap from our 6%, 7% to the best in class. That is actually double digit. We are reaching for 9%. Then, of course, Inission Power has to step up, and that is a longer journey, but they have shown now that they are able to do that journey. For Inission EMS portion, we should also be able with our strategic thinking here now, actually, turning over to more organic growth. In the quarter we have 7% organic growth and 13% acquired. If we look at the LTM numbers, we have 13% organic growth and 10% acquired growth. So far we have stuck to the new strategy by slowing down the acquisition speed and focusing over to organic growth. Also we are, of course, helped by the megatrends. You have heard me talking about that before, but we have the nearshoring. We have the regionalization work that formerly were sent Far East. They are now staying in Europe, and they are even staying in the northern part of Europe where we are active. We have the automization, robotization, megatrend, digitalization, also Internet of Things is still there, proceeding. Then of course, electrification, which is a driver of electronics big time. We are also now for sad reasons really, we have a booming defense sector where we have growing contracts, and we also have ambitions to improve there even further. That was all from me. Have we got any questions, Henric? Yes. I will start off with a couple of questions of my own and give people a bit of time to type their questions in the chat, and then I'll move on to those. First of all, I would just like to ask on the guidance, which you leave unchanged, but at the same time, you flag that the run rates in H2 should be SEK 210, SEK 220 per month, which, when I look at it, would put you above the top of your guidance range. How come you don't raise the guidance here? Prudence, to be really confident. We also think that what we are stating now is that we will reach these SEK 2.5 billion and feel confident with that, looking at our book. Then we also have to remember that we have Nordic factories. So July in my world is a half month. If you correct for that, I think SEK 2.5 billion-ish is very close. But we also know that we have a good book. So the chances of overshooting this goal is good, put it like that then. Okay. Very good. I just quickly wanted to ask about the data breach that you press released earlier this month. Will there be any costs associated with that in H2 that we should look out for? No. This was very unfortunate, and it is a sad story. I can talk long about it, but we actually had our security consultants in Italy to improve the system. While doing that, the door was open for a really, really short time and someone sort of slinked in Italy and got the information in our Finnish service. All of this is to be very clear, and I think our press release also states that it is all Inission Power, Enedo/ Efore information. We have been working with this during the summer, contacting because it is personal data. So we have contacted all of our employees, of course, easy, but former employees, more difficult. From operational point of view, we were down hours. So we did not lose anything when it comes to operational. Still, though, our personnel data ending up at darknet, that is a loss, and it should not really happen. When it comes to what we learn now after summer, however, and that is really what triggered the press release, that is also Efore/ Enedo shareholder data have been leaked. We cannot get hold of these people. So that is why we did this announcement, so that those that are reading the paper and getting the news, and if they have had Enedo or Efore shares, they will be aware. But it stays on that level. Yes. So there is no cost associated with this. No. Okay. Very good. Then it would be interesting if you could talk a bit about the situation with PCB lead times and the general component shortage situation that you are seeing. You mentioned in the report that it affected the phasing of sales within the quarter a bit. But what should we expect in H2 because of this? Difficult question, really, because so far we have longer lead times on some items and that of course, if we can place orders on six or nine months, then we need it and we think we are going to need it then. It is easier than compared to if we come on a year, 12-month, or even an 18-month plan. It becomes more difficult on the component side. On the PCB side, we have had deliveries not coming. That is better now, but the situation is constrained. We are of course trying, and you can see that also from our inventory. Our factories are trying to protect their deliveries by actually bringing home more than they are actually needing. That is also a very difficult game since a typical bill of material in our industry is 100 rows, and it is difficult to know what you are going to miss since lead times are long. But so far we are quite optimistic, even though we are really aware that things can change to the worst quickly. That is how we play this. Okay. You flagged in the report that there was quite a bit of inventory buildup ahead of the autumn in the quarter. Was any of that, or how much of that maybe is the right question, related to these shortages? Partly the buildup of inventory is that we have order book building up. We have good deliveries coming up during the autumn, and we have brought home material for that. Then you could argue, "Yeah, but you brought it home too early." Yes. That is part of that, but then also the other thing, the share of that, difficult to judge because we have a decentralized organization, and they are sitting there factory by factory and looking at this. It could be mentioned that most of this inventory buildup is for our Norwegian factory in Løkken, and they are really connected to Kongsberg. Kongsberg have actually after summer now, they have lengthened the horizon. They are back now where we were during the last component crisis. They are giving us orders now for 18 months. That is part of the psychological atmosphere. They are afraid, they are pushing and pressing, bring home material, and I think perhaps that is also why we see more than half of these extras you will find there, and a lot of that is Kongsberg related because these people are afraid of not getting their deliveries because in that industry, Kongsberg is absolutely booming. I visited them during the spring here, and they have three years order book. It is a ridiculous situation. So it is a more a matter for them now how to ramp up production in their whole supply chain where we are only, of course, one small part. All right. Let's move on to some questions from the audience then. First question here, is your target ahead focused more on increasing the EBIT margin or on growing with acquisitions? What do you think your EBITDA level would be today if you did not acquire businesses? Good question. No, as I just said in the presentation, we have the idea of shifting over. We will keep on growing by acquisition, but we will do that slower, and we try to do that with the acquisitions also with higher quality. So I think, or if we have decent organic growth, 5%-10%, or let us play with the idea that we have 10% sort of consistent organic growth. For us to move in the EMS portion here now from 7%- 9%, I think that it would be difficult to not do that if I put out my cheek a little bit. Because if the system is growing, the difficult part for all industry, but also for us is of course, when you have this up and down, and especially if you are shrinking a lot, then you have to downsize because you still have the square meters there, you still have your investment there. We also have all of our coworkers that are skilled and loyal to us, and we want to protect them also. Then we are a subcontractor, so of course, if volumes go down, we are adapting our costume. We do that because that is part of the game, but we do not do that lightly either. The answer on the question would actually be, y es, we would absolutely have 2%, 3%, perhaps even 4% higher EBIT margin if we totally stopped acquisition and just focused on EBIT. But we think everything, road always have two ditches, one to the left and one to the right. It is a balance game, and we have decided to shift over, but not totally because we think and we are proud of our growth journey with the actual profitability level that we have had. Then if you take Inission Power out of the picture, as I showed you, I think we are proud of what we have achieved, even though we know that our colleagues, some of our colleagues I would say, because not all, some of our colleagues are doing even better. All right. Next question. Are you working on any defense contracts that may lead to higher volume in the near future, and if so, what sort of impact could they have? Yeah, we are working. Kongsberg, they are one of our top five customer, and we are working with these people, and we are not into the defense sector there, that is something that explodes. But Kongsberg Seatex that became Discovery, when they splitted Kongsberg in Shipping division and Defense & Aerospace division, Discovery belongs now to the Defense division, and we are doing a lot of business with them, but we are also quoting, and we have test orders. In Halden, we have real business, not substantial, but we have real business in Løkken to KDA, Kongsberg Defence & Aerospace, and we have good hopes that these contracts will improve in volume. We are not there yet, but we are very positive for that. Absolutely. Then we also have our top five customer, as I have talked about, FalCom, this GN Hearing Danish company, in these few colleague. From a startup, they are also now top five customer of ours, growing rapidly. But that is communication and hear protection devices. So that is nothing that explodes. Still, though, it is the armies around the world that is buying from FalCom. All right, could you give any further comments on the underlying demand from customers outside the defense and data center sectors? I would say stable, and yeah, it has been stable, and you can see it almost from our regions, where perhaps our Norwegian colleagues are more Kongsberg related, and they are coming up quicker. Our Swedish companies that have more perhaps old-fashioned industry customer, we see tendencies clearly now that demand is coming back. It's not like shooting through a roof or anything, but after this back and forth, Liberation Day, this April thing, and the war in Hormuz, and Iran and all of that, it's a lot of uncertainties created out there. Totally unnecessary, of course, but we see signs of that underlying demand in our sort of general industry is improving. Absolutely. So the answer is yes. Long answer. Could have been short. Could have been yes also. All right. Another question on the defense sector. Absent any large defense contracts for Inission directly, do you think the boom for peers like Kitron, etc., will spill over to you? Are there any volumes competitors are lacking capacity for that you could bid for the near term? Not near term, but long term. We have seen long term that some of our bigger colleagues in the Nordic, but also in the world, they have what they call entry ticket, and they are these people that having SEK 50 million or even SEK 100 million as an entry ticket. If you have less volume, you're not allowed to. They don't let you in even. For us, a SEK 15 million contract, and then also for Inission, it's a big contract, but for an Inission factory, it's a fantastic contract. So there are possibilities for us, perhaps not directly related to defense, but when everybody's doing well, and the biggest one are moving upwards, it's creating a room for us medium players here. Absolutely. So the question is interesting and relevant, but then it's, of course, really difficult to quantify it. But we see those signs, absolutely. I'll give the listeners a couple more minutes to type in their final questions. While we wait for that, maybe you could give us an update on what share of your sales are now related to defense and data centers since these sectors have been performing well. Yeah. On defense, we increased from 7% to 12%, 13% last year and keep on growing. We don't have any in our segments that is data center, but that is very much connected to electrification in our world. ABB, I've talked about our top five customer here, and we have Kongsberg, we have FalCom. ABB is also top five, and these people are also doing extremely well. I don't have a percentage there in my head, sorry, but they are doing well, and they are one of our biggest customers. We are growing together with ABB. Absolutely. Also we have new contract coming up since a few years back with Eaton. That is an ABB, if you talk electrification, ABB sort of colleague or competitor even. We have good chances of being a part of that ride. Okay. You mentioned also in the report that the M&A pipeline is growing quite a bit. It sounded like you've seen a bit of a shift there. I was just wondering if you could say anything about if you think there's any particular driving force in this. Is there anything going on with the sentiment among sellers or why is this? Yeah. I have talked about our pipeline, or we call it the stow, where we have our projects, and we have the cool and the lukewarm, the warm and the hot, and we have record high number on the hot plate. The definition on the hot plate for us that is this case is concrete for sale, and it will be sold. It has piled up there, to the extent that we have with our limited top resources there actually cope with this. We also then prioritize and do the ones that we really think are interesting, and that is Nordic, and that is, of course, profitability. It is EMS. The reason for that, maybe it is really that the economy is coming back, activity is higher, compared to 2024, 2025, when a lot of EMS companies were shrinking. Then it's of course, difficult to go to the M&A market and say, if you have a downward trend, "Hey, but this will be much better," because all seller I meet, they always talk about the fantastic next year or, and the year after that. Now when you can see an improving situation, then it's of course, easier to sort of try to argue for that this trend will continue. So maybe that is really the reason for a lot of or much more is. But then also we are a small player here and, yeah. I think, yeah, that might be the reason. They think they can sell for a decent price now. But we are also a cautious bidder. We have been bidding and losing. We have our idea of 4- 5 EV value, EBITDA, debt cash free. Going down in Europe, this 4- 6, it doesn't hold. We have increased our multiples, but we are still not there yet. But eventually, we will close something. We have good hopes for that. I have talked about Denmark, I have talked about Finland, and there are also opportunities in these areas, that we are scouting on. Yes. Very good. I don't see any new questions in the chat, so, I think it's time for us to end this call. Fredrik, maybe you want to say some final words? Yes. Thank you all for listening in. All of our listeners and viewers, I think, all in all, Inission made a good quarter. Also the message for H2 is that what we can see now, we have a decent even a good and stable order book, and we will be able to deliver on our financial targets. That is my message. Thank you.