Executive Vice President and CFO, Nolato
Nolato - Q1 Presentation 2026
CEO Christer Wahlquist and CFO Per-Ola Holmström present the Q1 report for 2026. Q&A after the presentation.
0:00 Start
0:35 Summary Q1 - Nolato Group
1:45 One Group - Two Business Areas
2:20 Medical Solutions - Sustainable growth and global expansion
2:39 Medical Solutions - Focused product areas
4:19 Medical Solutions - Q1
5:36 Engineered Solutions - Advanced technology and high-productivity manufacturing
5:53 Engineered Solutions - Focused product areas
6:54 Engineered Solutions - Q1
7:35 Group financial highlights
9:17 Sustainable development
10:20 Current situation
11:49 Q&A
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About Per-ola Holmström
Per-Ola Holmström, CFO of Nolato, presented the company’s second quarter 2026 financial results alongside CEO Christer Wahlquist on July 17, 2026. He reported group sales of approximately 2.5 billion Swedish kronor, representing 4% currency-adjusted growth, with the strongest performance in the Medical Solutions business area. EBITA for the quarter was 247 million kronor, yielding a margin of 10.1%. Holmström noted that the margin was affected by increased raw material prices and startup costs for new programs, while describing the company’s cash flow as strong. During the Q&A session, Holmström addressed questions about elevated group costs, attributing them partly to a 6 million kronor severance charge and costs related to an intensified M&A agenda. He stated that the combined group costs from the current and prior year quarters represent a more normal level. Regarding higher input costs, Holmström said the company expects about one-third of the impact to persist into the beginning of the third quarter, with the remaining two-thirds already accounted for in the second quarter. He also noted that net financial liabilities excluding pension and lease liabilities stood at 1.055 billion kronor, equivalent to 0.7 times EBITA, which he described as providing flexibility.
Transcript (76 segments)
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Host0:01
Hello and welcome to today's presentation with Nolato where she CEO Christer Wahlquist and CFO Per Ola Holmström will present the report for the first quarter of 2026. After the presentation, there will be a Q&A. So, if you're calling in and want to ask a question, please press star nine to raise your hand and then star six to unmute yourself when handed the word. You can also send in questions via the form to the right. And with that said, I hand over the word to you guys.
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Christer Wahlquist0:25
Thank you and welcome to the presentation of Nolato's first quarter of 2026. Uh Christer Wahlquist speaking here and starting on page two. The first quarter. Uh during the first quarter of 2026, we saw growth in both our business areas. Uh despite a very volatile geopolitical situation. Uh the total organic growth, if we adjust for currency, ended up at 3% uh and was a little bit stronger on the medical side with 5% and 1% on the engineered side. That summarizes to an EBITA of 260. And of course, the EBITA was strongly affected by currency headwinds as we calculate to 7%. Uh we kept our margins on 11% and sustaining them in a good way. Uh and of course, our strong financial position uh with very good possibilities to execute our acquisition agenda remains. Turning to page three.
Summarizing the Nolato Group. Uh the group consists of two business areas. The medical solution at 57% of the total and engineered solution at 43%. Of course, it's two different markets, but behind the scenes we are doing similar things. Of course, with some different growth drivers and the different key needed things, but the two business areas create synergies by combining them to the customer interface.
Then we jump to page four summarizing the first of the medical solutions. And here we can see a 20-year graph of our development, and we are of course continuous sustainable growth with global expansion as a target. If you look in behind the scenes on page five, we summarize the different focus product areas. And of course, then we can start with the in vitro diagnostics, which this quarter had a good growth and ended up at 18% of the total business area. This therapeutic areas is a long-term growth market that we think has good potential for the continuous years going ahead. The second one is cardiology, ended up also growth, 7% of the total in this area. This is of course the area with the toughest quality demands. Then we have pharma packaging decreasing as a share of the total, 11% and this is an area that we entered into because we wanted to build ourselves strongly into the drug deliveries area. And then of course, we see the drug delivery increasing from 16 to 70% of the total. This is a long-term potential with delivery devices for the large molecules within pharma. Then we saw endoscopy and general surgery decreasing as a total of the total group ending up at 20%. Uh, we saw some stock changes in that market. And then continence care, it's a high volume market building for future.
Jumping to page six focusing on the performance first quarter of medical. As mentioned, we increased the sales with 5% adjusted for currency. And as I mentioned before, we saw growth in in vitro diagnostics, higher proportion of new products. We saw a continuous upbeat performance of the drug delivery. We saw as mentioned before, surgery contracted due to inventory adjustments and other markets had stable volumes. The margin ended up at 11.8% points. We saw some negative impact from the in the quarter from growth in newer products that have not yet reached the planned volumes. And of course, resources for starting up the new projects have some negative impact on the margin. The expansion in Hungary linked to the large customer program within the drug delivery systems is proceeding according to plan and the validation deliveries was during the quarter according to plan and late in the second quarter, we expect to have our first commercial volumes in that program.
Jumping to page seven on the engineered solutions side. Uh, and of course here we are advancing our high productivity manufacturing on a global scales, adjusting the customer base and growing in new areas. If we look on page eight, we are the focus different areas here. Uh we saw consumer electronic grow as a share of the total ending up at 11%. Here we are doing advanced products for smart homes, so strong growth in that area. The automotive was stable at 23% of the total. Uh on the hygienic side, we saw some stock movements decreasing the share of the total to 13% from 15 before. Uh others were also had some headwinds on the white good side uh and also some on the forest equipment. Materials had very strong growth within the quarter. Uh this is as mentioned a little bit premium margins and as a share of the total, it was growing from 18 to 21%.
Summarizing the business area's first quarter, we saw 1% adjusted growth. Uh very strong growth for the materials at full 15% adjusted for currency. We saw as mentioned before strong growth in the consumer electronic market where the smart home products are growing. Lower volumes within the hygiene affected by in motors as mentioned. And stable volumes for automotive. So the margin ended up at 10.6 percentage and of course was affected by the favorable mix with the higher proportion of materials.
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Per-ola Holmström7:36
Good afternoon. Per Ola Arnstrom, CFO and group financial highlights on page 10. Net sales was in the quarter and a 3% growth ending up at 2 billion 357 millions. Currency headwinds of 7%. Operating profit amounted to 260 millions compared to 271 millions last year. Again affected by currency. We had an unchanged EBITDA margin of 11%. Tax rate was within expected range of 22%. Cash flow from operating activities rose to 225 millions compared to 135. The change of working capital was lower than last year. Net investing investments affecting cash flow decreased to 193 millions compared to 271. Mainly because last year included an operating property in Poland of 69 millions. Return on capital employed for the last 12 months was 14%. Net financial liabilities in relation to EBITDA on a low level 0.5 times securing flexibility for expansion.
Turning to page 11 on some development on the sustainable side. We have had a very long-lasting focuses on sustainability which we feel support our business offer to the market. So it's creating opportunities for us. We have during 2025 operated all plants with 100% renewable electricity. We have then eliminated scope one and two emissions, meaning that the scope three now accounts for 99% of our total carbon dioxide footprint. We have also during launched very ambitious sustainable targets for 2020 to 2030 that are guide developments in climate circularity. So, it's a very long-term focus and we are ahead of our competitors and feel that this is gaining market positions and possibilities for us.
If we turn to page 12, focus on the current situation per business area first. Of course, we see on the medical side continuous growth strategy, very high market activity. A lot of focus on innovation and sustainability. We have in our base a very broad customer base with very close, long-standing customer relationship. Uh, we are expanding, so establishment of operations in Malaysia and the expansion in Poland is ongoing. On the engineered solutions side, we are advancing our market positioning, not least in the consumer electronics. And we are on a good way of establishing positions in new product areas. We see success in new products, new technologies, mainly data centers, that is very positive for the material side. And we are expanding our operations in Malaysia. And on the overall, we have a very good possibility and focus on acquiring and adding new technologies to our portfolio, creating synergies to our customers. Thank you. We are now opening up for questions.
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Host11:38
Thank you so much for the presentation here. And now, as you mentioned, we will now open up for questions. If you're calling in and want to ask a question, please raise star nine to raise your hand and then star six to unmute yourself when given the word. And the first caller here is Oddvar Gilani from ABG. You have the word.
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Oddvar Gilani11:58
Uh yes, hello. Um I would like to start off on a question since you mentioned data centers in the report, which is probably the hottest thing around right now. I feel I have to ask if you can quantify the exposure you have towards data centers and perhaps how much that part contributed to with growth in Q1.
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Per-ola Holmström12:19
Yeah, I would say that um it's still very limited numbers in a group perspective. But of course, it's supporting the growth rate very much and it's coming from almost very limited sales in that area. So, it's standing for a substantial part of the growth.
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Oddvar Gilani12:48
Okay, I understand. And then on the sort of I guess risk of rising input costs, and I appreciate you move these on to customers with some lag, but just to get a picture of this, since you have a lot of petrochemicals on the input cost side and it's always difficult to track exact prices since there are so many different grades. Can you help us with a rough indication on how much with current price levels you would expect material costs to rise going forward?
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Per-ola Holmström13:16
Yeah, we have exactly as you say exposure to that and we do see a lot of changes going on right now. And it's a daily change. But, we do anticipate that in the near time we would see an increase of the pricing to us between 5 and 10%. That is the range we do anticipate.
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Oddvar Gilani13:56
Okay, that's very helpful. And then, if I remember my numbers from the last time in 2022 when we had an oil price spike at the time I think you said roughly 60% of your total material costs were linked to oil in some way and you had roughly 3 to 6 month lag on moving this forward. Are those rules of thumb still valid or have things changed since then?
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Per-ola Holmström14:22
Um, I would say that that is an overestimate of the fuel impact in our bomb. Um, I would say it's more if we look on the things that is going on right now and what's increasing substantially. It is more 1.6 billion to 1.7 billion of our cost base that is subject to this 5 to 10% price increase in the near time scenario.
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Oddvar Gilani15:02
Okay. Thank you. That's very helpful.
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Christer Wahlquist15:06
Yeah, and one thing in addition to that Aryan is that as you say this is something that we pass on to our customers and we have been exposed to this from time to time and we can see that we have a good track record of being able to pass on this to our customers and coming out in the same shape when it comes to margins. But as you say there is a time lag and that might be around three to four months that we are affected by not having transferred all of that.
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Oddvar Gilani15:52
Yeah, I understand.
And a final one from my end on medical and you mentioned these new products that aren't quite reaching the planned volumes that you had expected. Can you go into a bit what the reasons are behind this and if there's any structural issues we should be afraid of or if this is just temporary?
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Christer Wahlquist16:15
It's should be a little bit nuance on that. The ramping is of course a little bit delayed but during a normal ramp you see those lower volumes during a period so it's not off track. It's more the ramp is ongoing and not on profitable volumes yet. So there is no structural change in that.
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Oddvar Gilani16:51
Okay, and anything on why it's slower than expected or is that just you know always an uncertainty? Is it within normal estimate risk so to say?
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Christer Wahlquist17:03
I think it's close to according to plan so it's more linked to the sort of introduction to the final markets.
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Oddvar Gilani17:14
Okay, I understand. In that case that's all for me, so thank you.
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Christer Wahlquist17:18
Thank you.
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Host17:20
Thank you so much for the questions. And the next caller here is the cell phone number that end with 1008. You have the word.
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Oscar Ankarcrona17:33
Thank you. This is Oscar Ankarcrona from SEB.
So, my first question just want to continue on Adrian's question on the potential more than pressure in the near term. So, first of all, I think you said 3 to 4 months. So, I mean Q2 obviously will naturally have a lag effect where you don't have a lot of price increases. Is that how to interpret it? So, you should see Q3 more of sort of normalized effect on the beta level.
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Per-ola Holmström18:10
Yeah, I think the timing would be more that the effects during April is very limited actually and that we will see a spillover into Q3 instead. So, that is more the timing we would see.
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Oscar Ankarcrona18:28
All right. And then just also to clarify the 5 to 10% price increases. How should we interpret that? Is that across the board or is that a number or a share of your total sales that you're going to push the 5 to 10% price increases to the customers?
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Per-ola Holmström18:46
The 5 to 10% price increases, that is what we are facing from our suppliers of the actual raw materials we're buying by the fuel pricing. And that is an average. It's of course different percentages. High ones, low ones. And that is our estimated average we do see going forward the next coming months.
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Oscar Ankarcrona19:22
All right. So, when you refer to 1.6 to 1.7 billion, that would be the plastic raw mats, I suppose, and you're going to increase or that you have an increase of 5 to 10% and those will be passed through to your customers. Is that how I interpret?
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Per-ola Holmström19:42
Right. Exactly.
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Oscar Ankarcrona19:44
All right. Perfect. Thank you.
Then I just had a question on the GLP-1 ramp-up from late Q2. I think you previously mentioned that you were sort of break even when you started with the validation sales. So, just wondered if you could add some comments to the incremental margin profile of the commercial volume. So, will you have very high drop-through or does cost increase a lot when these commercial volumes are shipped?
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Per-ola Holmström20:23
Yeah, like we have explained earlier, we don't see any large negative effects going forward, but of course we won't have the margins expected at full-scale operation. But we don't see that the margins would turn down dramatically based on that startup, and that project is of course one that we're explaining the margin in Q1 as well. Because we already have most of the cost base we are going to use to produce that in larger volumes as well. So, there is a certain negative effect in the start, but we don't see that to be any substantial negative effects going forward.
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Oscar Ankarcrona21:29
Got it. That's helpful. Thanks. And then just finally sort of broad question, I suppose, but given that you have very broad exposure in terms of offering and also geographically, just want to hear your thoughts on the geopolitical uncertainty. Has this caused a big shift in demand from your customers, which could potentially affect volumes near term or do you feel like you're resilient even in the engineered segment?
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Christer Wahlquist22:02
It's interesting. We've seen some volatility over time from different segments and markets. Some are in some periods a little bit cautious, then again, short time later, they are sort of afraid of some lack of supply, so then they increase. So, as an overall, I think it's been volatile, but stable underlying, but it could be looking forward, it could also affect maybe single quarters with some stronger or some weaker sales. So, there will be some volatility connected to this geopolitical situation.
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Oscar Ankarcrona22:46
All right. Perfect. That was all for me. Thank you very much.
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Per-ola Holmström22:49
Thank you.
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Host22:50
Thank you for the questions. And then we go ahead to the next caller, which is cell phone number that ends with 886. Please go ahead.
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Anders23:13
Okay. Can you hear me? Sorry about that.
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Host23:16
Yes.
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Anders23:17
Perfect. Hi, it's Anders at Nordea. So, I wanted to ask Christian some questions.
Firstly, on sort of the materials exposure that we discussed. I mean, with quite solid growth in the quarter, it would be interesting to hear you elaborate a bit more on sort of the durability of this growth. I mean, is it mainly a result, looking specifically maybe at data centers, that mainly a result of specific customer programs or should we view it as more broad-based exposure in this end market?
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Christer Wahlquist23:55
Yes, I think it's a good question, and I think it's a situation where we are currently going into and have been going into new markets for some time, and it's not connected to a single customer. It's a broad growth across different sectors. Of course, we talked a little bit about the data centers, but it's also some defense. It's across different customers and different markets. And we feel that of course, it was a very strong growth on a high level this quarter, but we see good potential for continuous growth within this area.
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Anders24:38
Okay, very good. Thank you. And sort of just taking data centers as an example, are you able to share anything in terms of how many customers you're selling into in that vertical?
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Christer Wahlquist24:52
We have numerous customers, numerous different smaller projects that adds up to this.
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Anders25:02
Okay. Thank you.
In sort of surgery, you mentioned some inventory adjustments particularly early in the quarter as I understood it. Could clarify a bit if we should view this mainly as channel inventory normalization or is there any sort of end demand softness here?
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Christer Wahlquist25:29
Well, we think it's volatility in the supply chain still going on.
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Anders25:37
And how do you arrive at that view just so that we understand that.
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Christer Wahlquist25:45
Yeah, of course we monitor the sort of end market movements and what kind of end products our deliveries are going into and then we monitor them and then we compare that with our deliveries and then we see volatility. So in some period we are delivering more volumes than the end market sellout and in some periods we are selling less than the end market movements and then of course that is movement in the supply chain.
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Anders26:19
All right. You're doing your homework in other words. That means to sort of question that more the rationale so we understood that comment. Thank you.
Finally, I wanted to ask a bit on sort of you talking about IVD growth and newer products taking larger share. We discussed the novel ramp up in Europe but with some volumes not yet at commercial levels. I mean, could you break down a bit more what you're seeing not just in terms of the previous discussion, but by end market IVD, drug delivery, surgery, and what needs to happen for the new product ramps to move from margin dilution to supporting the margins over the next couple of quarters. Is it mainly a factor of volumes, or is there anything else in that ramp up that's important to consider?
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Christer Wahlquist27:13
Of course, during the early volumes in a new program, we have some additional cost because we are making sure that the quality is working in all levels. So, we have some extra cost to make sure that we are not delivering anything out of specification. Then gradually when volumes and time elapses, then we can reduce our cost base of producing, and of course we get some efficiency of volumes. So, that's normal thing. Now we have quite large programs that are expected to ramp. So, of course, it's hitting in this quarter.
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Anders27:59
Yeah. Okay, very good. Appreciate the answers. Have a good afternoon. Thank you. Thank you.
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Host28:07
Thank you for the questions. We will now go ahead with the next caller who is Mikael Elam from Carnegie.
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Mikael Elam28:16
Yeah, can you hear me?
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Host28:18
Yes.
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Mikael Elam28:19
Okay, great. Thanks. Thank you my question. Um yeah, I also have a follow-up on this surgery and market area and the inventory adjustments. You have had that for quite some time. Would be great if you can talk to us a bit more about this volatility and maybe comment on the product pipeline quality and the underlying market growth, what you're seeing there, and also your market position in this area to get an understanding of the underlying factory.
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Christer Wahlquist28:55
Mhm. So starting in we entered into this market some years ago with the view that there is changes coming in the market, more robotic surgery coming, and so on. And that change has been a little bit slower than we expected at that time. But of course we think that change is something that is positive. And that's why we entered. The volatility it's very long supply chains in the surgical market. And then you can have swings with different inventories in different levels in the supply chain. So it's been more volatile than we expected. And we foresee that for some time coming as well.
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Mikael Elam29:52
Mhm. Okay.
Um, all right. We have to accept that, I guess, going forward as well. And one thing about the silver input cost that you had struggled with a bit in Q4, how did that develop? And have you taken care of it on current silver prices?
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Per-ola Holmström30:14
Yeah, I think you could say that it's been handled with a lot of work during the first quarter, and we did see effects of that in the beginning of the quarter. At the end we do think that most of that has been taken care of either by adjusting pricing or by having a discussion with the customers of changing materials to other metals that are not that involved in the pricing of the silver materials.
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Mikael Elam30:53
Okay. I'm just curious about the materials area. How much is volume and price and mix effects in that 15% growth that you talked about?
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Per-ola Holmström31:08
Of course, there are some effects coming from the price effects, but I would say that the larger part of the 15% is definitely coming from volumes.
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Mikael Elam31:25
Okay, good. And my final one is on Cathodic. Can you update us on what to expect for 2026 and maybe also for 2027?
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Per-ola Holmström31:34
Yes, we commented that after Q4 650 to 700 millions for the full year 2026, we are still at that expectation. So, 650 to 700.
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Mikael Elam31:58
Okay, good to know. Thank you.
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Host32:04
Thank you for the questions there. They were all the callers we had, but we have also had questions sent in to us.
Can you clarify what impact higher input material prices had on Q1 profitability? Also, what magnitude of impact should we expect in Q2 and onwards? And how does the impact differ between engineered and medical?
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Per-ola Holmström32:29
Yeah, we do have explained the maths behind it and our best assumptions. The effect during Q1 were very limited. And it's an onward effect and we did say most of that is during Q2 and some will spill over into Q3. If it stands where it is right now. So, I think that is the explanation we can give in uncertain areas.
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Host33:08
Thank you for that. That was all the questions we had. So, thank you to Nolato for presenting here today and thank you all for tuning in and sending in questions and then calling in.
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Christer Wahlquist33:17
Thank you all for your interest in Nolato. Thank you.