Nolato - Year-end Report 2025

and welcome to today's presentation with Nolato, who is going to present the report for the fourth quarter of 2025. With us here to present today is CEO Christer Wahlquist and CFO Per-Ola Holmström. After 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.

Thank you and welcome to the presentation of Nolato's fourth quarter of 2025. Starting on page two, we had sales that totaled just shy of 2.3 billions in the quarter, which gives a growth of approximately 2% adjusted for currency. We saw an increased growth rate for the medical solutions business area at 5%. We saw a decrease approximately 1% for engineered solution adjusted for currency. We had some headwinds on the sales in the last part of the quarter due to Christmas holidays and during that time. Our operating profit ended up at 236 millions in comparison to 240. This was strongly affected by currency headwinds of 6%. The margin rose to 10.4. So we saw improved margins in both areas, but sequentially lower due to somewhat weaker volumes during the Christmas break and also some start-up costs for the new programs in United States. If we focus on the full year of 2025, we ended up at close to 9.5 billions in sales. That corresponded to a 2% increase, adjusted for currency. We saw an operating profit increase 11%, even though we had a strong currency headwind. The margin improved and ended up at 11.3% in comparison to 9.9. So we saw a full 1.4 percentage points increase of margin. The earnings per share ended up at 2.88 SEK per share. And we have a very strong financial position enabling us to execute on our increased acquisition strategy. The dividend proposal is 1.7 in comparison to 1.5 kronor per share. And that is a current payout ratio of 59 in comparison to 61 last year. If we jump to page five starting with medical solutions, here we are on a growth and global expansion journey and this business area now corresponds to 58% of group sales in the fourth quarter. On page six, we see our focused product areas. We feel that we are very well positioned with leading global customers and positioned in very interesting product areas. If we go through them a little quickly, we see the in vitro diagnostics with a long-term growth potential and we have a very strong position in this therapeutical area. Cardiology, of course, high-end market, a lot of lifetime implants and very high demands on the products delivered. Drug delivery, a growth market area where we have a very strong position and well positioned for continuous growth. Endoscopy and general surgery, it's a changing market. It's interesting with the new sort of more robotic surgery that are coming in. Continence care, of course, high volume market with huge volumes. If we then jump into the fourth quarter for medical solutions, we ended up just above 1.3 billion in sales, which corresponds to 5% adjusted currency growth. We see that the drug delivery market continued to exhibit growth within the auto injector and pen injector systems. And we saw a positive development for the in vitro diagnostic during the year with a slow start last year and then increasing volumes. If we look on the margin side, we ended up at 11.6% margin for the business area. That is an improvement of 0.4 percentage points compared to 2024. We had during the quarter negative impact due to temporary high cost for the startups as mentioned before. And also some volume headwinds during the Christmas breaks. Our expansions are going according to plan both in Hungary, Poland, and Malaysia. Jumping into engineered solution, which is a sales level of close to a billion and 42% of group sales in fourth quarter. In this area, we are focusing on different product areas, of course, the consumer electronics where we see potentials. Hygiene, good potentials and automotive, of course, a little bit slow right now as we explained in previous quarters. And then as a little bit different market, the materials where we see strong growth, but also affected during this quarter by the increased cost of precious materials. Jumping to the next page and then summarizing engineered solutions for the fourth quarter. As mentioned, strong growth materials, 10% increase if we adjust for the currency. We saw sustained performance for consumer electronic, particularly in Asia. After a positive performance during the year, volumes decreased for hygiene in the last quarter due to inventory adjustments ahead of year end. The total business area ended up at the margin of 9.9 in comparison to 9.2. We saw, of course, favorable product mix, but if we compare to the previous quarters of 2025, we had negative impact of the lower volumes and sharply increased precious metal prices as mentioned.

Thank you so much for the presentation there and as you mentioned we'll now carry on with some questions. So if you're calling in and want to ask a question press star nine to raise your hand and then star six to unmute yourself when handed the word. And the first caller here is Carl this one from Nordea. You have the word.

Hi. Hi it's Carl here from Nordea. Sorry for a slow unmuting. A couple of questions here. It is of course a lot of dynamics in this report so I hope to unpack some of them. You mentioned 100 basis points in engineered owing to shutdowns as well as the precious material thing. So firstly I wonder what materials are we talking about and secondly yeah how do you view that topic specifically for Q1 and Q2?

Hm. And what portion of the 100 basis points was the metal or material thing compared to the customer orders shutdowns?

Uh and what did you say about Q1? Is it same effect or less effect or ballpark?

That's very clear. Uh jumping into medical, you mentioned the production ramp up in the US, the 50 basis points impact. How long is that ramp? And what product are you? Is it a multi-product facility or what are you ramping?

Good. And the final question, if I may, is on the medical organic growth. Did the new auto injector contract that you're manufacturing in Hungary contribute with a similar magnitude as in Q3? And if so, what is the main delta behind the acceleration of the organic growth in medical?

Mhm. Okay, oh sorry, if I final one. In terms of the M&A cost you touched upon, it seems a little bit on the high side given your history of doing due diligence. Is it fair to assume that it's a bigger transaction or is it several small ones you're looking into?

Okay, fair enough.

Very good. Thank you. All for me.

Thank you so much for the questions. And the next caller here is Oscar Lönnquist from SEB. You have the word.

Hello. Hello. Sorry. Uh wasn't able to mute myself. So, yeah, I just had one question on the volumes. So, assuming that there were earlier shutdowns in Q4, do you expect to see a catch-up effect in Q1 or is more of a normalized quarter?

All right. I see. And then just on the startup costs here in the US, any particular reason why you sort of highlight that as a temporary cost? I suppose that I mean, you're looking to expand most of the time.

All right. I see. And then just a follow-up on Carl's question before, but just a clarification on the pricing adjustments in materials in specific. So, how would you handle the dynamics of price increases when we have so volatile precious metal prices?

All right. But have you done any price increases this far based on the higher material prices that we saw in especially in Q4?

All right. Perfect. That was all. Thanks.

Thank you. And yes, final shout out here if somebody want to ask a question, please press star nine to raise your hand. We'll give you a couple seconds here to see if anyone else want to ask a question. It seems that that was all the questions we had. So thank you so much and Lotto for presenting here today and thank you all for tuning in. I wish you a pleasant day.

Bye.