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Welcome to the CTT Systems Q2 2026 report presentation. For the first part of the presentation, participants will be in listen-only mode. [Operator Instructions] Now I will hand the conference over to the speakers CEO, Henrik Hojer and CFO, Markus Berg. Please go ahead.

Thank you, and good morning. Welcome to CTT's quarterly earnings call. I'm Henrik Hojer, CEO. And with me today, I have Markus Berg, our CFO. We will present CTT's financial results for the second quarter and the outlook going forward.

Next slide. Starting with the highlights in the second quarter. We continue to see momentum in our OEM business with higher volumes. Sales in U.S. dollar increased sequentially 21%, driven by aircraft build rate ramp up and higher content value per A350 shipset. We foresee next ramp-up in volumes in Q1 '27.

Aftermarket demand remained resilient despite higher jet fuel prices and flight disruptions. A positive highlight was that spares demand surged with higher order intake and sales late in the quarter.

Next slide. Looking at the financial performance in short, comparing the same quarter last year, net sales were in line with our currency adjusted outlook. Net sales decreased SEK 4 million to SEK 76 million, negative FX impact with SEK 2.5 million. EBIT decreased to SEK 14 million compared with SEK 18 million. The EBIT margin was 19% versus 23%. Earnings per share decreased to SEK 0.79 versus SEK 1.19. Operating cash flow improved SEK 24 million versus SEK 3 million.

Next slide. Net sales bridge from comparable quarter last year shows growth driven by SEK 12 million in OEM and SEK 3 million growth in retrofit, offset by a SEK 10 million decline in private jet and SEK 8 million lower aftermarket sales.

If adding some perspectives under the numbers, OEM, growth reflects the ongoing widebody production ramp-up and remain supported by strong structural demand. While growth is not linear and occurs in steps, the underlying trend remains positive and is driven by structural increases in aircraft production. The year-on-year increase is 125%.

Private jet sales temporarily impacted by the absence of deliveries during 2026, activity has been largely dependent on ACJ programs. Given the limited number of VIP projects in the market, however, quarterly sales can be volatile. We have a better setup going forward. The combined -- combination of ACJ and BBJ programs supports a higher long-term activity level.

The reported decline in aftermarket sales requires some additional context. The year-over-year decline is primarily explained by approximately 9 million of distribution inventory buildup in the comparable quarter last year. Adjusted for this effect, underlying aftermarket sales increased by roughly SEK 1 million. A breakdown of reported sales shows that aftermarket sales accounted for 64% and 28% from system sales.

I now hand over to Markus for some more detailed financials.

Thanks, Henrik, and good morning. Starting with the EBIT bridge. Compared with Q2 last year, EBIT decreased SEK 4 million to SEK 14 million, positively impacted by SEK 1 million in FX, minus [ SEK 2 million ] from lower exchange rate on sales but plus [ SEK 3 million ] from account receivables, account payable valuation.

Negative sales mix volume decreased EBIT with SEK 1 million, and sales mix resulted in an EBIT decrease of SEK 6 million. Lower costs, mainly from cost savings, increased EBIT with SEK 2 million. Currency effects remain a wildcard that is hard to predict with major impact on CTT sales and earnings.

Even though CTT has all loans in dollar and implemented cost savings, it is not enough to compensate for the negative currency effect on sales. Expected volume growth and cost control will gradually drive the margin upwards to 25% or above.

Let's move on and look at the cash flows. Operating cash flow was strong in the quarter, plus SEK 24 million compared to SEK 3 million last year. Working capital, plus SEK 13 million, where account receivables benefited from the receipt of previously overdue payments during the quarter.

A new loan of SEK 9 million was obtained during the quarter to finance the expansion of the Nybro facility. Dividend payments of SEK 30 million compared to SEK 67 million last year, reduced cash flow during the quarter.

Let's continue and look at the net debt. Net debt amounted to SEK 34 million compared to SEK 35 million in Q2 last year. Cash closed at SEK 12 million. In addition, CTT has SEK 48 million in available credit facilities. Equity ratio at 71%, same level as Q2 last year. Return on capital employed at 17% compared to 23% last year.

Let's move on and look at the year-to-date numbers. Year-to-date, net sales increased 6% to SEK 142 million compared to SEK [ 144 ] million. Currency adjusted plus 13%. Sales higher mainly due to the increase in the OEM area. EBIT increased 9% to SEK 24 million compared to SEK 22 million, giving an EBIT margin of 17% compared to 16%. Operating cash flow increased to SEK 15 million compared to SEK 8 million.

I now hand back to Henrik for the outlook.

Thanks, Markus. Let's move to the updated outlook for Q3 and the full year 2026. For the third quarter, we expect revenue to be modestly below the previous quarter. We repeat the full-year outlook provided in the previous report with strong demand growth in OEM, estimated revenue to increase 45% to 60% in U.S. dollars compared with 2025 and an improved aftermarket business, estimated revenue growth in U.S. dollars of 5% to 15%, partially offset by weak year in private jet with few deliveries.

I will now give you some more details. OEM. The next ramp-up in OEM production volumes is scheduled for Q1 2027. While not all deliveries for the year are firm, it now appears increasingly unlikely that revenue growth will reach the upper half of the estimated range. Comparing the second half of the year with revenue generated in the first half, the outcome is expected to be approximately the same level or marginally lower in U.S. dollars.

Aftermarket. The outlook for the aftermarket business strengthened somewhat during the quarter, primarily driven by spare parts sales. If this trend continues, revenues should reach the upper end of the outlook range or exceeded. However, we do not yet have full visibility or predictability across all parts of the aftermarket business for Q4. We maintain the outlook range of 5% to 15% for the time being.

Private jet. In private jet segment, projects previously scheduled for late 2026 have been postponed. As a result, full year 2026 is now expected to be the weakest year in several years.

Looking ahead, however, we expect to benefit from a broader pipeline as Boeing business jets, now sells the BBJ-737MAX with our system as baseline configuration. Both Airbus Corporate Jets and BBJ have several projects scheduled for '27 with our systems in the spec. In addition, there is an extensive pipeline of VIP projects planned for 2027. Taken together, these factors position us for a very strong recovery year next year.

Retrofit. For retrofit, we repeat the full year revenue in U.S. dollar, is expected to remain at the same level as in 2025 as no further deliveries are currently scheduled for '26.

Next slide. In Q2, our aftermarket business remained resilient, supported by healthy underlying demand. Our delivery volumes were well aligned with the end-customer activity, resulting in a sequential 5% increase in U.S. dollar revenue. Spare part orders were particularly strong in the end of the quarter and continued to gain momentum into early July.

The first half of 2026 reflected the underlying demand environment well. Looking beyond '26, we expect a growing installed base to continue to support demand for consumables and spare parts, while the entry into service of the Boeing 777X is expected to create new aftermarket opportunities.

Historically, revenue from IP and spare parts increased during the first years of new aircraft program. as the fleet enters operation and airlines take first delivery. We expect the 777X to follow a similar pattern.

Next slide. The OEM business is our resilient growth engine with production volumes trending upward. In Q2, we had a strong quarter. While the ramp-up may continue to fluctuate from quarter-to-quarter, we expect sales to increase steadily over the coming years. CTT's OEM growth is primarily driven by two factors: one, wide-body production rates and deliveries; and two, our ability to expand the average shipset content value per aircraft.

Production rates per month is currently at 8 for the 787 with the target of 10 later this year. Airbus is produced in 6 to 7 A350s per month and aims to reach 12% by 2028. In addition to aircraft rate hikes, we see opportunities to accelerate growth through higher shipssrt content. We have already begun to benefit from an increased A350 selection rates and we expect this positive mix effect to continue building through '26 and '27.

Taken together, increasing OEM production rates and higher content per aircraft provide a strong foundation for sustainable growth in the years ahead.

Next slide. As expected, the quarter was weak for private jet business, reflecting the absence of system deliveries. Although certain ACJ progress have shifted from '26 into 2027, the underlying market outlook remains highly attractive. Supported by our strong partnership with ACJ and our recently established co-collaboration with BBJ, we are well positioned to benefit from a growing pipeline of large-cabin VIP aircraft projects.

Both ACJ and BBJ currently plan several aircraft deliveries in 2027 that include our system as part of the aircraft specification. Combined with a substantial pipeline of additional VIP opportunities, this provides a solid foundation for a strong recovery and supports our ambition to establish a structurally higher level of activity than in the past years.

Next slide. In the quarter, we delivered a second system batch to Jet2.com. No more deliveries are scheduled for 2026. Full year 2026 will be unchanged compared to 2025. I repeat messaging from previous calls, we need additional orders, and we need to obtain availability to install the system on new aircraft.

Together with Jet2.com and other airlines, we try to convince Airbus that it should be possible to install our green tech system in a new aircraft before delivery either as line fit or provisioning for post-delivery modifications.

I now hand over for questions and answers.

[Operator Instructions] The next question comes from Karl Bokvist from ABG Sundal Collier.

First one is on the ramp-up phase here from Q1 '27. I just wanted to understand that if it's -- if you're mainly talking about the ramp-up phase among the OEMs and therefore, the kind of lead times as you typically deliver your systems a bit before that ramp-up occurs among the OEMs.

Good morning, Karl. Yes, I mean it's actually both. As Boeing and Airbus is ramping up their production rates, of course, there are ordering systems from us to correspond to that ramp-up. And of course, we are delivering some months before our equipment is installed in the aircraft. So when Boeing goes to 10, we have probably gone to 10 a little bit earlier.

Understood. And then also on the content per aircraft, it's something you highlighted and talked about for some time now. So good to see. And this is perhaps more of a housekeeping question, but the content per aircraft on the 787, is that one still stable? Or is there anything happening on that platform?

It's very stable over the years. Maybe I could see a slight increase. But I mean, we are already on a very, very high level, trending around 2.5 out of 3 possible humidifiers per aircraft. So very stable, I would say, and a very good selection rate.

And on that same topic, if or when it happens, maybe that will be more kind of retrofit -- in the retrofit channel. But anything to say here about the opportunity now as we get more and more 350s flying around with humidity onboard and that it could increase the potential to create interest in installing humidifiers on the Dreamliner?

I mean that's a clear target for us and has been for years. both to convince Boeing to, at some point, have the option on the line-fit aircraft with cabin humidification to match A350 and the 777X, which both has it. And then we see an increasing logic in retrofitting our system as the number of airlines with our system in the premium cabin flying is increasing. We see opportunities arising on both the A350 and the 787.

Understood. On the VIP, I just -- when reading your remarks in the written report, the deliveries scheduled for the third quarter, you talked about some projects towards the end of the year being postponed into '27 and that's the VIP overall for the full year, will be a bit slower.

But can you just give us a bit of color on those projects expected for delivery in Q3? Because my interpretation then is that there will be some revenues booked in Q3 related to VIP then.

I mean you're correct that we postponed some deliveries from Q2 to Q3. So that's going to happen. I reiterate that the full year will be a quite weak year, maybe one of the weakest years in a long time. But I also reiterate that the pipeline is really good. Our baseline is, of course, the systems on ACJ320 family and now BBJ-737MAX, where our system will be baseline. And that has been extremely weak this year, but it looks really good for the next year.

On top of that, there's quite a few other VIP projects that should start end or beginning of next year with deliveries later on in '27. So pipeline looks really good, but it's been shifting to the right.

Understood. And on the aftermarket side, when -- something you talked about, also how you try to get or that you have been now closer to the distributors to understand the level of inventories and so on, how would you assess the kind of inventory level at the moment, given the uncertainty in the world? Do you -- is it possible that they could do another kind of round of inventory restocking and thereby create this kind of volatility once more?

No, I mean, when we look now at our distributors and as you actually pointed out, we have a lot better visibility on all parts of our distribution chain and their stock levels, we see that stocks are at the normal level. Our sales is in line with their sales to the airlines. So even if you can have smaller fluctuations, we don't foresee that it should be any big upsets.

And we also commented that in the speaker notes here today that even if we have had disruptions in the first half due to the war in the Middle East, it has -- we have not seen an effect on our sales, and we have not seen a large effect on the end-customer demand either. So hopefully, we're in a good position where stocks and demand is on the right level.

All right. And my final one, well, to both of you, but I noticed in the cash flow that there's been an increase in the investment pace, not that much on the tangible side, but more on the intangible side. So is it possible to shed some light on what that increased investment in intangible assets refers to?

Of course, Karl, I can take that one. It's -- a large part of the investment in the second quarter is related to the expansion in Nybro facility. So we are expanding our facility there for higher volumes in the future. So that's the biggest part of the investment.

All right. And okay, correct me if I'm wrong here, but I think it was -- yes. All right. Sorry, my mistake here. I thought that it was a tangible increase, my mistake. So -- and on those investments, just to understand, that's more about capacity, but you also going down to the other side of things, the personnel that should handle that increased capacity, how do you think about recruitment needs in the upcoming years?

But that's totally right. I mean we need more space to handle the ramp-up from Boeing and Airbus. I mean Boeing is building a new factory for the 787. And with that, we need to have some more space to follow that expansion that Boeing is doing and also Airbus following closely behind.

So far, we've been very successful recruiting people for our production in the region of Nybro where there's lots of skilled people and we have good cooperation with the schools and also with everybody in that area. So I'm pretty positive that we can handle this expansion on the people side as well.

[Operator Instructions]

We have got 1 question from the activity feed. It's about PMA. The question is, is PMA available to 350 already or only for 787?

That's a good question. And as we see the market development, as we get more successful on the A350 platform, there has been PMAs for parts of our system for A350 platform as well. And then we talk about the [ pads ], of course, to be stringent, but not fully out. So there is some PMAs available for the A350 platform as well, yes.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you. Before closing, let me summarize our outlook. OEM demand remains our primary growth driver, and we foresee significant volume growth over the coming years. As discussed, the OEM business is characterized by long lead times and high barriers to change. While this requires patience, it also provides exceptional visibility and resilience through market cycles.

Importantly, continued growth in the installed base supports sustained expansion of our aftermarket business. At the same time, we see additional growth opportunities in emerging. As more airlines introduce cabin humidification in business class, we expect an increasing retrofit market.

In private jets, we expect a rebound following a transitory year. our partnerships with Airbus corporate jets and Boeing business jets will generate a structurally higher activity level than in the past.

We also remain focused on expanding OEM availability of our products on large-cabin business jets and narrow-body aircraft. Overall, we believe CTT is well positioned for delivering profitable growth supported by strong OEM demand, a growing installed base and an emerging and new growth opportunities.

Thanks for listening, and have a wonderful summer.

Welcome to the CTT Systems Q1 2026 Report Presentation. [Operator Instructions] Now I will hand the conference over to the speaker, CEO, Henrik Höjer. Please go ahead.

Thank you, and good morning. Welcome to CTT's quarterly earnings call. I will present Q1 '26 financial results and the outlook going forward. Next slide. Starting with the highlights in the first quarter. We continue to see a momentum in our OEM business. Q1 marked the best OEM quarter since Q1 2020, driven by aircraft build rate ramp-up. We foresee strong development going forward. In '26, airlines struggle from higher fuel costs and flight disruptions. As a result, an increased number of airlines have begun reducing flight capacity and announced additional future cuts. This will lead to lower aftermarket revenues across the industry.

However, CTT is not immune, but we will benefit from structural advantage through its installed base on modern long-haul aircraft. Our base case scenario assumes traffic disruptions in Q2, mainly affecting short-haul flights and older wide-body aircraft, mainly in Europe and Asia. We expect limited impact on our aftermarket revenues. The company's long-term growth drivers, particularly within the OEM segment, are expected to largely remain intact, given the aircraft industry's long production cycles and substantial order backlogs. Next slide.

Looking at the financial performance in short, comparing the same quarter last year. Net sales increased 16% to SEK 66 million. If adjusted for FX impact of SEK 10 million, the increase was 21%. EBIT increased to SEK 10 million compared to SEK 4 million. FX impacted minus SEK 1 million. The EBIT margin was 15% versus 7%. If adjusting for one-off project costs and fully implemented cost savings, EBIT margin was 19%. Earnings per share increased to SEK 0.53 versus SEK 0.3. CTT generated weak operating cash flow of minus SEK 9 million versus plus SEK 4 million due to payments due in April and late payments. Next slide.

Bridging net sales from same quarter last year reveal small changes overall and comes down to net effect in the aftermarket sales. Aftermarket sales increased mainly due to weak comparable quarter due to inventory reductions in Q1 '25. Net effect plus SEK 12 million. Revenue from OEM decreased SEK 1 million. FX offset volume increases. A breakdown of total sales shows that aftermarket sales accounted for 66% and 26% came from system sales. Next slide.

Comparing with last year, EBIT increased SEK 6 million to SEK 10 million, driven by SEK 12 million from higher volumes, offset by SEK 1 million by FX and SEK 4 million from negative margins. Next slide. Weak operating cash flow of SEK 9 million, working capital negative minus SEK 17 million due to account receivable payments pushed to Q2 '26 and inventory buildup. This is temporary. We expect better operating cash flow going forward. Next slide.

Net debt amounted to SEK 21 million, comparing minus SEK 29 million in Q1 last year. Cash closed at SEK 16 million. We expect to improve our financial position going forward, driven by stronger cash flow, pushing down net debt to negative. Next slide. Let's move to the outlook for Q2 and the full year '26. For the second quarter, we expect revenue in U.S. dollar to increase compared with the previous quarter, but not exceed the comparable quarter last year. Updated 2026 outlook. For the full year 2026, we expect higher revenues in U.S. dollar, driven by significant volume increases within the OEM segment and higher aftermarket revenues.

In U.S. dollar, we expect OEM revenues to increase by 45% to 60% and aftermarket revenues by 5% to 15%. We no longer expect full year private jet revenues to exceed '25 levels as several VIP projects have been deferred into 2027. The outlook for private jet segment has not worsened. The change is primarily related to timing. Retrofit revenues in U.S. dollar are expected to remain at roughly the same level. Next slide.

Looking at the aftermarket. Inventory levels at the distributors are better balanced. We had a solid Q1, and we view it as a good reference going forward. Next slide. The outlook for CTT's OEM business is strong, given planned aircraft ramp-up by Airbus and Boeing. CTT's growth pace primarily depends on Airbus and Boeing's ability to scale production and deliver wide-body aircraft. More new build aircraft will drive CTT's OEM sales. Boeing 787 is now on rate 8 per month, targeting 10 per month later this year. Airbus is at 6 to 7 A350s per month, targeting 12 in '28.

In addition, CTT aims for even higher growth rates by improving shipset content. CTT will -- in '26 start to recognize sales impact from higher A350 selection rates. In addition to line fitting, the flight deck humidifier, A350 operators to a greater degree now select humidifiers for crew rests and business class. This will gradually result in higher average shipset value on every new build A350. Next slide.

In private jet, 2026 starts weak with no planned kit deliveries. During the first 3 quarters, revenues are expected to come mainly from development projects. Airbus Corporate Jets front-running by promoting humidification for ACJ320, the TwoTwenty and the 330. Prospect pipeline looks good within [ ANS ], but with uncertain timing. Boeing Business Jets includes humidification as baseline configuration, and we have several VIP opportunities with deliveries scheduled for '27. Next slide.

We started to deliver the first Jet2.com system last year. Deliveries in '26 are scheduled to be unchanged compared to '25 all in Q2. We need additional orders and we need to obtain availability to install the system in new aircraft. Together with Jet2.com and other airlines, we try to convince Airbus, that it should be possible to install our Green tech system in a new aircraft before delivery, either as line-fit or provisioning for post-delivery modification. Next slide. To summarize, OEM is driven by higher aircraft production rates, indicating steep ramp-up in our deliveries in '26. Private jet is establishing a higher net sales baseline, though '26 will be slow. Sales pipeline is strong and revenue should trend higher in '27. Aftermarket sales in '26 expected to be higher than '25 and higher sales will gradually improve EBIT margin in '26. I now hand it over for questions and answers.

[Operator Instructions] The next question comes from Karl Bokvist from ABG Sundal Collier.

First one is on the OEM side. As you say, production rates, at least the guided ones from the OEMs are indicating that they're heading upwards. Just out of curiosity in case you're picking up anything in the value chain that could pose a risk to this or if it's more related to the aftermarket, which we'll get into later in the Q&A.

Thank you, Karl. No, I'm not picking up anything else listening to the same messages as everybody else. Boeing talked a little bit about certification problems, still on the seatings. But other than that, I think they're doing pretty good. And that the seating problem is usually not affecting the production rates, rather the delivery rates.

And can you remind us how the lead time looks for you currently when it comes to OEMs raising production rate and you actually delivering higher systems and booking revenue?

I mean, exactly how early -- much earlier we deliver our systems compared to when they are mounted in an aircraft and then finally delivered to the end customer is quite hard to judge. But we see that now Boeing has really established production ramping up steadily from a year ago, 5, via 7 and now stable on 8. They put orders on us, I would say they're starting to fill up orders in Q4. So we see a steady rise there.

On the Airbus side, we're happy that we have now completed the move-up from Tier 3 to Tier 2, which gives us better visibility even if we have very short delivery times to A350. We see that the forecasts are stabilized on a higher level and stable during the year. So I think not maybe answering your question directly, I think it gives you a kind of indication on how it looks.

All right. And then if we head into the aftermarket channel here and how slower air travel could affect this. So leaving a year, where we had inventory adjustments and would you say that the inventory levels among your distributors -- first of all, that you have a better kind of track or monitoring on the levels of this? And two, that the levels are now kind of healthy or normalized so that they will not just simply rely on depleting their inventory and that could pose another risk to the aftermarket sales for you?

Well, as we stated in the report, the inventory levels at the distributors are better balanced. We also saw that we really tracked the end market demand during Q1. We have good visibility in our distributors' sales and inventories. And I don't know if anybody noticed, but we just moved our distribution channel within the Boeing company to a place where we think we are better or I know that we have a better structure, and we will also have better visibility than we have in the past. So we feel confident that we are in a situation where the aftermarket is and the stock levels are balanced and that we have the right distribution channels now.

Then coming to the second part of your question is how the ongoing turbulence in the world will affect our sales. And as I said, -- and what we can read so far is that airlines are taking out the nonprofitable lines, which is usually short haul and old aircraft and all CTT products are on the profitable long-haul businesses on the modern fleets, the modern wide bodies. So yes, I don't think we will be totally untouched, but I think we can navigate this turbulence in a very good way.

And can you just both like repeat what you said on the retrofit side, how we should think about, I mean, all else equal, maybe there will be some delays or not. But based on kind of your plan as of now, how you think about the retrofit deliveries this year and the next possibly?

So if we look at retrofit this year, we will continue to deliver systems to Jet2.com. They will be on the same levels as they were in '25, and they -- those systems will be delivered in Q2. Then, of course, we continue to look at the market for retrofit of both the anti-condensation systems and also the humidification systems, but we have no orders yet, and that means that it's very unlikely that we will have any more deliveries affecting our net sales during 2026.

Understood. And then also just going to the cost side, the one-off costs, well, the name says itself, but just to understand like what makes you confident that this will be a one-off item and not something that could arise again?

No. But I mean this cost is linked to the ACJ330 kit system development project that we signed in '24 and have been developing together with ACJ and our partner, PMV during '25 and '26. And in a project like that, we also have some costs to our supply chain. And one of those costs came now when the project was finalized, which is natural. And that means that we will not have one-offs like that. If I get a new kit development project, I might have new one-off like that, but they are always linked to a project.

Understood. And my final one is just apart from the currency, we see a lot of different input materials increasing in price. So just curious how you think about, well, cost management on that front and also the possibility of price adjustments to mitigate inflation?

If I start with the first part of cost control, our business is not immune from price increases on material. We, of course, try to have long-term contracts with our supply chain. And in most cases, that is the case. And there, we have a stable cost situation. Where we see big cost increases, we need to take decisions and see can we change the supplier? Is that in our environment, a possible way to do it linked to that we also need improvement of Boeing and Airbus in the end? Or can we even -- which we have done in some cases, in-source the production to lower the cost. So we're constantly working with the cost base on our OEM projects and of course, on the VIP side and the aftermarket as well.

On the price increase side, looking at the OEM business, we run under long-term contracts, which are fixed for at least a couple of more years. But after that, there is a possibility to negotiate with Boeing on the price side. And if you look at the price increases on aircraft that they sell, I think there's a possibility to adjust to a higher cost situation that we have seen after the pandemic.

On the Airbus side, we have a little bit better possibility to adjust. And even if it's not great, there is a possibility. And as you know, then finalizing it on the aftermarket, our contracts give us the possibility to adjust the prices and usually, the adjustments are in line with the worldwide inflation. And private jet, of course, there is a possibility to price adjust.

Understood. And then just finally, one comment that you talked about 1 quarter ago was this ambition to get the penetration up to around 2% for the full year. And I'm just a bit curious how we should -- well, now 3 months further ahead into the year, maybe a bit better visibility on that side. So one, how do you think that is progressing? And how we should think about this kind of penetration for the full year?

No, but as I said, when it comes to the OEM situation. We really see that we are -- the volumes are picking up on A350 and that we are seeing a better selection rate going forward. If we are exactly on 2% when the year ends, I cannot comment on today, but we are very confident that we are growing faster than their production rates on the A350.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you. And then before closing, I will take this opportunity to summarize. Although the business environment for airlines will be difficult with fewer flights, we expect long-term global air traffic growth to resume. CTT is not immune, but we have a robust business model supported by growth driven by long-term and resilient aircraft production plans. This enables us to continue growing in essentially all scenarios, even if airlines adapt their operations to higher cost levels over an extended period. As a result, we anticipate resilient growth in the installed base of humidifiers, which in turn supports aftermarket growth and creates additional retrofit opportunities. There will be -- there will, for sure, be turbulence along the flight, but we are well positioned. Thanks for listening.

Welcome to the CTT Systems Q4 2025 Report Presentation. [Operator Instructions].

Now I will hand the conference over to the speakers, CEO, Henrik Hojer; and CFO, Markus Berg. Please go ahead.

Thank you, and good morning. Welcome to CTT's quarterly earnings call. With me today is Markus Berg, our CFO, and we will present the Q4 financial results and outlook going forward. Starting with the highlights in the quarter. We signed agreement with Boeing Business Jets according to MOU that we signed in October. In '25, the installed base of humidifiers in service on A350s and Boeing 787s grew with 10%.

Looking at the financial performance in short, comparing the same quarter last year, net sales decreased 31% to SEK 57 million. If adjusted for FX impact of SEK 10 million, the decrease was 18% or SEK 15 million. EBIT dropped to SEK 7 million compared to SEK 34 million. FX impacted minus SEK 13 million. The EBIT margin was 12% versus 41%. If adjusting for the temporary FX effects, 14%. As earlier announced, we have initiated cost savings counteracting a lower dollar rate and improving the EBIT margin. Fully implemented, EBIT margin improved 200 bps. Earnings per share decreased to SEK 0.45 versus SEK 1.93. CTT generated a weak operating cash flow with minus SEK 5 million compared to SEK 16 million due to that almost all quarterly revenue in December with payment due in Q1.

Bridging net sales from the same quarter last year, OEM added SEK 4 million, counteracted by a SEK 3 million decrease in private jet. Aftermarket sales decreased SEK 27 million due to inventory buildup and distributors in Q4 '24 and inventory reductions in Q4 '25. If adjusting for the inventory reductions in Q4 '25, CTT sales would have been SEK 10 million higher. This had a significant negative impact on mix and earnings. A breakdown of total sales shows that the aftermarket sales accounted for 61% and 34% came from system sales. Order intake was SEK 65 million compared to SEK 81 million. Backlog in the quarter ended at SEK 131 million compared to SEK 48 million.

I now hand over to Markus for more detailed financials.

Thanks, Henrik, and good morning. Starting with the EBIT bridge. Compared with last year, EBIT decreased SEK 27 million to SEK 7 million, impacted by SEK 13 million in FX, SEK 12 million due to lower volumes and SEK 5 million from negative sales mix. Currency effects remain the wildcard that is hard to predict with major impact on CTT sales and earnings. Even though CTT has all loans in dollar and implemented cost savings that will have a full impact in the first half of '26, it's not enough to compensate for the sharp decline. Currency contributed to a lower margin, but it's also due to depressed volumes. Volume growth and cost control will gradually drive the margin upwards to 25% or above.

Let's move on and look at the cash flow. Weak operating cash flow of minus SEK 5 million compared to SEK 16 million last year, affected by low EBITDA and customer payments being pushed to the first half of '26. Strong operating cash flow in the second half of '25, same level as EBITDA.

Let's continue by looking at the net debt. Net debt amounted to SEK 9 million compared to minus SEK 25 million in Q4 last year. Cash closed at SEK 27 million. In addition, CTT has SEK 58 million in available credit facilities. Equity ratio at 74%, same level as last year. Return on capital employed, 15%. We expect to improve our financial position going forward, driven by strong cash flow, pushing down net debt to negative.

Let's move on and look at the year-to-date numbers. If looking at full year '25, net sales decreased 12%, currency adjusted minus 5%. Good that system sales increased SEK 15 million in private yet, SEK 13 million in OEM and SEK 3 million in retrofit. Aftermarket sales were though down [indiscernible], difference between the years was amplified by inventory buildup in '24 and inventory reduction in '25, and SEK 20 million difference in revenue from IP spares due to exceptionally strong demand in '24. If adjusting for distributors' inventory reduction, CTT sales should have been SEK 32 million higher, reflecting an impact from inventories.

Continuing with the EBIT bridge for the full year. Compared with last year, EBIT decreased SEK 65 million to SEK 48 million, impacted SEK 32 million by FX, SEK 12 million due to lower volumes and SEK 24 million from negative sales mix. Let me repeat that volume growth and cost control will gradually drive the margin upwards to 25% or above.

Let's move on and look at the proposed dividend. The Board of Directors proposes an ordinary dividend of SEK 2.4 per share, in total SEK 30 million or 78% of net earnings, same level as last year.

Let's move to sustainability. CTT continues on its journey to develop our sustainability efforts. I would like to particularly highlight 5 achievements during '25. First, certification according to ISO 14001 and 45001. Second, circular project for recycling of pads for end customer. Third, strategic sustainability goals and activities per material area is set. Four, training in new sustainability policy and code of conduct conducted for all employees. And finally, new sustainability report that is inspired by CSRD. During the year, we have also improved the result for several of our strategic sustainability goals. I would especially like to highlight the result for the Great Place to Work survey, which has increased to 85 from 80, a great level as a total average and a proof of that CTT is a great employer.

I will now hand back to Henrik for the outlook.

Thanks, Markus. If looking into '26, I can conclude that the headwind from inventory at distributors will end. The first quarter, we forecast higher sales quarter-on-quarter in U.S. dollar, driven by gradually better correlation between CTT's aftermarket sales and underlying airline demand. We also forecast -- moreover in private jet, we expect another weak quarter. The outlook for '26 is significantly higher volumes in OEM and improvement in the aftermarket business.

I start with the aftermarket outlook. The underlying aftermarket shows stable, but low-digit growth in '25, reflecting slow increase in the number of systems installed in '24. CTT sales figures were overshadowed by inventories at distributors. CTT gained from inventory buildup at distributors in '23 and '24, and we suffered from inventory reductions in '25. Net sales in '25 amounted to SEK 167 million. If pairing with underlying demand, CTT would have had SEK 32 million additional sales and aftermarket sales were SEK 199 million.

At the beginning of '26, inventory levels at the distributors are better balanced. This will underpin and rebound in sales when deliveries gradually mirror actually end market demand. In addition, the population of humidifiers, Airbus A350 and Boeing 787, has increased by 10% in '25. All other things equal, this means higher revenue in U.S. dollar compared to '25. The outlook for CTT's OEM business is strong. Given successful aircraft ramp-up by Airbus and Boeing, deliveries will pick up significantly from Q1 '26 with Boeing as the frontrunner. CTT's growth pace primarily depends on Airbus and Boeing's ability to scale production and deliver wide-body aircraft. More newbuild aircraft will drive CTT's OEM sales. [indiscernible] is now on rate 8 aircraft per month compared to 5 aircraft per month in Q1 '25 and Boeing is targeting 10 aircraft per month later this year.

In addition, CTT aims for even higher growth rates by improving shipset content. CTT will in '26 start to recognize sales impact from higher A350 selection rates. In addition to line fitting the flight deck humidifier, A350 operators, to a greater degree, now select humidifiers for crew rest and business class. This will gradually result in higher average shipset value on newbuild aircraft.

In private jet, the first half of '26 looks weak with no planned [indiscernible]. First 2 quarters revenues are expected to come mainly from development projects. Airbus corporate jets front-running by promoting humidification for ACJ320, the ACJ220 and the ACJ330. We have several sales prospects in the second half of '26. Boeing business jets includes humidification as a baseline configuration. First BBJ 737 MAX kit system is under development. We have several VIP opportunities with deliveries towards the end of '26 and in the beginning of '27. If they develop as planned, we should be able to increase this year's sales despite the weak start.

This picture is from Greenpoint Technologies. We are together developing cabin humidification to be installed in 4 BBJ 787s. During the quarter, the cabin system for the BBJ 787-8 was delivered and the pre-study of the design for the 3 BBJ 787-9s was finalized. During the first half of '26, the development will be finalized and the systems delivered. In addition, this is a good example when VIP projects function as proof of concept for cabin humidification at commercial applications. The 787-9 fleet is a big opportunity for cabin humidification, both line and retrofits.

We are still targeting to enter the large cabin business jet market, a SEK 100 million opportunity per year in first sales. As stated before, we need to be endorsed and included in the offerings by the OEMs. We continue to address Bombardier Global, Dassault Falcon and Gulfstream. Not yet there, but I can conclude solid progress in our discussions with Bombardier together with Liebherr. In '25, we broke a 3-year loosing streak with 0 anti-condensation retrofit deliveries. We started to deliver the first Jet2.com system in Q3 and another 25 out of the 146 are scheduled for deliveries until end '28. We need additional orders, and we need to obtain availability to install the system in new aircraft. Together with Jet2.com and other airlines, we try to convince Airbus that it should be possible to install our Greentech system in new aircraft before delivery, either as line fit or provisioning for post-delivery modification. As part of this effort, we also have trial systems with major low-cost carrier in 6 A321s. But I don't expect to close another big retrofit deal in the first half of '26.

To summarize, OEM deliveries will take off in Q1 '26, driven by higher aircraft production rates, indicating steep ramp-up in our deliveries in '26. Private jet are established on a higher net sales baseline, but the first half of '26 will be slow. Sales pipe is strong and revenue should trend higher. Aftermarket sales in '26 expect to be higher than '25. Higher sales will gradually improve EBIT margins in '26. I now hand over for Q&A.

[Operator Instructions] The next question comes from Karl Bokvist from ABG Sundal Collier.

So a couple of questions. And the first one, if I start on the smaller side of the business. But my impression when you had the Q3 call, for example, regarding VIP and private jet opportunities was that both the ACJ business opportunities, but also some other areas would potentially improve into Q4 and Q1. So I'm just curious if this is related to what you've talked about before that the private jet side of Airbus, for example, they don't have enough available production slots or if there's anything else that has impacted the timing of such deliveries?

Karl, thanks for the question. I think ACJ has a great pipeline, and they're doing really good on the market. There is, as you indicate, some shortage of aircraft available from there. But I don't see -- ACJ is more or less as we forecasted. And BBJ is actually picking up now after a couple of years where it's been a little bit slow. So I think we're -- the market is more or less as we expected it to be.

All right. Understood. And on the -- more about kind of visibility here on the aftermarket channel, I appreciate the comments you give here both during the presentation and in the actual report. But now when you actually quantify the impact of the inventory effects, what actions have you taken in order to gain better visibility of just how this has impacted you and how you can try to mitigate such effects in the future?

I mean aftermarket visibility is key to CTT. And the last couple of years, we have actually worked very hard to increase our visibility. I think we have now reached a stage where we are in the position to talk about effects of inventory, which we have not done in the past. And that is, of course, because we have worked with our supply chain to have better visibility, better predict and forecast sales to the end customer, better forecast and predict what inventory levels our distributors should have. And as we talked about before, we have more than one distributor, one maybe fourth running on visibility, but we are doing steps with other ones as well to increase this visibility. And of course, one thing for us, having a more stable business is to avoid inventory buildup at our distributors and try to balance this during '26 so that they sell as much as we sell.

Understood. And has anything changed on the time line from kind of higher production rates at the OEMs to deliveries from you and actual booking of revenues? I believe previously, you've talked about 3 to 6 months, if I'm not mistaken.

No, I don't think anything has changed. I think the good -- what changed during '25 was that Boeing was actually hitting all their milestones. They increased the rate from 5 to 7, exactly as they predicted going into that year. And they also went up to 8 now beginning of this year, just as they predicted. So I mean, just comparing 5 last year in Q1 to 8 per month in Q1 '26 is a big increase. And as you know, the selection rates on the 787s are very high and very stable, and we saw that during last year as well.

What we see with Airbus is that they are gradually increasing a little bit, not as transparent as Boeing on what rates they are. But we have now finally concluded the supply chain. So we're now moving up as Tier 2 on the A350 program, which means that we will, during the year, gradually have better visibility, and we hope that we then can confirm that the higher selection rates will drive our sales even higher in OEM on top of the rate increases.

Understood. And the comments there on the aftermarket side with the growth in the installed base, and you said that the inventory situation is now better balanced. Does that mean that we should start to think about kind of mirroring of growth for you on the aftermarket side with the installed base already now at the start of the year? Or is there still a bit more to do on the inventory side before we see this happening?

But as I wrote in the CEO comments, we say that the inventories are better balanced. That doesn't mean that they are perfect. And gradually during the year, we will see that they are perfectly balanced, and then we should have a mirror effect of distributor sales to the airlines, and that would mirror our sales, and that would gradually come into play here in the beginning of '26.

[Operator Instructions] the next question comes from Karl Bokvist from ABG Sundal Collier.

So with the comments there on the profitability when you now talk about cost actions and higher volumes expected to lead to margin improvement towards '25 and onwards, just curious, given the high uncertainty of the currencies, does that assume current prevailing spot rates? Or are you using any kind of different currency level when you think about how to reach that 25%.

Karl, I will take that one. Well, as you know, as I said, currency effects will remain something that is really hard to predict. But we have calculated with an exchange rate a little bit below 9%, so a little bit lower than today's level. We are not doing any forecast for the exchange rates ourselves. We are looking at the bank's forecast and use that forecast in our forecast.

Understood. And just to confirm here, I mean, it's not really like you're in a position to be worried about it. But the payments that you've talked about, we've had this situation before a quarter here or so. The payment of deliveries, is that something you expect can be recouped already in Q1, most of it?

Most of it in Q1. Some payments will come in the second quarter. But I don't see -- I mean, it's already -- one, you have to look at cash flow in a longer perspective. So if you look at, for instance, the second half of '25, you can see that we have a really strong cash flow, in the same level as EBITDA. So one separate quarter can always be a little bit weak, but in the long run, we will have good cash flow.

Understood. And then perhaps coming back to you, Henrik, one on the Boeing 777X, I believe there was some news out just 1 or 2 days ago about potentially starting test flight productions and so on again. So can you just remind us how you think about when CTT will start to deliver more material deliveries for the 777X? I know you, in the past, have delivered some prototypes or demos, if I use my wording.

Sure. I'll do that. What Boeing has stated is that the 777X will enter into service in the beginning of '27. I actually heard some Boeing representative talk about that the certification would be done end of this year, but they stuck to the in-service date for '27. They also stepped up the flight testing to another level. They have different levels, which I don't really -- it indicates that they are moving on with their flight tests and making progress. So they seem to be quite confident.

For us at CTT, the most important thing is that the production is actually running and has been running for the full '25, and I think it started actually in '24. And these are the aircraft that will be delivered to customers in '27. So production is running. Yes, you are right. We have delivered prototypes, but we have also delivered production systems, certified production systems, which [indiscernible] not mistaken. And of course, these systems will go into the new production aircraft. And we need to -- we'll have to see what kind of production rates, which airlines are taking the first aircraft, and we hope to restart our deliveries end of this year or beginning of next year. Long answer, but I hope it was an answer to the question.

Yes, absolutely. And then on -- yes, just writing down what you said here. But on -- sorry, yes, so on the A350 here, previously, you talked about the kind of average shipset content per aircraft that you expect this to be closer to, if I'm not mistaken, 2 per aircraft going into '26. And in the comments here, you talked about how the higher average shipset content will help you. But has anything changed here? Is it still that we should think about roughly 2 units per aircraft for '26 deliveries? Or could it be less or more?

No, I would say nothing has changed, and we can see that it is correct.

Alright, yes, that was all from my side.

Thank you, Karl. And I just will go back to the inventory levels. And just to reconfirm, our distributors have inventory that are balanced now going into Q1. If I said something else, that was not my intention. So inventories are balanced, and we will see that this affects our sales starting in Q1 '26.

We have one question from the chat to Henrik regarding PMA. Is there any correlation between aftermarket sales declining and the launch some years ago of competing PMA? Could you give some granularity on the issue?

Sure. We saw the PMA entering the market in '22. We have previously talked about that the market experience on PMAs is that there's usually 80-20, 80 for OEM and 20 for PMA. And I would say that has been quite stable since we first saw the PMAs entering the market in '22. And we closely track our market share, and I could say that we are in that range of the market average, 80-20 or even a little bit better. So I would say that there is, of course, a loss of market share, but that has not changed during the last couple of years since we saw this competition. So actually, no to your question, that's not why we see a decline in sales. We see that we have this effect for a long time, and we see that our sales to the airlines have actually increased during '25, even if we -- CTT has a lower sales to our distributors due to these inventory effects that are now balanced.

Then we don't have any more questions in the queue or on the web. So let's [indiscernible] this earnings call. So before closing, I will take the opportunity to summarize. In '25, we had headwinds from FX and transitory effects in the aftermarket. In '26, FX will remain a joker, but we don't know -- but we do know that the inventory effects will end. '26 will be better, driven by system sales, primarily in OEM and higher aftermarket sales. Thanks for listening.

Welcome to the CTT Systems Q3 2025 Report Presentation [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Henrik Hojer; and CFO, Markus Berg. Please go ahead.

Thank you, and good morning. Welcome to CTT's quarterly earnings call. We will present the Q3 financial results and the outlook going forward. Starting with some highlights. I want to highlight that we report strong system sales numbers, up 80% so far in '25, driven mainly by private jet and OEM. In Q3, we delivered the first anti-condensation system to Jet2.com of a total of 146. I'm also proud to report that we at NBAA in Las Vegas last week signed a letter of intent to extend collaboration with Boeing Business jets, offering a cabin humidification system as baseline configuration across the BBJ airplane portfolio.

It strengthened our outlook going forward as both ACJ and BBJ now promote cabin humidification. Finally, we continue to expect the partnership with Liebherr Aerospace to include the new COMAC C929 aircraft model. If Liebherr is selected to supply the ECS system, CTT will supply humidifiers and dehumidifiers to Liebherr. The C929 is designed with a total of 6 humidifiers and 2 dehumidifiers as standard. Development is expected to start next year.

Looking at the financial performance in short, comparing the third quarter with the same quarter last year, net sales increased 29% from SEK 57 million to SEK 74 million. At fixed exchange rates, revenues increased by 39%. FX had a SEK 7 million negative net sales impact in the quarter. EBIT amounted to SEK 19 million compared with SEK 15 million. The EBIT margin was 25% versus 26%.

We have initiated cost savings to counteract a lower dollar rate and improve the EBIT margin. Fully implemented, an additional 200 bps would have strengthened the EBIT margin in the quarter to 27%. Earnings per share increased to SEK 1.15 versus SEK 0.98. CTT generated a strong operating cash flow of SEK 33 million versus SEK 8 million. Bridging the net sales from the same quarter last year, private jet added SEK 12 million, OEM added SEK 2 million and retrofit added SEK 2 million.

A breakdown of total sales shows that aftermarket sales accounted for 59% and 37% came from system sales. If we look at order intake and backlog, order intake was SEK 48 million compared to SEK 69 million. Backlog in the quarter ended at SEK 129 million compared to SEK 47 million. I now hand over to Markus for more detailed financials.

Thanks, Henrik, and good morning. I will start with the EBIT bridge. Compared with last year, EBIT increased SEK 4 million to SEK 19 million, driven SEK 15 million by higher sales volumes, offset with SEK 5 million from negative currency effects and SEK 5 million from negative sales mix. CTT has initiated cost reduction measures. Fully implemented, the EBIT margin in the third quarter would have been 27% instead of 25%.

Let's move on and look at the cash flow. Strong operating cash flow at SEK 33 million compared to SEK 8 million last year, driven by EBITDA of SEK 20 million and plus SEK 16 million from working capital. Operating cash flow is expected to exceed EBITDA in the second half of the year due to positive working capital. Let's continue by looking at the net debt. Net debt amounted to SEK 2 million compared to minus SEK 13 million in Q3 last year. Cash closed at SEK 35 million. In addition, CTT has SEK 57 million in available credit facilities. Equity ratio at 73%, same level as Q3 last year. Return on capital employed at 24%. We expect to improve our financial position driven by strong cash flow, pushing down net debt to negative.

Let's move on and look at the year-to-date numbers. In the first 3 quarters, net sales decreased 5%, but increased 1% if adjusting for currency. System sales increased SEK 29 million or 80% to SEK 66 million. Aftermarket sales were down SEK 40 million due to FX and tough comparable numbers from inventory buildup in '24 and inventory reduction in '25. CTT also had a very strong spare business in '24.

An important remark is that end-user demand for consumables is stable. Fact is that distributor sales to airlines increased. The situation with inventory excess is transitory. We predict that we will enter '26 with normal levels. Margins expect to improve in '26, driven by higher sales and full impact of cost reductions. I now hand back to Henrik for the outlook.

Thanks, Markus. CTT will not give a specific guidance for the next upcoming quarters going forward. This is due to unusual large currency movements with U.S. dollar versus Swedish krona, shorter lead times from order to delivery and changed buying behavior among distributors. All in all, this makes it more difficult to predict net sales in the short term.

That said, we would like to flag that there is a risk that distributors will keep their inventories down before the end of the year. It's not good for our sales and earnings, but it's a one-off effect. If looking at aftermarket sales, trailing 12 months are at SEK 193 million. We had inventory buildup in '23 and '24. And in '25, we suffered from inventory reductions.

The underlying aftermarket shows stable growth, reflecting last year's slow increase in the number of systems installed. When system sales now have started to take off and continues into the next few years, the aftermarket is expected to grow faster. Given that Airbus and Boeing reached their production targets, we expect the installed base of humidifiers to grow by more than 20% per year. We are continuously working with our aftermarket distributors to adapt and improve customer value as well as visibility and measures to reduce order volatility between the quarters.

The outlook for CTT's OEM business is strong, given successful aircraft ramp-up by Airbus and Boeing. Orders and delivery schedules indicate deliveries to pick up significantly from Q1 '26. CTT's growth pace primarily depends on Airbus and Boeing's ability to scale production and deliver wide-body aircraft. More new build aircraft will drive CTT's OEM sales. In addition, CTT aims for higher growth rates by improving shipset content. CTT will end '25, beginning '26 start to recognize sales impact from higher A350 selection rates.

In addition to line fitting the flight deck humidifier, A350 operators to a greater degree now select humidifiers for crew rest and business class. This will gradually result in a higher average shipset value on newbuild A350s. The private jet business in '25 is heading for a strong sales revival. Airbus corporate jets front-running by promoting humidification for ACJ320, the ACJ220 and the ACJ330. We have strong sales pipeline in VIP, although there is some uncertainty when projects will start. We are still targeting to enter the large cabin business jet market, SEK 100 million opportunity per year in first sales.

As stated before, we need to be endorsed and included by the offerings by the OEMs. As you can see in the picture, we continue to address Boeing Business jet, Bombardier Global, Dassault Falcon and Gulfstream. Not yet there, but I can conclude solid progress in our discussions with Bombardier together with Liebherr. As I mentioned previously, we have entered the next phase with Boeing Business jets.

On this slide, you can see Boeing photo released from NBAA in Las Vegas last week. The intention to further collaboration, offering a cabin humidification system as a baseline configuration across the BBJ airplane portfolio. This is an important step for CTT. It strengthened our outlook going forward as both ACJ and BBJ promote cabin humidification. The value and benefits behind this decision also apply to larger cabin business jets. In '25, we will break a 3-year losing streak with zero anti-condensation retrofit deliveries.

We started to deliver the first Jet2.com systems in Q3 and another 25 out of the 146 are scheduled to be delivered until the end of '28. We need additional orders, and we need to be obtained ability to install the system in new aircraft. We focus on retrofit customers in Europe to drive and put pressure primarily on Airbus, where we have a better momentum. Together with yet2.com and other airlines, we try to convince Airbus that it should be possible to install our Greentech system in new aircraft before delivery, either as line fit or provisioning for post-delivery modification. As part of this effort, we also have a trial system with a major low-cost carrier in 6 A321s and outstanding quotation at 3 European airlines. But I don't expect to close another big retrofit deal in '25.

Let's summarize. We are in a good position to grow from where we are now. OEM deliveries are set to take off, driven by higher aircraft production rates. The outlook based on delivery schedules from Airbus and Boeing indicates steep ramp-up in our deliveries starting end this year and beginning of next year. Boeing is back on track, and I expect a swift ramp-up to 10 aircraft per month in '26, but demand is there for higher output. CTT plans already for 12 to 14 aircraft per month. Airbus A350 is following right behind. Private jets are establishing a higher net sales baseline, although we will have variation between quarter-to-quarters, sales pipeline is strong and revenue should trend higher.

Private jet is also in good conditions to further increase sales with BBJ now making cabin humidification standard following and passing ACJ, sending a strong signal to the rest of the private jet OEMs. Our aftermarket sales are expected to increase compared to '25. And finally, we will deliver better EBIT margin and profit '26 driven by higher sales. After a few years of delay, CTT is about to begin the next phase of growth. With that said, I now hand over for Q&A.

[Operator Instructions]

This is Albin Barnevik from ABG standing in for Karl Bokvist. I have a few questions, if I may. So first off, regarding your comment on shorter lead times, does that comment refer to all sales categories or only the OEM segments, for example?

Albin, thanks for joining us. The shorter lead times actually refer to all our businesses. It includes OEM. But with the kit systems on ACJ and now soon also on BBJ, we also make that valid for the private jet market. And in the aftermarket, we also see that all our distributors are reflecting the airlines with shorter lead times and the smaller batches.

Right. Noted. And based on your current view on the customer selection rates, will there be an increase in content per aircraft already in 2026? Or should we see that effect coming more towards the second half of that year?

But based on the selection rates that Airbus is communicating with us, we see that this selection rate increase should start already in the first half of '26.

All right. Great. And considering the destocking among distributors and the comment you flagged regarding the changed buying behavior, what is the risk of the destocking continuing into '26? And -- or are the levels now better balanced? How do you see that going forward?

When we look at the stock levels at our distributors, it's been a quite struggling year this year, and we knew that we entered '25 with high stocks at our distributors. We have, during the year, together with them worked them down with a small hiccup mid this year when one of our suppliers changed our distribution strategy, making them need some more stock to actually have our things at more stocks around the world to better serve the customers that raised the stocks a little bit even further. That is now worked down, and it should be worked down to a level where we actually need to start to refill end of this year or beginning of next year.

All right. All right. And can you give any comments on the growth in the installed base and how we should think about the aftermarket sales?

Yes. So when now Boeing and Airbus are on steady numbers in the production rates per month, and they are increasing quite steep next year. When they hit those numbers, our forecasting is that we should grow the installed base with more than 20% per year going forward.

All right. Great. And lastly, if I may, on profitability. Currency can fluctuate, of course, but can you go a bit more into detail what actions you have taken to raise margins?

I can take that one. CTT is both working with increases prices to customers and cost savings, of course. And that is cost savings in both raw material, cost of goods and fixed costs, consultants, personnel and IT. There are some examples of improving the margins.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

We have received one question from the activity feed to Henrik. How does the plans for 777X look going forward?

Good question. I mean we are following what Boeing is saying, and there is some indication that there is a delay in the certification process that should take place during next year, '26. They have not changed the first delivery dates still in '26. So we're quite positive they're making progress. Let's wait and see what they say at their earnings call next week in -- on the 30th of October. But we're quite confident in the plans on the 777X, but let's listen and see what Boeing says next week.

And then there is no more questions in the feed. So let's close this down. And before closing, I would like to take the opportunity to repeat what I brought in my CEO comment. There are bright spots such as new sales starting to pick up with an increase of 80% so far in '25. Looking ahead to next year, I can state that the drivers for our growth have strengthened further during the quarter. After a few years of delay, CTT is about to begin the next phase of growth. Thanks for listening, and have a good day.