I-tech Aktie

It is early afternoon and we continue to dive deeper into today's reports release. Now we shift our focus towards I-Tech, who during this morning published their report for the first quarter of 2026. And standing next to me is Markus Jönsson, who is the company's CEO. Welcome.

Thank you very much, Mike. It's great to be back.

It is good to have you back. So you will give us a short presentation and then I'll return to ask a few questions.

Indeed. So firstly, then for those of you who are sort of experiencing or meeting I-Tech for the first time, just a brief introduction before we jump into the numbers and sort of the outlook going forward then.

So the space that I-Tech is operating in is today marine transport. So our sort of innovation space, you could say, is this statement here. What if 1/3 of the global fleet of 110 (sic) [ 110,000 ] commercial vessels were using 36% more fuel than needed even just for 1 day. What would that actually mean for operating costs and emissions? And the fact of the matter is it is this bad, right? This is actually our data when indocking ships coming in after 5 years of service. They are using too much fuel. And it's the effect really of biofouling on the ship's health.

So essentially, when a ship is submerged under water, organisms start to grow on the ship hull. And in the beginning, it's typically slime. Later on, there could be weed and also then different hard fouling species like barnacles, for instance. And this significantly increases ship's fuel consumption. And of course, that is impacting, you could say, operating costs, but also then elevating sort of the emissions of CO2 and GHG gases. So really having good biofouling control is an important topic. And that's then where I-Tech and our product, Selektope comes in, right?

We help the ship owners and ship operators to reduce their emissions to air. We help to predict marine ecosystems because biofouling on ship's hull is actually seen today or viewed as the #1 source for transfer of invasive aquatic species and we need to protect our sensitive coastal environment. And lastly, what is also important is that we want to reduce the emissions to the sea, to the oceans. And here also Selektope presents a very sort of great innovation in terms of how much chemicals are actually emitted to the ocean.

So briefly on I-Tech today then. We believe we have a very scalable business with plenty of additional potential. So we have a unique technology and we possess sort of intellectual property in terms of patents, but also, you could say, know-how in terms of formulations and coating developments, et cetera. We are an asset-light company, so our production is outsourced. So the company today mainly focuses on sales and marketing and innovation.

In terms of market penetration, then we estimate that Selektope is today present on around 3,500 ships out of the global fleet and of around 110,000 commercial vessels, as we said in the beginning. So plenty of room for continuous growth. And this is the development that I-Tech has had since the IPO back in 2018. So a really solid growth journey and we see that also is continuing for now, right?

So without further ado, then let's dive into the Q1 results. And hereby, I will hand over to our CFO and Head of Operations, Magnus Henell.

Hello, everyone. Yes, it's nice to be here again, and it's also nice to be here presenting a good result. And before Markus continues to discuss the outlook further on, I will dig in a little bit through the numbers.

As you -- as Markus said before, we have had quite interesting growth from IPO until 2025 with a small hiccup during 2025 with some lower volumes. And as you can see on this graph up here, 3 out of 4 quarters during 2025 was actually significantly lower or at par with the previous quarters, the year before. So it's really good now to see that we can come back with actually a growth, both in terms of volume and in terms of currency adjusted revenues.

We are losing 7% on the top line in Swedish krona, but that is mainly the exchange rate. Well, it's, in fact, only exchange rate. And the growth and the base that we are working on with our customers, it is solid. Amongst our largest customers, we have a very solid base and we have significant growth with the smaller ones. And as we discussed last year, we had 1 customer that took significantly lower volumes than the year before. They are now back on a more normal level for this quarter, which then means, as I said before, on the top line, we lose 7%, but we gain equally much in Swedish krona on the gross margin because that is also significantly improved.

And that is -- the main effect of the gross margin is the continuous work with our producers, but also the customer mix. It's a little bit more of the more higher revenue customers for this quarter than for the previous ones, which then coming back -- coming down to the sort of the more main profit, EBITDA and EBIT, we are strengthening them a little bit, SEK 1 million up on the EBIT level, significantly on the margin level, we are going from 35% to 39% for this quarter. So a very good quarter financially.

What we can point out is actually what you see in front of you as well that the operating cash flow is significantly lower than last year. One main effect is that now when we use all our tax benefits, we're actually starting to pay the taxes. So the main effect here is that we had almost SEK 10 million in tax payment effect from previous year coming into this year. So it's a little bit more normalized cash flow. But on the other hand, also we had quite much more revenue coming from Korea, which I will talk about the next slide, where we have a little bit longer payment terms with our distributor there than we have in the rest of the world. So that is also one effect for the cash flow this quarter.

And coming into the geographical spread, you can see that Korea's share has increased quite significantly. It's both due to the second largest customer, but also to our main customer, CMP who has also higher growth -- higher sales in Korea than previous quarter last year. The other regions are a little bit lower in terms of volume, but I would say that, that's mainly a distribution in time effect over the year. It's been a positive development also for these regions. But I think Korea is really sticking out on this quarter.

And now we also look into the small highlights, if you say so from the financial part, of course, the growth being back on a growth path again is really wonderful to stand here and present for you. The diversification amongst our customers is also very interesting that we are continuing to diversify the customer base and with the strong sales in Korea and of course, our margins. We should have high margins. We're having high margins. And hopefully, we can continue to have high margins. On the gross margin, Markus will come back to some issues that might soften that a little bit in the coming periods. But in general, it's been a very nice development for the quarter.

So then I'm leaving over for Markus again to take on the outlook.

Thank you very much, Magnus. Very great numbers indeed, and happy to be able to present that today. So a little bit on the market outlook then. Our sort of familiar viewers, you have seen this slide a number of times, right? But it's just to explain the market potential as we see it, right? So every year, approximately 2,000 new vessels are being built. But at the same time, then this fleet of 110,000 commercial vessels, they need servicing, right? And they have to do that at least every fifth year. That means that there is roughly 20,000 dry docking events happening each year. So the dry docking, the maintenance segment is the big segment for I-Tech to focus on going forward as well.

The opportunity for sort of sustainable antifouling solutions, we estimate to be roughly in the range of USD 300 million to USD 500 million as a gross potential. The graphs in the bottom just showing you the split between the different markets. In terms of new build, China is dominating with more than 60% and actually have increased, you could say, the share of new orders also now in the first quarter of 2026. So they're really dominating then followed by Japan and Korea. And probably that order has been reversed this year as well in terms of new orders anyway.

Also for the dry docking for the maintenance segment, China is dominating. And here, you can see that it's other Asia, including Japan, but also Turkey and to some extent, still Europe has a role to play in the maintenance segment. So that is sort of the gross market potential as we're looking into and a little bit of explanation.

If we look at the outlook for shipping as such, we talk about -- you could say both about the earnings for the ship owners and the ship operators, but also then on the activity in terms of new building. And there, of course, we are specifically tracking new orders, sort of new ship orders that are being placed because it's important to see then in the future, what would the market be like.

So if we start with the ClarkSea Index, which is sort of a measure to see how well paid are the shipowners for their shipping goods. And here, we can say it's up tremendously in the first quarter this year. And that sort of solely comes as a consequence of the uncertainties and sort of in the Middle East. So it's the tanker segment and crude tanker segment specifically that have seen really increased charter rates, right? So the price of shipping oil has increased tremendously.

The other charter rates are more stable. So you can say that, that has not moved so much in Q1. If we look at the newbuilding and the contracting of new vessels, we can see that, that has also actually hit a 17-year high as the activity or new contracting activity rose 40% year-on-year. And this has been driven, you could say, by a tripling of new tanker orders. So at the same time, as charter rates have increased, also the number of orders for new tanker vessels have increased. And also there has been a rebound in the LNG contracting, LNG tankers.

So Chinese shipyards, they continue to advance their positions. They really got the lion's part of the new contract. So 70% of these new orders actually landed in Chinese shipyards. Korean yards captured another 20%. So they also had a strong start to the year. And if we look sort of going forward for this year, it's the geopolitical issues overall, you could say that remain one of our major risks to the growth momentum. And we'll come back to that in this slide that is [ Asia ] here.

So essentially, what is happening now that we are in a tightening supply situation when it comes to crude oil, but also all the derivatives of crude oil. So essentially, all the chemical raw materials that is needed, you could say, on one hand to build ships, but also then to produce the antifouling coating that ends up on the ship. And this has been covered now as well, right? We see, especially in Asia, really a crunch in terms of the availability of raw materials.

For I-Tech, it's not so much an issue of availability since we are producing quite low volume. But on the other hand, we are hit by tremendous price increases on raw materials. And that's what you can see in the graph to the right here. So you can say -- you see that raw materials have steeply increased, indexed, you could say, at 140 compared to 2023. And coming back then to what Magnus was saying, so we have been able to negotiate, you could say, better production fees. But of course, this is impacting our total production costs as well going forward. So measures will have to be taken then from our end going forward.

So we come to the reregistration process of Selektope in the EU. And this is also a long runner here. And what has actually been news, and we released that this week is that the standing committee on biocides has actually made a written procedure, a so-called voting in writing to extend the current approval of Selektope to the end of the year, so December 31, 2026. It was actually set to expire now in the end of June, but we can see then a proposal for nonrenewal has not been discussed in the committee, and they haven't initiated the final stages of the process, which is inter-consular services and the WTO TBT process, which has not started.

So it's mentioned then as a way to be -- you could say, to have the time necessary to conclude on the case. We, of course, view this as very positive because that gives us a sort of an extended time line, of course, to influence the outcome. And of course, the standing committee on biocidal products, they will have more time to review all the input and the data that have been put forward. And also I-Tech, we are commissioning a new and an additional safety study to try to iron out and solve some of the unsolved issues on the science part, right? So the data available for the assessment of the safety of Selektope. So that is very positive.

If we come to the business development pipeline, it's also been something we talked about throughout the last year and which has continued to advance in this year. We are looking into complementing technologies such as additional active ingredients, so additional biocides that could be complementary or synergistic with Selektope, but also other additives like -- and also like binder materials that represent also a significant part of the formulation cost of our customers.

We announced in December a new collaboration with Havey and those discussions have advanced very favorably and in a positive direction. So we hope to be able to talk more about that during this year. We are also exploring, you could say, additional market segments like aquaculture and the yacht market going forward and also looking into new and more innovative business models. So all in all, we hope to be able to share more information about this during the course of this year.

So wrapping up and then coming to the business outlook. So we definitely foresee the need for price adjustments as a response, you could say, to the escalating raw material price situations. So that will be a theme for this year. As I already said in terms of new strategic partnerships regarding technology and business development, we definitely aim to have more news here throughout the year.

And of course, a continuous strong focus then on advocacy linked to regulations, not only in the EU, but sort of we have a number of ongoing cases also in the U.S. and New Zealand and other places. So more work being done here. And also, we have been welcoming new team members in I-Tech. So we are growing the team, and that's essentially to be able to grapple with all the new activities that are ongoing at the same time.

So that was in short, you could say the presentation. Now we really look forward to the questions, Mike.

Yes, very much. So thank you very much, Markus Jonsson and also Magnus Henell and there's a lot of activity in the chat, and I'll try to balance both questions here. But first of all, you're delivering a record quarter for I-Tech relative to your volumes sold, but despite this net sales dropped 7%. You mentioned that this was due to currency effects. But is it solely due to currency effects? There's no sales per volume metric that also been affected?

No. I would say it's only the currency effect for this time. And if you look to it, we have a 13% degradation of the U.S. dollars compared to Q1 last year. So it's been quite stable for Q1 this year, but still when you compare the quarters between them, you have this 13% degradation and that comes directly into the effect on the top line, unfortunately.

And moving further down a little bit in your P&L, you reported good margins as well. Gross margin increased to 60% operating margin, 35%. Magnus during the presentation, I believe you heard -- I heard something about margins maybe softening in the future. What would cause that?

Yes. But as Markus explained, we are now looking into a quite turbulent world market on crude oil and all the derivatives from the crude oil. And we anticipate that we will have higher production costs moving forward. We're also anticipating to take some of the effects of that from the customers, I would say, and increase prices towards them.

But I'm not looking for a huge amount of percentage, but some small percentages dropped, it could be for the coming quarters. It's not written is still, but we need to bring it up. But compared to previous year, there should not be any major effects.

And Oskar also asked the increased production costs, that's something that you're already noticing? Or is that ahead of time?

That is ahead of time. All the production, and you can also see that on the gross margin because we haven't been able to increase the prices towards the customers for the first quarter. And of course, you see that we have a very good gross margin. So that is ahead of us. Yes.

And in talks of also raising potential prices to clients, what is the price -- how would you describe the price elasticity?

Yes. So I would say, in normal circumstances, price increases are quite challenging, right? Because, of course, we are talking about long-term contracts, new ship orders have been placed, et cetera, right? Maintenance market is more fluid and it's maybe easier there in general.

And then, of course, we have commitments, you could say, to our customers. However, the situations right now are quite extraordinary as a consequence really. And we see that sort of also from our customers, right and downstream of us, people are implementing price adjustments simply to be able to cope with the situation, right, to be able to have material to offer to the customers and to be able to complete the projects, right?

So I would say there is also a general understanding that price increases will have to happen throughout the value chain as a consequence of the uncertainty. And even if we have sort of some sort of a conclusion to the existing situation, right, we have created a backlog of issues, right? This will take months to sort out in any case, right?

So even if we take sort of a very positive development from now onwards, right, we're talking months of turbulence still in the market before this has settled, right? And we are sort of back to more normal levels.

Do you see any significant risk that driving prices up will decrease volume?

That could be a risk. I see more is a risk that we mentioned in the market outlook, right? Simply that our customers are unable to source the appropriate amount of raw materials because it's not available. So they're actually not able to produce the amount of antifouling coating needed to satisfy the customer, right? I see that as more of a risk, right? But of course, you're right, there is, to some extent, that risk as well.

We'll talk more about the raw materials soon. But before we do that, a viewer asks, please, could you explain why receivables increased so much? Are you extending credit terms to your customers? Or are customers taking longer to pay?

No, we're not extending payment terms, but we have longer payment terms with our Korean distributor. And since the share to Korea increased from a little bit more than 30% up to 45% for this quarter, that will, of course, have an effect also on the credit base.

Last time you were here presenting your Q4 report, you talked about your significant client that decreased their volume during the fourth quarter due to financial difficulties. How has that situation developed?

Well, I think as we mentioned, we saw a stabilization of the order patterns during Q4 already last year. And as Magnus alluded to here, we've seen quite a strong start in the beginning. So I mean, they are back to more normal levels now as we would have expected.

And Oskar asked, do you expect that the second customer's demand is now more normal or stable during the last month? And I assume that the second largest customer is the customer that is [indiscernible].

Yes.

All right. Good. And then continuing on to Oskar's question, he also asks this one. If you have to choose one, which market is the most important for you in the coming 2 to 3 years?

I mean all our markets are important to us, right? But we have obtained quite a strong position in both Korea and Japan, right? So we talked about it, I think, in earlier shows as well, right, that China is our #1 growth market, right? And penetrating, you could say, the maintenance segment.

So if you say China and maintenance segment, these are the key growth areas for us, right, for Selektope going forward. So we, of course, value Korea and Japan, but we need to grow more in China definitely going forward.

So interpreting that then you're choosing growth over stability when choosing more money?

Yes. No. I mean, stability is the base for growth. So of course, like I said, right, our existing customers and the markets are really important to us, right? But in terms of unlocking additional growth, we will need to put additional resources and focus on specifically China and the maintenance segment going forward.

Let's talk about then the Middle Eastern conflict and its consequences. You described in the report that the conflict has affected tanker contracting during March. So far into Q2, how has that developed?

Well, it's difficult to say how it's impacting, you could say, new building contracting, right? There's typically a delay here. Like we say in the report, we saw a decrease of sort of new orders coming in throughout March, right? But we will have to see the April numbers are not really out yet to our knowledge, right?

So I think if there was really a surge in new contract, you could say, in the beginning, right, for tankers. So I would expect them this to normalize a little bit throughout the year, right? Of course, it's an aging tanker fleet. It needs replacing. And of course, they need to meet up to renewable fuel criteria going forward. But also, I would expect sort of the levels to be more normal going forward in this year. But let's see.

And there are also concerns how oil availability and chemical raw materials will affect the shipping sector more long term in the aftermath here?

Yes, definitely. I mean, in terms of availability, right? I think short-term positive benefit for operators of tankers, right? They, of course, can charge more for transporting oil, et cetera, right?

But as we talked about here, sort of the big crunch and the availability of raw materials is, of course, affecting the business negatively. I mean, if you talk LNG or liquefied natural gas, right, here, we know that there are ships sort of idling at the moment because they don't have business, right? The production I think has dropped so much that they do not have business. So there are many impacting sort of -- or yes, parts of the shipping business being impacted of the consequences in the Middle East.

Of course, from our perspective, we are worrying more about the availability of raw materials and the ability of our customers to satisfy the shipyards need for antifouling coating because that will directly impact our business.

Maybe I should point out that it's not the availability of our production of the raw materials. It's mainly the binders and everything that you need to put into the paint where we see an effect of.

Precisely because the question a viewer did ask what specific raw material would be impacted? And can these raw materials also be sourced from other regions?

Well, typically, it's solvents, right? That's one that's been talked about, but also the raw material for binder production. So I mean, that's the problem. We live in a global world, right? And 20% of the available output has been sort of reduced significantly, right?

So -- and it's not only the oil coming out of the Middle East, right? It's all the chemicals as well, right? And of course, you could say there is a possibility for chemical industries in other regions to fulfill the need. But if there is an overall lack for crude oil, of course, then there is a lack of crude oil, right? And it doesn't matter that you have free capacity to turn it into solvents if the oil is not available. So it is -- if this continues throughout the year, it could be quite severe consequences. And of course, not only for shipbuilding, but for all businesses actually right.

And to circle to the oil then, low availability and high prices, couldn't one make a case that, that would benefit you considering you're drawing down -- you're helping clients drawing down their oil consumption?

Absolutely. And also, there are a lot of ships idling at the moment, right, being exposed to biofouling. So after this, a lot of ships would have significant fouling problems, right? So of course, the ones that have invested in good antifouling solutions would have lower operating costs, right? So definitely.

Let's talk about regulations then. The EU has extended their approvals to Selektope to take further time to finish their ongoing process. Date is now the 31st of December. How do you view this decision?

Well, as I alluded to there in the presentation, it's quite positive, right? I mean, although you could say that the extension is sort of expected due to the process, right? They do not have enough time, you could say, to complete the necessary steps of the process, right? So they had to extend it in any case.

However, the positive side of that is, of course, there is more time, you could say, to consider the input that has come into the process. And there is more time, of course, and to generate support for, you could say, a more thorough evaluation of the product segments of antifouling, right, when it comes to all our products, not only our product, right, but the others in this product category. So we view it as quite positive, right? It gives more time to influence the process.

Possibly a very difficult question, but the decision to push up the final decision date, has that changed your expectations regarding the final decision?

I think it's too soon to say. I mean, it's still a lot of uncertainty around that, right? I would say it's not negative. Let's say that at least, right? So slightly leaning towards the positive, of course.

That was all my questions, but we have many more viewer questions. We take them one by one. First of all, can you share any information about new products that are being developed?

Not really at this point, right? We will come back to that throughout the course of this year.

Next question is, what is the estimated market share of I-Tech breakdown to new build and dry bulk?

Yes. So we look a little bit at our market then. So if you take Korea, for instance, our sales to Korea, this is predominantly new build, right? So all that volume tends to go into new build. In Japan, it's more of an even split.

And the same, you could say, goes for our sales to China. So we typically say around 60-40, so 60% new build, 40% maintenance. Of course, with a rising trend, you could say, on the maintenance side, right? But that is simply it's a 10x bigger market. So it takes a longer period of time to grow that share significantly.

Next question is, can you elaborate a little bit on EOGRT that you're conducting? What is the timing on this? And how long will the study take?

Yes. This is, you could say, a complex and long-term study, right, because you essentially study the effects of the chemical onto test species, right, over generations. So you simply -- you look at sort of the offspring of that and what happens to that offspring, et cetera. So it's multi-generations.

I think we are counting on approximately 2 years to complete the study as such, right? And long time, complex study, of course, quite costly to do as well, right? But we are happy to do it as well, right? And sort of it's mainly for other regions that we are doing it, but of course, it's useful in the EU context as well. We hope that, that sort of can really shine some light on the remaining uncertainties, right, of the effect of Selektope.

Is there an endocrine effect or not, right? And of course, we are arguing this is -- there is not a detrimental or a negative effect on the endocrine system. But to be found out with the study.

About to read up the last question from Laura. But as I do, I would like to also remind the viewers that if you have any more questions and please post them in the chat. So of the 9 major paint companies, 2 are still in development stage. Is there any update on commercialization timing for those?

Not really in terms of timing, but the customer #7 is sort of approaching slowly, we would say, to be more of a steady and regular commercial customer. But we are still not changed the classification. So we're still saying it's regular business to 6 out of 9 with an option of #7 and coming and joining soon.

One of the viewers also clarified, it was same you asked a question about the market share. How much do you estimate the market share of I-Tech in the maintenance out of the entire TAM, same for new build?

In general, we estimate around 3% to 4% of the total market share. And as Markus said, approximately the maintenance market is 10x the -- so I would say 0.3% to 0.4% of the maintenance. And well, I don't do the math that fast now, but a little bit higher on the new build side.

New question from Laura. You mentioned some hires during the quarter. How many additions should we expect over the course of the year? And how should we think about the operating expenses trajectory for the rest of the year?

Yes. So we are bringing on 3 new full-time employees, you could say. That's the plan for this year. And of course, that situation can be updated throughout the course of the year. But currently, there is no firm plan. So that is the added effect that we see now. And maybe you want to talk.

Yes. But if you talk in general on the operating cost, of course, we have the entire EU situation, which have driven a little bit more cost during Q1 than Q4. So -- but it's actually a matter of how much that will drive, I would say, how much effort we need.

And of course, we're coming into the study to this endocrine disruption study. that will take significant effort. And we have spoken about it before that it's a SEK 10 million study over 2 years. So we said it before, so I can say it now as well that we take half of this year, roughly.

That was all the questions I had and from the chat. But Markus Jonsson and Magnus Henell, thank you very much for being here presenting and answering our questions.

Thank you very much.

Thank you very much.

It is 1:00, and we welcome viewers here to the report presentation of today where you, as a viewer, also have the opportunity to ask questions to the management, and you do that via the live chat during this broadcast, I will be keeping an eye on it.

Today, we are joined here on stage by I-Tech, who has published their final and fourth quarterly report for the fiscal year of 2025, and standing beside me is Markus Jonsson, who is the CEO of the company. Welcome.

Thank you very much. Good afternoon.

Good afternoon. You have a presentation prepared for us here today, and I will simply hand over the word and come back later to ask a few questions.

Yes. Thank you very much, Mikael. So a new year, new possibilities. We're here live from Stockholm today from the Investor Studios to give you the presentation of the year-end report of Q4 for I-Tech.

So before we get into the numbers, et cetera, I will just do a brief introduction of the company in case there are any new viewers or people that are not acquainted with I-Tech from the past.

So essentially, what I-Tech is and what we are doing, we are a biotech company, an ingredient provider. But our key focus market is maritime shipping, and really, the problems that we are here to solve or one of the major problems is the question that we are posting here on the first slide. So what if 1/3 of the full global fleet were using 36% more fuel than needed even for 1 day, what would that mean in terms of costs and emission for shipping? And that's exactly one of the key challenges that we are addressing in I-Tech.

So our solution is targeting a problem of fouling for ships. So really, the underwater surface area of the ship can get fouled of various organisms. And our solution is targeting barnacles, which is so-called hard fouling. And why are they a challenge? Well, they create a big additional drag on the ship. So it means they increase friction and increase need for power and more fuel to actually smoothly travel through the water.

The barnacles are thriving in most marine environments, so all across the globe. And they are cunning little creatures in a sense that they are super gluing themselves to the surface. So they are very, very difficult to remove, and you risk damaging the coating if you try to remove them. So really, the most efficient strategy is to actually prevent them from settling on the ship is how.

So our solution is called Selektope, and it is actually a clever solution coming from the world of pharma. So originally, it's a sedative that is used for humans and for veterinary medicine, but scientists then found out that it has the opposite effect on the barnacle larvae, it actually makes them temporarily hyperactive. So it doesn't kill or harm the target organism, but actually deter them from settling on the surface. And this really helps the shipowners then to reduce the emissions to air but also protect our sensitive coastal marine ecosystems because biofouling on ships' hulls is today is the #1 vector for spreading of invasive aquatic species. So it's really important to keep our ships clean so that we protect sensitive local ecosystems.

And the third thing, which is so ingenious with our solution, Selektope, is that we are also reducing the emissions to the ocean very, very significantly. It's extremely efficient. So you need a very, very small amount, which in itself then protects the environment further.

So now we will come to the results. And in that case, I will hand over to CFO and Head of Operations, Magnus Henell, who will take you through the numbers, and see you later.

Let's go into the results, and very nice to be here again, talking to all of you. And as we start on this slide, I just want to give you a short overview of what happened in the company over the past years. As most of you know, we have had a very nice growth of the company. Even though we are declining a little bit this year, we're still on an average of roughly 30% since our IPO in 2018, which is very strong numbers over the 7 years that these are presented. And I also want to give you an idea that when we're coming into Q4 and the full year of 2025, we are comparing to very extremely strong sales numbers in Q4 '24 and also in Q1 '25. But these are very strong, and we will talk a little bit about why we are not as strong today.

Looking on the full year, we see that our smaller customers show a really strong growth, but we also see that the sales to our second largest customer is much lower than last year. We will go into the details later on.

Talking about Q4, as I said, we're comparing with a tremendous quarter last year. We have, unfortunately, a decline in net sales in Swedish krona of 33%. I think it's quite important to point out that the currency adjusted growth downturn is only 23%. It's still large, but it's much lower. And then you can see that the U.S. currency has really impacted us.

What is really nice to see for this year is that we actually improved the gross margin by 6%. We're going from 54% gross margin to 57%, and that is due to mainly our operational efficiencies, where we have better production processes, more producers making sure that we have a stable production price, which means that we can also be stable towards our customers.

Coming into the result. Of course, we have reduced both EBITDA and EBIT down 5% roughly on both, but they are still very strong. And this shows also by the very strong cash conversion that we have in the company. For the quarter, we have an operating cash flow of almost SEK 13 million compared to SEK 6 million last year. So on the cash side, it's growing. And our cash balance, of course, is also growing into the almost SEK 150 million.

Looking into '25 as a full year, the comparison numbers are not that dramatic. We are down 6% on the net sales. We are up 3% on volumes. We are up 2% in the currency adjusted growth. But unfortunately, in Swedish krona again then, we are down 6%. Also here, for the full year, where we have improved the gross margin up to 57% also for the full year. We need to point out that our largest customer, Chugoku Marine Paints, they grew by 21% this year, which is a really strong growth compared to what we show in the final end. So with this growth in gross margin, we're in Swedish krona actually larger gross profit than we had previous years. And then we have invested a little bit more in our operational cost, which means that we lower the result of it, but we're still on almost 30% EBITDA level.

And looking into the geographical spread of our customers, which is quite important. We have emphasized before, we're coming back to the regulatory part that Europe is a very low percentage of our sales. It's only 2% for '25 as full year. Last year, it was 3%, which means that Asia has taken yet another little bit bigger part. The ratios between the 3 largest markets, which is Korea, China and Japan has leveled out. Last year, Korea was 50% of the sales, and China was quite much lower. Japan has been stable over the years. But the main reason is actually the very nice growth in China and the lower sales to our second largest customer, which means that China is a really important market moving forward with all their maintenance work. It's really growing nicely, and 96% in 2025 is a very strong growth.

So just to summarize the financial year of 2025, we have forward momentum. We have headwinds in some parts, tailwinds in some parts, but we have a very strong margins and cash position, 57% gross margin, 25% EBITDA. We have a diversification. Our smaller customers grow really strong. They grew by more than 100% over the year. We have our largest customers growing by 20%, and the volume growth in China is 96%, which means that we were quite -- we are confident for the future, but we also need to prepare for all the upcoming work. So in the proposal from the Board, there is a proposed increase of the dividend, of the ordinary dividend from SEK 1 per share up to SEK 1.25, but with no extra dividend for this year. And I think Markus will talk a little bit more about that when he's coming back into the picture.

Thank you very much, Magnus. Yes, as you mentioned, we have underlying very good developments with the majority of the customers in the portfolio. And as you mentioned then, very strong cash generation and really a large cash at hand, right? So what is it that we will be doing with these funds, you could say, besides giving it back to our shareholders then. Well, we want to keep some of the cash to develop the business. And we will come in and talk about business development now in the next section, which is the outlook then, and how we will move the company forward.

So if we start a little bit talking about the market outlook, I mean, overall, for shipping, it's still quite positive. We saw a small increase in seaborne trade around 1.1% during last year. It was a little bit higher in 2024. In terms of, you could say, the shipyards output, it increased actually by 6% measured in gross tonnage, and we expect that to continue actually in 2026 as well and even growing more by 15%. So really the -- at the moment, there is a large output coming out of the shipyards, right?

We see, of course, contracting activity being somewhat lower during 2025. It was quite a bit of a turbulence in the first half of the year that sort of impacted the new contracting. So we are talking then the order books of the shipyard, you could say, 3 to 4 years out into the future, they dropped, but they are still significantly above, you could say, the 10-year trend.

We also see a quite solid outlook in the maintenance and repair market. It is somewhat cyclical, but of course, it's the larger part of the market. We say typically new ships around 1,800 to 2,000 ships per year, and the service events are between 15,000 and 20,000. So it's a much bigger market then, of course, very important for us as a growth market. And Magnus was mentioning that also as China as being one of the key regional markets for us to grow. So I think we look back at 2025 and are really happy about the uptake that we're seeing in China and looking forward to that.

So from a market perspective, of course, there is this risk, you could say, of geopolitical instability. But also you could say on shipping, if we have a more stabilized world, you could say, going forward, it could also be that the tonne-miles of shipped goods could actually go down, right? If the Suez Canal opened up as in the good old days, et cetera, right? So there are sort of risks of stability as well, you could say, to shipping and the charter rates, et cetera, going forward. But we see continued good momentum in the market, really. So that, it's good to see for 2026.

Another parameter that we are following is actually the price of copper. Copper oxide is the traditional antifouling solution that is used, you could say, to prevent barnacles and hard fouling from settling on the ships. And Selektope then, representing sort of a new technology could also be quite interesting from a cost performance perspective going forward. So we have seen quite an increase of copper prices. And actually, what this slide is demonstrating is the margin benefits for 2 companies or, you could say, 2 products competing head-to-head with similar price points at different prices of the copper, right?

So if you go back to 2016, the copper price was quite low. It was around $5 per kilo. And at that time, you could say, it was actually slightly beneficial then versus an entry price level to use a formulation without copper and Selektope instead. But sort of in the recent years, we've been in a market setting actually where copper prices have been high enough so that Selektope is actually more advantageous from a margin perspective, right? And also then looking into the future here, it's predicted that there is actually a lack of copper going forward, right? And that would drive up prices, and it would make Selektope much more attractive as a solution to prevent barnacles as well, right? So we see that as giving us additional momentum for the future for growth of Selektope. So it's really nice and a good factor going forward.

Now we come then to the reregistration process in Europe that we have been talking about, you could say, extensively over the past 2 years. So essentially, where we are in the process for this year, then we reported back in December, that there is now a proposal for a nonrenewal of Selektope's approval for the European market, which we, of course, regret that EU, despite our best efforts to inform, has come to this conclusion, right?

There is still, of course, a chance to influence this decision because we expect then a decision to happen, you could say, earliest in Q2, most likely. So there is still some time for us to affect. And of course, we are preparing for a scenario where there is a nonrenewal, and we also say that, of course, we will take this on more from a legal perspective in that case.

So we should see this as the first round, and it's a story that will continue. So regulatory costs and costs associated, that will be continuing to be on a slightly elevated level at least for this year and probably also for the foreseeable future if we have to do additional testing. So this is the status and the situation with EU.

So if we come to a more positive story, it's the story of our business development pipeline. We also have talked about that quite extensively on previous earnings calls. And we are really, really active, and we can see that now also during Q4 and into this year that our activities are ramping up. So we are speaking to several new interesting collaboration partners in parallel. We were fortunate enough to actually announce our collaboration with Havey Advanced Materials in the end of November. So that is one partner that we are talking to, and there are several others. And you can say then, what is the focus of your business development pipeline. Well, it is to bring sort of complementary solutions to our existing customers. But also looking then into other attractive marine markets such as aquaculture, the more of the yacht market, et cetera.

So we are really actively working here, and we can see also that this is now starting to consume quite a bit of resource from the entire team here. So that's something we will come back to, again, the need really to invest in the company for the future here when it comes to fixed costs and resources. But it's quite exciting results so far. And we, of course, look forward to be able to talk and give more news about the business development pipeline during the course of this year.

So coming then to the business outlook. We spoke about in the report as well, we see new customer product launches, specifically for the Korean market. So we will, of course, closely monitor and see how these products develop. But as we're also stating, most likely, it will take quite a bit of time until these volumes contribute -- sorry, these products contribute significant volumes going forward.

As I mentioned then for the business development pipeline, we are sort of in active negotiations around a variety of new potential strategic partnerships, and that's something we are looking forward to advance and close them during this year. We will have continuous advocacy linked to regulations and of course, engage the European Union, but also our other key markets on the topic of sort of Selektope and Selektope approval.

And as I was mentioning then in order to be ready for the future and to be able to complete all the business development activities, we have taken the decision to increase the team. So we will be welcoming several new team members, permanent members then during the first half of this year. So we also need to bring them up to speed and introduce them to their new tasks, et cetera. So that is the focus of the company.

So coming back then to the strong cash position. So Magnus was mentioning that we're looking into increasing the ordinary dividend. Also, there could be changes in the regulation so that we could be actually -- to be able to consider share buybacks for the future. But we also need to keep some of the cash to be able to realize some of the business development opportunities going forward. So that is really the plan as it looks now for this year.

So with that, I think we're done with the presentation, and we look forward to an engaging Q&A session.

Thank you very much, Markus and Magnus. If I'll begin with sort of the numbers first, looking at your net sales decreased by 33%, and the operating profit almost halved. But looking at the full year, as you explained during the presentation, it's not as dramatic, a respective 10% decrease there. How should shareholders sort of interpret this development in your long term? And how does this quarter sort of reflect your long-term development?

So maybe we should talk about our customers a little bit, right? So we have very few customers, right? And as we have talked about in earlier earnings calls, for 2025, we had a very big and significant customers that actually came back to us and said then due to financial difficulties, they were actually then going to reduce the demand for this year, right? So that was something you could say that happened well into 2025. And you could say that we have grown very positively, you could say, with the other smaller customers. But so far, I mean, it hasn't been able to fully compensate. Although actually, our volumes are higher, right, for 2025 than 2024. So yes.

And considering that the volumes are higher in 2025 than 2024, how come net sales are still decreasing?

Well, I think as Magnus was mentioning, currency has been sort of a big headwind for us as well, right? The fact we are buying and selling in U.S. dollars. So I mean, there is no currency risk as such, right, in the business, but because of sort of the devaluation of the U.S. dollar, it looks more dramatic, you could say, in Swedish crowns than in dollars.

Global seaborne trade has been increasing this year. It's not as big as last year, but this is despite the global uncertainties that you sort of described in your report. A question from the chat asked the following question. Industry data shows strong results, but the company still struggles. Is that suggesting that you're losing market shares?

No, we do not believe we are losing market share overall. I mean on the contrary, we believe that we are actually increasing our market share, right? And I think especially the results in China is demonstrating that, that we are growing so substantially in China, right, for 2025. So underlying, it is actually quite a positive development. As Magnus was mentioning, our biggest customer grows by 20%, right? And we have several of the smaller customers, although from a lower level, growing more than 100%, right? Unfortunately, overall, then you're looking at in Swedish crowns, right, it's not able to compensate sort of the dramatic reduction of volume that we see from one of the larger accounts there, right, which was actually down 2/3, right? If you just compare calendar year, right?

And let's talk about that customer then, 2/3 scaling down that volume compared to your other customers that are sort of scaling up. Talking about the significant customer that is scaling down, what can you tell us about that customer?

Yes. We actually touched upon that also in the Q3 presentation, right? But they were sort of reporting 2 things during last year. One thing was temporary financial constraints internal, right? So that was one reason. And also then, you could say early on in the year that they actually had higher stock levels. So that sort of one thing led to the other, right? And that's why we saw the significant drop. However, long term, we do not see that this customer is in trouble, sort of, and they will most likely recover in the long picture, right? It's not that they are going to disappear from the market, that we see is very, very unlikely, right?

There are many who are wondering the identity behind this customer. And well, I understand that you might not be able to tell us exactly who it is. Can you tell us something?

Well, unfortunately not. I think several of our customers actually do not want us to mention them specifically, right? So we have to respect that. But it is a significant customer, right? And I mean it is, you could say, a financially sound and stable partner long term, but they have had some sort of temporary challenges during last year. So of course, we remain sort of positive in the long run also with them, you could say, to be able to recover and come back from the situation that we have been in during 2025.

And in recovering those volumes for I-Tech, are you seeing that your smaller customers are continuing to ramp up their volumes? Or are you also expecting your more significant customer to recover?

Well, long term, definitely, we would expect them to recover, but how quickly that is happening, right, is, of course, a little bit unclear to us, right? But if you look at the smaller customers, they were logging very impressive growth figures, right? And if you're launching a completely new product or an extension, et cetera, right, they do develop quite differently as well, right? But we see, we previously talked about PPG as one customer that was launching a new product during last year that really sort of replaced an old product, right, and has been taking significant volume, and we see that continuing as well, right?

There are people in the chat also curious about what we can expect from that one significant customer more concretely during 2026, but also your other customers during 2026.

Yes. I mean we cannot go in and comment specifically account by account. And I think it's also fair, and we keep on stressing this, I think, at every call as well, right? There is quite substantial variation between quarters, right? That depends on the customers' purchasing behavior, right? And since we have so few customers, you actually see then quite big deviations between quarters also in sales, right? The long-term prospects are positive, right? And we expect to continue to grow with Selektope. Of course, then Asia being the key growth market, right?

Let's talk about reapproval then on the EU front. The EU has proposed not to renew the proposal for -- the approval for Selektope. What are the reasonings from the EU side? And what are your counterarguments when sort of, how do you call it, disputing this?

Yes. Yes. So this, you could say, proposal is based on what we claim then, you could say, 2 essential flaws, right? So the first thing is that the expert group, which is called the BPC Group, they have then proposed to label medetomidine, which is the active substance in Selektope as an endocrine disruptor, right? And for us and looking into the scientific definition of an endocrine disruptor, we, of course, see that our substance does not fulfill that criteria, right? And I think the key criteria is that you have to cause an adverse effect in the organisms that you're looking at. And it's not -- there is no adverse effects, right? So we, of course, then dispute, you could say, the conclusion that the substance is endocrine disrupting.

I think the second thing, and that Norway then as the reporting state, they were concluding is that there are several alternatives to Selektope in the market. So it's not needed, right? And that's the second thing which we believe is also flawed, right? Because in reality, there are very, very few biocides that actually work against hard fouling and barnacles, while you could say the report is erroneously suggesting that there are 8 or 9 different other biocides, right? They do not even discriminate between soft and hard fouling, right? So you can see that there is really a lack of industry understanding and chemical understanding, right? And then they're also mentioning an array of, you could say, of non-biocide alternatives, which we see they are not really mature enough commercially or available for that type of solution and so on, right? So there are several errors then, right?

And also not only I-Tech, but an array of stakeholders have been pointing this out to the European Commission and the member states of all this what we believe are errors in these conclusions then, right? And so far, unfortunately, we haven't been heard or sort of they haven't listened to this. So hence, we believe if there is finally a negative decision, we will, of course, move on and challenge this legally, right, which we think we have a very stable base to do.

And talking then about cost because you did mention in the presentation that you're expecting elevated costs relating to this reapproval process, can you elaborate on that and sort of what levels you're expecting?

I'm handing over that one to Magnus, actually.

Yes, I think we have quite a bit of cost already today for the year we're trying to influence and that takes external resources. And these costs that we have, which is roughly SEK 2 million a quarter. So roughly SEK 8 million to SEK 9 million for the full year. We expect them to continue, maybe not the same resources, but as Markus says, maybe into the legal resources, et cetera. So that will continue for next year. And that is not an elevation of it. But what we also see is in order to fight this wrongfully labeling of endocrine disruptor, we most likely will, during the year, start a larger study where we actually can prove even more scientifically that it is not an endocrine disruptor. And those large studies, they are around SEK 10 million in cost, which will be spread over a couple of years, but it will still increase our cost. So maybe half of that could come this year. But that is really also depending on what happens in the outcome.

Let's talk a little bit about the outcome then. Someone from the chat is also curious, if the decision becomes negative to say, if it's not reapproved, then is that effective immediately? Or is there any sort of countermeasures you can take to delay the date of effectivity?

Well, when sort of the vote has happened, and it's sort of public, right, there is what they call a 6-month grace period, right? So then sort of it's a grace period for where the customers then have time to adapt, you could say.

Unfortunately, a legal case or a challenge of the decision could take between 6 to 12 months, right? So we actually could end up in a situation then where it can affect the market. Hopefully not, but let's see. We still are hopeful for a positive outcome.

And if we look to the European market, it's still a very small share of your net sales today, 2% if I'm not mistaken. Can you elaborate a little bit on the -- on your strategy to roll out the product in Europe granted that the reapproval is approved?

Yes. Europe is not a big market. It is 5% to 8% maybe of the global opportunity for Selektope, right? So it is quite a minor market from the beginning. Unfortunately, because of this piece of legislation that we have, which is called the BPR, the Biocidal Products Regulation, it doesn't really work in Europe. So Selektope was originally approved in Europe back in 2016. But until today, actually, no end product, so a coating product from a customer has actually received EU-wide market approval under this piece of legislation so -- because the member states have not been able to agree on what they call the environmental protection criteria.

So actually, the legislation is not working today. So it's very difficult, you could say, even with the reapproval, it's very difficult for, you could say, the opportunities to be realized very quickly in Europe as long as we have this piece of legislation that is sort of working from our perspective very less than optimal, right? It's actually blocking new innovation, which we believe is a key challenge for shipping, right? And if we want to stay competitive in Europe, it is an issue that we will have to address, right?

And with this entire process and the challenges you're facing in the EU regulatory, could that potentially cause some concern for potential customers in Europe?

Yes, we see, of course, a negative decision in Europe, right, is sort of tarnishing the brand a little bit, right? And of course, you could say that the other regulatory regimes in other regions of the world work differently. Some of them resemble a little bit of legislation in EU, but none of them have really picked up on the topic of endocrine disrupting so far. So of course, we need to be closely monitoring this, right, and be proactive also in our communication versus, you could say, regional stakeholders and also regional regulators in our key important markets. So that is a key focus for us, right? We do not want this to spread outside Europe, right, in the future.

And what is the risk or sort of uncertainty around that, that you're facing at the moment? I know some of the people in the chat are very curious to know. What is the risk that Asia will also sort of reevaluate this thing?

Well, we assess it as very low at the moment, right? But we need to continuously sort of be close both to the regulators and to the market, right? So to make sure that we are informing them that we bring up the scientific proof on the table, et cetera, right, to show sort of what does the data really say about, on one hand, endocrine disrupting and endocrine deficiencies and then also, what type of alternatives are there out there, right?

For instance, we can mention another region, which is very important to us is South Korea, right? They have also a very restrictive policy around biocides. But they are going about this completely differently than Europe is doing. So they are now looking to implement sort of a cap, you could say, on the amount of biocides that you can use in an antifouling product, a 1% cap, which means that it's actually a source for innovation, right? And that's why we saw these 3 new products that we were talking about being launched in Korea then during the autumn is actually to be able to match this new legislation, which is a headache and it's driving innovation, right? And a 1% cap is no problem for Selektope. We are fully effective at 0.1%, right? So it's actually a positive for us, right?

So we see, you could say, one other country that we're shipping is really important. And they also want to protect ecology and have low emissions to the ocean, but they take a completely and more, what we think, much more educated way of sort of reducing then the emissions of biocide, right? So there are really positive examples for Europe actually to follow on how to regulate, you can say.

You mentioned the 3 new products that you launched in Korea?

We are not launching. Our customers are launching coating products.

Are these expected to be significant contributors to revenue as they ramp up?

It will take time because these products have been developed then to match this new piece of legislation, right? And that has sort of -- it's going to be implemented, you could say, step-wise, et cetera. It will take a number of years before you could say that, that new piece of legislation is phased in and so on. So we expect it to take time also because before these products really contribute significantly. And of course, we should also know that we are already quite big on the Korean market. So you could say there could be some cannibalization between different customer products, right, on the market.

Overall, it's not negative for us, right? If you replace an old product with 0.1%, a new product with 0.1% Selektope, that's an even game, right? So it's, of course, that additional potential that we are after in Korea, which are the products that are not using Selektope today. So that's what we mean. It could take some time before it's significantly contributing to our sales.

Let's talk about your cash position then. You're entering 2026 with a cash reserve of SEK 148 million. It's a rather sizable position considering that it's roughly SEK 12 per share, but also while you're proposing a dividend of SEK 1.25 per share. In utilizing this cash reserve, I know you mentioned it in the report, but could we get a repetition?

Yes. So besides the dividend, we want to keep money, sort of cash at hand for our business development opportunities, the opportunity pipeline, right? So if we are able, you could say, to act on any of these partnerships and there could be elements of acquisitions involved, et cetera, right, or upfront payments, we want to ensure that we have cash available so that we don't have to go out and ask for money for such smaller things, right? And then also, there could be better things to do with the cash than actually giving it back in dividend.

I don't know, Magnus, if you want to comment on development?

Yes. But there is a proposal on the table to actually change the regulations about First North companies or nonregulated market companies to actually be able to buy back shares, not synthetically but really buybacks as the companies on the main market are allowed to do. And we are actually then also considering waiting in this legislation for us to be able to buy back shares instead of increasing the dividends.

Yes, there's a question -- there's a viewer who's asking a follow-up question. Why are you not doing share buybacks in the first place instead of dividends?

Yes. As I said, today, on a nonregulated market, you could do -- I'm not totally into it, but you could do some kind of synthetical buyback twist, which we are not really interested in doing right now. But you need to be on the main markets, the main regulated markets in order to follow regulation and be able to buy back shares. But that regulation is considered to be changed by end of this year.

And Markus, you mentioned you wanted to have cash on hand. How much?

How long is a string? Now we see, and you can say several of these opportunities, it's ranging, right, how much would be needed. So we prefer to stay on the safe side, right, for now. And let's see. Hopefully, we want to really act on some of these opportunities and move fast, right? And then it's better to have the cash at hand to be able to do this.

There's a lot of viewers who are posting their questions here in the chat. So I'll just fire off as I see them. Following question, your balance sheet shows an increase in year-end current liabilities of SEK 3.6 million but your cash flow statement shows that liabilities consumed SEK 4.2 million of cash. Could you explain this discrepancy?

I actually can't say without the numbers in front of me exactly what they claim from the cash flow analysis that liabilities consumed those SEK 4.2 million. But there is -- there are normal changes in the current liabilities with the vendor payments, et cetera. But of course, we also are increasing our tax liability as a current because we need to pay it during 2026. So that might be the discrepancy that he is talking about.

Regarding the MOU that you have with Havey, for those of us without a background in chemistry, could you please explain in simple language how this helps to diversify I-Tech's current portfolio of products?

Yes. So I was showing a paint can at the slide earlier here. Maybe we can go back to that one. It's maybe easier to explain. So if you look at the paint can, you see here what are the contributions or the value in that paint can of different raw materials. And today, we are in that part, which is called additives here, which represents 30% to 40%, but it can be even higher, you could say, 30% to 40% of the value of the raw material cost of the formulation. And what Havey is doing, they are working with the binder systems or as it's called here, resins, which is essentially the part of the formulation that binds the coating together. So the biocides and the binders, so the resins, these are the 2 key ingredients that actually, on one hand, represents the majority of the cost of the formulation, but also then provide sort of the key performance criteria and benefits of the formulation.

So we have been working, you could say also before Havey then with binders as one of the innovation tracks, you could say, in I-Tech. But sort of we have started to work together on looking at future innovations here. You could say, both better performance but also more sustainable antifouling solutions going forward. So we hope to be able to continue and close that discussion, you could say, during this year as well. And then we have a very interesting space for future innovation and something that can also contribute significantly to sales.

We hope that answer will suffice as we move on to the next question. You also wrote that you will be welcoming new permanent members in the first half of this year. Can we expect the operating cost to increase moving forward?

We have been talking about slight increases. We are increasing the staff by a few numbers over the year. We have been talking about what kind of costs we are driving from the regulation part. There will be some external costs, maybe not increase, but we will still have external costs in regards to the business development activities. And of course, if we come up with a really interesting internal business development where we need to spend a little bit more R&D cost.

But significantly changes -- the only significant change, I would say, that would be if we go into this long-term study on the endocrine disruption. But otherwise, yes, small increases. But we are at -- we have a slim business model, and we should try to keep it slim. We have like, for the full year 2025, we're almost 30% EBITDA. So we shouldn't, even if we make a lot of money, we shouldn't start spending too much money, but we should spend money on developing the company. And there, we shouldn't be afraid. If we need to spend money there, we should spend money because we're making money as well.

As we move over to the next question. As with the new building activity up in 2026 and much easier comparables, is there any reason why we shouldn't expect a strong growth in Q2 2026 and onwards?

Well, as we said, long term, we remain very, very positive on the case, right? We have very, very good momentum with the majority of the customers, right? So we stay very positive sort of on the long-term prospects for Selektope, but of course, also for the other interesting things that we have in the pipeline to complement, you could say, and build a more diversified and stronger I-Tech going forward, right? So yes.

I just want to complement that. As Markus is talking about the organic growth of the company, we still have the hustle with the U.S. dollars even now during the first part of this year, it decreased significantly even more. So where will the bottom be on the dollar, we really don't know. So that could be one part that counteracts. But as we said, organically, we're very -- looking very nice into the future.

So should we be prepared for stable sales or increase in costs? That's the question, I'm sorry, I will elaborate on the question. What level of growth should we expect in the SG&A in 2026? Do you think that we will see organic growth excluding FX currencies or should we be prepared for a year of stable sales but increasing costs?

I think we have guided enough at this time. We are not giving any forward-looking statements, really. But we have been talking about cost drivers for the coming year. And we can do -- we are talking about how we see on the market. And then I think you need to draw your own conclusions about that.

Let's talk about new hires then. When you're looking to recruit, what key sort of skills are you looking for and the focus areas?

So you could say the business development part is, you could say, driving a need for more capacity. But then you're right, I mean we also need additional skill sets. So one area we are looking into strengthening is, for instance, regulatory affairs, right? We have this ongoing case with the EU, but we also know that we have to stay proactive with the other regions. We are working on new things as well. So that's an area we need to strengthen. Of course, also the commercial side, we will look forward to strengthen going forward. So these are the main areas, really.

And when we're talking about the reapproval process, we also talked about that the European market is a rather small market. And there's another question here. Why spend the -- between SEK 8 million and SEK 9 million per year in legal cost and potential new studies when Europe is already a small addressable market?

Yes. I think we touched upon it a little bit. It's mainly to prevent tarnishing the brands, right? Of course, we want to have a technology that is seen as an environmental sound option, right? And what EU is sort of claiming now, it's claiming that it is an endocrine disruptor and therefore, should not be on the market. We need to challenge this more out of principle than out of direct commercial value and also to prevent that this would spread in the future, right? So we need to take this head on, right? That's the option for us, right?

And so far, has there been any spillover effect of the reapproval process in Asian markets?

Well, we talked about this earlier as well. There has been a spillover effect in terms of, you could say, new developments, not in the existing sales, so you could say what has already been launched in the market. But you could say some customers then, they look on the market very globally, and they want to launch, you could say, products that are available in all regions, right? We have had feedback that they have paused global developments. They have still continued with their Asian product developments, right? But sort of we have already seen it impacting these global products, right? But that is now sort of very much in the past, right? So yes, we do not see that affecting them, you could say, Asia to that extent.

In the start of this Q&A, you mentioned that you're not seeing yourselves losing any market shares. But if you were asked the following question, do you see any increased competition from silicone-based antifouling or new technologies?

Yes. I mean silicone technology is an alternative coating technology, right? So you could say that you could view then silicone maybe versus traditional antifouling coating, right? There, of course, is a competition here. And some silicones, they claim to be without biocides, right? But the most commercially successful silicones do contain biocides, right, today. And to -- actually, we see also, I mean, for the future to continue to have high performance, right? Biocides are really giving an edge also in silicone technology, right? So I think we view silicones more as a growth opportunity because to date, there are no silicone products with Selektope inside. So that is actually a growth opportunity for us, right?

Yes. We will ask the final question here from the chat and ask the following. Can you address the sales in the maintenance segment, are they ramping up?

Definitely. I think we see maintenance sales in China sort of be more predominant than new build for our sake, right? So the fact that we have grown significantly in China is also sort of a tick for us growing in the maintenance segment. So both of these things are sort of interconnected and a key strategic objective of us, right? So yes, definitely.

CEO, Markus Jonsson; and CFO, Magnus Henell, thank you very much for being here presenting and answering questions.

Thank you, Mikael.

Thank you.

Hello, and welcome to today's presentation, where we have I-Tech with CEO, Markus Jönsson; and CFO, Magnus Henell, presenting. After the presentation, there will be a Q&A. [Operator Instructions] And with that said, please go ahead, Markus and Magnus, with your presentation.

Thank you very much, Martin, and good morning, and welcome to this Q3 call. Today, we actually extended the presentation a little bit to talk more about the market as such to also answer your questions towards the end, but let's get going then with the introduction part. So we will be brief here. I mean, most of you who are joining the call know about us, right? But I-Tech as such, a scalable business model, still low penetration. We calculate that we are approximately 3,000 out of a global fleet of 100,000 ships. So plenty of growth. Production is outsourced. We are focusing on the sales and marketing and product development of our product sector.

We are addressing key maritime challenges, which is to reduce the emissions of CO2 and fuel use, also to help protect sensitive ecosystems and marine environments from the transfer of invasive species and also reduce the emission of chemicals to our oceans. And this is what we are working within I-Tech. The solution is a pharmaceutical ingredient with a nonlethal effect on barnacle larvae. They become temporarily hyperactive and they cannot settle on a ship hull that has been treated with Selektope. The substance is highly efficient, so 0.1% is needed approximately for having a good barnacle protection. So you can formulate very innovative coating products also using Selektope.

Why are barnacles such a big challenge for global shipping? Well, they are present essentially almost all around the globe. They thrive in most marine environments. And when they settle on the ship's hull, they superglue themselves to the surface, which makes them very, very difficult to remove and you actually end up damaging the coating when you try to remove them. So really, the most efficient strategy is to prevent them from settling on the hull. So today, we included a few more slides from this study and survey that we did together with Safinah Group earlier this year, where we look then at the indocking conditions of around 700 ships. So Safinah is a coating adviser. They help the ship operators and shipowners to select the right coating for their particular ship and the trade route, et cetera, that it's on. So Safinah has a great database, you could say, of the conditions of ships when they come in after dry dock.

And one of the market perceptions here is that barnacle fouling is mainly an issue for very slow steaming vessels or vessels that have a very low activity level, meaning that they are idling in the water and then giving the barnacle larvae ample opportunity to settle on the ships hull. But actually, what we showed here together with Safinah is that all type of vessels actually have issues with barnacles. So what you're seeing here on the Y-axis are various ship types like product tankers, LNG ships, cruise ships, container ships, et cetera, right? And the light green is actually showing how many of them actually have the presence of animal fouling. So you see really it's a majority of all the ship types. So not only slow steaming, but traditionally fast steaming ships also like a car carrier or a container ship that is running on high activity and quite high speed.

Another market perception that we want to highlight is that barnacle fouling can be completely avoided with some coating technologies. And actually, we were looking into that in our survey as well. And we are comparing 2 main technologies here, one being traditional self-polishing coating. That is the light green bar and then more, you could say, modern or silicone type FRC coatings, so foul release coatings. And foul release coatings, they are available on the market, both biocide-free and with biocides. But essentially, what we see on a macro level here is that overall, both of these coating technologies have issues with barnacles, and it's not that one is better than the other. There are, of course, many types of SPC products. So you see a larger variation and also a lot of different tiers of products, right? So that's also the secret, I would say, in this industry to formulate the right product for the ship and the trade, et cetera.

But overall, silicones also have issues with barnacles. So with I-Tech's previous work, we have been able to improve in ship-to-ship case studies, the value of Selektope. So you can find that Selektope case on our website. Also in the Safinah study, we had the luck actually of finding then 12 ships in this data set that had been coated with Selektope. And here, we are comparing the 12 ships, you could say, to the general population. So that is what the graphs are showing here. But essentially 1/3 of all the ships have really an unacceptable level of barnacle fouling, right, something that would equate to 36% more fuel use, right, trying to maintain the same speed through water. With Selektope -- and of course, here, it's a limited data set with 12 ships. But most of them had none or very little barnacle fouling, right?

So it's clear also here again then proving the value in the market of Selektope, right, which we are very happy to have. Another key insight that was actually coming through now in September when we had our International Antifouling Conference, so -- which I-Tech is hosting and arranging here in Gothenburg every second year. So now this year was the third edition, and there was about 200 participants, you could say, from all around the globe and from all different types of places of the value chain working with antifouling for ships and other marine installations. And what Safinah showed here is also -- it's a little bit worrying, but it's also sort of answering the question. So why -- if your technology is so efficient, why isn't the penetration going quicker? And of course, there are many caveats and layers to choosing the right coating product.

And what Safinah is showing here with the statistics they have that for these ships that come in and have severe macro fouling, actually, the owner end up choosing the same manufacturer and often the same product, right, despite sort of obvious proof that this was not the right coating, right? So it just signals, you could say, the challenge and the barriers we are up to in terms of inertia and of creating market awareness that there are better solutions there. Another example then that comes from the autumn here is a work we've done together with Coach Solutions. So Coach Solutions is a performance management company. They help shipowners then to monitor and track the performance of their hull. So essentially, they can see through measuring various analytical points of the ship performance, how severe, you could say, fouling has become on the ship.

So that is what the graph is showing to the right here. The gray color is indicating where the ship is inactive. And in this case, we've taken the case of an oil tanker trading on time charter. So essentially an owner that owns the ship, but is putting it up for hire, you could say, to transport goods. And the case here is really to prove that it always pays off for a premium antifouling coating, right? So you compare in the table to the left here, the price of a low-tier antifouling and the price of a high-tier antifouling, right? But -- and it's more than double as expensive to coat your ship with a premium antifouling solution, including, you could say, full blast and good preparation of the surface, but you spend less on cleaning, but the important part is the production or the productive time.

So you could actually bill more hours if you have a ship that is coated with a high-tier product, right? So the earnings potential in this example for this oil tanker, then is -- you could say it's a typical oil tanker that is trading Middle East, Africa and Europe, et cetera, right? The earnings potential for them of using a high-tier antifouling instead of a low tier is USD 1.2 million, right, over 5 years. And of course, if you have a fleet of 100 tankers, this starts to be massive, right? So it really sort of reflects the challenge we're up to also to convince the market, right, to go for more premium antifouling solutions.

Then we come to the market outlook. And as I was writing in the comments, you could say in the report, actually, the macro conditions have improved after the summer. So there was quite a bit of worry and turbulence and so on in the beginning of the year, especially in Q2 as a consequence, you could say, of global trade politics, et cetera. This has sort of stabilized, I would say, and charter rates have actually strengthened. So charter rates is how much a shipowner is being paid to rent out a ship for a specific service or a trade route, right? It has actually improved over the summer, which is good news. As we have said earlier in the year, also the number of new ships that are being produced this year is actually expected to rise by about 6%, 7%. And sort of that is, of course, ongoing, right?

These projects have been started about 2 years ago. So these ships will be delivered this year. So there's a really high activity in the shipyards. What we have seen then and what are worrying signals is that the contracting activity. So essentially, the fact that shipowners are placing orders for new ships. But these are like 3, 4 years out sort of in the -- from now, right? So the contracting activity now is for -- to start building before 2030, right? So 2028, 2029, right? And here, we have seen then a drop of 50% this year compared to last year, but sort of the activity and the contract level is still close to the 10-year average. So it's not a disaster.

What has also picked up this year and what we want to highlight in this report is ship repair activity has also jumped, you could say, around 7% this year. And this is -- it has to do, you could say, with the sort of the average age of the total shipping fleet, right? So there were a lot of ships built between 2010 and 2015 that are now coming in sort of for major repair, but also upgrade work. So we see a lot of owners doing energy saving technology updates, right, so-called ESTs, right? And here, we want to highlight also that Europe still plays a very important role for repairs of ships.

So China has about 45% market share, but Europe also almost have 20% when it comes to ship repairs. So a little bit, you could say, a different situation. And the graph we show in the bottom right here is sort of the standard service. So that is when the ship goes in for inspection and also where you always typically then do a recoating of the antifouling, right? And sort of this varies year-to-year because of the age of the total fleet, but it's an upgoing trend as well, right? You have a lot of bulkers and tankers needing service on a regular basis. So this is, of course, what is creating stability, some cyclicality between the different ship types, right, over the years. But overall, there is a steady stream of ships that needs both repair and maintenance and recoating, right? So that is really the -- overall the noncyclical element of our business, right?

Now we come into the interim results, and so I hand over to you, Magnus.

2

Thank you very much. So we're coming into the main topic of this call today, and we're actually starting up with the same picture as we started up last quarter where we actually showed a very large dip towards the Q4 and Q1. And still, we -- Q4 and Q1 was very high and -- but we have a good uptake in Q3 now. And compared to them, of course, it's a little bit lower, but it's -- we shouldn't forget that this is our third strongest quarter ever with a 10% organic sales growth towards a quite strong Q3 last year. And what we have discussed before as well is that we see a lot of variations. And it's hard to find the really seasonal pattern in these conditions. But of course, the trend is still upwards.

The market conditions for the shipping is still positive. So we're working on to it. And then coming into the sort of fact results for this quarter. You can see in front of you that we have a very small increase on the net sales compared to last year, 0.5%, but we shouldn't forget here as well then that we have -- when we currency adjusted the revenues, we have a 10% growth and even further on the volumes. We still have a very good gross margin, which is a result of all the work that we have done on this side during the last periods. Hopefully, we can increase it a little bit more moving forward. I think Markus will talk a little bit about it in the far end, but this is a good and stable level.

Both EBITDA and EBIT are growing compared to last year, 14%, respectively, 18%. And I think it's really nice to show that we have a 32% EBITDA margin. And we're showing that the business model holds, even though we are forced to spend quite a lot of money on things that we don't want to spend money on, which Markus will come back to later as well. And then the cash conversion, I think, it's almost the best cash conversion quarter we have had. Of course, this is really depending on ingoing and outgoing payments, but SEK 23 million in operating cash flow for the quarter and 121% increase from previous year is quite good. It gives us a strong cash balance in order to further develop the company.

And to conclude sort of the financial part, I think it's quite interesting to look on the geographical spread. And if we start on the little bit more negative side, for those who were with us in the Q4 call, you can see that Korea has lost almost 14%. It was roughly 50% of the sales in Asia during last year. One of the reasons is what we have reported that one of the customers has slowed down a little bit. But I think on the positive side, on the other hand, is that both Japan and China, which are really strong maintenance -- and new building for Japan, of course, but China is really strong on the maintenance side, have grown both in proportion of our sales and also in the total revenues. And I think the major take we should take with us from this picture is actually that we are increasing in China, which is a very important market moving forward.

So to sum up then, market conditions overall are still favorable and good, I would say, both in terms of new build and the service and maintenance activity, right? So there is no worry here. As we report and one of our customers have had a lower offtake -- or reported to us that they would have a lower offtake this year than last year. We are highly dependent still on individual customers, right? Our total addressable market is around 10 customers and so on. And of course, as we grow the business, it's not going to be a straight line upwards for sure. So I think that's to say around of this section, right? It's not market related. It's more for individual customers that we can sort of ascribe to a little bit weaker than we have hoped as well growth here, right?

Okay. So now we come to the outlook then. So we start with the regulatory or this ongoing saga that we have around the reregistration of Selektope, right, to be used in Europe. And as you saw in Magnus' previous slide, Europe has actually grown a little bit this year. So 2% of our sales is to Europe. But it is, of course, a strong symbolism, right, to have a product that is registered in all markets, right? So from that perspective, it's important. Right now, you could say we are in between 2 of these interactions with the standing committee on biocidal products. And we are still, you could say, awaiting the outcome and the meeting minutes from the meeting that took place now in the end of September to see sort of what is the latest from the commission in terms of our application.

We note now also that we have got some attention, you could say, also in media for our case, right? The Financial Times then published a piece over the last weekend, which is a very nice piece and that we would recommend you to read, of course, where they talk about sort of how EU's strategic goals of battling the climate and taking on the challenge of invasive species, et cetera, and then coming with a regulation that really goes against this, right -- and odds, right? So where we sort of illustrate a little bit of failure for European regulations, right? So we are monitoring this closely, and we are not changing, you could say, the communication.

We believe that there will be some more clarity this year around where the case is going in Europe. So we will definitely come back to that, you could say, during the last months of this year to you. So we also thought that we will speak a little bit more about the business development pipeline. As I stated also in the comments, we have several new partnerships, dialogues ongoing in parallel here, and we're really pushing forward and to be able to announce something during Q4. We are working very actively both with complementing technologies like other active ingredients and other additives for coatings and also other sort of major components, which is more than the binder systems, you could say, which is another interesting area. So these are 2 sort of technology areas that we are looking into for future partnerships.

The other marine markets is, of course, you could say, offshore energy, but that is sort of very much in the start-up phase. More mature are aquaculture and the yacht markets, right, that we've also been talking about in the past. There are also projects, you could say, which are more forward leaning and looking more into the future that also sort of circulating in the business opportunity pipeline. But also here, we hope to come back then more towards the later part of the year. So then we come to the outlook. So if we start with the market then, well, we see continued currency headwind. And of course, there is market turbulence relating to trade. But as we are stating then, the market has definitely turned out to be better after the summer than before, right? So it's actually less turbulence, I would say, right now, right? But this can, of course, change quite quickly.

So if we're looking at then in terms of the customer development, we, of course, would love to see some new product launches, and that would sort of be required, right, for the growth journey to really accelerate again is to come into more of our customers' products. And that is also what we're looking forward then, both with existing but also new customers in the near term. But it's difficult to say exactly, of course, when that comes because that transparency we do not have, right? And as we mentioned, we're also looking at closing then some of the new strategic partnerships in the coming period here. So as Magnus was alluding to, then the gross margin has improved quite nicely over this year, but we are looking at sort of implementing these actions that have been initiated last year fully, right, for the remainder of this year, which, as Magnus is stating then, would enable us to continue to strengthen the gross margin more going forward.

And of course, the ongoing expenditure on advocacy linked to regulation, we can see -- I mean, it will continue at least this quarter, right, and then sort of into next year for sure. So I think that is the outlook. And now we are happily awaiting and looking forward to your questions.

Thank you very much, Markus and Magnus for the presentation. And yes, let's dive into the Q&A section here. Start with the first question. What is the average sales value of your Selektope sales for an average size vessel?

It's a good question. But of course, we need to start by saying it really depends, of course, on the size of the vessels, but also on the strategy that you take for coating this, right? Is it the Selektope-containing coating that you apply both on the sides of the ships and underwater on the bottom side? Or -- and how many layers are you applying? Is this a ship that is going to traffic very hot warm water, so you need a thick layer of coating or sort of a little thinner? Is it acceptable? But I mean, it can range and vary from the value of the Selektope sales to one ship between $15,000 and maybe $100,000 per ship, right, depending on the size and sort of the thickness and layers, et cetera, of the coating. Typically, then we could say around maybe $25,000, if we are sort of to give an average value.

When a paint OEM will produce a batch containing Selektope, do they produce paint for 1, 3, 5 or 20 boats at the same time?

That's a good question. Again, it depends. But you could say -- I mean, major projects taking place in the shipyard, right? You can only fit a certain number of ships in the dry dock at the same time, right? So of course, they try to minimize their stock levels as well. But let's say, there are maybe 3 ships being able to be coated at the same time, right, so then you have a sort of an indication, right, how much paint has to be ready on the shelf, right?

Thank you for clarifying that. Could you quantify the impact of the reduced offtake from the sizable customer that reported financial constraints earlier this year? And how high would your growth figures have been, if they excluded the revenues -- if you exclude the revenues from this customer?

I mean -- sorry, we cannot go into that level of detail here, right? I think we also -- we cannot discuss, you could say, customer relationship in detail sort of on the call here. So we would refrain from answering that question, unfortunately.

And over the past few quarters, we've seen revenue move from about SEK 59 million to SEK 57 million and down to SEK 31 million last quarter, and now we're about roughly SEK 42 million. We're trying to get a clear sense of what the baseline revenue run rate should be. Would you say that there's some cyclicality or seasonal factors that we could understand better?

Yes. I was hoping that we could understand the seasonal factors better, but we should understand that all of our deliveries are quite big deliveries. So it depends on in which quarter. You can have one quarter with a couple of deliveries coming late in the quarter and then coming in early in the quarter past the next one. But what we can see is that we have an upgoing trend on the volumes and on the organic, well, currency adjusted sales.

We have 10% up year-to-date this year, and we have 14% in the volumes, but it's not really easy to find the seasonality. Of course, you would believe that you should have large sales in maybe Q4 and Q1 depending on the sort of spring season of a lot of maintenance in the areas where we actually have quite cool winters. But on the other hand, many of the shipyards are in areas where the weather doesn't really matter. So I was hoping we could answer that question more thorough, and we tried over the years, but it's hard to find the patterns.

Yes. There are no clear patterns that you can -- there are many patterns sort of crossing each other, right? So it's difficult to -- but I think -- I mean, you can look at the year-to-date numbers as well, right? We are stating in the comments to Q3 that [indiscernible] they have grown their sales by 18% this year, right?

Thank you for clarifying that. You mentioned that you expect to announce new partnerships in Q4. Does that relate to Selektope or new ingredients or technologies?

Yes. The cryptic answer will be both, right? Some of these projects are very associated with Selektope and some are sort of adjacent, right? And other products -- the projects are also sort of looking into new technology areas, right? So we have really a range of different ideas that we're pursuing in parallel here. And we have been able to mature several of them quite substantially during this year, which is great. And we would love to come out and talk more about them soon.

And it's encouraging to see significant growth from Jotun. Do you know what has been the driver for that growth?

The driver is, of course, that the customers are asking for the product, right? They want more of this type of product. So I would say that is behind the growth, right? And I hope it's because it's performing well in the market.

And what would you say are your key takeaways following the antifouling conference?

Yes. I think we touched upon it a little bit in the introduction, right? There were some good new insights into behaviors definitely. The value of antifouling, I think, it was highlighted over and over again. I think that the conference as such is really proving in itself its value because we are bringing, you could say, together the value chain, also including academic research, right? And we need to create, I think, longer term, more of a common language, right, when we try to compare technologies, sort of me coming in from other industries.

What I see is not very common here is actually using the socioeconomic impacts, the life cycle analysis of different technologies, right? So biocides, you could say, are under pressure, you could say, from an environmental point of view, and they should rightfully be, right? Because, of course, you should minimize sort of the release of chemicals in general to the ocean, right? But you also have to be sure that what you're comparing this against, right? Is the cleaning really better? What is the implications on the fleet size and sort of on the operations of cleaning, et cetera, right? We would love to see more science-based, more socioeconomic studies. And I think this conference creates really a foundation to collaborate across the value chain, but also with academia to increase the level of scientific drive, I would say, when comparing different technologies and different approaches to biofarming management. So the conference is in itself hugely valuable.

You reported a lower Q2 due to natural variations between quarters. What would you say was the main reason for the weaker organic growth this quarter compared to last year?

Yes, it is the mix effect, right? And we are talking about that one customer having challenges this year, right, and actually taking lower volume than last year. So I would say that is one of the main reasons.

And the next question is, if your product is so good, why isn't the market penetration better than it is today?

Yes. It's market inertia and risk avoidance, you could say. And as the slide we show in the introduction, right, even if the ship owner is faced with the fact that the coating system that they choose last time failed them, they have severe macrofouling, over half of them continue to choose the same manufacturer and the same product, right? And that is the type of behavior we need to change in the industry. And here, awareness, of course, is important and marketing, right, to educate and show the potential of doing a better job in terms of biofouling management, right, and the value of it, right? Because, of course, it's not only good for the environment, it also saves you money as a ship operator.

And I believe you touched upon this in the presentation, but maybe you can add some more color to this. Is there any news on the EU reapproval?

No. As I said there on this slide, we are waiting, you could say, for the outcome of the last meeting, right, so no. And I just reiterate, right, we expect to have some more clarity still before the end of this year, right? Although it's not sure that the process will end, I mean, the extension that we got this year, right, was for 1 year. So the current approval for Selektope runs to the end of June 2026, right? So in theory, it could take up until June, but we hope for more clarity than that still this year.

And you said volume growth was ahead of FX adjusted sales growth. Can you share some more color here? And what pricing pressure are you seeing?

Yes. The only color we can say is that the mix of customer during this year compared to last year is a little bit more skewed towards the really high consumers such as CMP, of course, which have a little bit lower price. So that is sort of the main reason for that. Price pressure, we are always under price pressure with our customers. They want to have the most efficient and most cost reduced way of handling the barnacles, but I don't think we have more cost pressure than any other actuary within this business. There is still a good business case with the Selektope included in the paints.

And of course, we have discussed this many times before. It somewhat also depends on if the end customer then or our paint manufacturer have developed a new paint based on Selektope or if they have just introduced Selektope into an existing formulation, which is very good. And what we can see is that the price pressure is higher on that side where they actually introduced it into the existing formulations. But in general, I think we are under the same price pressure as everyone else in the business.

Yes. I'm just saying, I mean, the foundation of the value proposition is very strong, right? So if the coating manufacturers reformulate around the effectiveness of Selektope, they could achieve a better performance at a reduced cost, right? And of course, it creates more value for the shipowners. So it is a win-win-win business case, right, and so on. So fundamentally, the value proposition is very strong, which helps us, right? And then -- yes.

And is it fair to assume that will not be possible to match the very strong Q4 2024 and Q1 2025 levels in the coming 2 quarters?

Well, as we have touched upon here, these were really great quarters, right? Q4 and Q1 were really high. So of course, it's a challenge, right, and especially then sort of with one customer buying less this year. But we do not give the exact forward-looking statements here, but it's a challenge, yes.

If orders from CMP and PPG both have growth, who is lowering the growth?

Yes. There is one customer as we have stated then with a little bit of troubles this year, and they have sort of confirmed now that they will be using less product this year than they did last year.

And how many new products are currently in development phase with customers? And how many are you expecting to introduce to the market over the next 2 years?

Yes. It's a little bit challenging question because we are working, you could say, on the R&D side and the product development side. We are working basically with all of the major customers in parallel at the same time, right? There is not complete transparency, you could say, in our customers' plans to launch new products, right? And that is a challenge for us, right? So we know, of course, when we have technical breakthroughs, we have helped them to solve various challenges related to their technology, but that does not translate to that we actually know when and where and exactly in what form they will launch these products, right?

But -- I mean, I would say there are 4 or 5 projects, right, that can turn into new products on a fairly short notice, right? So that's, of course, what we are closely monitoring to see that this is happening going forward.

And how is the current discussion going ahead of 2026 with a Korean player that has reduced volumes in 2025?

Once again, we're coming into the forward-looking statements. And of course, we are in discussion, but there is nothing we can sort of elaborate around in this call.

Understood. And could you give us an indication of this quarter's cost for the EU reregistration process?

Yes. I actually assume that, that question would come up. And actually, it's been a quarter with significant cost. And I would say it's roughly between SEK 2 million and SEK 2.5 million in external costs depending on some overlapping activities. So it's really not easy to say, is it truly the EU cost or is it another purpose?

Maybe it's significant.

Yes. And for those who have been with us, I think we have reported quite consistently that we are on around SEK 1.5 million run level on these type of costs. So this quarter has been a little bit more.

How is the pricing point compared to silicone coatings?

Yes, it's a little bit difficult to answer this question. So if you take a high-tier self-polishing coating then, you could say copper-free based on Selektope, that would be a rather high price point as well. We have heard that silicones are quite costly, right? And the value proposition is, of course, that it would improve the performance even further. So yes, it's difficult for us to comment specifically on that, right? But now if you compare high-tier to high-tier, I would say silicones tend to be maybe even a little bit more pricing.

Can you make any comment on how the Q4 has started so far?

No.

Okay. And Magnus, you mentioned 40% growth in volumes, but 10% organic, does this mean a major price reduction?

No. As I explained before, it's an effect of the customer mix in the quarter. There's no price reductions.

Did you say -- sorry, yes, 14% right? it's not 40%, Magnus.

Okay. Thank you for clarifying that. Yes. So has your major customer, CMP, showed improved revenue growth in Q3 versus Q2?

Excuse me, can you rephrase that question again?

Yes, absolutely. Has your major customer, CMP, shown improved revenue growth in Q3 versus Q2?

No, they are slightly lower. Q3 compared to Q2, is that...

Yes, correct.

Yes, they have improved...

Yes, they have improved.

Substantially.

Q2 was -- as we said, it was low because of quarterly variations.

How do you market Selektope when you sell through distributors?

Well, I mean, the marketing of Selektope is, you could say, mainly targeting ship operators, shipyards and sort of the broader value chain, right? We, of course, work together with partners, agents and distributors and try to make sort of material available in local languages, right? So that it also supports their efforts, right?

Have you thought about Selektope in silicones?

Absolutely. It was actually the reason that we included silicones to show that there is a barnacle problem as far as Safinah and we have sort of concluded, right, also for silicones. So we view silicones as a very nice growth opportunity because to our knowledge today, there are no silicone coatings that contains Selektope or any sort of specific barnacle protection technology. So that is, I would say, a potentially major innovation breakthrough that we are, of course, actively working on.

Thank you. And we'll take one final question here before wrapping up this Q&A section. Your Head of Sales guy is leaving I-Tech soon. Have you found a replacement?

He's not leaving soon. He's approaching, you could say, a golden age. So we are looking at strengthening the sales team in general, I would say, as well. But yes, the plan is really to recruit a new sales resource, right?

Correct.

Okay. Thank you very much, Markus and Magnus for your presentation here today and also answering all of our questions. And thank you, everyone, who tuned into this presentation with I-Tech, and I wish you all a great rest of the day. Thank you.

Thank you.

Thank you.

Hello, and welcome to today's broadcast with I-Tech, where our CEO, Markus Jönsson; and CFO, Magnus Henell, will present the report for the Second Quarter of 2025. After the presentation, there will be a Q&A. So if you have any questions for the company, please submit them using the form to the right.

And with that said, I hand over to you, Markus.

Thank you very much, Ludwig, and good morning, everybody, to this Q2 presentation from Moindal. It's me, Markus Jönsson and Magnus Henell by my side. And we'll just dive straight into the material.

So for any newcomers to I-Tech, we will just have a brief introduction. So I-Tech is a biotech company with a unique technology targeting antifouling coatings for ships. We're a knowledge-based company, and our production is outsourced. We estimate that we are on today around 3,000 out of a global fleet of 110,000 commercial vessels. So plenty of opportunity to grow going forward.

We are addressing some of the key challenges for international shipping, which is the emission reduction of CO2, prevention of the transfer of invasive species. We'll talk a little bit more about that. And also then emission to water of chemical substances. So our solution is well positioned to help shipping companies and ship owners to address this challenge.

The solution stems out of Swedish wire technology, and it is, I would say, a drastic improvement in terms of performance, both to prevent barnacles from settling on to ship and also the amount of chemicals that is needed to achieve the desired effect. We are in at 6 of the 9 largest paint companies today and working actively with all of our retired customers.

So during the Q1 presentation, we talked about the market a little bit. So at the start of the year with the turbulence around the global trade, et cetera, it's sort of called for a discussion of what can the implication be for I-Tech going forward. So we would say, in Q2, of course, the preconditions has continued to evolve. But looking more specifically at shipping then, I think it's positive to see that the charter rates have maintained at a sort of a very good level, around $25,000 per day, which is sort of an indication that at least that is stable, the demand is stable.

If we look at the deliveries of new ships, new vessels, that is predicted to increase this year by about 9%, and that is well underway as far as we see.

The worrying signal is the contracting of new vessels and the turbulence we saw in the beginning of the year, we have seen so far a significantly lower contracting rate, coming, of course, from a situation with very strong growth in 2024, but it has markedly slow than in 2025. It's not an issue here now. But of course, if this prevails that could be a challenge for us in around 3 years from now. But let's see how that evolves.

So that was a quick introduction. Now I will hand over to Magnus then to take you through today's results.

Thank you for the introduction. That brings us into the quarter and the first half year of this year. And as you all have seen, I guess, in the report where we are coming with a quite slow quarter, but we would like to share this picture first to really emphasize that we are coming into a slow quarter from two exceptionally strong quarters, where we saw a huge growth and very nice purchases from our customers. And we can see that both as we wrote in the report, there are some short-term inventory buildup in our customers, which we foresee that it is really short term. But also the turbulence that have been in the market during the start of this year, that has had some negative effect on us. I think it's really we need to emphasize that the macro conditions for the shipping, they are still very positive.

So when we look into the results of this quarter, I think we also need to see the whole picture, but let me take you through the quarter first. As you have already seen, we had a -- net sales were 26% lower than Q2. I know the expectations have been very much higher, of course, from our side as well. But given the different events during the quarter, this is unfortunately the result. We are, of course, also talked about this during the last 5 quarters since our previous sort of reduction over a quarter in Q4 2023 that it is a little bit stochastic still the business. So it can go up and down in the quarters. And as you see, it was two exceptionally good quarters in the beginning and there will be variations.

I need to emphasize that again. And of course, the exchange rate hasn't played in our favor. Of course, we have lost roughly 13% only on the exchange rate. So what is positive in the quarter though is that we are still increasing our gross margin. It continues. And this increase in the gross margin is a combination of new supplier, some process improvements and of course, also price pressure on the existing suppliers, so to speak.

And coming out of the quarter, we're ending at 21% EBITDA which is good, but bad for us. But I think also a positive is the strong cash balance that we are still growing even that we have a dividend during the quarter with 34% compared to last year.

But as I said, I think we need to look at the full picture and the first half year gives a little bit more flavor of where we are, where we combine the first 2 quarters. And here, we show double-digit volume growth. The exchange rate makes that just or almost double-digit net sales growth. But we're coming out with a very good EBITDA margin of 30%, which is where we should be in our view, so to speak, and the operating cash flow is also good.

So taking into account, of course, Q2 is a bad quarter, but we also need to look on the full picture of the first half year and the trends moving forward. And just to round up the financial part, so to speak. We're having a situation with still it's very much Asia, we have 99% RSAs in Asia. But what has happened over the quarter into this first half year is that Korea has taken over a little bit more again with a little bit drop of the portion of the sales in China. So that maybe doesn't say anything for the long term, but I think what we also need to emphasize again is that all the customers we have the smaller customers below the #2 are growing significantly, although well back from a low level, but they are continuing to grow.

Okay. So just wrapping up, then I think it's important as Magnus is saying, to look also at the development of the full year. And I just want to emphasize what Magnus was saying there, the number one reason for the results in Q2 is the natural variation. There was really strong sales in Q4 and Q1, one customer then reporting high inventory, you could say, in the [indiscernible] right? The market turbulence in the beginning -- or end of Q1, beginning of Q2, could have had an effect, you could say, on purchasing behavior and risk mitigation, et cetera. But as Magnus is saying, I mean growth first half is still good, especially if you look in the volume or nominal currency there.

So if we look at the split from CNP and the other customer base, you could see that CNP has grown again their share a little bit in the first half. So 28% of the sales comes from the broadening customer base. But this space has grown their volume by 41% in the first half of the year, which is sort of also underlying then the additional growth potential going forward because many of these customers are coming from pipe volumes, and we have seen positive developments. We've talked in a number of quarters about PPG. I think their growth in the first half was 172%. But there are also now more customers that start to display higher growth rates among the smaller ones, which is speaking well for sort of the underlying strength of the business as such and the future growth prospects, I would say.

And also, cash balance, yes, it grew 20% versus H1 2024. So the underscoring sort of the positive momentum in the business, and Magnus was mentioning the gross margin as well, right, which is another good thing as developed even a little bit better than anticipated so far this year. So very good developments there.

So let's look at the outlook a little bit then as well going forward. And here, we actually start with the regulatory situation and the reregistration process in EU, which is this theme that we keep coming back to. What was a significant event during Q2 was the extension of Selektope's existing approval year then to accommodate that this process that we're going through now can be finalized. So essentially, the old approval was set to expire in the end of June, but they have now given it an additional year.

During the summer and in July, I actually participated in the first implementation dialogue regarding the bio side product regulation. So this big regulatory package in the EU, which was a very good event. It was hosted by the Commissioner Várhelyi and his cabinet and also included members from other commissioners and also -- so it was a good opportunity for industry and other stakeholders to sort of highlight the challenges and the opportunities to develop this legislation going forward.

And another very important meeting happened just after that when I and the I-Tech team got a chance to meet the commissioner's cabinets. And in this meeting, we had the opportunity to point out some of the factual errors that has been apparent, you could say, in the ongoing reregistration process of Selektope. So we, of course, anticipate and look forward to see how this meeting can influence the process positively going forward. The first occasion where we can see an indication of the results will be at the next standing committee meeting, which would be in September.

The meeting after that is in December. We still hope that we will be able to say where this process of reregistration will end towards the end of the year. But as we have flagged numerous times, it's very difficult to see. Now at least we know there is a deadline for the mid of next year. with the relegation of the current approvals.

So that's the status here. I would say, quite good development over the summer. Also, we released a new white paper about filling in niche areas of ships. I think now we come towards the end of the summer. I think many of you have maybe seen use of exotic species turning up in our coastal waters around Europe, at least here in Sweden, there has been some very noteworthy spottings of new marine species. This is, of course, threatening by diversity of our European coastal waters. And the #1 source for spread of invasive species is actually the fouling of ships holes. And we talk a lot about sort of the big areas of the how because that has implications for the fuel consumption. But actually, you have very much problem in the so-called niche areas, which are very difficult on one hand to service and maintain, but also very, very difficult to clean during the dry docking cycle.

And here, actually, then you have the possibility for invasive species to thrive. And that could be in CCS and CCS ratings in crossover tunnels or broad thrusters. So it is really to highlight and put an emphasis for the industry to develop better solutions here to help preventing the spread of invasive species. And here, of course, our solution, Selektope, has the opportunity to give much better protection versus barnacles. And barnacles is really, you could say, a host organism for other invasive species. So tackling that would have a big implication.

So coming to the business outlook then. Well, the uncertainty in market turbulence is, to some extent, continuing, you could say. I mean, there is new updates regarding trade tariffs, et cetera, going forward. However, we've seen positively then that the shipping business is stable and the new ship deliveries is set to increase for this year. So underlying, it's still a quite good market. The currency headwind, we have suffered that in Q2. Now it has been stable during this quarter, but we will see then how the rest of the year develops.

But as also we said then, I mean we look forward to more positive developments with customer product launches. During the quarter, we have got confirmation then of one customer intending to launch a new product in Korea later this year. And we also see or anticipate several new product launches in the end of October, and let's see more about that going forward. Also, the business development activities are developing really nicely. We had some good technical milestones achieved during the quarter.

And also then last but not least, I mean, we will continuously work on the operational improvements and the outlook as -- of course, specifically to the EU, but also for the rest of the world when it comes to achieving additional registrations, U.S. market, for instance.

So I think that concludes the presentation part, and we eagerly await and look forward to your questions.

Let's start with some questions here. You previously experienced a similar pattern in which sales growth was halted in Q4 2023, which rebounded in Q1 2024. Can we assume a similar pattern here?

Well, we stress every time that there is a substantial variation between quarters, right? And we can say that the result is predominantly because of quarterly variation. So the underlying business is positive and is developing positively. We see a good volume growth of the larger and growing shares of smaller customers. So there is definitely more to be seen in the future.

Do you think your gross margin of 59% in the quarter is a sustainable level going forward?

Yes. If we work proactively with our suppliers and of course, with making sure that we have good prices towards our customers also in the future. I think we should look at a sustainable level, of course, it can also vary a little bit depending on the customer mix because, of course, we have different prices. et cetera, different mix over which the supplier we are delivering from moving forward. But I think we're starting to look on a more sustainable level, yes.

When do you expect inventory levels to be more normalized?

Well, I think the inventory levels at our customers, I think we have talked about that extensively also is, in general, quite low. Paint manufacturer, they are really taking pride in keeping low inventory levels. And we have -- as I take, we have a very good response time and are able to deliver quite quickly to our customers. So in general, customers have very low inventory levels. We made this comment specifically around one customer than in Q1 that was buying large amounts in Q4 last year. That resulted in them having a high inventory in Q1. But in general, I would say inventories levels are not high with our customers.

What development in sales have you seen during the first half of Q3?

Well, we do not give forward-looking statements, right? But I think we are saying with emphasis that the main result for the low results in Q2 is because of natural variation in orders.

Gross margin was very strong in the quarter. Should we expect a level around here going forward?

As I said in the previous question, I think we are looking at sustainable level of gross margin for the coming periods. Then of course, it can go up and down a little bit, but it shouldn't be any major deviations.

Given you see the current sales environment, as well as temporary, the cost for adding workforce are behind now, given the drop in share price, would it make sense to buy back some shares.

Unfortunately, we don't have -- we have a situation where we can't buy back shares. So that is not an option we can elaborate on.

What percent of 2024 sales came from the customer with financial difficulties?

Yes, we do not have a number of that, and we cannot give that, unfortunately.

Was the customer reporting high inventory, your major customer CNP?

No.

No. Let's take some more questions here. Should we expect 2025 and 2026 growth to continue at a historical rate despite a lower Q2 revenue?

Yes. Unfortunately, we cannot give detailed forward-looking statements, right? But the underlying business is still developing positively and sort of the market is not as rough and turbulent as we had anticipated, it could be this year. So there is still positive momentum in the business.

What is new technical development milestone you have reached? Is this related to combination with silicon? How material could this product be?

Yes. Unfortunately, we cannot go into the details, but it is one of the organically developed project, so sort of coming out of our innovation team. And it has the potential actually to be a major contributor to future growth. So that's why we are quite excited about this. And of course, pressing on with this project as soon as we can.

Given the significant decrease in net sales during Q2, together with halving of operating profit and net profit, I would appreciate your view on disclosure obligations in such context, could you kindly elaborate on the considerations behind not issuing a profit warning ahead of the report, given that both top line and bottom line development shows us a clear deviation from last year?

Yes. Of course, that is a good question. As we don't have any sort of obligations to do it, we have a policy which we have had since 2018 when we were listed on NASDAQ First North, that we don't issue any -- nor any positive warnings nor any negative warnings. Of course, if it would involve sort of situations where we have things happening such as entering a new customer or losing a customer. Of course, we will disclose that also during the quarter. But regarding the financials, we have a policy of not disclosing any financials between the reports.

What accounted for the interest expense? Hasn't all debt now been repaid?

Yes, all the have been repaid, but that is interest expense or similar cost this part we are looking at is its exchange rate loss on the U.S. dollar account and the variations of the U.S. dollar account.

Moving on to the last question here. Do you plan to pay dividend again?

Yes. I mean we have assumed the policy of dividend payments going forward. So that is definitely planned.

Thank you. That was all the questions we had. So thank you so much for presenting here today, and thank you all for tuning in. I wish you a pleasant weekend when it starts.

Yes. Thank you very much.

Thank you very much.