Impact Coatings Aktie

Good morning, and welcome to today's webcast where Impact Coatings will present its financial results for second quarter of 2026. Joining us today is CEO, Jonas Nilsson; and CFO, Lena Aberg. At the end of the call we will have Q&A.

[Operator Instructions].

With that said, I will hand it over to you, Jonas and Lena. Please go ahead.

Welcome to this presentation of the second quarter 2026 interim report. Here is the agenda for today's webcast. We will start with highlights and business momentum from Q2, and the big highlight is, of course, order intake of SEK 39 million. We will also give you a tour of the coating services here in Linköping showing the production. Our CFO, Lena Aberg, will take us through the financials of the quarter then summary and outlook and a Q&A session at the end.

The main message from the quarter is that we had a strong order intake of SEK 39 million. We received 2 system orders in 2 of our main market segments. We also increased volumes within Coating Services and continue to add new customers, particularly in the Energy segment. Net sales increased to SEK 9.7 million, mainly driven by Coating Services. Overall, the quarter shows that the strategic decisions we have made in the recent years are gradually converting into customer orders and business.

Impact Coatings is active in 4 main market segments: energy, automotive, electronics and luxury goods. These markets may look very different, but the applications have several things in common. They require advanced coatings, often on relatively flat components and they need efficient production at industrial volumes.

During the quarter, we had good order intake in 3 of these 4 segments: energy, electronics and luxury goods. This demonstrates the value of having a technology platform that can serve several different industries. The fourth segment, automotive, remained somewhat quieter during the quarter and activity is still affected by the weak general development of the car industry. But we continue to work mainly with existing customers in automotive, particularly when it comes to decorative components that must be transparent to radar signals.

During the quarter, we received 2 orders for our in-line coater IC500 system. The first order was from HJWave, a supplier of waveguide antennas used for radars. We shipped the system in mid-July, only 3 months after receiving the order. And we have now also done the installation and site acceptance tests in Korea. This short delivery time was possible because of our decision to build systems based on sales forecast and keep key components and subsystems in stock.

The second order was from LINDBERG, the Danish premium eyewear company, which is now part of the Kering Eyewear Group. These orders are good examples of how our platform can serve very different applications while using the same core technology. I talked about the Wave order and waveguide antenna market in the Q1 webcast. So let's now focus on the LINDBERG order and the luxury goods segment.

LINDBERG manufactures premium titanium eyewear. Their frames are known for their design and quality. And personally, I think they look very good. Over the years, LINDBERG has purchased 8 coating systems from Impact Coatings. We have several machine customers in the luxury goods segment, for example, company coating parts for watches. And at our coating service center here in Linköping, we also provide decorative coatings for products as medical hearings.

Eyewear components for watches and hearings, all have 1 important requirement in common. The color must be exactly right. Our systems use a continuous process. This allows the customer to measure the result and adjust the process continuously to stay within very tight tolerances. Immediately when a part comes out of the machine, the color is measured and the process is tuned by the operator in real time. That is, of course, not possible with traditional batch coating systems.

Coating Services is an important part of our business, particularly in the Energy segment, it generates revenue, but it also allows customers to test and qualify our coatings before moving to larger production volumes and before buying their own machines. During the quarter, one of the new strategic customers we discussed in Q1 has placed substantial coating orders and has now passed SEK 5 million. This illustrates how our customer relationships normally develop from initial testing to qualification to growing production volumes and, in some cases, eventually to system orders.

To show you what this looks like in practice, I will now hand over to Peter, our IR Director for a short tour of our factory downstairs. It's a bit noisy in our production, so you might need to turn up the volume to hear Peter properly.

[Presentation]

Thank you, Peter. So we have system orders in electronics and luxury goods and coating services volume orders in energy. But as you saw, we are not only doing volume production of PEM electrolyzer plates here in Linköping, we also do coatings in our other business segments. And due to a high level of automation in our factory in Shanghai, we run most of the customer samples here in Linköping. We have the same machine concept for all our business areas, and we use the same machines from customer samples all the way up to fully robotized production lines at the customer sites.

This is a competitive advantage for us. Let's leave the factory tour and have a look at our strategy. Our development during the quarter supports both our tactical and our strategic direction. Tactically, we focus on the orders and business opportunities available today across our 4 main segments. Strategically, we are building a long-term position in the commercially driven solid oxide market, particularly in stationary power applications such as data centers. And now we are starting to see concrete results from this strategy.

During the quarter, we added 3 new paying customers in solid oxide applications. Winning 3 customers in a new market is an important achievement. It's naturally more difficult than adding customers in a market where we already have an established position.

So let us take a closer look at the new customers we have added during the quarter. In total, we added 11 new paying customers during the second quarter. 3 of these were in solid oxide applications, 5 were in PEM electrolysis, where we already have an established position. The initial orders from new customers are normally small. Our sales cycles are long because coatings must be tested, qualified and approved before production volumes can increase. This customer, therefore, make only a limited contribution to revenue today. However, they create a foundation for future coating volumes and potential system orders. The customer development during the quarter gives us confidence that our strategic focus is taking us in the right direction.

So going back to PEM. PEM electrolysis for hydrogen production continues to be an important part of our energy business. During the quarter, we added 5 new electrolysis customers and we continue to see substantial coating services production volumes from existing customers. The international electrolysis market is consolidating. Some companies have left the market while investment is increasingly concentrated among the companies with the strongest position and the best ability to scale.

Today, most of the leading international electrolysis companies are paying customers of Impact Coatings. And this, of course, gives us a strong position as the market enters its next investment phase.

We also signed a letter of intent with a South Korean company LT Metal at the end of the quarter to collaborate on the commercialization ofiridium oxide coatings. This can expand our business both with existing and new customers by adding more value to each coated component and by making the qualification process easier for the end customer.

With that, I will hand over to Lena, who will take us through the financial results.

Thank you, Jonas. And we will start with the Q2 summary. Total net sales for the quarter amounted to SEK 9.7 million. Coating Services was the main contributor with the SEK 9.1 million, more than doubled sales compared to the same period last year. Aftermarket has been slow, reflecting the lower activity at many of our system customers, SEK 0.6 million compared to SEK 2.1 million in Q2 2025.

The order backlog for Coating Systems was SEK 29.4 million at the end of the quarter for the 2 machines sold in Q2. And order backlog for Coating Services was SEK 1.7 million, the same as Q2 '25. Looking at the first half of 2026. Total net sales amounted to SEK 22.4 million compared to SEK 16 million. Coating Services increased from SEK 10 million to SEK 20.9 million. Aftermarket decreased to SEK 1.5 million compared to SEK 6 million, mainly due to some sold machine upgrades made in 2025. And they were reported as aftersales.

Operational costs, but excluding raw materials and supplies, was minus SEK 40.0 million compared to minus SEK 46.5 million, reflecting the effects from the cost-saving measures implemented. EBITDA improved to minus SEK 19.5 million in the first half compared to minus SEK 26.3 million. And EBIT improved to minus SEK 24.1 million compared to minus SEK 30.1 million. Closing cash balance was SEK 15.2 million compared to SEK 30.8 million. But the larger order backlog and lower customer advance payments than last year, and we will come back to more details at the cash flow statement.

If we take a closer look at the income statement for Q2 2026, all the amounts in SEK million and compared to Q2 2025. Even though net sales for the quarter increased to SEK 9.7 million, total revenue decreased to SEK 10.5 million compared to SEK 14.7 million. This was mainly due to the low change in work in progress, while Q2 2025 was SEK 6.8 million.

Gross margin increased to 62% compared to 48%. Other external costs decreased slightly to minus SEK 5.6 million compared to minus SEK 5.7 million. Personnel costs decreased SEK 3 million to minus SEK 12.3 million compared to minus SEK 15.3 million. And the number of full-time equivalents for the group by the end of the quarter was 41 compared to 57 in Q2 '25.

Depreciations increased to minus SEK 2.3 million compared to minus SEK 1.9 million. And there was a currency gain of SEK 0.6 million compared to 0. So operating loss for the quarter was minus SEK 13.0 million compared to minus SEK 15.8 million.

Looking at first half of 2026 compared to first half 2025. Net sales increased to SEK 22.4 million compared to SEK 16 million in the first half of 2025. But total revenue decreased to SEK 23.1 million compared to SEK 34.4 million. And again, this was mainly due to only SEK 0.7 million in change in work in progress this year while the same period last year was SEK 14.9 million. Gross margin increased to 62% compared to 50%. Other external costs decreased to minus SEK 10.5 million compared to minus SEK 11.6 million mainly due to reduced travel expenses, lower marketing costs and lower cost for consumables.

Personnel costs decreased to minus SEK 24.9 million compared to minus SEK 31.2 million, clearly reflecting the implemented cost reductions. Depreciation increased to minus SEK 4.6 million compared to minus SEK 3.7 million. And the currency gain was SEK 1.6 million compared to a currency loss of minus SEK 0.8 million. Operating loss for the first half of 2026 was minus SEK 24.1 million compared to minus SEK 30.1 million last year.

And we move to the balance sheet, and I will make the comparisons with the year-end 2025. We have had low level of investments, so total fixed assets decreased from SEK 68.6 million to SEK 68.3 million, mainly due to depreciation. Inventory in raw materials increased to SEK 58.2 million from SEK 54.7 million, mainly in components. There was also an increase in work in progress to SEK 24.6 million compared to SEK 21.7 million, and that's for the coming machine deliveries.

Receivables increased by SEK 1.7 million to SEK 25.2 million compared to SEK 23.5 million, mainly due to increased accounts receivables from increased sales. Outgoing cash balance by the end of the quarter was, as mentioned, SEK 15.2 million compared to SEK 37.4 million by the year-end in 2025. And we will come back to that in the cash flow statement. Equity decreased to SEK 133.6 million from SEK 154.5 million, mainly due to the cumulative loss for the year. Prepayments from customers decreased to SEK 1.1 million from SEK 7.9 million due to invoiced sales in the first half of 2026. And short-term liabilities increased SEK 13.8 million to SEK 56.7 million, mainly due to increased accounts payable and increased prepaid revenue.

Looking at the cash flow statement for the first half of 2026 in comparison with the same period in 2025. Cash flow from operations, before change in working capital, was minus SEK 19.9 million compared to minus SEK 27.5 million. Cash flow from change in working capital was positive SEK 3.3 million compared to SEK 8.3 million. And the positive effect this year is mainly from increased short-term liabilities such as accounts payables and prepaid revenue.

Cash flow from operations was minus SEK 16.7 million compared to minus SEK 19.2 million in 2025. Cash flow from investing activities was minus SEK 0.6 million compared to minus SEK 4.1 million due to low level of investments. Cash flow from financing activities was minus SEK 5.0 million this year due to the repayment of the short-term loan, while financing was plus SEK 20.5 million in the first half of 2025 due to the raising of new loans.

In total, this resulted in negative cash flow for the first half of 2026 of minus SEK 22.3 million, of which minus SEK 3.0 million in Q2. And compared to minus SEK 2.8 million in the first half of 2025. And a closing balance of SEK 15.2 million compared to SEK 30.8 million by the end of Q2 2025.

That was the financial update, which means that we move on to the summary and outlook.

Thank you, Lena. So to summarize, we had strong order intake during the quarter with business across 3 of our 4 main market segments. The 2 system orders demonstrate the strength and flexibility of our technology platform. At the same time, the 11 new paying customers are building the foundation for future coating volumes and potential system orders. It's particularly encouraging that 3 of these customers are in solid oxide applications. Winning customers in a new market takes time. And this is an important indication that our SOFC strategy is starting to convert into real business.

We now have a broader customer base, a clearer offering and a stronger starting point than we had 1 year ago. Going forward, we will continue to focus on sales and customer development. At the same time, cost control, cash flow and improved margins remain essential as we work towards long-term profitability.

With that, we are ready to take your questions.

Thank you for that presentation, and we will now open up for a Q&A session.

[Operator Instructions]

With that said, Lara Mohtadi from ABG, the word is yours.

Jonas and Lena, just a couple of questions from me. Firstly, I'd like to ask a little bit on the market and if we start with Europe, you've pointed to clearer policy signals in the U.S. and China feeding into momentum, but Europe has been a bit absent from that framing. When would you say that Europe sits in the demand picture? Is it structurally lagging? Or are there any specific policy or maybe customer catalysts you're watching for to make it to turn.

If you look specifically at the Hydrogen and Engine market, I would say that it's structurally lagging. But despite that, if you look at the number of new customers we have during the quarter, so we had 11 new customers during the quarter. And a substantial part of those 11 new customers, they were actually in Europe. So I would say that, yes, Europe is a bit slower, but we are making progress also in Europe.

Okay. That sounds promising. And just on sort of the competitive -- or your competitive position, you said that you haven't lost any recent orders to competitors, if I understood you right. What would you say is actually driving that? Is it more your technology? Or is it more sort of the relationships that you built through these qualification processes?

I would say it's a combination. So first, it's the technology and the fact that we can use the same machines all the way from customer samples to coating services and sell the same type of machine, that's appreciated by the customers. And the fact that we can easily make customer samples means that we can get new customers. We can start qualify them. And that process is quite long to qualify a customer. And the earlier you start, the better. So this is a competitive advantage we have.

Another competitive advantage is that we are starting to become one of the big players in the market. And sometimes, we are referred to as the biggest player when it comes to coatings for electrolyzer. And in China, when it comes to coatings of fuel cell plates, we are the biggest player. So that also helps in the customer relation.

Very clear. And then you had recently had 2 orders with one of them being delivered recently. And could we just talk a little bit about your other application areas, such as well the -- SOFC, which you've recently started to actually, you think that, that will contribute to orders. When do you think you'll get an order from SOFC?

Yes. So as we saw this quarter, we have 3 new paying customers in SOFC. We have previously reported that we do have a collaboration with Ceres Power and the collaboration with Ceres Power is giving us access to the licensees of Ceres Power. And that is, of course, giving us a jump start with the customers. However, it's still the fact that customers, they need to do sampling. They need to test in their own stacks. They need to test everything. And typically, tests for solid oxide fuel cell stacks, they run for 5,000 hours or 10,000 hours. And if you look at 5,000 hours, that's half a year, 10,000 hours, that's 1 year. So it's very much driven by how much do the customers need to test.

The good thing is that the customers in this market, they have standard products. So they are not project-oriented. So they have their standard products. They plan their production, they plan production volumes. So when they switch from 1 coating method to another coating method, they will do that for all their production and all their customers and all their projects.

And these samples and test that you just alluded to, will that generate the coating services revenues? Or is this something won't contribute to your revenues?

So we always charge for samples. So even sort of the smallest test gives some small revenue. But what we see so far on the solid oxide market is that there might be sort of going directly from sampling to machine sales. Some of the customer dialogues we have, they are more like, okay, first we sample and when the testing is done, well, then we go for a machine. Other dialogues are more that, okay, first, we sample, then we will go for coating services for a short period of time and then there will be machines sale. So the solid oxide market is more machine focused than, for example, the PEM electrolyzer market where the customers tend to stay longer in coating services.

But in both markets, the end go for both us and the customer is to have a machine at the customer side.

Very clear. And just the last one for me. Your most recent orders have actually been for the IC500. I'm just wondering if has there been a shift to maybe demand what your IC500 versus your newer IC2000? Or is it just, in this case, that may happen to be -- those machines they wanted. Where are you seeing demand? Is it for both machines or specifically more for IC500.

We see demand for both types of machines. And as you saw when Peter was showing you in the factory, they have sort of -- it's a similar concept, but the size is different. So if we look at LINDBERG, one of the main competitive advantage is that you can tune the color so you can have very, very tight tolerances on the color. And that means that you don't want to put too many pieces in the chamber at the same time. So a big chamber is not necessarily an advantage. So the chamber size of IC500 is perfect for the LINDBERG application.

For energy applications, where you have high volumes or you have large plate size, yes, then you tend to go for an IC2000 instead because then you need a little bit larger chamber size and use that either to put more plates in the chamber at the same time. Or to have large plate sizes like you have with electrolyzer plates. So it's not that we see a shift in demand. It's more that for the luxury goods market and for the electronics market and to some extent also for the automotive market, that is more towards IC500, where the energy market is more towards IC2000.

And moving on, we will go through some written questions. How is the search for an industrial partner progressing?

Yes, I can answer that. So we have -- as you know, we announced in December that we're looking for an industrial investor. And we have contracted an adviser to identify and bring in an industrial investor. So far in the process, we have been quite picky. We want an industrial investor where we see a clear -- where we see clear synergies. And we have got some interest. We have had some visits here to a factory in Linköping. But at this stage, I cannot share any details regarding those discussions.

Moving on. We have a question about LT Metal. Will the collaboration with LT Metal in the future mean that you will sell machines or coating services or both? And is the collaboration with LT Metal of strategic importance? And if so, why?

So 2 questions. I will start with one of them. So is it a strategic importance. Yes, we have been working withiridium oxide for quite some time. And we are one of the very few companies, maybe the only one in the world that can offeriridium oxide coatings of PTLs in an industrial scale. Of course, there are research labs and universities that can do this in smaller scale. What in the end determines the performance of the system is the combination of the PTL and the coating. That's why it's so important for us to work closely with the PTL suppliers.

So what we can offer is a complete solution, a whole product to our customers. So we can have something that is already tested. So the combination of LT Metal PTL and our coating is already tested, and we can have a data sheet and we can show it to the customer. it's easy for the customer to buy.

Overall, we have carried out testing together with customers at different locations around the world and looking specifically at LT Metal, they are very capable, and they have their own testing facilities also. So we have conducted tests at their facilities and at other locations. So the collaboration with LT Metal is an important step in moving forward from the lab scale to commercial volumes. And it's partnerships like this that is needed to be able to supply a whole product to the market and make it easier for the customer to buy. So offering a complete solution rather than separate components.

Then your next question was if this could lead to machine sales, was that your next part of the question?

Yes. If the partner -- the collaboration. Does it mean you will sell machines or coating services or both?

Yes, both. So as a start, we will sell a lot of samples and then the next will be to sell coating services. And the good thing withiridium oxide coatings is that it's not a new area. It's 1 more layer. So today, we're coating PTLs. So we take the PTLs, we make a coating on top of the PTL to reduce contact resistance and increase corrosion performance. On top of that coating that we already do today you put theiridium oxide coating. So it's easy to implement in our current offering of coating services.

Also, this will lead to machine sales in the end, and it can lead to machine sales both to the customers we have today, which is primarily sort of stack manufacturers. But it can also lead to machine sales to PTL manufacturers who want to provide a complete product to their customers if they want to provide a coated PTL.

So both coating services and machine sales is possible outcome of this collaboration. Yes.

Great. Moving on, we have a financing question. Your liquid funds currently stand at approximately SEK 15 million. Could you comment on your liquidity needs in the near term measures you're considering to secure financing for ongoing operations and ensure sufficient funding going forward.

Yes, I can take that. Our forecast, including, for example, the order backlog and what's in the balance sheet indicates that it looks fine looking forward, it's manageable. So -- but of course, as Jonas mentioned before, we have previously announced that we're continuing with the process of seeking an industrial investor and that work continues as well. But looking at our cash flow forecast, we see that analyzing them looks time to us in the coming months. So is that an answer?

Yes. Finally, we have a question regarding waveguide antennas. Why do you choose to sell coating systems instead of keeping the coating volumes in-house when it comes to waveguide antennas?

Yes. Of course, that's a fair question and sometimes you tend to think that if you go up the value chain, you earn a lot of more money. If you go back to the previous quarterly presentation, I mentioned that around 100 million vehicles are produced each year. And if we assume 5 radar units per vehicle and 2 antenna halves per radar, that gives a potential market of around 1 billion antennas have to be coated each year. That's a large number.

And as you know, we have a push-pull strategy, which means that we work both with our direct customers and with our customers' customer. So this also include radar system manufacturers. So we talk to radar system manufacturers that are our customers' customer. And this discussion also help us to understand expected production volume. And we get estimates for radar manufacturers. They have shared with us under nondisclosure agreements, and they normally have a quite wide range. So they should always be treated with a grain of salt.

But one estimate we have received from a serious radar system manufacturer, I cannot tell which, was around 200,000 antenna halves per day. And at that level, at 200,000 antenna halves per day, machine sales is the preferred business model because that's sort of suitable for our type and our size of company to supply the machines to the company that will actually produce 200,000 antenna halves every day. Did that answer your question?

Yes. And that was the final question for today. So we will now conclude today's conference call. I would like to extend my sincere thanks to Jonas and Lena for the presentation as well as everyone who submitted questions and joined today's webcast. I wish you all a pleasant day.

Good morning, and welcome to today's webcast from Impact Coatings. With us today is CEO, Jonas Nilsson; and CFO, Lena Aberg, and they will present the numbers from the first quarter 2026. We'll open up for a Q&A after the presentation [Operator Instructions]. And with that, I leave the audience over to you, Jonas and Lena.

Hi, everyone. Welcome to this first quarter 2026 Interim Report Presentation. Here is the agenda for today's webcast. We will jump directly into Q1 and what the work in Q1 has led to now in April. Our CFO, Lena Aberg, will take us through the financial, then summary and outlook and a Q&A session at the end.

So Q1 highlights and highlights after the period. Q1 resulted in a net sales of SEK 12.7 million and EBITDA of minus SEK 8.8 million. From a financial perspective, Q1 was not great. That's just how it is. Business development is hard ongoing work and the outcome can vary a lot from quarter to quarter. But we are clearly starting to see is the work paying off. During Q1, we brought in 2 new customers in coating services, one in security defense and one in medical technology. We also saw continued test orders with electrolysis and fuel cell applications from existing customers. We would, of course, have liked to have more customers during the quarter, but the work we did in Q1 paid off in Q2.

In early April, we added 2 more strategic customers, one in PEM electrolysis and one in SOFC. Both are in early stage, but with really big potential. After the quarter, we sold an IC 500 machine to Korea. We received the order on April 10 and the usual initial payment we received on April 14. The delivery of the machine is expected to be done in Q3 this year. We also continued the discussion regarding an INLINECOATER system to our long-time customer, Lindberg, who is in the luxury segment. This is in line with the letter of intent that we announced on December 11 last year.

So a few words about the machine order, which we press released on April 10. This is an order within our Electronics segment. The application is metallization of plastic waveguide antennas for automotive radar. The customer is HJWAVE, a Korean supplier of waveguide antennas for automotive radar sensors. And Korea is an important market with this large automotive industry. In addition to delivering the INLINECOATER, we intend to work together with HJWAVE to develop new cost-efficient metal coatings for waveguide antennas to support their customers.

Automotive radar is already a multibillion-dollar market, and it's expected to see double-digit growth. Many new innovations in the automotive business come from Asia, especially when it comes to electronics and also intelligent software. In a news program, [indiscernible] last week, they talked about the Beijing Auto Show. Maybe some of you also listened. They said that Beijing Auto Show is the biggest auto show in the world. The show is running until 3rd of May, so you still have time to go there. Anyway, what came out was pretty clear. A lot of intelligent self-driving cars are coming. And for that to work, cars need radars, LiDARs and cameras to understand their surroundings.

People are talking about at least 5 radar units per car, one in each corner and one in the front. And all of those radars need antennas. So this is what an injection molded waveguide antenna looks like. It's made from molded plastic because you need a complex structure to guide the radar signal correctly, but the plastic doesn't conduct electricity, so it needs to be metallized. Most automotive radar antennas come in 2 halves that are soldered together.

And then the finished antenna sits in a bumper. So it's a pretty tough environment for the antenna. Therefore, you need a coating that can handle adhesion and solderability. It has to provide good antenna performance and provide corrosion resistance. This is a very good fit for us. We like advanced multilayer coatings on flat surfaces and antennas, they are basically flat even if they have some 3D features.

If you look at the market, around 100 million vehicles are produced every year. If you multiply that by 5 radars per car and then by 2 for the antenna halves, it's a big number. We're not there yet, but this is our first machine to HJWAVE, who has a strong position in the Korean automotive value chain and good connections to the Korean car brands.

I mentioned that in April, we took 2 strategic orders, in SOFC and one in PEM electrolysis. These are test orders, but from 2 very important players who are now paying customers to us. The orders are a direct result of the work we did during Q1. And now we're continuing that work, taking them from initial sampling to real volumes. SOFC stands for solid oxide fuel cells. One of the application area for them is to power data center. We have talked a lot about SOFC as our strategic focus, but that doesn't mean that we have left PEM.

In our coating service center here in Linkoping, we have volume production to several electrolyzer manufacturers. And in PEM electrolysis, we see a clear consolidation in the market. Some are pulling out. That means fewer players, but stronger ones. That means bigger volumes and a more stable market. That creates good opportunities for us to grow our market share.

The geopolitical tension affects the short-term investment willingness, but long term, it highlights that there's a vulnerability in the energy system, and we need to work on energy independence and energy resilience. This interest in reduced fossil fuel dependence is something good for us who work with technologies that enable flexible and local energy production. In '25, we did a strategy pivot towards natural gas-powered solid oxide fuel cells. We talked about powering data centers, and we also talked about energy resilience. SOFC can convert multiple fuels to electricity. So if there's a shortage of natural gas, you can run them on, for example, locally produced hydrogen. That hydrogen must be produced either in the same SOFC system that is running the other direction or more likely by PEM electrolyzers.

The PEM fuel cell market remains in a transitional phase with China as the driving force. But also here, we expect the drive for energy resilience globally and particularly in China to speed up the deployment. So all in all, although geopolitical tensions are bad in the short term, they are creating future opportunities for us.

So going back to China. As usual, Chinese New Year's falls in Q1, which leads to reduced activity in our coating service center in China. But this year, it was not just that. We also had a transition between 5-year plans, which basically put the fuel cell market in a bit of a vacuum. The old subsidies expired, and it wasn't until mid-March this year that things started to become clear again regarding the new subsidy program. The details are not fully defined, but the overall direction and size are. So if you're interested, you can look at the China Comprehensive Hydrogen Pilot Program. I recommend to Google on that. We believe that this program will continue to be the market driver in the Chinese fuel cell market.

So let's have a look at the financials. And as I said before, the numbers for the quarter could have been better, but we are clearly seeing that the work we have put in is starting to pay off, both in terms of system orders and new customers. At the same time, we have taken actions on the cost side, so we are in a better position as volume starts to come back.

So with that, I turn to Lena.

Thank you, Jonas. So let's start with the Q1 summary. Total net sales amounted to SEK 12.7 million and Coating Services was the main contributor with SEK 11.7 million, of which SEK 4.8 million relates to sale of metals in inventory, part of the transition to the new metals management agreement. The order backlog at the end of the quarter was SEK 4.5 million compared to SEK 2.6 million in Q1 2025. Aftermarket has been slow, reflecting the lower activity at many of our system customers. So SEK 1.0 million compared to SEK 3.9 million in Q1 2025.

Operational costs, but excluding raw materials and supply, was SEK 19.8 million compared to SEK 23.6 million, clearly reflecting the effects of the cost-saving measures implemented. And the number of FTE in the parent company has now, after the quarter, decreased approximately 42% since December 2024.

So EBITDA improved to minus SEK 8.8 million compared to minus SEK 12.4 million, and EBIT improved to minus SEK 11.3 million compared to minus SEK 14.2 million. Closing cash balance was SEK 18.3 million, and we will come back to details in the cash flow statement.

If we take a little closer look at the income statement, all the amounts will be in million and compared to Q1 2025. Even though net sales for the quarter increased to SEK 12 million, total revenue decreased to SEK 12.6 million compared to SEK 19.7 million. And this was mainly due to almost no change in work in progress this year, while in Q1 2025, it was SEK 8.1 million.

Gross margin though increased to 62% compared to 52% and the work with further reductions in cost of goods sold continued. As I already mentioned, operational expenditures decreased and other external costs decreased to minus SEK 4.9 million compared to minus SEK 6.0 million, mainly due to reduced consultancy fees, travel expenses and costs for consumables. And personnel costs decreased to minus SEK 12.6 million compared to minus SEK 15.8 million. And the number of FTE for the group by the end of the quarter was 47 compared to 61 in Q1 2025.

Then depreciations increased to minus SEK 2.3 million compared to minus SEK 1.8 million following investments from previous years. We had a currency gain of SEK 0.9 million compared to a currency loss of minus SEK 0.8 million last year. And operating loss for the quarter was minus SEK 11.1 million compared to minus SEK 14.2 million.

And we move to the balance sheet. Now compared to the year-end 2025. So low level of investments, so total fixed assets decreased from SEK 68.6 million to SEK 68.2 million due to depreciation. Inventory and raw materials decreased from SEK 54.7 million to SEK 51.0 million and mainly in metal inventories. Receivable decreased by SEK 1.2 million to SEK 22.3 million compared to SEK 23.5 million at the year end. And outgoing cash balance by the end of the quarter was, as mentioned, NOK 18.3 million.

Equity decreased from SEK 154 million at the year end to SEK 145.1 million due to the loss for the quarter. Then prepayments from the customers have decreased SEK 4 million to SEK 3.9 million due to invoiced sales in Q1. And short-term liabilities decreased SEK 9.5 million to SEK 33.4 million, mainly due to repayment of the SEK 5 million short-term loan in the parent company, but also due to decreased accounts payables.

Looking at the cash flow statement with the comparison with Q1 2025. Cash flow from operations before change in working capital was minus SEK 9.1 million compared to minus SEK 11.7 million. And cash flow from change in working capital was minus SEK 5.3 million compared to plus SEK 8.5 million. And the negative cash flow effect from this year is mainly from payments of short-term liabilities, including payments of the costs connected to the rights issue of approximately SEK 3 million and also the decrease in customer prepayments of SEK 4 million.

So cash flow from operations was minus SEK 14.4 million compared to minus SEK 3.2 million in Q1 2025. Cash flow from investing activities were only SEK 0.1 million compared to minus SEK 2.4 million. And cash flow from financing activities was minus SEK 5 million this year due to the repayment of a short-term loan. In total, this resulted in a negative cash flow of minus SEK 19.3 million compared to minus SEK 5.6 million and a closing balance of SEK 18.3 million compared to SEK 26.3 million in Q1 2025.

That was the financial update. So we go to summary and outlook.

Thank you, Lena. So Q1 was not a strong quarter from a financial perspective. That's clear. But what we are seeing now is that the work we have been doing is starting to convert into business. We are adding new customers. We are getting test orders, and we are starting to see system orders coming through. And that's the key. Our business is built step by step from test orders to coating services to volumes and finally, to systems.

And with the sampling orders we have got, we can confirm that SOFC is the right long-term strategy. But with that said, we don't stop working with PEM, with antennas and with our other segments. At the same time, we have continued to adjust the cost base, so we are in a better position as volumes are coming back. So while the numbers in this quarter are not where we want them to be, we do see a clearer path forward now than we did a few quarters ago.

And with that, we open up for questions.Thank you for this presentation, Jonas and Linda. We open up for Laura from ABG. [Operator Instructions]

Laura from ABG. Just a couple of questions from my end. Firstly, in your report and also in your presentation, you mentioned that coating services orders have been delayed a bit. Was this customer specific? Or would you just say it was broader? And would you say that activity has normalized now in Q2 so far?

No, this was customer-specific, and it's not due to lack of need of coatings. It's due to delays in the supply in the plates and PTLs to coat. So there has been some delays in the supply chain. So we have not yet got the raw material in time, which means that some of the orders have been delayed. You can also see that we do have an order backlog for Coating Services when we go out of quarter 1. So it's not due to lack of interest.

Okay. Very clear. And another one on your metals agreement that you press released in December. You announced that the new metal agreement would reduce working capital needs by around SEK 30 million. And in Q1, you wrote that the positive one-off of the SEK 4.8 million was flagged as accelerating that transition. So basically, my question is how much of this SEK 30 million has been realized so far? And what's the expected timeline for the remainder?

Yes. You can regard the SEK 30 million like a frame that can be used. And with the transition now, with the expedited transition from the old agreement to the new agreement, we have better -- we can apply that new agreement more rapidly. So what we have is we have a supplier that keeps metal in a stock for us. And we also have 90 days invoice of metals from that supplier, which we can use if we want to. Of course, everything comes with a cost. So there's no free lunch. So this is something that we can use when we want to use it, but we don't have to use it and we don't have to take the cost. So it's basically a month-to-month decision how much of that we are using.

Very clear. And then you -- obviously, you highlight from the oxide as a key long-term opportunity. But as you know, the development cycles are long. So what's sort of a realistic timeline for the first system order here? Do you have any customers that have come quite a long way along the line? Or what should we expect?

Yes. We do have several paying customers in the area of SOFC. And as reported now after the quarter, we took one very important strategic customer in this area. And we can also say that the collaboration we have with Ceres Power is good in this respect. If you look at Ceres Power, they publicly announced who are the licensees. And this collaboration, it gives us access to their licensees. So we are making progress. But at the same time, it's very hard to say exactly when will be the first system order.

Yes. Very clear. Also, you mentioned the Chinese Hydrogen Pilot Program that was announced in March. Have you seen any sort of tangible pickup here in customer dialogues or maybe in the pipeline this announcement? Or is it still too early, would you say?

We have seen -- in the customer dialogues, we have seen a clear difference. So before it was announced, everyone was waiting and everyone thought that, well, China is going to continue in the same way as before. But without this pilot program, our customers didn't really know. Now they know that, okay, it will continue. We haven't really seen that in production volumes. We have seen it in some smaller orders, and we have definitely seen it in the customer dialogues.

Okay. And just the last one from me. Aftermarket seems to have dropped quite a bit this quarter. And of course, this reflects customer activity. But do you think with maybe the machine order you announced after Q1 and the broader installed base, do you sort of think the aftermarket will recover? And what can we see? Would you say that the current run rate is maybe the new normal or should we expect in this segment?

I expect it to recover. And there's a correlation between aftermarket services and how much our customers are producing. If we look at China, for example, we saw that in Q1, we had lower activity in our coating service center. It was not only the Chinese New Year. It was also this vacuum between policies. All our machine customers, they experienced the same. They experienced the same Chinese New Year, but they also experienced this vacuum. So the activity was low at our customer sites. And if the customers are not fully utilizing the machines, fully using our machines, then of course, the need for aftermarket services is lower.

Thank you, Laura. We have a couple of questions from the audience as well. First question, how do you get a collaboration with an industrial player?

Once again?

How do you get a collaboration with an industrial player?

Are you referring to the press release in December that we are planning to bring in?

Yes, I think the question. . .

Yes. We are. So we are planning to bring in an industrial investor during this year as we press released in December. Of course, from an operational perspective, the focus is on customers and orders. That's our primary focus. But with that said, yes, we are progressing according to what we press released in December. For example, we have contracted an adviser for bringing in a strategic investor. So yes, that's progressing.

The hydrogen sector is often cited as a growth engine. However, the global adoption of fuel cell technology has faced some headwinds recently. How do Impact Coating navigate this?

Yes. If you look in a broader perspective, some years ago, some 5 years ago, people thought that passenger vehicles would be powered by fuel cells and not by batteries. The battery technology has improved a lot and also the adoption of batteries has improved. So no one really believes that passenger vehicles will be on a sort of big scale powered by hydrogen. But what we see is that trucks, loris, buses, heavy transports, they need other power sources. So we see traction there.

We see -- if you look at the short perspective, China is sort of the big market for fuel cells. And last year, we increased a lot in our coating service center. So we doubled -- sorry, in '25, we doubled the production of fuel cell plates in our coating service center in China compared to the year before '24. Now this quarter has been slow. And we believe it's due to this vacuum between policies. So we believe that it will continue to be the driver. The Chinese market will be the driver for fuel cells.

But with that said, I mean, we announced our strategy pivot towards SOFC. And the big difference between PEM fuel cells for passenger vehicles and SOFC is that PEM fuel cells, that's mainly driven at the moment by subsidies. Now we know that the subsidies will continue. But the SOFC market, it has a commercial driving force. So the strategy pivot was from a subsidy-driven market to more commercially driven market. But with that said, we don't stop our activities in the PEM fuel cell market. We continue to do that, but we believe that the growth will be in SOFC. Long answer, but I think it's -- your question.

Yes. Thank you, Jonas. One last question here from Finwire. What specific operational milestones must be hit to reach a breakeven point without requiring further external financing or capital injections?

Yes, sell machine. It's simple. We need to sell machines. Coating services is not enough. So we need to sell machines. And the machine order we took now in April is a good start. We do have the letter of intent with Lindberg also. So that's also good. But we believe that we will sell machines in all our segments during the year.

Thank you, both Jonas and Lena. And I leave now the final words for you from Impact Coatings. So I would like to thank you for listening to this quarterly presentation. And especially, I would like to thank our shareholders who participated in the rights issue in December. So thank you.

Hello, and welcome to today's Finwire broadcast presentation with Impact Coatings.

[Operator Instructions] With that said, I'll hand the floor to you, CEO, Jonas Nilsson; and CFO, Lena Aberg. Please go ahead.

Hi, everyone. I am Jonas Nilsson, and welcome to this presentation of the fourth quarter and year-end financial report.

Here is the agenda for today's webcast. We will start with a brief presentation of the company, mainly for our new shareholders. Then we will talk about our new strategy and especially SOFC, solid oxide fuel cells. Then we will go through the highlights from Q4, and some full year highlights. Our CFO, Lena Aberg, will take us through the financials, then summary and outlook and a Q&A session at the end.

So Impact Coatings in brief. Impact Coatings is an advanced material science company with world-leading solutions in the areas we are active. We provide solutions consisting of coatings and machines for coatings. We have a flexible business model with both machine sales and coating as a service. We are active in several markets, but focus on energy where our machines provides a perfect fit.

Today, we are the market leader for PEM fuel cell coatings in China. According to our calculations based on customer data, about half of the volume of stainless steel plates for PEM fuel cells that were produced in China during 2024 and 2025, have been coated in either an IC2000 or an IC500 machine delivered by Impact Coatings. We also have a strong position when it comes to noble metal coatings for electrolyzers. And now we are going to use this position to focus on the SOFC market. So before going into Q4, let us talk about our strategy.

Impact Coatings has built a strong and well-established position within the PEM-related applications. PEM-related applications, that is PEM electrolyzers for green hydrogen and PEM fuel cells mainly for mobility, converting green hydrogen into electricity. But the market for PEM and green hydrogen has not taken off as expected. So now we use the position and experience from PEM to enter the solid oxide fuel cells market. And also here, we aim to become the market leader.

So those of you who listened to the capital market update in November, knows that AI data centers consume a lot of energy, and it's problematic to build power lines to those centers in a short time.

Earlier this week, I had a lunch with the Head of Distribution division at Tekniska verken, that is the local utilities company here in Ostergotland. He confirmed the challenge with data centers and the environment and legal framework they are acting from is not really designed for fast transitions, such as the demand for power to AI data centers. According to him, it takes a long time to build new power lines, much longer than building the data center itself. And this can also create competition and some friction in the local society when there's not enough power for all businesses. He didn't really have a solution, but to me, he confirmed the problem.

One solution is high-efficiency SOFC, solid oxide fuel cells, which convert natural gas into electricity, which can be used to power data center without interference with the local infrastructure. By using containerized SOFC power plants, which are easy and fast to deploy, this can also be done in time. However, SOFC stacks, they operate at high temperatures and contain a lot of stainless steel plates called interconnect. Stainless steel at high temperature evaporates chromium, and chromium will kill the SOFC stacks. So to avoid chromium evaporation, the stainless steel interconnect plates needs coating. We provide solutions, machines, and services for coating of stainless steel interconnect plates.

The emerging market for SOFC systems is commercially driven and is expected to grow much faster than green hydrogen applications. We do have a strong position in the green hydrogen market, and we are going to use that position to also grab the SOFC market. So we have been working with SOFC at low intensity for several years, but now it's time to scale up.

Suddenly, the world needs data centers and data centers need power. The electricity consumption of data centers is expected to double by 2030, and power supply is a major bottleneck to deployment of data centers. SOFC power has now reached commercial scale and containerized SOFC systems has the ability to bring data center online about 3 to 4 years before grid electricity is available.

Testing has proven our coating performance, and we are recognized as high-quality supplier for interconnect coatings. So growing in this market is our main strategic focus right now.

We are currently working with Ceres, one of the leading technology players in the SOFC industry. Ceres licenses its technology to Doosan in Korea, Delta Electronics in Taiwan, and Weichai in China, which are all major global companies. We can't yet say exactly how large this market opportunity will be, but the top-down analysis indicates several hundred machines in just a few years.

The picture on the right, that's actually a picture from outside and inside of Doosan's factory in Korea, where they are producing SOFC stacks. So it's a big factory. Well, you might ask, why do we start doing something new. Well, this isn't new. It's a natural step. From the strong position in the PEM fuel cell market, SOFC is the natural step.

In terms of product market fit, it's a perfect match. SOFC components that are flat plates, and we are specialists in 2D objects, they require advanced multilayer coatings on both sides with different coatings on each side. And the more advanced requirements, the stronger the need for Impact Coatings. The plates also have exactly the right dimensions for our IC500 and IC2000 machines. This means we do not need to invest in new machine development.

Another important aspect of the SOFC market is that each system requires more coated plates than the PEM fuel cell system. So higher volumes means higher revenue, and that is regardless of if it is through coating services or machine sales.

So let's switch to Q4 highlights and full year highlights. But first, some words about the market and business context. And to put the quarter into context, 2025 has been a challenging year. Investment decisions have been delayed across several industrial sectors and the growth in hydrogen-related applications has been substantially slower than what we anticipated a year or 2 ago. For Impact Coatings, this has meant limited demand for machines, which has directly impacted cash flow and liquidity during the year. At the same time, the organization has continued to execute well operationally, particularly within coating services.

So the key message at this stage is that we have acted proactively to ensure that the company remains operationally strong and financially resilient in a difficult market environment. So we have, during 2025 and in Q4, taken important actions to strengthen the foundation of the company. We completed a rights issue in the fourth quarter to strengthen liquidity. The rights issue was completed in a quite demanding capital market environment. The outcome was below our initial ambitions, but it provided an important liquidity contribution, SEK 26.6 million before issue-related costs.

Together with the rights issue, we have taken several structural measures to adapt the company to the current market conditions. During the year 2025, we implemented cost reductions across the organization, including a reduced headcount and a range of efficiency initiatives. These measures will take full effect during 2026.

In addition, we have a new metal supply agreement, which gives flexibility and have materially reduced the amount of capital that needs to be tied up in operations. There are a number of things in this agreement that gives the flexibility to improve working capital. I will not go into details, but I can say that it is about who owns the inventory, it's about payment terms and other things related to recycling of metals.

We have also worked with working capital loans, both in China and in Sweden, and we have managed to get favorable terms. So taken together, these actions strengthen the foundation of the company and gives us better control and resilience. And we can see the effect of these measures in the Q4 numbers.

Operating cost is reduced by SEK 7.5 million compared to Q4 2024. Operating profit ended up at minus SEK 3.3 million, and we closed the year with a cash balance of SEK 37.4 million.

Looking at more numbers, total net sales amounted to SEK 17.6 million for the quarter. We had a strong coating services, SEK 15.3 million, which was the main contribution to total net sales. Order intake was also in line with net sales and order intake includes also new sampling customers, both in SOFC and iridium oxide. The order backlog at period end was SEK 10.6 million, which gives a good start of the new year. There is SEK 1.3 million on systems, which originates from revenue recognition of previous deliveries.

Aftermarket has been slow, which reflects the lower activity at many of our system customers during 2025. But to stay efficient, we have used personnel from the support and from the assembly organization to strengthen coating services.

On a rolling 12-month basis, it's obvious that we are affected by very low machine sales. However, we do see stable development in coating services. And historically, this has been a good indicator of upcoming machine orders. So we expect orders during the year in all 4 business areas: energy, automotive, electronics, and luxury goods.

Looking at coating services, it can be mentioned that we doubled the customer deliveries in number of fuel cell plates in 2025 compared to 2024.

The company does not typically report incremental business progress outside of these quarterly reportings. However, during the rights issue in Q4, we wanted to provide investors with maximum information and announce more news than we normally do. So here are some of those news.

More than $1 million in orders from our big North American customer, a new low-cost but still high-performance coating delivered to a customer. We now meet the needle standard that is required by our Japanese sampling customers. Lindberg, a luxury goods manufacturer, wants to buy one more machine. And as I said earlier, we have doubled the production in our Shanghai facility. If you add the production made by us and also by our machine customers in China, you can also clearly see that we are the market leader on the Chinese fuel cell market.

We have a capital markets update on November 24, and this is a recap of the key points communicated. So focus on SOFC, we expect orders in all 4 segments, and we expect continued growth in coating services.

So now I leave it to Lena, for the financial update.

Thank you, Jonas. So we'll start with the income statement and all amounts are in SEK million, and let's start with the quarterly figures.

As Jonas mentioned previously, net sales for the quarter was SEK 17.6 million, a decrease compared to the SEK 42.4 million in Q4 last year. But in Q4 '24, we had a coating system sales of SEK 27 million. If we go to capitalized work for own account, it was SEK 0.1 million this quarter compared to a negative SEK 1.2 million in Q4 '24, which was a correction from previous quarters.

Change in work in progress was SEK 0.2 million and Q4 '24 was SEK 6.2 million. Other operating income was SEK 5.2 million compared to SEK 0.1 million in Q4 last year. And this is mainly revenues from metal recycling in the subsidiary in China. So total revenue amounted to SEK 23.0 million compared to SEK 47.5 million in Q4 '24.

The gross margin was 83% for the quarter compared to 55% in Q4 '24, which then included machine sales, and we also have some other income with higher margins in Q4 '25.

If we go down to other external costs, they were minus SEK 6.7 million compared to minus SEK 9.1 million in Q4 '24. And in Q4, premises costs were actually lower compared to Q4 '24, since we then had overlapping double rental costs and also costs for moving to the new facilities. Q4 2025 also had decreased costs for consumables, freight, and consultants.

If we look at personnel costs, they were minus SEK 13.1 million compared to minus SEK 18.7 million in Q4. And the number of FTE for the group by the end of the quarter was 50 compared to 66 in Q4 '24. So that's, of course, the main reason.

If we look at depreciations, they increased to SEK 2.2 million compared to SEK 1.7 million in Q4 '24, and this is mainly due to investments during '24. So the operating loss for the quarter was minus SEK 3.3 million, which is a slight improvement compared to minus SEK 3.7 million in Q4 '24. And it's a combination of lowering operating expenses and also better gross margin.

We had interest expenses of minus SEK 0.2 million compared to an interest income of SEK 0.2 million in Q4 '24. And in total, Q4 adds up to a net loss of minus SEK 3.8 million compared to minus SEK 3.1 million in Q4 '24.

If we look at full year, we see that the total net sales were SEK 47.3 million compared to SEK 109.9 million in '24. And again, the difference is due to the coating system sales in '24, which amounted to SEK 74 million. Coating services sales, on the other hand, increased by 67% compared to '24. And in aftermarket sales, we had a decrease to SEK 10.1 million compared to SEK 14.3 million with the main decrease in China.

The total revenue for the full year was SEK 73.5 million compared to SEK 102.4 million in '24. And the changes beside the sales were that we had a change in work in progress of plus SEK 15.3 million while we had minus SEK 18.5 million last year. And we also had the other income of SEK 7.7 million this year, which was much lower last -- in '24.

If we move down a bit to the gross margin, it was almost 62% for the full year, which is the same level as in '24. Other external costs were minus SEK 23.9 million compared to minus SEK 27.1 million in '24. And here, we can say that the increase in rental costs for the full year was compensated by lower costs for, for example, consulting, repair and maintenance, consumables, and travel costs.

Looking at personnel costs for the full year '25, they were minus SEK 56.9 million compared to minus SEK 61.7 million in '24. And as I mentioned, the decrease in FTE by the end of the year was significantly SEK 50 million compared to SEK 66 million.

Depreciations increased to minus SEK 8.2 million compared to minus SEK 6.4 million in '24, again, as -- following the lower -- the investments in coating machines during '24.

As for currency exposure, we had a foreign exchange loss of minus SEK 1.5 million this year compared to an exchange gain in 2024 of plus SEK 1.0 million. Interest expenses were minus SEK 0.4 million, which are interest for loans, compared to the interest income we had in 2024, plus SEK 1.2 million. In total, this adds up to a net loss of minus SEK 45.9 million for the full year '25 compared to the minus SEK 29.6 million in '24.

We move to the balance sheet, starting with fixed assets. We have intangible assets that increased in capitalized development costs, SEK 3.3 million. As for tangible fixed assets, we have some investments for upgrade of our own machine and some installations and also other fixed assets, in total SEK 4.5 million. There are SEK 9.9 million defined as long-term accounts receivables, a decrease from SEK 16.3 million at the year-end '24.

If we look at inventory, raw materials decreased almost SEK 40 million from SEK 94.5 million, to SEK 54.7 million, and this is mainly noble metal inventories.

Work in progress, on the other hand, increased to SEK 21.7 million compared to SEK 7.7 million by the end of '24. Receivables decreased by approximately SEK 28 million, mainly due to received customer payments. And the outgoing cash balance by the end of the year was SEK 37.4 million compared to SEK 32.5 million by the end of '24, and we will have a closer look on that in the cash flow statement.

Equity increased by the loss for the year, but increased by the net proceeds from the rights issue, of course. In long-term liabilities, we see the long-term part of the raised loans at our subsidiary in China, and that was SEK 0.7 million at the end of '25. Prepayment from customers have decreased, and this is mainly from repayments following a new commercial setup with one of our major customers.

As for short-term liabilities, accounts payables decreased, but short-term liabilities have increased due to the loans raised during 2025, about SEK 27 million by the end of '25. The loans are mainly in our subsidiary in China, but also including SEK 5 million in the parent company.

Looking at the cash flow statement. The cash flow was, of course, negatively affected by the minus SEK 45.2 million in operating loss after depreciation. Then after adjustments for noncash items, cash flow from operations before change in working capital was minus SEK 38.0 million compared to minus SEK 22.2 million last year.

There was minus SEK 1.8 million in negative cash flow effect from the increase in working capital; however, an improvement from the minus SEK 50.7 million in '24. And as mentioned at the previous slide, the positive effect was from decreased inventories and decreased receivables, but then there was a negative cash flow effect from the decrease in prepayments from customers.

Cash flow from operations was minus SEK 39.8 million compared to minus SEK 72.9 million from the same period last year. Investments were kept low during '25. And as I mentioned, SEK 4.5 million in intangible assets and then capitalized development costs of SEK 3.3 million. So minus SEK 7.8 million in total compared to minus SEK 16.7 million in '24.

Then we have the cash flow from financing activities, and that was SEK 52.1 million. Proceeds from the rights issue in December were SEK 26.6 million and then related costs to that of SEK 3.2 million. And loans raised during the year amounted to SEK 28.7 million.

In total, this resulted in a positive cash flow of SEK 4.4 million for the year compared to minus SEK 89.7 million in '24, and the closing balance of SEK 37.4 million compared to SEK 32.5 million in '24.

This was financial update, which means that we move on to summary and outlook.

So to summarize, we are operating in a market environment that remains challenging, and we expect the recovery to be gradual rather than immediate. Coating services provides a stable base of activity while we continue to work towards converting customer dialogues into system sales. At the same time, we are building on our existing technology and customer relationships to develop opportunities within SOFC, while, of course, maintaining a strong focus on cost discipline and liquidity.

So now it's time for Q&A.

Thank you for your presentation, Jonas and Lena. Now we open up for questions.

First questions come from Lara Mohtadi.

A couple of questions from my end. Just a little bit on SOFC. So you pivoted your strategy towards SOFCs. Would you say this is purely a coating services play in the near term? Or are there concrete discussions for maybe system sales within the sales -- system sales segment as well? And when can we expect SOFC segment to yield results in actual -- in system sales?

So the SOFC market, it's both coating services and system sales. And there are very big similarities between the PEM fuel cell market and the SOFC market. If we look at the PEM fuel cell market, we have been successful and especially in China, we have been successful in our push-pull marketing. So we approach the customers' customer, i.e., one step up in the value chain, and we get approved and qualified by those customers, and they, in turn, go to their suppliers of stainless steel plates and tell the suppliers of stainless steel plates that we want to buy coated plates and the coating should come from Impact Coatings.

We have the same dynamic also in the SOFC market that it's the same or similar companies that do the stamping and the forming of the stainless steel plates. The initial market is more driven by coating services. But to reach volumes, you want to consolidate your production lines and you want to have the stamping and the coating at the same place. So that means machine sales to the stamping companies. And that could be new customers or it could be existing customers that invest in upgrades or new machines for SOFC.

A question on your North American customer that now accounts for a large part of your coating system sales -- services sales alongside [ SOFC ]. Would you say there are discussions to convert this specific relationship into a system sale maybe this year or next year? Are these discussions you're having with this customer?

So we announced several years ago that we have plans to start coating service center in U.S. We put that on eyes*. So we pushed the pause button on that due to lack of volumes. Now we see that the volumes starts to ramp up in Q4. We did have good volumes. We have good order backlog starting Q1. So it's also natural to have a look at having the coating, not in Sweden, but having the coating in North America. And that can be done in different ways. It can be done either by us, starting a coating service center in U.S. It can be done by managed services that we place a machine in U.S. at someone and that machine is operated either by our personnel or someone else's personnel. Or it can be that we sell machines to North America and convert that business to machine sales. So I would say that all those 3 doors, they are open.

Well, you mentioned that despite increasing volumes in China, the market hasn't really triggered any new system investments yet. So would you say that this is just purely a cyclical delay, maybe waiting for the scale? Or is it more a structural shift where these customers maybe they prefer outsourcing for coating services rather than actually purchasing their own systems?

Yes. I would say it's more of a cyclical delay. And selling machines in the market, you need growth rate, quite high growth rate in the market to sell a lot of machines, or you need a big installed base, so you exchange the old machines for new machines.

There was growth in the market previously. But if you compare '24 to '25, dependent on which market report you read, it's -- the market has increased in China, but it's like 10% to 20%. And with such market increase, you don't install new machines or it's not necessary to install new machines. So we expect the Chinese PEM fuel cell market to grow. We expect that China will continue to be active in this market, and looking at things that have been published from the new 5-year plan, it looks good.

So we believe in continued growth in the Chinese PEM fuel cell market, but we believe that growth in the SOFC market will be faster and it will happen more in the SOFC market. But long term, yes, it's -- we are still working with PEM fuel cells in China, and we still believe this will be a good market for us, and it will grow.

If we just move on to maybe cost savings. In the report, you mentioned that there are further effects that are to be realized during the year. Could you maybe quantify how much of the savings actually have been reflected in the current figures versus how much is still left to maybe filter through?

Yes. So in total, we have reduced the staff with 38% in the mother company. So that equals about 20 full-time employees. And there is some delay to get full effect on that. But the major part is we have changed our -- we have made major changes to our purchasing function. We now have a much more technical purchase, and that will reduce COGS. So the COGS reduction will come during this year. And of course, the COGS reduction doesn't come until we sell machines.

You're mentioning COGS. Maybe just could you elaborate a little bit about how we should think about the gross margins in the coating services segment. You reported quite a healthy gross margin of around 60% this quarter. Should we think of this as the sort of gross margin level for this segment as it's been the majority of your sales this quarter?

Yes. So typically, we have higher gross margin on coating services than machine sales. So we are working on increasing the gross margin on -- also on machine sales.

When it comes to coating services, we are also working on increasing the gross margin on coating services. And the press release we sent out about the new coating, which is a high performance but lower cost coating that has been delivered to one customer, that is one step in that direction to lower the material cost of the coating. So we expect that we can also increase the gross margin also within coating services.

The press release you said with the new supply agreement, it's supposed to reduce working capital needs by around SEK 30 million. You also mentioned this in your presentation. When can we actually see the full effect of this?

Yes. And in this agreement -- it's different parts in this agreement. So one part is who owns the inventory. So we can reduce the inventory that has to be owned by us. And of course, that has an effect. Also, it's about recycling. So we do not have to have that much inventory within the recycling cycle.

The third part is payment terms. And to utilize the payment terms, there's, of course, a cost. Everything comes with a cost. So there's an interest on that. So that is something that we can use if we want to, but we will not use it if we don't have to, because we don't want to take the cost for it.

You also mentioned recycling here. In your -- in the income statement in the other operating income item, you had quite some significant revenues from metal recycling in Impact Coatings, China. Could you just elaborate a little bit on this?

Yes. So when you coat in a PVD coater, you evaporate metal. And some of that metal you evaporate lands on the thing you coat for your customers. So for example, if you coat fuel cell plates, some of the metal lands on the fuel cell plate. Some of the metals lands on shields. And the purpose of those shields is to collect metal so that metal can be recycled. So those shields are sent for recycling and then you get that metal back. And sometimes you get that metal back as metal and sometimes you get that metal back as cash. And in this case in China, we have got that back as cash. So that's why it looks like we have some sales, but it's actually that we get the value of the metal back.

Now we can go ahead with the written questions that we received via mail.

The first one is, how large a reduction in personnel have you had?

Yes. As I answered before, it's 38% in the mother company, and that is equal to 20 full-time employee equivalents.

Your next question is, you have communicated that you are looking for an industrial investor for a directed share issue during 2026. What type of investor could that be?

Yes. So we are -- we have communicated that, and we are looking for an industrial investor. So it could be the corporate venture arm of an industrial investor or it could be someone in the value chain that we are active and preferably higher in the value chain that we are active. So someone who doesn't only see this as a financial investment, but also someone who can see business benefits with the investment.

The final question that we received is, is it still the American customer who accounts for the majority of coating services?

It's a big important customer, and we sent a press release that we passed USD 1 million during Q4 in orders from this big American customer. So it's a big one, but we also have big customers in China. So yes, it's a big one, but it's not the only one.

Thank you. There are no more questions at this time. So I give the word to you for some closing remarks.

So thank you for listening to this webcast. And to all the shareholders, I would like to say thank you for your continued support. We are looking forward to 2026.

Welcome, everyone, to this Capital Markets update. My name is Jonas Nilsson, and I am the CEO of Impact Coatings. Today, I will talk about 3 main things. We have proven technology and established operations in Europe and China. We have a strong position in the fuel cell and electrolyzer markets. And now we are taking a step into the power generation market. This presentation is made in connection with our ongoing rights issue. So please make sure to read the important information included in the presentation materials. The investor presentation can be found on the Rights Issue page in the Investors section of our website.

First, I would like to invite you to visit our factory in Linköping tomorrow. Doors will be open at 1:30 p.m., and there will be both a presentation of the company and a tour showing our production facilities and operations here in Linköping. Please notify the company today if you intend to participate by e-mail to [email protected].

So this is today's program. I will start by walking you through our investor presentation. Then Yaowen Wang, our Regional President in China, will take you on a tour in the factory in Shanghai and give his view on the market. After that, we will have an external guest from U.K., Caroline Hargrove, who is the CTO of Ceres. Ceres is one of the big players in the SOFC market. Then Rob Mamazza will follow and give an update of the North American market. And finally, Kristian Hillgren will talk about how our technology help us to grow faster with the customers we already have and how we use our existing technology to bring on new customers and applications. After that, we will have an outlook and summary.

So again, welcome, everyone. I am Jonas Nilsson. And as I said, I will talk about 3 main things. We have proven technology and established operations in Europe and China. We have a strong position in the fuel cell and electrolyzer markets, and we are now taking a step into the power generation market. And as I said before, this presentation is made in connection with our ongoing rights issue. So please make sure to read the important information included in the presentation materials.

I have now been at Impact Coatings for 2 years. And the thing that attracted me when starting was not the green transition or the hydrogen. It was the opportunity to grow a business in an emerging market. In 2024, we saw a substantial increase in sales. '25 has been challenging when it comes to machine sales, but we see growth in coatings services. In order to increase the business, we are broadening the scope into the power generation market, which is very interesting. We are a material science company, and we have the expertise to innovate. But for innovations to be successful, there must be a problem to solve. There must be a need.

So to set the scene for today, I I'll start with some reflections from an article in Dagens Industri a couple of days ago. So why do we need advanced coatings? Well, according to Dagens Industri, the planned data center in Strängnäs will consume 4x more power than Uppsala, 750 megawatts. It takes a long time to build new power lines, longer than building the data center itself. In the article, there was no solution presented. It was just a problem. The solution is high-efficiency SOFC solid oxide fuel cells, which convert natural gas to electricity, which can be used to power a data center. And by using containerized SOFC power plants, which are easy and fast to deploy, this can be done in time.

However, SOFC stacks, they operate at high temperature and contain a lot of stainless steel plates called interconnects. Stainless steel at high temperature, it evaporates chromium and chromium will kill the SOFC stack. So to avoid chromium evaporation, the stainless-steel interconnect plates need coating. We provide coating solutions, machines and services for coating of stainless-steel interconnect plates. We are not part of this project in Strängnäs. It's just an example to give you a taste what we're going to talk about today.

So as you see on the screen now, this is why we need advanced coatings. But the question could be, does it really work? So to give the proportions, 750 megawatts is a lot. It's more than Öresundsverket in Malmö, which is a natural gas-fired power plant of 450 megawatts. A containerized SOFC solution would need the space of 10 soccer fields, but would produce more power than Öresundsverket. So it's a lot of SOFC stacks and a lot of coating, but it's not unrealistic. To produce those coatings, you need 8 machines and 1 year. That is definitely doable.

So what about the market? According to calculations from Ceres Power in the U.K., the need in 2030 will be 22 gigawatts of SOFC power plants. Compared to the planned data center in Strängnäs, that is not an enormous amount. And with somewhat 230 machines, you can coat all the needed interconnects. So if you have those machines installed in 4 years from now, you can cover the world market need for coating of stainless-steel interconnects. The emerging market for SOFC systems is commercially driven, and it's expected to grow faster than green hydrogen applications. We do have a footprint in the green hydrogen market, and we are targeting the SOFC market.

So with that introduction, we jump into the investor presentation. So here's the agenda of our investor presentation. The slide deck can also be found on our web page. I will not go through every slide in detail, so please visit our web page for the full deck. We will save the investment case and outlook until after our guests have presented, and we will end with a Q&A. But please send in your questions during presentations.

Impact Coatings is an advanced material science company specialized in coating using PVD technology. PVD stands for physical vapor deposition. I will come back to that later. We address material challenges found, for example, in the energy sector. We deliver complete solutions. That means both advanced coatings and machines for industrial production. And the delivery model is flexible. We both sell machines and offer coating as a service. This -- the delivery model, this is one of our unique selling points.

The market we target that are several growth markets, Energy, Automotive, Electronics and Luxury Goods. Focus is on energy. And the energy segment contains both green hydrogen and also the new area of power to data centers. We have operations here in Linköping and Shanghai and sales offices in Korea, Germany and the United States. In Linköping, we manufacture machines and provide coating as a service. In Shanghai, we have volume production with coating as a service. In the recent years, China has been a large market for us. If we include the deliveries from Sweden, it represents about 70% to 80% of our total revenue in the past few years.

If we look at the revenue split on this slide, machine sales has been challenging in 2025. However, we are expanding in Coating Services. And based on forecast from customers, we do expect to expand more in Coating Services during next year. Going back to machine sales, we assess that in 2026, we will have machine sales across all 4 areas: Energy, Automotive, Electronics and Luxury Goods. And this assessment is based upon our current sales pipeline.

So we talked about this in the introduction, mainly it's about applying thin layers of advanced materials on top of cheaper materials to achieve higher performance at a lower cost. For example, applying a thin ceramic coating on stainless steel to get excellent electrical performance, corrosion resistance and heat tolerance using a low-cost base material. So PVD, it's a horizontal technology that can be applied across many market verticals. Our machines, which you see in the center, they are optimized for advanced multilayer coatings on flat objects. We have selected market verticals with a good product market fit. So we are active in Energy, Automotive, Electronics and Luxury Goods.

The key area for us is energy. And then we are talking about solid oxide fuel cells, PEM fuel cells and PEM electrolyzers. So energy isn't about hydrogen. It's about energy security and reliable power supply, sometimes with the additional benefit of a low CO2 footprint.

And to repeat for new listeners, an electrolyzer converts electricity into hydrogen and a fuel cell converts hydrogen into electricity. All contain flat components like the ones that you see to the left on the slide, and our machines are perfect for coating flat objects. So our solutions are used for stationary power generation, for example, natural gas-powered SOFC fuel cells. This is a new and very exciting area driven by the development of data centers. I believe that this will be our biggest revenue area in just a few years.

Heavy vehicles powered by fuel cells. We have customers and volume production in China. There are several thousand of heavy trucks delivered with our coatings in the fuel cells. And with the Chinese Roadmap 3.0 of new energy vehicles, we expect this number to grow. We also work with customers in aviation, where hydrogen and fuel cells are attractive because they are lightweight compared to batteries.

Looking at hydrogen production, electrolyzers produce hydrogen for storage and transport to be used when and where energy is needed. We are a leading supplier of coating solutions in this area and have ongoing volume production. We also work with a new and very advanced coating area called iridium oxide. This has the potential to increase revenue on existing customers. For all those segments, our coatings are used for critical components in these systems. And to a large extent, it is the coating that defines the performance of the complete system.

So talking about hydrogen, we do have to admit that hydrogen for passenger vehicles has not turned out as many had hoped for, including what we had hoped for. So we have adapted. We have tuned our coatings more towards commercial vehicles, trucks and buses. And there, we have customers and ongoing production. We also adapt and find new applications or maybe I should say adjacent applications with big commercial drive and SOFC is one such.

We have been working with SOFC at a low intensity for several years, but now it's time to scale up. SOFC that stands for solid oxide fuel cell, which is high-efficiency stationary fuel cells that can be powered by natural gas, converting natural gas into electricity. And the rapid growth of AI data centers, as we talked about in the beginning, requires a lot of energy, and this has accelerated the development in the field of SOFC. On the right, you see Doosan's factory in Korea, but other major players like Bloom Energy in the United States and Delta Electronics in Taiwan are also investing heavily. They do not talk about the green transition in traditional terms. They talk about commercial projects and real business opportunities.

Impact Coatings is currently working with Ceres, one of the leading technology players in the SOFC industry. Ceres, they licenses their technology to Doosan in Korea, Delta Electronics in Taiwan and Weichai in China. They are all major global companies. We cannot say exactly how large this market opportunity will be, but the top-down analysis indicates several hundred machines in just a few years. And if we look also at the bottom-up analysis from customer contacts we have, that is quite interesting.

So looking at the investment case, we have proven technology and established Coating Service Centers in Europe and China. We have strong presence in the fuel cell and electrolyzer markets and great interest in SOFC, which we strongly believe in. We have a flexible business model that makes it easy for customers to buy, and this is a unique selling point. During the year, we have done significant cost savings and efficiency improvements. This has lowered the breakeven point. And with today's cost level and the sales mix of 2024, we would reach positive EBITDA.

We also have strong strategic partners and reference customers. So now we are conducting a Rights Issue of SEK 87.5 million. It will be used to expand what we are already doing and scale up, and this means especially within the SOFC sector. So SOFC is expected to be our future growth engine. We're also going to find new applications for existing technology, reduce production costs for our machines and strengthen working capital.

So we have now gone through an introduction to Impact Coatings. Let us take a deeper look at a few areas. The first area we will take a deeper look in is SOFC. This is so interesting, so it has got its own section.

But before that, some questions we have got. So one question I can see here is, you talk a lot about SOFC, but what about PEM?

And -- it's not that we are going to stop doing PEM. Some years ago, we were like a PEM-only company. We're not a PEM-only company anymore. PEM is important for us, but we believe that SOFC will be the growth engine for the coming years in the sort of near to mid-future. Long term, we still believe in PEM, and we're going to continue to work with PEM.

So let's go to next section, SOFC. So the commercial weakness for green hydrogen in mobility applications, especially passenger cars has affected both Impact Coatings and our global peers negatively. You can clearly see this in stock prices, including our own, but we adapt to the market, and we are now shifting our focus to where the opportunities are strongest, where there is growth, there is capital and there is real business for our customers. Fortunately, our work with hydrogen is also highly relevant in SOFC.

So looking at different regions, the green hydrogen market and fuel cell markets has been dependent on subsidies. In U.S., production of green hydrogen has been subsidized. And in China, consumption of hydrogen regardless of color has been subsidized. That is 2 different strategies, but both driven by governmental support.

In the U.S., we saw a slowdown already in the end of '23 of the green hydrogen market. With green hydrogen, we mean PEM water electrolysis. This market slowdown has been much longer than we expected. And even though it's now picking up, it is still slower than what we believed. But long-term development of the green hydrogen market, we still believe in. But for us as a company, we need additional legs to support us.

The Chinese fuel cell market gave us revenues in '24 and continue to give us revenues. We have actually established ourselves as one of the market leaders in this market. This is, of course, good, but it's not enough. And with the upcoming 5-year plan with the Roadmap 3.0, we believe in long-term development, but we still need additional legs to support us. So therefore, there is now a big strategic shift in our company, and there's a big strategic shift in the power market.

With the increasing number of data centers, the need for power is becoming huge. And the need for power is much bigger than our current energy systems can sustain. And the time to get grid connection is long. Fortunately, we have a solution for this, which has now been reaching commercial scale. And at Impact Coatings, we are right in the sweet spot for this.

So with SOFC, the time to power will be much quicker than with any other solution. And also the efficiency is much better. So we will, of course, continue with our current hydrogen customers, and we will be there when the market picks up. We do have a great offering for the hydrogen market, but we don't want to be financially dependent on the hydrogen market. Therefore, we will drive revenue from the power to data centers market.

So we started talking more actively about SOFC solid oxide fuel cells about 6 months ago, but we have been researching and developing in this area on a smaller scale for -- actually for several years. In early '25, we began to see growing customer interest, clear product market fit and a need to broaden our offering beyond PEM technology. Today, we see major players moving forward. We are talking about companies like Bloom Energy, Ceres Power, Doosan and Delta Electronics. Those companies are not talking about the green transition in traditional terms. They are talking about commercial projects and real business opportunities. And their share prices look strong, at least over the past 6 months.

These companies describe a rapidly growing market driven by a couple of strong trends. First, the growth of AI data center. Secondly, the push for energy independence that in a world where energy import is both risky and expensive. And we also see some niche applications like powering cruise ships. Most commercial SOFC system today run on natural gas, but they are hydrogen-ready. For our coatings, the fuel source matters little. Hydrogen is the active ingredient in power generation process regardless of whether it's supplied directly or extracted from natural gas.

Going back to the market, one example to illustrate the market. Bloom Energy recently entered a partnership with Oracle to install SOFC systems at selected Oracle Cloud Infrastructure data centers in U.S. The problem with data centers is that it takes 3 to 4 years to connect them to an electrical grid with enough capacity. So SOFC technology enables local power generation using natural gas or pure hydrogen. We are not involved in this specific Bloom, Oracle project, but it clearly shows the direction the market is moving.

So what problem are we actually solving for our customers? A typical SOFC power unit is about the size of a 40-foot container. And at the center are the SOFC stacks surrounded by reformers, heat exchanges, after burners, compressors, cooling systems, power electronics and more. And the lifetime of the stack depends largely on the quality of the coatings. The stack wears out faster than the rest of the system, making it a replaceable component similar to brake pads in a car. So by delivering high-quality advanced coatings, we help extend lifetime and improve performance of the entire stack. So coating quality is not just a technical detail. It's critical to the entire SOFC business case.

And commercially, there are 3 big global ecosystems for SOFC, Bloom Energy in the United States, Ceres in U.K. with its licensees in Asia and HD Hydrogen in Korea with subsidiaries and investments in Finland. We are working with Ceres in the U.K., one of the leading players in the market, which also give us access to their licensees. We're also working with HD Hydrogen. HD Hydrogen is a spin-off from HD KSOE, that is HD Korea Shipbuilding and Offshore Engineering. And HD Hydrogen is now operating under the Energy Business Division of HD Hyundai. HD Hydrogen plan to establish manufacturing capabilities in the second half of 2026 with high production capacity of SOFC systems. As I said earlier, it's too early to forecast service or machine revenues, but this is our top product development priority today.

So why expand into new areas and why do new things? Well, in fact, this is not really new. SOFC is a natural step. In terms of product market fit, it's a perfect match. SOFC components are flat plates, and we are specialists in 2D objects. They require advanced multilayer coatings on both sides with different coatings per site. And the more advanced requirements, the stronger the need for impact coatings. The plates have exactly the right dimensions for our IC500 and IC2000 machines, meaning we do not need to invest in machine development.

And the market is dynamic and growing, which fits our business model perfectly. We support customers from prototype stage through coating services and all the way to owning their own machines as volume grows. Another important aspect of the SOFC market is that each system requires more coated plates than a PEM fuel cell system. Higher volumes means higher revenue, whether it's through coating services or through machine sales.

So the SOFC part is one of the most interesting parts of today's presentation, and I urge you to stay and listen to Caroline Hargrove from Ceres, who will present later. But now we will see if there are any questions or if we should continue with the company overview. I think we do not have any questions. So we continue with the company overview.

So we are primarily a machine manufacturer, and we produce our machines in Sweden. We have Coating Service Centers in Linköping in Sweden and in Shanghai, China. We also have sales offices in the U.S.A., in Germany and in Korea. Our application areas are global, but the market demand and market penetration is different for the different areas, as you can see on the left of this slide.

Something about the technology. PVD stands for physical vapor deposition. You place a metal disk called the target inside a vacuum chamber together with the object you want to coat. A plasma is ignited. Metal from the target is vaporized and condenses onto the surface of the object. And by adding different gases, you can create new advanced materials, for example, ceramic coatings.

Our machines have 3 separate vacuum chambers arranged in a circle around a single turbo vacuum pump. This enables advanced multilayer coatings needed in the application areas we serve. The circular design also leads to low cycle time, so it's suitable for high-volume production. It leads to easy integration with automation solutions and robots. And the machines, they have a few moving parts, which increases reliability. This is very important for us when serving customers all over the world.

So the machines, they are designed for flat components and have great benefits for flat components. This allows us to select market verticals where our technology is a very good fit. Looking at our competitors, they tend to be either larger and more expensive or smaller and slower.

So our headquarters is located in Linköping. In our new factory in Linköping, we have capacity of manufacturing 1 machine per month, and we can upgrade that to 2 machines per month. In both Linköping and Shanghai, we operate Coating Service Centers. There, we use our own machines to coat components for our customers. In Linköping, we mainly handle customer samples and volume production of electrolyzer components for -- both for the European and American markets. The orders that we announced from the customer -- North American customer, the orders that exceeded USD 1 million will be coated by the machine you see on the picture there.

And tomorrow, you are all invited to our factory tour. In Shanghai, we do fuel cell coatings in high volume. Already in September, we exceeded the total annual volume for 2024. Today, we run shifts in the factory. But if needed, we can, of course, increase capacity by adding more machines. We are a machine manufacturer. As you can see on the slide here to the left, the factory uses robots to increase both capacity and increase quality.

So we have talked about the fact that we manufacture and sell machines and that we also sell coating services. So our delivery model makes it easy for customers to buy from us. This model is not very common in the industry. So it can be seen as a unique selling point. We are primarily a machine supplier, but we offer coating as a service to lower the threshold for starting. And we also offer managed services, meaning we operate the machine on behalf of the customer. Customers can move from samples and R&D through coating services and managed services all the way to full production in their own facility using the same type of machine. And the whole idea behind our delivery model is to make it easy for the customer to buy.

So let's have a look at the sales figures, starting with Coating Services. In '22 and '23, coating services were driven mainly by North America. In '24, revenues were driven mainly by China. This year, we signed a volume agreement with a European electrolyzer supplier, but most of the volume has come from FTXT in China, a subsidiary of Great Wall Motors, one of the major car manufacturers. In Q3 this year, our big North American customer, which was an important electrolyzer customer for us earlier, has returned and continued to place orders.

Looking at machine sales, machine sales vary a lot from quarter-to-quarter. In '24, machine sales was driven by Chinese fuel cell market with orders from 3 customers, 2 of whom were recurring machine customers. This year has been challenging when it comes to machine sales, but we expect to sell machines next year in all areas that we are active, that is Energy, Automotive, Electronics and Luxury Goods. A good example of a machine customer from last year is Feintool, a Swiss company skilled in metal forming with a factory in China. They have decided to enter the fuel cell market and supply formed and coated plates for fuel cells.

And this is what it looks like inside the Feintool factory. Note our machine, you can see it on the right side and again, behind the inspection equipment. On the left, you see a picture of the fuel cell value chain in China. At the top are the stack manufacturers, in the middle are the plate manufacturers and at the bottom are companies like us supplying machines and coating services. So I will explain the push-pull on the next slide.

The push-pull strategy has been very successful for us. So let's start at the beginning of the customer journey. It starts with discussions with the end customer. The end customer verifies and validates the technology. Then the end customer makes a decision, sometimes called make or buy. They may choose to do coating in-house, bottom right, and then they buy a machine from us. They may choose to purchase coating services from us, of course, or they go to their supplier and say they want to buy coated plates. In this way, they create a pool, and we can either sell a machine or sell coating services to their supplier.

So this is one of the advantages of a flexible business model. We are included regardless of how the end customer wants to buy. And also many customers, they require a second source. We can be present in both supply chains, both the primary and the secondary. So here are some examples of customers and partners. They are all large companies and leaders in their respective segments.

So now let's go through the financial. More information about the financials can also be found in our quarterly reports.

And let's see if we have some questions first. How important is the coating for SOFCs?

Well, if you don't have coatings -- it's Andreas who asked this question. If you don't have coating on the interconnects, the interconnects will start to evaporate metal and that metal will kill the stack. So the coating is essential for the longevity, for the long-term durability of the stack. So the coating is essential for the economics of a complete SOFC system because the stack is a replaceable component. And if you increase the lifetime of the stack, you decrease the cost of the system.

So with that, we go to the financial update. So in both '23 and '24, we increased our revenue. We focus strongly on sales and deliveries, and we saw rolling 12 months net sales increase. You can see this in the upper graph. This year, we have seen a negative overall growth due to system sales being challenging. At the same time, services have increased, which you see in the bottom graph.

Looking at Coating Services, we see strong sales in Coating Services this year. We run full production in China with double production volumes compared to '24, especially during the second half of '25, we have a strong order intake also from North America and Europe. Net sales for the first 3 quarters was SEK 20.6 million, and we ended Q3 with a SEK 10.5 million order backlog. And Coating Services order intake continues to be strong in Q4, including from our large North American electrolysis customer. Meanwhile, system sales has been challenging this year. Customers have postponed capital investments, mainly due to external factors like global uncertainties.

But there is continued interest in our products. We do not see that we lose orders to competitors. There is also global momentum now. We see policy signals from U.S. and China that reignite industrial activity. You will hear more about this in our presentations later from China and North America.

So our outlook for '26. We have overall strong Coating Services and many ongoing sampling activities with customers. So the company expects coating services net sales in '26 to exceed that of '25. And looking at the machine sales pipeline and global momentum, the company expects to achieve system sales in each of its 4 major markets during 2026. So in each of Energy, Automotive, Electronics and Luxury Goods. And on top of that, we have our SOFC activities.

So during '25, we have performed significant cost savings and efficiency measures. So first, we don't have any near-term investment needs. We have a strong factory in Linköping and a strong factory in Shanghai. We have reduced staff, mainly in Sweden and implemented additional savings during Q4, which will take effect in Q1.

We are redesigning our purchasing function with the goal of reducing COGS, and we are talking about measures that together represent much more than 15%. We have taken actions to reduce inventory, and we continue to do so. And the purpose of all these measures is to reach breakeven with fewer machines. So with the savings that we have already completed, we will reach positive EBITDA with the same sales level as in '24. And in '24, we achieved that level starting with an almost empty order book. So that was the financial update.

Now let's look at case studies or if we have any questions. No questions for now. We have 6 different cases to show how we work with our customers. I will not go through them all. I will just show one to you. So one of our biggest machine customers in number of installed systems, both historically and in recent years is the Danish luxury eyewear manufacturer, Lindberg. It's today part of the Kering Group. And this is an endorsement from Lindberg and their Head of Coating, Niels Mikkelsen.

So let's have a look at the market. PVD is a broad technology that can be used in many industry segments. We have chosen market verticals where our machines fit well and where advanced functional multilayer coatings are needed. We are active in all 4 business segments, Energy, Automotive, Electronics and Luxury Goods. And as I said before, we expect machine orders in all segments during next year.

If we look at the segments, a few examples. In energy, we work with components for electrolyzers and fuel cells, that's flat parts that need advanced coatings with ceramics and precious metals. And within Energy, we also have our new area, SOFC, that we have talked a lot about today. Automotive, many of you drive cars with emblems or decorative parts that have been made by machines we have delivered. In Electronics, for example, radar antennas, they are often made of plastic coated with metal.

Our technology enables adhesion, solubility and antenna performance. And we are also active in Luxury Goods like eyewear, as you saw on the previous slide. So in all these market segments, we have a strong product market fit. And the lower part of the slide shows examples of specific industrial projects.

We continue to develop our existing verticals, Energy, Automotive, Electronics and Luxury Goods. And this includes solid oxide fuel cells. It also includes catalytic coatings such as iridium oxide. We are also actively exploring new markets and applications, for example, semiconductors, heat exchangers and defense. If you look at heat exchangers, they are flat components. So it's a good match for our technology. In the defense sector, we are, for example, looking at methanol-powered fuel cells for soldiers and electromagnetic shieldings for military drones. But as I said before, SOFC is our main focus new area.

So let's see if we have any more questions. A question from [ Jorn ]. How do you see your patent portfolio and the risk of competition when they expire?

Well, we deliver solutions to our customers. We deliver coatings, we deliver expertise and we deliver machines. So our offering is not heavily dependent on patents. Our offering is much more dependent on our expertise, experience and know-how. So regardless of other patents, if they are active or if they expire, we will be a relevant supplier to the customers.

Let's see if we have any more questions. No, no more questions right now.

So with this, I would like to introduce our next speakers. The first one is Yaowen Wang, our Regional President in China. The second one is an external guest from U.K., Caroline Hargrove. She's the CTO of Ceres, one of the big players in the SOFC market. Then Rob Mamazza, our Regional President in North America, will follow and give an update of the North American market. And finally, Kristian Hillgren, our CTO, will talk about how our technology help us grow faster with the customers we already have and how we use our existing technology to bring on new customers and applications. And after that, we will be back and summarize.

So with that, I would like to introduce Yaowen Wang, our Regional President in China. The floor is yours.

Thank you, Jonas. Good morning. I'm Yaowen, Regional President at Impact Coatings China. As Jonas said, we have achieved a significant growth over the past couple of years in China. Our turnover for the rolling 12 months by end of the third quarter in China has reached SEK 50 million. And today, I'm happy to share more about what great things we have been doing and the great potential in front of us.

Before my presentation, firstly, I want to take you to a facility tour through a video to our Coating Service Center in Shanghai. What you are going to see in us is one of its kind PVD coating production line for fuel cell plate that can be operated with full automation and traceability of every single plate. I think it will work as a good starter. Please, there we go.

[Presentation]

Okay. Welcome back. As you have seen, our production is carried out in a clean room, handled with robot, equipped with end-to-end quality inspection and integrated into our mass system. We are demonstrating to our customers that our lean production concept can ensure the product quality and scale up to big volume. It's a unique feature and a core advantage for which reason our solution is selected by the customer, such as Epson. Epson Group is a Singaporean public company. If you follow -- have been following us, you probably have heard their name in several cases. They are specialized in precious metal components for electronics and automotive.

We have -- they have 2 of our IC2000 PVD system. And what they have built is similar to what you have seen, but extends to the whole process from coil steel to complete plate fully automated. Now since the establishment of our Chinese entity in 2022, we have successfully established ourselves in the market as a reliable full solution supplier of PVD fuel cell coatings. We have built a professional team that offers localized services covering the entire sales cycle.

Next slide. The investment into our China Coating Service Center has generated significant results. We anticipate delivering over 500,000 plates this year, a volume that will double that of 2024. As I mentioned in the beginning, during the rolling 12 months until Q3, our Chinese entity has generated about SEK 50 million revenue. As you know, we are not only providing services, but also PVD system. If combining with the volume that our PVD system customers have also delivered, our impact coating ecosystem will make up for approximately 50% market share.

And furthermore, our Coating Services business has also brought us closer to the end customers, the fuel cell engine producers. And these customers are the ones who determine what coating technologies will be used in the final product. Such strategic positioning forms a key part of our push and pull market strategy, enabling us to better meet market demands and proactively driving more sales.

Next, I want to show some remarks from our distinguished customer, Will Zhang, the Chairman of FTXT, as an excellent case that demonstrates our solid position in the supply chain and the close relationship with end customers. FTXT is a leading hydrogen power system supplier in China. And this year alone, FTXT has delivered over 1,000 fuel cell electric vehicles in China with our coating. I will pause here for a minute so you can read his quote.

Okay. Last year, our 2 companies signed a 3-year joint development agreement focused on developing new cost and durable fuel cell coatings and ultimately demonstrating the coating durability in the real life. I strongly believe that we are growing into a true industry leader by working with those remarkable customers like FTXT, not only shaping the market, but also part of the policymaking process. As you may know that the government policies play a vital role in China economy.

And next slide, I would like to share some news about the policies around hydrogen. Well, in the rest of the world, the hydrogen economy seems still in a high headwind, but China is already gaining a first-mover advantage. By the end of 2024, the cumulative commissioned capacity of renewable hydrogen production projects worldwide had existed 250,000 metric tonnes per year with China accounting for over 50% of this total. And recently, a few top-level policy announcement underline the position of hydrogen in the Chinese economy for the future.

The recommendation for the 5th Five-Year Plan (sic) [ 15th Five-Year Plan ] covering the 5 years from 2026 released by the Central Committee elevates hydrogen energy to 1 of the 6 strategic future industries. In alignment with the top-level plan, the technology road map of Energy-Saving and the New Energy Vehicle 3.0 released by the China Society of Automotive Engineers set a specific target, 4 million to 8 million units of fuel cell electric vehicles by 2040. As I proudly said previously, we are in a strong position in China market and grasp the growth potential.

Finally, I would like to circle back to the topic Jonas has previously discussed, solid oxide, and talk about why China matters and the great potential out there. Solid oxide has got significant attention as a fast way of power deployment with flexible fuel selection and possibly zero emission that are crucial for addressing the power deficit driven by the rapidly surge in AI computing demand. China, with no doubt, is a major player in AI. According to the data published by the authority, China counts 32% of global computing power and capping the 30% annual growth rate in the past 5 years. Industry leaders like Jensen Huang from NVIDIA even anticipate that China computing power will surpass other nations fueled by low energy costs and favorable regulatory environment.

This trend unlocks tremendous potential for solid oxide among other fuel cell technologies, especially when integrated with renewable power and electricity storage. The ambition of China is not only to develop AI, but in a green and sustainable manner. For instance, it sets the regulation on the percentage of green electricity and energy efficiency for data centers. Solid oxide is an excellent fit to fuel AI growth in green manners. Furthermore, China has distinguished advantage for solid oxide development and has a robust industrial foundation and holds abundant reserves of rare earth metal, which are the key material for solid oxide cell manufacturing.

Here, I just provide 2 examples from the supply chain. One is Weichai, who recently signed a manufacturing license with Ceres Power to produce solid oxide fuel cells. The other is Three-Circle Group, who is the supplier of key ceramic components to the top SOFC manufacturer in the United States of America. We at Impact Coatings are ready to embrace this tremendous business potential with years' experience and expertise in solid oxide PVD coating. We can already provide coating service locally for fuel cell -- for solid oxide fuel cell in a small scale, and we are ready to ramp up as the market comes. Thank you.

Thank you, Yaowen. Very interesting to hear. And now I want to direct a special welcome to our external guests, Caroline Hargrove, who is the CTO of Ceres in U.K. And before Caroline starts her presentation, we will just have a short little break. So stay tuned.

[Break]

Hello, everyone. My name is Caroline Hargrove. As Jonas introduced me, I'm the CTO at Ceres. We are a solid oxide fuel cell provider, as you just heard. And my short presentation today will tell you a little bit about our technology and the market we see in data center power globally.

Just a quick intro on Ceres as a company, we have -- we're only doing solid oxide technology. We spun out of Imperial College more than 20 years ago, and our technology works both in power and in green hydrogen. We have unique IP. We're metal supported solid oxide. But what is more unique is that we have a licensing model. And that means that we -- although we have a small manufacturing capability here in the U.K., this is not our business. Our business is to license the technology at cell and stack level for other big corporates to scale -- build the factories and scale and sell the products.

So as I was mentioning, the -- our technology works both as a fuel cell and as an electrolyzer, the exact same technology works in both directions. And it therefore applies to many different applications depending on the system that you build around it. But today, I wanted to mainly concentrate on the AI and data center side. But of course, the same systems will apply to commercial and industrial power. Shipping is slightly different in that, it does need to be robust, but this technology also is robust, but that's a longer term. The very short term is definitely the AI and data centers.

As I was explaining, our technology is -- involves cells and stacks, and that's what we license, the technology of how you make and industrialize the cells and stacks. The systems, we make some that are mainly demonstrators and then our partners build systems like you can see there, both in power and in hydrogen. But if you look at the map of where our partners are, the manufacturing partners, they're mainly all in Asia. And you can see that Doosan, which is in Korea, they are our first partners with a manufacturing plant that is now commissioned.

Delta is in Taiwan. They are still building their plant. They have a dual license in FC and EC. DENSO have gone into EC and that's electrolysis and they're in Japan. Weichai, which you just briefly saw is our partner in China. And we also have a partner in India, Thermax, and they are system license. So they will buy stacks from one of the above to build into systems at the moment for electrolysis and green hydrogen. And we also have a partner in Shell. Shell, we have a demonstrator, I'll show you in a minute that is currently running at Shell.

But what is unique about our technology and how -- what the link with Impact coating is that our technology is metal supported on a stainless-steel substrate. And that means that we apply our anode, our electrolyte and cathode on top of a stainless-steel substrate that sees the fuel going in and the air on the other side and then the current collectors coming on for the electricity produce. And in between each, there is an interconnect and that means we can stack all those cells into one big stack. Those need to last for years. And for us to do that, those -- both the interconnect and all our cell has to be good against poisons, but especially the interconnect because it is exposed to steam and oxygen and so on. And therefore, it's prone to corroding.

And as you can see because it's also a stamp interconnect, we -- for us, the quality of the coating is very important because it decides on the lifetime of that part, which is one of our critical parts because we've got a lot of them in our spec. And this is where we have worked with impact coating and seeing how we can do effective and very good at preventing corrosion and keeping also what is a fuel cell poison like chrome inside and on the steel and not diffusing into the cell. So those things are very important.

But as I was mentioning, we work into an environment where we are only licensing the technology. So what is important is that we test what works and develop techniques that work. And then it's between our supply chain and our partners who make the deals for commercialization. So for example, this is the factory at Doosan. So it's a 50-megawatt factory that have opened, and they are now -- have started production. And it just shows you the scale of automation. We don't have that here in the U.K. Our small factory is very manual handling and so on. This is a fully automated process. And they also build systems that are then going to be the ones that are put for data centers and for other applications that are stationary power.

Weichai have started building systems already, and we've signed a manufacturing license as well, and they will be, I'm sure, going very quickly at building their factory for that as well. This is a quick view of where Delta have purchased their land for their factory in Taiwan. So they are investing heavily in SOFC, again, for -- mainly for producing stationary power in data centers. And this is just a quick view of what a system looks like. This one is in electrolysis mode, but this is the one that is running at in Bangalore at Shell.

But in terms of SOFC market, this is -- just wanted to give you an overview that this is based on Bloomberg New Energy numbers. But this is only SOFC, so it's only the solid oxide fuel cell power numbers and just gives you a view that there is a -- to 2030, which is around the corner, do you see 22 gigawatts of market opportunity in SOFC and of which half is in data centers. This is their numbers. We don't sell directly to customers, but we know that from our partners, it would be at least 50%, if not more, of the market that they want to go after is data center.

And part of that and where the market is favorable to this is, of course, Far East, as you could expect, but also a lot in America because the grid is actually overwhelmed with the demand. And a lot of the time, those fuel cells, we're talking about time to power. It costs a lot of money to build an infrastructure. If you can arrive and put something behind or on the current grid or behind the grid so that you power the data centers immediately, that gets you there much quicker. And these days, it's at least 5 years we hear often even more so to have a gas turbine. The lead time is really high because the demand is so high.

So hence, we feel that there is a sweet spot now of data centers. And as I was saying, the combined cycle gas turbine is up to 7 years, possibly. We hear about small nuclear reactors, but this is -- I believe it's at least 10 years away for them to provide this power. But we also need those high-voltage connection if you're going to make centralized -- more centralized power. So it is -- this is a long-term play. And why is SOFC good at this is the efficiency is really good. A gas turbine is 35% to maybe 45%, that sort of thing, maybe a little bit higher than this. And SOFC will go up to 60%. And if you're using industrial power and can use the heat and do a combined heat and power, that efficiency goes up, too. So it is quite compelling, and that's why our partners really like this kind of technology and have taken licenses.

I was saying time to power, really important. The resiliency often people don't realize, but in a -- this is an electrochemical system. There's no moving parts. And it's good at running baseload. So for data center, you can do that. But it also has -- it's -- although it's a high temperature fuel cell, it's got a high thermal mass. So you can easily load, vary based on what a data center demand is, which is very good. There's low noise. There's no particulate emissions. So no NOx , no SOx. Yes, if you put natural gas in it, it will be producing some CO2, but 1/3 less than if you were burning the CO2 with no NOx, no SOx, as I said. And you are ready to be to collect the CO2 as well because it's a much more concentrated CO2 emission. So you can much more easily capture it. As I said, the fuel efficiency is high. It's at least 60% and much higher if you needed to -- could use the heat. And it's -- as I said, it works with natural gas, but it obviously works on hydrogen. So if you have -- if you make this kind of investment, you will be ready for hydrogen where hydrogen is available as well.

So the idea, all our partners are building these in modular systems that will go from megawatts to gigawatts, but that's up to our partners. And in the U.S., they've even added some tax credits for -- which is 30% on the fuel cells. And the big player there is Bloom, and Bloom Energy has -- their valuation has gone up enormously this year because they've signed quite a few data center deals and they benefit on top of it for investment tax credit. And when you're talking about data center and the need for resiliency, it's -- when you have smaller pieces like stacks for fuel cells, you can provide resiliency at a lower cost. So actually, despite the fact that people are paying a premium at the moment for power, it is actually very cost efficient.

Just wanted to put one slide from one of our partners, Delta, to just show that's how they sell this because we don't sell direct to customers. Our partner, Delta, for example, they do. And another big thing for them, so they're looking at where the -- a number of areas where the systems apply. So where do you get your input gas? So either hydrogen or natural gas, either from a grid or from liquid natural gas. But the other thing that is interesting for them is that fuel cells provide DC power. And DC power, they are linking that directly to the need for data centers, which is also DC power. So they are -- and their course is electronics. So they see solid oxide fuel cells as also very good at improving the efficiency, the electrical efficiency and reduce the complexity of providing the input to the data centers if they are co-located.

So -- and as you see at the top, there's also potential for carbon capture. At the moment, we know it's possible. It's not top of the agenda, unfortunately, for most people, but it is absolutely possible and much more cost effective with this type of technology. I just wanted to leave you with just an equivalent electrolysis market. I know electrolysis is a lot less in vogue at the moment, and it's a much later market. But I'm just mentioning that Bloomberg still see this as a big market, but much later in the 2040s, but a much bigger market for SOFC.

So I just wanted to mention that briefly so that it's not -- our technology does work in both directions. And there are some areas in the world where it does make sense to already do green hydrogen. So that's why some of our partners are interested. And showed that this is a system that DENSO already built and it's running now with our stacks, and it's JERA. So as a demonstration for making hydrogen. So it is happening. It is also a possibility with our systems.

So this is all I wanted to bring forward. I know I've told Jonas, if you have questions, I'm happy to answer them in writing. It's not easy for me to stay on for your whole presentation, but I'm happy to get back to anybody with questions.

Thank you, Caroline. Thank you very much for your participation here. And for me, it was very interesting to hear how you describe coatings and also how you describe the importance of coatings in your system. Thank you very much. And now we will have a short pause. And after that pause, we will listen to Rob Mamazza, who will give his view on the North American market. So stay tuned.

[Break]

Perfect. Okay. So first slide. Good. So my name is Robert Mamazza. I'm responsible for North America. I'd like to take a little time to give a brief history update where we are right now and what we see for the next 3 years. So for Impact Coatings, North America means Canada and the United States. In this area, the main drivers for us are water electrolysis. So we do the coatings for the anode pack separator plates, PTLs. So this is the lion's share, and most of it is PEM. However, in this region, we are seeing an increase in inquiries in some of our activities with solid oxide technologies and AEM. So AEM is anode (sic) [ anion ] membrane exchange. So this is kind of like PEM, but it moves a different charge. Otherwise, it's quite similar. And solid oxide is like solid oxide fuel cells, but in this case, it's solid oxide water electrolysis.

So we also do some fuel cells, but it's a much lower level. So we've submitted coatings. We have some qualified coatings, but nothing commercially significant. And where we do have customers that do both, where the customers do water electrolysis and fuel cells, we have seen them divert resources from fuel cells to water electrolysis. So it's an interesting phenomenon. And in some cases, we've noticed that the fuel cell activities have been pushed offshore, specifically to China, and we're able to be part of the handoff to our Chinese colleagues over there. So it was a business that we started here wasn't lost because we were able to catch it on the other side.

So to diversify the region and move a little bit outside of hydrogen, we have some -- we've been looking at other things as well. And to date, the only commercial traction we have is within MedTech, but we're constantly trying to push this to give the stool an additional leg, so to speak.

Next slide, please. So just a little bit in terms of in the news type stuff. So here, we have one of our own press releases. So to date, this year, mostly in the second half of the year, our new orders from our main customer that we have in this region so far have superseded USD 1 million. So this is a very exciting trend, and we expect this to continue throughout the rest of this year and through next year as well.

You also see here some prominent names are also investing in the region between Canada and the states. And you see Cummins here also having some cross-border activities. So Cummins in Canada, delivering some PEM technologies to a power generation facility in Niagara, New York, where the Niagara hydroelectric will be supplying the power to generate the green hydrogen. So there are some big names at play in the region. So we also see this as confirmation that we're in the right place, doing the right thing.

Next slide, please. So in this region, in particular, we acknowledge that policy support is important. I think everywhere with green hydrogen policy support is one of the things that enables it to happen. So in the United States, we have the Inflation Reduction Act, and we have the Infrastructure Investment and Jobs Act. So both of these, we have seen to be very positive for green hydrogen activities. And very specifically within the 2, there is a section that's referred to as 45V.

So a lot of people will just say 45V is this and so forth. What that is, is it's a tax incentive, and it goes up to USD 3 per kilogram for clean hydrogen. So the cleaner, the closer you get to the $3. In the case of water electrolysis, it is clean. So you would get the full $3. So this is a massive pull that is driving everything else behind it, right? So any facility, any component manufacturing, the stacks themselves, is all being driven by this financial incentive.

This was suggested to be at risk with the recent administration, and we noticed some of the issues started to arise even before the election when it was believed that the election results would be how they turned out. There was some anxiety in the market, and I think this caused a tapping of the brakes or pressing pause because it was understood that if this went away, things would really take a turn for the worse. However, with the most recent bill that was passed by the new administration, this was preserved. So we still have the $3 per kilogram in place. There were some modifications to it, probably the most significant one was to be eligible. The date at which you have to break ground for your hydrogen facility has been moved forward in time.

However, I think this can be easily overcome and all the projects that are in motion right now are fully eligible. So that was a huge positive. And when that made it through, you could feel a surge in things with the confidence renewed. This doesn't mean, however, that 100% was good. There are some funding that was going to various projects that had been targeted and some of it was actually cut. However, what we've noticed, specifically in California, that the Governor, Gavin Newsom said, yes, independent of the federal dollars, we're still going to move forward. And also with the California example, they had budgeted about USD 12.5 billion with a B for their hydrogen projects and $2 billion of that was coming from the federal government. So it wasn't 100% dependent on federal dollars and they claim that between state dollars and additional investment that they'll be fine.

And to put this in perspective, the states in the United States themselves can be quite economically powerful. So if you look at California and if you were to assume it were its own country, it would probably be the fourth or fifth biggest economy in the world. So it's comparable to Germany. So they have the financial resources to handle these things. Other states that are important to these hydrogen hubs, so there are 7 altogether. Texas and New York. They also have substantial resources, and they too, Texas and New York, if they were countries themselves, they'd be in the top 10 economies globally in terms of size with GDP. So there's resources there to make things happen. I think it's going to be fine. Some dollars have to shift. If anything, some of these projects might push to the right a little bit, but they don't go away.

On the Canadian side, they took a slightly different approach where in the U.S., they were incentivizing the end product, the commodity itself, the hydrogen. In Canada, they were incentivizing the CapEx to make things happen. So a slightly different approach. It's difficult to say, did one work better than the other. I think they're both working. Also in Canada, they have distributed ways to keep things happening. So you have the Canadian Infrastructure Bank. The regional governments are doing quite a bit. Quebec had some announcements that they're doing quite a bit with the green hydrogen.

So we think governmental support and policy is in favor, and you can see this. And all of this is really prompting up the water electrolysis. So I think this is why you see that shift from fuel cells to the generation of the hydrogen itself. That way, it's more of an energy topic than something on the consumption of the energy side.

So next slide, please. So the 3-year outlook. So what does all this mean as we go forward? I think the -- it's going to continue to grow. Yes, there might be a little bit pushing to the right. You might see a little bit of a consolidation, at least in the customer base, we've noticed some of this. I think any time there's a little bit of a slowdown anywhere. The bigger you are, the easier it is to keep going. So yes, it's -- things are moving. We see the demand to be sustained, albeit things have kind of reshuffled and readjusted a little bit. Nonetheless, it's going to be 2-digit growth, most likely in the 20-plus percent range. And this takes into account that some of the hydrogen hubs have pushed to the right in terms of their time line. Still, it's still a healthy annual growth rate.

We also see that PEM is likely going to remain dominant for the next several years. However, the solid oxide technologies are on the coattails of PEM. They will be ramping thereafter. They're going to have more of a market share, but we're involved in both of them. So for us, either way it goes, I think we'll be fine since we have a play in both. Both of these technologies require coatings and advanced materials to reach their performance potential. They're heavily reliant on that, and this is what we provide. So we are enablers in both of these technologies. So we're happy with our position in this value chain, and we're ready to go. And we're talking to these guys who are doing these things. So we're in the right place as well.

And next slide. So if we put it all together, North America, it's going to be a multiyear growth engine for revenue, right? We're seeing that already. We're positioned. This is going to be the outlook. With the main players, those who are going to be making it happen on the hydrogen delivery side, we're involved. We have commercial relationships. We have ongoing technical relationships. So we are in the right place. Also, the buildup for the hydrogen is happening, right? There was some speculation a little bit earlier about this, but things are trucking ahead.

So most of the revenue is going to come on the PEM side, but we're involved in the solid oxide. We're there, and I think it's going to offer longer term some upside to all of this. Although there is some federal policy uncertainty that we've seen in Canada, that environment is stable and the U.S. governments, I think, are going to play a big role in this. So yes, at the federal level, you may see some things at the state level, it's entirely different.

The final point, we've had some discussions about brick-and-mortar in North America. This is still planned. We will do it when it financially makes sense. However, in the meantime, we're processing out of Sweden. Our customers are okay with this. Yes, there's some talks about the tariffs here and the tariffs there, but we really haven't seen the impact on what we're doing. So it's not been such an issue with us. So that's it from my side. Thanks for your time and attention.

Thank you, Rob. And Rob will stay for the Q&A session. So if you have any questions to Rob, you can just post those questions, and we will come back to Rob during the Q&A session. So now here with me, I have Kristian, and we will have just a short pause, I think, or shall we run right away? Yes. Okay. Then we will go ahead. So the floor is yours.

Thank you. Thank you. So during the next 15 minutes, I will talk about how our technology can make us grow faster with our existing customers. And also how we can use it to bring on new customers in new markets and new applications. And I will do this in 3 steps. First, I will talk about the INLINECOATER as a platform for producing high value-added parts. And then I will move on to the focus for this talk, the iridium oxide for cost-efficient PEM electrolyzer manufacturing. And last but not the least, how we can use our technology for solid oxide fuel cells.

So let's jump into it. To set the stage here, the INLINECOATER is all about manufacturing. It's a high-tech equipment to produce advanced coatings. It's built for industry. It can achieve a very high volume, high production capacity. It has high repeatability, meaning that you get the same coating every single time. And it also has a small footprint. And this is important for the factory floor space. If you compare the INLINECOATER to some competing PVD solutions, to the left here, we have a competing batch system. That one is not ideal for producing parts for fuel cells and electrolyzers. And to the right-hand side, we have a very, very large linear coating system. Those systems are usually very, very expensive. And they kind of only make sense if you have really, really large need for volume manufacturing or if you have very, very large surface areas that need coating.

So in that sense, the INLINECOATER is a superior market fit here. So the combination of its capacity and scalability and economics is a reason why it's the market's choice here. And one really important thing here is that we have the same equipment for different applications. So the system looks the same, but what we do is that we configure them differently. We equip them with different coating materials to solve different problems for our different customers.

Now introducing iridium oxide. But first, I would like to set the stage from the perspective of the PEM electrolyzer. Typically, you will see that the PEM electrolyzer is often illustrated as a containerized solution. And inside this solution, you will find various components and functionalities like pumps, compressors, power electronics. But critically, you also have the stack. And it's inside the stack where the water is split and where the hydrogen is produced. And the components that we coat, they go into the stack. And to the right-hand side here, you have 2 components. On the top, you have a separator plate made of titanium. This is usually plated or coated with gold and platinum. It's about the size of an A2 paper for a megawatt class electrolyzer. And on the bottom, you have a titanium porous transport layer. It's kind of like a titanium sponge that is flat, you could say.

And these we routinely coat. The main purpose is to provide electrical connectivity that should be stable throughout the lifetime of the stack. But to add further value here, we move into the PVD iridium oxide, and this coating is catalytic and it opens up a new field for us. Today's reality, what you find in commercial stacks on the market today is that you have the iridium oxide catalyst on the so-called membrane. And this works, but it comes with a huge challenge. And that is that the typical designs require hundreds of grams of iridium per megawatt.

So Inside the stack, you have the porous transport layer. This is normally coated with platinum and you have the membrane with a very, very thick iridium oxide layer. And to put some numbers to it, 500 grams of iridium is about EUR 75,000. Iridium is very, very expensive, and it is limited in supply. So this really is a bottleneck.

So is there anything we can do about this? Yes, there is. We can actually coat the porous transport layer with Iridium oxide instead of having the membrane coated. And this we do by PVD. So you can think of it like we are moving the catalyst functionality from the membrane onto the PTL. And by doing this, we can reduce the need for iridium from hundreds of grams to tens of grams per megawatt. So some numbers to that. Well, you can see on the slide here, it says EUR 3,750. So we're talking about an order of magnitude in cost saving. And this, of course, has tremendous value to our customers.

So the opportunity here is actually quite simple. We use less iridium, we can use it more efficiently. And of course, we want to combine it with an industrial manufacturing process. And that's exactly what we are targeting here by placing the iridium oxide on the PTL using the INLINECOATER. So we're already coating PTLs at industrial scale today, platinum. And then to -- in the cartoon here, you can see that we have 3 coating chambers. We run an adhesion. We will run the platinum deposition, double-sided. And then in the third chamber, we can add the iridium oxide, but only on one side where it's needed, and we only add it in a very, very precise and tiny amount.

And then, of course, for our customers, it means less iridium. They get a lower cost per stack, which makes their products more competitive in the electrolyzer market. And additionally, it means there is no extra production step for the catalyst coating because we do the catalyst coating in the same run. So it simplifies the membrane as well. And for us, well, it means a much higher value per PTL. We can sell more coatings, more revenue, the same customers. And we can also have a higher utilization of the same INLINECOATER.

And then I would like to touch upon the major theme of today, solid oxide fuel cells and how we can apply our technology here. So I mean, for us, this is a new market, sure, and we see a very high volume manufacturing need. And essentially, there is a need many, many -- for many, many small, coated metal plates per stack. And things get really interesting here. I'm going to paint you a picture like every megawatt of solid oxide fuel cell power can need tens of thousands of coated plates. And that -- this means that for 1 gigawatt, we're talking tens of millions of plates. And then you've given the market data from the previous sessions today, you can crunch some numbers.

But it's a great opportunity for us because we can use the same existing in coated platform. And material-wise, I won't go into too much detail here, but we're talking about metal layers, ceramic layers, some rare earth elements, which we haven't really been doing in the past, but our machines are perfectly capable of producing these kind of coatings.

So value for customers here. As Caroline mentioned, these coatings are critical for lifetime. So the INLINECOATER can produce dense high-quality coatings, and this gives the desired corrosion protection to prevent chromium poisoning. And this really is the cornerstone for long-life durability in a solid oxide fuel cell. And of course, talking about power generation, these things need to last for years and years.

The INLINECOATER also brings very efficient -- cost-efficient manufacturing regardless if it's in Coating Services or if it's really that high-volume manufacturing where we have dedicated equipment. So for us, it essentially means there is a new growing market that can drive equipment sales. So -- and if we put the iridium oxide and the solid oxide development into kind of one simple strategy slide, this is an Ansoff Matrix and it kind of visualizes strategies for growth based on existing products and new products and existing markets and new markets.

So if we start with our existing products and existing markets, sure, we have the INLINECOATER, we have the PEM market where we do precious metal coatings. Now we have done product development. So we have developed the iridium oxide coating. And this now essentially means that we can sell more products to the existing market. So this is a step to the right in this cartoon here. If we instead look at the solid oxide fuel cells and well, also the solid oxide electrolyzer market, it's a new market, but we do have the INLINECOATER platform ready to go. So we move one step up here in this Matrix. We take our existing products and existing technology and move it into new market. Then of course, this is another opportunity for growth.

And then I would basically like to wrap up here. First, just stepping back a bit from the details. I mean the common thread, what we're really seeing here and what we're really doing is that we're turning our coating technology into a competitive and profitable platform that adds value across multiple energy technologies. It doesn't depend on hydrogen or natural gas or those specifics. It's all about energy and how we can add value to the energy sector.

And specifically today, I covered 3 topics. I covered how the INLINECOATER is on production platform. I talked about how we can reduce the iridium usage in PEM electrolyzers by moving the catalyst from the membrane to the porous transport layer. And lastly, why the solid oxide market with tens of thousands of coated plates per megawatt is a really good fit for our technology. Thank you.

So thank you, Kristian. And also Kristian will stay. So if you have questions to Kristian, our CTO, then you can post those questions, and we will take those questions during the Q&A session.

So now we have come to the last part of our investor presentation. So we are at investment case and outlook. So let's start with the outlook. As we have talked about today, Impact Coatings changes its short-term strategy to focus more on power generation with solid oxide fuel cell, commonly fueled with natural gas to power AI data centers. And the world experiences a big need for off-grid power, and that is mainly driven by AI data centers. This creates an opportunity for us to shift our short- and medium-term strategy to focus more efforts on SOFC. And we do have the solutions that the market needs. Meanwhile, we continue to support existing and new customers in the hydrogen market, and we are going to take the things we learn in the commercially driven SOFC business and feed that back to hydrogen to continue to find more cost-efficient solutions also for hydrogen.

Looking at systems. So based on the current sales pipeline, the company expects to achieve system sales in each of the 4 major markets during next year, during 2026. So the markets are Energy, Automotive, Electronics and Luxury Goods. If we look at Coating Services, based on current customer forecast, the company expects Coating Services net sales in 2026 to exceed that of this year 2025. So we have proven technology with around 50 delivery systems and established Coating Service Centers in Europe and China. We have a strong presence in the fuel cell and the electrolyzer markets, and we have the new area of SOFC that will drive revenues and commercial terms.

Our flexible business model makes it easy for customers to buy. We have implemented significant cost reductions and efficiency improvements. This has lowered the breakeven point. So with today's cost level and the sales mix of 2024, we would be EBITDA positive. We have strong strategic partners and reference customers that supports our credibility and long-term growth.

Looking at use of proceeds. The first section is about doing more of what we already do and scaling it to volume. We have talked a lot about SOFC today, and you also heard Caroline Hargrove's view of the market. And you heard that coatings is essential for the longevity and long-term durability of SOFC stacks. And you heard that the lifetime of the stack is essential for the complete SOFC economy. So we are right at the spot to matter. But there are also other opportunities such as iridium oxide, which Kristian talked about. The second section focus on new applications for our existing technology. The third section is about reducing the production cost of our machines, and we have good opportunities to achieve meaningful cost reductions. And last, strengthening working capital. Here, you can see the time line of the Rights Issue. The subscription period runs from November 21 last Friday to December 5.

So that was all for today. So now we will move to the Q&A. But first, one last slide. So I would like to end with this slide that innovations are driven by problems. And here, we have both a problem and a solution. And also, as we heard from Caroline, we also have access to the complete ecosystem needed to deliver. So then we just take a short break, and then we go for the Q&A.

[Break]

Thank you very much for that presentation. And let's open up the Q&A section here. First, we have Lara from ABG calling in with a few questions.

Lara here from ABG. Just a couple of questions from my end. As you mentioned, coating system sales have been weaker in 2025, partly due to a softer market and customers taking a more wait-and-see approach. But you also mentioned clear policy signals in the U.S. and China. But what can we expect in Europe?

You mean when it comes to systems?

Yes.

Yes. In Europe, we have the automotive market. So what we can expect in Europe is primarily from the automotive market. If we look at energy, energy is more towards the APAC region and maybe some U.S. If you look at electronics like antennas, waveguide antennas, it's more towards APAC. And if you look at luxury goods, yes, that's also Europe.

Okay. Great. And you said that you've noted that you haven't lost any recent orders to competitors. What do you think is driving that? Is it primarily your technology? Is it your customer relationships? Or are there other factors?

Well, our machines, they are designed for advanced multilayer coatings of flat objects. And what we have done is we have selected market verticals where we have a very good product market fit, which means that where we are active, we have a strong position. So many customers, they do regard our machines and our offering as the best option.

I would say that the main reason why we haven't seen any machine sales this year is that there are uncertainties in the market. And when there are uncertainties, regardless of which type of uncertainty, you postpone your investment decisions if you are in a position to postpone investment decisions.

If we look at Coating Services, we do coating services and we sell machines for the same applications for the same markets. Now we see an increase in Coating Services, although we have seen a decrease in machine sales. So we believe that machine sales will pick up next year, and we believe that we will sell machines in all 4 areas.

Okay. Very clear. And you also talked a bit about exploring new target markets such as semiconductors, defense applications, heat exchanges and so on. In these segments, do customers currently use PVD coatings or do they use other methods like CVD? What's more common? And also on this, what do you see as the main barriers to entry for Impact Coatings?

So in some of the markets, they use PVD coatings, for example, in semiconductors, yes, PVD is a very common technology. We believe that we can find niche segments within semiconductors where our machines are competitive. In some other markets like heat exchangers, many heat exchangers, they are uncoated, but with new application areas for heat exchangers, well, there is also a need for coatings. And heat exchangers, it's flat obvious. They look similar to fuel cell plates.

So it's -- from a technology perspective, it's a perfect fit. And what we are doing is we are evaluating, okay, what's the need for coatings in this market, which type of coating, how big is the market? So explorative research of the markets. Also, when you look at the defense market, the development in the last years makes that a very interesting market. So we are also looking at the defense market.

Okay. Very clear. And if we just talk a little bit about your new application area, SOFC sales. You talked a little about the potential market size. But can you just give us a sense of potential revenue contribution from this business over the next couple of years?

Yes. If you make a -- personally, I don't like top-down calculations. But if you start with the top-down calculation, if you look at the number that was presented by Caroline, she presented 2 numbers. One was the near term for SOFC and one was the future for electrolysis by solid oxide SOEC.

But if we look at the near term, 2030, there will be a demand for 22 gigawatts of installed power from SOFC. If you do the calculation, like Kristian mentioned, okay, how many plates do you need to produce 22 gigawatts? It's a lot of plates. And if you translate that to machines, it's approximately 230 of our flagship model IC2000. So that's sort of -- you can get a size of the market. There are 3 ecosystems in the world that are big. It's Bloom Energy, it's Ceres Power and it's HD Hydrogen. And we are working with 2 of the 3 big ones.

Okay. Great. That was very clear. And currently, your biggest market is China. If we talk about the SOFC side, where do you see the biggest market potential?

So the biggest market potential for SOFC, it's in the APAC region. So Korea is very big when it comes to SOFC. We also see a market in Taiwan, but the sort of complete APAC region, we see the most activity for SOFC.

And do you see more or less competition for SOFC compared to other segments?

I would say that we see less. And maybe this is because it's an emerging market. And we have machines that are perfect for this market. So it's flat objects, it's high volumes. It's the perfect size, both for our IC2000 and our IC500. So actually, SOFC plates, they are a little bit smaller, at least smaller than electrolyzer plates and also smaller than most PEM plates. So we do not see very much competition in this area yet, I have to say.

Also, our strategy has been on the PEM fuel cell market. It has been our push-pull strategy. So we go to the customer's customer to get qualified by the customer's customer. And typically, the customer's customer is not that price sensitive as your customer. And if you are in at the customer's customer and if you're qualified, then you're quite hard to kick out.

And if we look at what we're doing with Ceres. So Ceres is a company that is an IP-based company. They license their technology to their licensees. And if you look at their homepage, they describe their licensing model. So they give drawings of everything you have to do to build those stacks, but they also give you the supplier list, so they have a complete value chain where you should go and buy each part that you need in the system. And this, of course, includes coatings. So if you are qualified by Ceres, you have sort of direct access to their licensees.

Okay. But how do these licensees currently coat the SOFCs?

So there are competing technologies. Some of the licensees, they are quite early. Delta was one example, Delta Electronics in Taiwan. Caroline showed a picture of the new factory. And as you can see, they are currently building their new factory. We also saw a picture of Doosan's factory in Korea. So Doosan, they are today using a competing technology. They are using what is called pre-coated material, which means that they don't coat. They buy steel. They buy steel coils with steel, which already has a coating.

And you have to form the plates. And when you form those plates, if you have the coating on the plate before you form it, well, you might crack the coating. If you put the coating on afterwards, after forming, which we do with our machines, then you are sure that you do not crack the coating in the forming process. So we believe that we have a huge competitive advantage compared to pre-coated steel.

Okay. And then if we just stick on the topic of your collaboration with Ceres, do you see revenues primarily coming from Coating Services in the near term? And if so, when do you see potential for coating system sales as the scale?

Sorry, you mean coating systems for the SOFC market?

Yes, sorry, yes.

So given that there's a complete value chain for the SOFC market, we will experience the same as we have seen on the market for PEM fuel cells that the stack manufacturers for PEM fuel cells, they are typically not coating themselves. They go to the suppliers of the plate to the forming suppliers, and they tell the forming suppliers that, well, we want to buy plates from you and they should have this flow feel and it should have this coating. So our machine customers are typically the ones who are doing the forming.

I showed a slide with a Feintool factory in China. That's a typical example of that. It's a forming company who have decided to enter the market of fuel cells. And in the example of Feintool, they are actually active both in PEM fuel cells and SOFC fuel cells. So this means that even in the early market, there are opportunities to sell machines to those companies who do the forming so that they can have the complete production lines.

Okay. And with this new market opportunity, when do you see Impact Coatings needing to increase investments? Obviously, you said there's no immediate need in the near term and you have capacity to increase demand. But could that change as customer demand or pilot projects maybe scale up?

You mean increased capacity in terms of Coating Services and increased capacity in terms of building machines?

Yes, both.

If we start with building machines, we have a very good factory here in Linköping, and I invite you all to our factory tour tomorrow. Today, we have a capacity of 12 machines per year, so 1 machine per month. We can produce that with the equipment we have. We can increase that to twice the amount to 24 machines per year, 2 machines per month. And to do that, we need some investments. But we don't need a new factory. We do have a very good factory. So the investment need is quite low.

If you look at Coating Services, well, if we see that Coating Services volumes increase, maybe we need more machines. But we do have space for more machines. So again, if you look at our factory here in Linköping and our clean room here in Linköping, yes, we do have space for more machines. And we are a company producing machines. So if we need more machines, yes, we can make more machines. Of course, it is an investment, but it's not a big investment.

Okay. And could you maybe give some examples of how you're working on reducing your build materials as you stated yourself, cost of materials?

So our machines, they consist of the machine core and then there's an electrical cabinet. In that electrical cabinet, there's a lot of equipment. The machine core, it's designed by the development to the developers of Impact Coatings. So there's a lot of experience in the machine core. In electrical cabinet, it's also a lot of experience that has gone into that, but it's more or less off-the-shelf standard parts. It's power supplies, it's pumps, it's different things.

Here, we have one benefit of being a Swedish company with operations in China, which means that we can do local sourcing. For example, of power supplies in China, that will significantly reduce bill of material costs for a system. So that's just one example. And what we now is doing is we're changing the purchasing function from strategic purchase to more technical purchase, which means that we can look at all the components we have in the system and see, okay, can we do some changes? Are there other alternatives to this component? Can we source it somewhere else? Do we really need this requirement specification? Or is the real requirement something else on this component so we can use another component. So there's a big potential to reduce COGS.

Okay. And recently, you also implemented cost savings initiatives. Have these fully kicked in? Or can we expect some further effects in the coming quarters?

The effect has not kicked in fully yet. So we expect the full effect in Q1. And so in Q2, we will see the full effect, and we will still have effect that is kicking in, in Q1. So we have made some staff reductions now in Q4. So it takes some time for that to kick in.

But with the cost savings we have done, we have put ourselves in a good position because -- we have done some sort of development and during end of '23, during '24, we delivered the first IC2000 machines to customers. Those customers were using those machines heavily. So our machines got battle proven. We have streamlined the production here in Linköping with our new factory. So we are much, much faster to assemble machines.

So with the current staff we have, we do have the capability to deliver the same sales mix as we had in '24. And with the sales mix we had in '24, we will become cash flow positive with the current staffing. So what we have proven in '24 was that we are able to sell. We reached SEK 110 million. And what we have proven this year is that, well, we are able to do some savings also. And if we combine this, we will be profitable.

Okay. Let's take some other questions that we have received here. We will take the first question from [ Johnny ]. To go straight to the key question for investors, are you signaling that based on your assessment of clients, markets and cost-saving initiatives that Impact Coatings is expected to achieve its first profitable year in 2026?

Yes, I will continue on where I answered the last question. So in '24, we increased sales. We had a sales about SEK 110 million. Now we have done cost cutting with the same sales mix as in '24, we will be EBITDA positive. And if we look in the sales pipeline for machines, we see that we have a strong pipeline in all 4 areas we are active. So Energy, Automotive, Electronics and Luxury Goods. So we expect during next year that we sell machines in all those 4 areas. And we also expect that Coating Services will increase. And if we do that, if we sell machines in all those areas and if we increase coating services, yes, then we will reach the sales mix of 2024.

Thank you, Jonas, for that answer. We'll take the next question here from Andreas. Is Mark Shay and Accendo Capital still committed to their investment in Impact Coatings? So far, it has been a disappointing investment.

I'll take that one. Mark Shay here. I'm the Chairman of Impact Coatings since May 2018 and senior partner at Accendo Capital. Accendo has been the largest shareholder in Impact Coatings since December 2017 through a Rights Issue at that time. And today, we hold about 34% of shares outstanding. I have a personal shareholding of 300,000 shares. That's separate from the Accendo fund. So we have -- over the time, we have been owners in the company. We have given Impact our full energy in terms of my engagement, but also engagement from my colleagues. We added a Board member this year additionally from Accendo Capital, Johanna Pynnä, who brings valuable industrial experience and has made a terrific contribution so far.

So it's from Accendo since the beginning, all hands on deck for Impact Coatings. And we've also contributed capital at each opportunity since the 2017 Rights Issue, and there have been several of those opportunities. Most recently, the issue announced at the end of '22 completed in Q1 '23, where of the SEK 148 million capital raise, Accendo Capital contributed about SEK 100 million, and that's what took us to 34% ownership and through an underwriting commitment for that.

Unfortunately, as things look right now, we are, as many funds are from time to time, fully invested. And that means that we don't, at this time, have capital to allocate additionally to Impact Coatings as much as we would like to. So Accendo Capital will not be participating in this Rights Issue, but we do still have our full energy and focus on the company. Personally, I will be contributing SEK 1 million from my own accounts separate from Accendo Capital. That covers my pro rata allocation in the rights issue, so the 300,000 existing shares plus a substantial additional commitment in that SEK 1 million. So hopefully, that clarifies and answers the question.

And finally, I'd just like to say thanks to Jonas and the team and especially Dr. Caroline Hargrove for a great presentation today, informative and inspiring. But to Andreas, I hope that clarifies and happy to take any follow-ups.

Thank you very much, Mark, for your answer there. We'll take the next question here. A question from Johnny. Does this outlook include moving forward with a plan coating center in North America?

The volumes we have today, we coat those volumes here in Linköping in Sweden. We still have the plan to establish a Coating Service Center in North America, and we are sort of holding our finger on the pause button. But there's -- we should be smart here. And we do not want to take a lot of costs before we see the revenues.

So before we really need the coating center in North America, we will not do it. And maybe there are other opportunities. Maybe we can sell machines to customers instead. So it's still in the plan. It's something that we can do if we need to do it to deliver in North America, but it's not sort of in its own interest to do it.

Thank you, Jonas, for clarifying that. We've got a next question from [ Christer ]. Can you describe the difference between your electrolysis solution and Smoltek?

I will take that one. There are, of course, many different ways to put on a coating for the iridium oxide. And the so-called porous transport layers, they are manufactured in different ways. They can be powder-based, they can be made out of fibers, they can be woven and so on. And then different companies have different ideas for how to produce the catalyst structure. But regardless, there is a need to put down the iridium oxide on whatever. And we can do this by PVD. And we have different knobs that we can tune to steer the process to get the right performance and properties that our customers are looking for.

So I'm not exactly going to discuss Smoltek's solution at detail here, but I will just leave it that there are different ways of achieving this kind of performance. And we see that our PVD technology adds a lot of value here for the end customer regardless of exactly which will be the best solution in the future. And most likely, there will be different solutions in the future.

Thank you, Kristian, for your answer there. And we'll take one final question here before wrapping up, and it's from Andreas. Do you view the German-based single-use technologies as a direct competitor in the SOFC coating space? And are they not better positioned for scaling this area?

We regard them as a direct competitor when it comes to hydrogen and water electrolysis. As of today, we have not seen singles in the SOFC space, but maybe we will see them. They have a different machine architecture. They make bigger machines. We believe that our machines have the right size and the right size for a volatile market.

And as of today, the SOFC market is volatile. It's a market where you have to be able to produce prototypes to produce small volumes and be able to produce large volumes to become qualified. And to become qualified, those small volumes has to be from the same machines or at least the same machine type as the large volumes. And this is sort of our expertise area. So we believe that we are very well positioned for the SOFC market with our machines.

Thank you very much. And that concludes the Q&A session here. Thank you very much, and I'll leave the word back to you, Jonas, for some concluding remarks.

So thank you, everyone, and thank you, everyone, for attending this Capital Markets update. So today, we have gone through our investor slide deck. You can download that from our website, and you can download that from the Investors section of our website.

We have talked a lot about the new area. We have talked a lot about SOFC, solid oxide fuel cells, and the market driver for SOFC and the difference between the sort of old hydrogen market and the new SOFC market, the old hydrogen market, it's still a very interesting market for us. We are one of the market leaders and in China when it comes to PEM fuel cells for heavy trucks, we might be the market leader.

It's still an interesting market for us, but what we see is that the SOFC market that's commercially driven compared to hydrogen, which is still in need of governmental subsidies. And that's the reason why we believe that the SOFC market is so interesting and that the SOFC market will drive revenues in the near future. And long term, of course, also hydrogen is very exciting.

So with that, I would like to thank you, everyone. And I would like to invite you to our factory tour tomorrow. It will start at 1:30 and we will end before 4:00 p.m. And if you want to participate, please send an e-mail to [email protected]. Thank you.

Warm welcome to Impact Coatings presentation for the third quarter of 2025. With us today is CEO, Jonas Nilsson; and CFO, Lena Åberg. After presentation, the company holds a Q&A. [Operator Instructions]

Jonas, the audience is yours.

Everyone, welcome to this presentation of the third quarter 2025 financial report. Today, I'm at a Hydrogen Technology World Expo in Hamburg in Germany to meet customers, so I hope that my Internet connection will work all through this presentation.

As you have probably seen, we announced today a rights issue in a press release. There are regulations governing how we can communicate about such a transaction so we will not go into further details about it during this webcast. Instead, I would like to refer you to our website for more information.

However, I will start by talking a bit more about the company in general today. So here is the agenda for today's webcast. First, some words about the company and our market segments; Q3 highlights; our CFO, Lena Åberg, will do the financial update; summary and outlook and a Q&A session at the end.

Impact Coatings is an advanced material science company specialized in PVD. We address material science challenges found among other areas in the energy sector. We deliver complete solutions, including proprietary and nonproprietary coatings, equipment, coating services and coating expertise. We target a number of growth markets, I will come back to these on the next slides.

We have operations in Linköping and Shanghai and sales offices in Korea, Germany and the U.S. In Linköping, we manufacture machines and provide coating as a service for customers. In Shanghai, we operate volume production with coating as a service. In recent years, China has been a major market for us. Including deliveries from Sweden, it has accounted for 70% to 80% of our revenues in the recent years.

So PVD is a horizontal technology that can be used across many industrial segments. We have shown some market verticals where our machines are well suited and where advanced functional multilayer coatings are required, areas where we can apply our expertise. I will give a few examples.

Energy. Here, we work with components for electrolyzers and fuel cells, flat components that require advanced coatings, ceramic materials and precious metals. Automotive. Many of you drive cars with emblems or other design elements produced using machines that we have delivered. Electronics. For example, radar antennas, waveguide antennas are actually made of plastic coated with metal. We enable adhesion, solderability and antenna performance. Luxury goods. Here, we provide scratch-resistant decorative finishes for eyewear and watches, for example.

What these market verticals have in common is that we see a strong product market fit. And at the bottom, you see examples of industrial projects where Impact Coatings has been involved over time.

In the energy sector, we primarily deliver solutions for coating for fuel cells and electrolyzer components. Our solutions help global customers meet needs for energy resilience and energy supply, whether they are using hydrogen extracted from fossil fuels like natural gas from ammonia or pure hydrogen made using a variety of methods. An electrolyzer uses electricity to separate water into hydrogen and oxygen. And the fuel cell does the opposite, converting hydrogen and oxygen into electricity and water.

The reactions that make electrolyzers and fuel cells work depend on flat components, you see that on the left, where robust but very thin coatings are critical because they protect against corrosion and decreased electrical resistance. Our customers require these coatings to make their systems last for many years and drive economy for their customers. Our secret sauce is machine design that is optimal for coating these types of components along with expertise and experience that we use to help our customers develop the right coatings for their specific commercial needs.

Our solutions are used for stationary power. Here, we are talking about natural gas-driven solid oxide fuel cell systems used to power AI data centers, microgrids or households. More on this shortly. Mobility. Heavy-duty transport powered by fuel cells, customers and volume production are primarily in China. Outside China, we also have customers in aviation, where fuel cell systems are promising because they are lightweight compared to batteries. Electrolyzers. Electrolyzers that produce hydrogen for storage and transport enabling energy to be used where and when it's needed rather than wasted or sold into the grid below production costs.

We have well leading customers and ongoing volume production in this application. Here, we also see new opportunities in innovative solutions using iridium oxide. So our unique combination of coating materials and coating machines is mission critical to our customers for system performance, lifetime and economy.

Next slide, please. So the commercial weakness of green hydrogen for mobility applications, especially passenger vehicles has negatively affected Impact Coatings and also our global peer companies. You can see the pain in stock prices for many companies from 2021 forward, including ours. We are adapting to the market and pivoting our strategy to where the opportunities are greatest, where there is growth, capital and return on investment for customers. Fortunately, our hydrogen-related work has great relevance and value in adjacent and emerging applications.

In our Q1 2025 webcast, we mentioned SOFC, which has been a low level R&D effort for several years. In early '25, we started seeing increasing customer interest and a clear product market fit and the need to broaden our offering beyond PEM. Today, the major players in the SOFC market, our potential high-volume customers, have made a big move forward. I'm talking about companies like Bloom Energy in the U.S., Ceres Power in the U.K., Doosan in Korea and Delta Electronics in Taiwan.

These companies describe a rapidly expanding market driven by two key trends: first, the massive growth of AI data center; and second, the global push for energy independence in a world where importing energy from other countries is risky and also expensive. These companies, they do not talk about the green transition in a traditional sense. They talk about commercially driven projects, real business opportunities but with technology that is still a step forward towards a greener future.

Most commercial SOFC systems today run on natural gas but they are hydrogen ready. And so are we. To our coatings, the fuel source doesn't matter much since hydrogen is sort of the active ingredient for power generation, whether it's pumped in as pure hydrogen or extracted from natural gas like methane. If you look at natural gas, it has 4 very useful hydrogen atoms and 1 carbon atom.

To go back to the market to give an example, Bloom Energy recently partnered with Oracle to deploy SOFC systems at selected Oracle Cloud infrastructure data centers in the U.S. The goal is to power growing AI workloads with reliable, low-emission electricity that can be quickly deployed and easily scaled.

There is a challenge in powering data center because it often takes 3 to 4 years to connect it to the high-capacity power grid. The SOFC technology allows Oracle to deploy on-site power solutions that can run on natural gas or pure hydrogen, providing scalable energy with a smaller environmental footprint. We are not involved in this project but it's a good illustration of where we are aiming.

Another aspect of the SOFC market, very relevant to us, is that each system requires more coated plates than a PEM fuel cell system. Higher volumes will drive higher revenues, whether we are selling coating as a service or selling machines. If we continue to look at product market fit, it is a perfect match. SOFC components are flat panels, flat plates. And we are excellent with 2D objects. We also have solutions for 3D objects. SOFC needs advanced multilayer coatings applied on both sides with different coatings on each side. The more advanced the customers' coating needs, the more they need Impact Coatings.

The plate are also exactly the right size for our small IC500 and our large IC2000 machines. So we do not need to spend money on new machine development. And it is a dynamic growing market which suits our business model since our delivery model supports customers from prototype to services to in-house machines as the volumes grow.

So what problem are we actually solving for our customers? A typical SOFC power plant is roughly the size of a 40-foot container, The core of the system are the SOFC stacks but the system also includes reformers, heat exchangers, afterburners, compressors, cooling systems, power electronics and more. The lifetime of the stack depends heavily on the quality of its coatings and the stack itself works out faster than the rest of the system.

So it becomes a replaceable component, a bit like the brake pads in a car. So by using high-quality advanced coatings, we help extend the lifetime and improve the performance of the entire stack. That's why coating quality isn't just important. It's critical to the economics of SOFC technology.

So in terms of commercial progress, we already have strong relationships with several leading players in this space, and we are well advanced in paid testing and evaluation with one major customer. So we expect to provide more concrete news about progress and commercial orders in the months and years ahead.

As in previous quarterly presentations, we start with net sales for the rolling 12 months, which amounted to SEK 72 million. It is a departure from the upward trend and, this is due to the lack of system deliveries in the last 3 quarters. Our long-term growth ambition remains firm and we are actively working to broaden the revenue base and increase the stability of the business over time.

The delays in machine sales is mainly due to external factors like uncertain market conditions which are causing customers to postpone investments, awaiting policy clarity or internal approvals. One data point to support this statement is to look at the development of the business excluding machine sales, that is, looking at only Coating Services and aftermarket that we have on the next slide.

Here is a graph showing rolling 12 months net sales excluding machine sales. With an order backlog at the end of the quarter of more than SEK 10 million, we see that we are on a stable level with the rest of the business excluding machine sales. Capital equipment sales is more sensitive to market uncertainties than services, and we clearly see that in the graph here if we compare it with the previous slide.

So total Q3 net sales amounted to SEK 13.7 million. It's down from SEK 31.7 million last year. This is primarily due to absence of coating system deliveries, a direct effect of slower customer decision-making. It's not a lack of interest. We continue to see active dialogues and strong customer interest, but we see that both a turbulent world and uncertain market conditions are causing customers to postpone investments.

If we exclude systems, net sales grew compared to 2024 primarily driven by higher activity in Coating Services. Net sales for Coating Services reached SEK 10.6 million compared to SEK 6.6 million for the same period last year.

China continues to run at a high pace with 24 hours a day, 6 days a week production. The China operations surpassed 2024 annual volume record already in September this year. Looking at North America and Europe, we have strongest order intake for Coating Services since Q2 '23. This is mainly but not only driven by our large American customer. Order backlog for Coating Services at period end exceeded SEK 10 million. Aftermarket reached SEK 3 million.

The financial results for the quarter reflects a challenging market environment, where delays in customer investment decisions have impacted both sales and cash flow. The Q3 operating profit after financial items was minus SEK 12.1 million compared to minus SEK 6.5 million last year. Cash at the end of the quarter was SEK 12.9 million.

We have today announced our intention to carry out a rights issue of shares of approximately SEK 87 million. And due to regulations governing how we can communicate about such transactions, we will avoid going into further details during this webcast. However, I do refer you to the press release and our website.

We have and still are taking cost reduction actions to address the current financial challenges and lower the company's breakeven point. Over the past quarters, we have implemented cost reduction programs. We have secured favorable loans, local loans in China to support operations and transition to a more generic inventory of precious metals, which increases operating efficiency and also reduces capital employed. We have improved capital efficiency and reduced both cost and risk exposure especially, as I said, by improved noble metal handling.

During the third quarter, we initiated further across the board cost savings focused on costs for personnel, other expenses and also COGS. In the total cost reduction programs, it has affected 19 employees and contractors, which has brought down the monthly run rate by over SEK 12 million compared to 2024. This includes both costs for personnel and other costs. However, especially with personnel, there are delays until the full effect of this materializes.

With regards to COGS, it is our intention to substantially reduce material costs by local sourcing in China, combined with design changes in our machines that allow usage of lower cost components. In 2024...

[Technical Difficulty]

We seem to have some problem with connecting Jonas. Are you here, Jonas? I receive no sound. Jonas?

Yes.

If you can please -- we lost you there for like 30 seconds. Could you please go through this page again, please?

Sorry. Sorry, yes. As I said, I'm at a trade fair in Germany so maybe my Internet was unstable. So shall I take the whole slide again?

Jonas, I suggest you start in 2024. That's where we lost you.

Hello, are you still there?

Yes.

So where were we? Where did you lose me? Did you hear that we focused on increasing sales and maintain the cost in '24.

Yes. You can start by the 2024 part.

Yes. So in 2024, we focused on increasing the sales, keeping the cost level. And when we started '24, we had an almost empty order book. But anyway, we ended at SEK 110 million or close to SEK 110 million net sales. So we were successful in our mission to increase sales. But as you have seen, it was not enough to reach profitability.

But based on the savings that we have already realized, we estimate that we would reach positive EBITDA at the same sales level and same mix of sales as we had in '24. And with expected additional cost reductions, especially in COGS, we would expect positive EBIT with the same sales mix as in '24.

Are you still with me?

Yes, we hear you.

So while cost-cutting and operational efficiency measures have been necessary and effective, we are also taking the next logical step to further strengthen the company's financial position and prepare for future growth. That's why we are now initiating a capital increase.

So with that, I'll leave it to Lena.

Thank you. We'll start with the income statement. And all the amounts are in SEK million, and let's start with the quarterly figures.

As mentioned previously, net sales for the quarter were SEK 13.7 million, a decrease compared to SEK 31.7 million in Q3 last year, which then included coating systems sales of SEK 21.5 million. However, sales from Coating Services have recovered substantially and were SEK 10.6 million for this quarter compared to SEK 6.6 million Q3 '24 with the main increase in China. Aftermarket sales were SEK 3.1 million compared to SEK 3.6 million in Q3 '24, and the decrease was in China.

Capitalized work for own accounts decreased compared to previous year and was SEK 0.4 million compared to SEK 5.7 million last year, where we had a lot of capitalized work on machines for our own use. Change in work in progress was SEK 0.2 million in Q3 compared to SEK 14.6 million (sic) [ minus SEK 14.6 million ] in Q3 last year when we had sales of a coating system in the quarter. Sorry, did I say minus SEK 14.6 million? It should be that.

Total revenue was SEK 16.1 million compared to SEK 23.0 million Q3 last year. Gross margin was 56% for the quarter, which was lower than the 69% in Q3 '24. Other external costs were SEK 5.6 million compared to minus SEK 6.5 million last year. And the increase in rental costs was compensated by lower costs, for example, consumables, lawyers' fees, marketing costs and lower travel costs.

Looking at personnel costs. They were minus SEK 12.7 million compared to minus SEK 14.2 million last year Q3, and we now start to see effect from the implemented cost reductions. Looking at FTEs for the end of the quarter, it's now 54 compared to 63 in Q3 last year. And this number includes both the cost-saving layoffs and an increase in China. As mentioned earlier, we continue with further actions in efficiency and cost reductions. That will have effect during the coming quarters.

There was an increase in depreciations, minus SEK 2.2 million compared to minus SEK 1.6 million in Q3 last year, and this is due to the investments in own coating systems last year. We have interest expense of minus SEK 0.2 million in Q3 due to the loans in our subsidiary in China compared to the interest income of SEK 0.2 million in Q3 '24. And in total, the quarter adds up to a net loss of minus SEK 12.1 million compared to minus SEK 6.5 million in Q3 '24.

Looking at the cumulative figures for the period January to September. Total net sales were SEK 29.7 million compared to SEK 67.5 million the same period in '24. And again, the decrease was due to the coating system sales in last year, which amounted to SEK 47.2 million. Coating Services sales increased by more than 80% to SEK 20.6 million compared to SEK 11.2 million in the same period in '24, and the increase is rather equally spread between the parent company and the subsidiary in China.

Aftermarket sales were SEK 9.1 million compared to SEK 9.2 million. The total revenue was SEK 50.5 million compared to SEK 55.2 million last year the same period. Net sales, as you can see, were much lower this year as mentioned previously, but with a change in work in progress of plus SEK 15.1 million compared to minus SEK 24.6 million last year.

If we move down to gross margin. It was 52% for the period January to September compared to 68% the same period '24. And this is mainly due to lower sales and the change of work in progress, which is rather high. It's without gross margin. Other external costs were minus SEK 17.2 million compared to minus SEK 18.0 million same period in '24. And the increase in rental costs, as mentioned, is compensated by lower other costs, for example, in consulting lawyers' fees, travel costs and conference costs.

Looking at personnel costs. They were minus SEK 43.8 million compared to minus SEK 43.0 million last year. The negative difference is from the first quarter this year and, as mentioned, from Q2 -- from Q3, we are clearly lower in cost this year. At the end of Q3, the number of FTE was 54 compared to 63 by the end of Q3 last year. And depreciations were minus SEK 5.9 million compared to minus SEK 4.7 million. And again, it's the investments in own coating machines last year which have increased the depreciation.

Currency exposure for January to September resulted in a foreign exchange loss this year, minus SEK 1.3 million compared to SEK 1.3 million exchange gain in the same period last year. Interest expenses were minus SEK 0.2 million compared to an interest income of SEK 1.0 million last year, and this is due to the new loans in China. In total, this adds up to a net loss of minus SEK 42.1 million for the period January to end of September '25 compared to minus SEK 26.2 million the same period '24.

If we move to the balance sheet. Starting with fixed assets. We have increased intangible assets in capitalized development costs, SEK 3.1 million. As for tangible fixed assets, we have some investments for upgradeable machine which we lease out to customer. We have installations and some other fixed assets, in total, SEK 3.7 million. We have SEK 9.1 million defined as long-term accounts receivables, and there's a decrease from the SEK 16.3 million at the year-end of '24, which is a movement to short-term receivables.

Total inventory decreased by SEK 24 million from year-end. Raw materials decreased SEK 38 million from the SEK 94.5 million at year-end to SEK 56.2 million by the end of Q3, and that's mainly some that some noble metal inventories have been sold. Work in progress increased on the other hand by SEK 14 million to SEK 21.7 million compared to SEK 7.7 million at the year-end. Receivables have decreased by approximately SEK 30 million, mainly due to received customer payments. And outgoing cash balance was SEK 12.9 million compared to SEK 32.5 million at the year-end, and we will come back to cash flow on the next page.

In the long-term liabilities, we see the long-term part of the raised loans at our subsidiary in China, SEK 1.5 million. Prepayment from customers have decreased, which is mainly from repayments to customers and some net things with the receivables. Short-term liabilities decreased in accounts payables, but short-term liabilities have then increased in Q2 due to the loans raised at our subsidiary in China.

Looking at cash flow statement. The cash flow was, of course, negatively affected by the operating result for January to end of September, which was minus SEK 41.9 million in operating loss after depreciation. There was a minus SEK 1.3 million in negative cash flow effect from the increase in working capital. And short-term liabilities decreased approximately SEK 56 million, mainly driven by repayments of customer prepayments. We had a decrease in receivables and had a positive cash flow effect from about SEK 30 million.

The decrease in inventory also had a positive effect on working capital. So in total, cash flow from operations was minus SEK 36.0 million compared to minus SEK 39.4 million from the same period last year.

As we have mentioned before, investments have been kept at a low level in '25, SEK 3.7 million in tangible assets, and then we have had capitalized development costs for SEK 3.1 million. Cash flow from financing activities was plus SEK 23.2 million and reflects loans raised by our subsidiary in China. In total, this resulted in a negative cash flow of minus SEK 19.6 million for the period January to September compared to minus SEK 54.6 million same period '24 and a closing balance of SEK 12.9 million of cash compared to SEK 65.1 million at the end of the same period last year.

This was the financial update, which means that we now move on to the summary and outlook.

Yes, summary and outlook. 2025 has been a challenging year with customer investment delays slowing coating system orders and deliveries. We see this as a temporary dip, also apparent in other industries, and we fully expect system sales to resume. At the same time, growth in Coating Services revenue during Q3 and that SEK 10.5 million order backlog show that our solutions are relevant and in demand. Many coating services customers, they are future machine customers, and their growing demand for volumes and additional coating applications is strengthening our sales pipeline and our conviction in the value of our expertise.

We have to recognize that green hydrogen for mobility, especially passenger vehicles which was hyped several years ago, has been a painful disappointment in the market. We are leveraging our valuable development work by shifting efforts to higher potential applications where there is growth, there is capital and where customers are making money.

One such application is SOFC power generation for data centers, where our work for several years has quite suddenly become commercially relevant. Whether customers use natural gas or pure hydrogen as a fuel, we provide mission-critical coatings that make customer economics work. We expect to update you with the commercial progress in this area during the coming months and years.

Cost cutting has been painful but necessary, and we have had to let go many of our valued colleagues this year. Along with efforts in working capital management and in reducing COGS, we are on a path to significantly reducing our breakeven point for profit and cash flow. Our work here continues.

To secure liquidity that gets us through what we see as a temporary slow period and give us fuel for growth, we are today proposing a rights issue of approximately SEK 87 million. I will personally join my colleagues in management and the Board in investing our own money in the next phase of Impact Coatings development, and we hope both existing and new shareholders will be joining us in this.

I meet several customers every week either traveling as today or when they visit us in Linköping or in Teams meetings. As I said in the beginning, I'm speaking to you from a fuel cell industry exhibition here in Hamburg. And here, I meet customers, I meet partners and actually even competitors. I am encouraged by the many positive signals we received about our coating solutions, and I can assure you that the sales team and I are working hard to convert these positive signals into sales.

Finally, we invite investors to a webcast on November 24 at 9 a.m. and to visit our Linköping headquarters and coating service center on November 25 at 2 p.m. We will send out separate press releases with the details, but already now you can pencil this in. So welcome to these events, and thank you for your attention today.

So let's go for Q&A.

[Operator Instructions] We have Lara from ABG.

Lara from ABG. A couple of questions from my end. My first question is on system sales. Could you maybe give a bit more color on the specific feedback you're receiving from, well, these customers that you mentioned that are postponing their investments? And well, building on your conviction that this is related mostly to market uncertainty and not a lack of demand, what would you say are the key indicators that are giving you this confidence?

The key indicator for that is that we are increasing our sales funnel. So we have more in our sales funnel now than what we had in the beginning of the year. So that means that customers are postponing their investment decisions. It's not that they go for competing technology. They are still active, but it takes longer time to close the business. You had several questions. Maybe I didn't answer all of them.

No, that was quite clear. But we can -- and maybe a follow-up on this. You wrote that you've only lost two customers during 2025. What would you say is the primary reason for these losses? And what steps are you taking to address maybe those competitive gaps or whatever the reason is?

Yes. If we look at those two specific cases, one was in decorative coatings. Our expertise is flat plates, primarily sort of 2D-ish objects. That's where we have a perfect product market fit. In some areas of the decorative market, you find those objects. And there, we have a perfect fit on the decorative market. Other decorative objects, they are more 3D-ish. And this was the case with that customer.

For the other deal that we lost, we lost it to a Chinese competitor. So they had lower price. So we are taking actions in lowering our COGS. And there are two reasons for lowering COGS. One reason is obvious, to create more gross profit. And the other is if you reduce COGS, then you can also have a more competitive offering to customers who are more in the sort of low-end segment. We don't have that competition in sort of the premium segment, but there was a customer that was -- well, I wouldn't say they're low end, but maybe low to mid-range.

Very clear. And well, if we talk a little bit about Coating Services. It's great to see the momentum. Could you maybe elaborate on the drivers in the regions China and North America and a bit on the growth from these key customers like FTXT and the North American electrolysis client? Are you seeing a wider expansion of customer base in these regions? Or is it primarily from these two driving growth?

Yes. If we start with U.S. and North America, there we see that we had a period where it was very much uncertainty in the market and especially about the subsidies for hydrogen. That is much more clear now. And that clarity, sort of across the board in North America, we see an increased momentum in that market now when we have clarity. If we look at China, it's mainly driven by FTXT but not only driven by FTXT. We also see new customer interest.

And we also see that our push-pull strategy, it works. It works not only with FTXT. FTXT is the company that we have sort of shown in press releases and we mention by name. But we also have others where we work in exactly the same way. So we go to the customer's customer to get our coatings qualified at the customer's customer. And the big benefit with this is that you can be both the primary supplier and the second source. So sometimes we deliver machines to the primary supplier of plates, and then we are the second source by our Coating Services to the same end customer. And this has been a driver for sales in China. So I would say it's both on existing customers and new customer contracts.

And in your report, you write about the new strategic shift into new application areas. You wrote about SOFCs, data center power, and you mentioned that as a fast-growing and exciting new market. What would you say is the realistic timeline for generating revenues from this application area? You said you would give some updates on this soon, but can you say anything already now?

Yes. We started development work several years ago, but then it was sort of on a low level because we see many similarities between SOFC and PEM. It's flat object, it's high-performance coatings, it's advanced coatings. And in our Q1 webcast, we started talking about SOFC. What has happened since then during this half year is that we see a lot bigger market interest.

And we see especially those four players as, I talked about, Bloom Energy in U.S., Ceres Power in U.K., Doosan in Korea and Delta Electronics in Taiwan, they are making big investments. And they are making big investments in factories, not big factories. We are in contact with several of them and they share their volume expectations with us. But unfortunately, I cannot disclose any volume forecast from those customers.

Great. And my final one is a little on your costs. You mentioned this in your presentation, but you had lower costs in the quarter. And you mentioned that more cost savings are coming. But could you maybe help us think of how we should think about the cost base going into 2026 and maybe talk a little bit more about the operating costs?

Yes. So we have lowered the run rate with a bit more than SEK 2 million. So the easy way of looking at it is that with the development we have done and with the deliveries we did in '24 and what we learned in '24 and the fact that we had customers that helped us to make our machines battle proven, we now have an organization with lower cost, less people, but an organization that can still do the same deliveries as we did in '24. And if we would do that in '26, sort of run '26 on the sales side as '24, we would become profitable.

We have a couple of more questions. What do you think about fuel cells for automotive applications? You have a main owner in this area.

Yes. As I said previously, so fuel cells for mobility, it is still a market. We are running PEM fuel cell plates in our Coating Service Center in Shanghai. We surpassed the '24 volumes already in September. So we see a growth in that. But if you go back a couple of years, the hype was not about trucks and heavy vehicles. The hype was very much about passenger cars. And we haven't seen that coming.

Electrical cars, they are quite good. And with the development we have seen in electrical passenger cars, it's likely that the hydrogen passenger cars will not be big. However, for heavy duty vehicles, for specialized vehicles, for transports, yes, we do see a market. And we still see a market in mobility, but it's not that hyped market that some people saw in a couple of years ago.

So that's the reason why we have to find new market verticals. And we want to find those market verticals that are commercially driven, not driven by government subsidies. And if you look at the SOFC market, it's a commercial market. It's commercially driven. It's real projects. It's happening now. So it's a good market for us. But of course, we will continue with the business we are currently doing on the PEM fuel cell market.

One last question for today. It's about competition. How does Impact Coatings stand in the competition landscape, you say?

We very seldom lose orders to competitors. So we are very -- in the market segments we are active, we are often regarded as the market leader, like PEM fuel cells in China, for example.

Thank you. That was my last question. Thank you both for doing this presentation, and we look forward to meeting you again the 24th of November then.

Thank you, and thank you for listening.