Scanfil Aktie

Good morning. Welcome to Scanfil's Q1 2026 Interim Report Webcast. Together with me here are our CEO, Christophe Sut; our CFO, Mr. Kai Valo; and my name is Pasi Hiedanpää. I am the Director of Investor Relations and Communications.

A couple of words about the practicalities. You have a chat box window in your screen, so you can actually type in questions in there, and we will have the Q&A at the end of the session.

Now handing over to Christophe, please.

Thank you, Pasi. Welcome to everyone, and very happy to share today our first quarter for 2026. First quarter, sharing a few key events, was rich in happening. As you know, we closed the acquisition of MB Elettronica during January. And MB Elettronica is now a part of Scanfil and included in our numbers since January '22, which means that we had more or less 2/3 of the quarter with MB Elettronica. And we were happy with both getting the team on board, but also, I will get back to it later, the development of that company during the quarter.

We also, on the organic side, announced the expansion of our site in Suzhou, where we will double our capacity in order to support the customers that are asking us for more capabilities and more opportunities for business. So that's also a very positive element.

Then continuing on the development of the quarter. For the first time, you will see today our revenue in Aerospace & Defense carved out of the Industrial segment. And we will start to report and give you a little bit more flavor on what is happening on that customer group, driven by the fact that it's now reaching the critical mass of 10%. So I think that it's important that you get visibility, and growing extremely strongly, both coming from MB acquisition, but also from our existing customer and past Scanfil customers.

And then finally, but not least, I mean, first quarter was also extremely active on the -- what we call NPI, which is the new project implementation, which means that both the effort we made last year in gaining new contract is translating into activities in our factories, but also is preparing for continuous development and continuous growth. So as you can see, again, a very rich quarter in terms of organic development and activities to support our organic growth, but also on the acquired front.

If we look now at key numbers for the quarter, I mean, we were pleased to reach EUR 230 million, which gives us an organic growth total about 20%. Organic growth was 6.5% in the quarter, which is definitely in range of our long-term target. I will say even above our long-term target. And we were very happy to see that it's now the third quarter in a row where we have an organic growth in the range of 6%, 7%, which is a very good number.

In terms of comparable EBITDA, we were at EUR 15.6 million, which was a growth of 24% versus last year, driven by both the good performance of our acquired entity, but also the good performance of our existing site. And it's very pleasing to see the combination after all the, I would say, changes that the first quarter was bringing to life to see that both organically, we bring new project, new customers, create organic growth. There is a return on comparable EBITDA, but also the acquired entity are performing well.

And then obviously, it gave leverage last year, we had the first quarter at 6.5% comparable EBITDA and this year 6.8%, which is, again, going in the right direction, which landed in a development of our earnings per share growing 17.4%, up to 0.15% -- EUR 0.15, sorry. So a positive development in the quarter, I will say, for all our key figures and the key metrics we are guiding on.

When we look at the revenue, I mentioned it earlier, I mean, we reached EUR 229 million, almost EUR 230 million in the quarter. And this was both driven by organic and inorganic growth where both businesses were developing positively, as I said before, the existing part of Scanfil as well as the acquired entities.

In terms of EBITDA, I mean, we know that first quarter is usually a little bit weaker in margin, driven by seasonality, also some vacation in the South Hemisphere and Asia. But despite that, we were coming out with 6.8%, which was definitely solid and stronger from what historically we have been able to deliver in the first quarter. And the total amount of EUR 15.6 million, which was also a very significant amount for the first quarter. So a real gap. And I will say both the development on revenue and the development on EBITDA were definitely in the trend that we were expecting to reach our long-term guidance and given us confidence in what we have iterated earlier in the year.

Now looking at the development per segment and for each of the region. America reached EUR 17.7 million during the quarter, strong development of organic growth. We had 12% organic growth in the quarter. As we mentioned before, we are starting the second line of electronic manufacturing in Atlanta. It's proceeding well. We have an unseen amount of new projects getting implemented there. I think during the first quarter, it's more than 150 products that we have been putting up live in our Atlanta site, which is a very significant amount. I mean you might not be able to relate to that, but I can tell you it's something that is very sizable.

Margin was step-by-step recovering in the Americas from the previous quarter, driven both by good performance of ADCO, but also by those contracts starting to build volume and starting to build momentum. So I believe that this trend will continue step by step during the coming quarters in the year. And we will also support a continued very strong organic growth as well as growth from acquired entity in that region. So positive to it and positive to the development.

APAC was once more very solid, reaching 7.4% of comparable EBITDA, which was an improvement of 0.5% against last year. A solid level of revenue of EUR 55 million, which was also an increase against last year and having an organic growth here also in the range of 10%. So a very solid development for our APAC region.

As I mentioned before, we will have to sustain this growth. I mean we did last year an investment in Malaysia. It's step-by-step taking speed and getting filled. The next step will be, as we mentioned in the quarter, an investment in China in Suzhou, where we have a significant amount of business and need to support those new businesses by expansion of the site. So I will say, on the number, it's a solid quarter. It's a stable and solid business and growing at a good pace.

Moving now to Central Europe. Central Europe, a lot of things happened in that region because this is where from now on, MB Elettronica is consolidated, which obviously gives a jump in terms of revenue. If we try to break a little bit the region, what we can see, starting by the organic part of Scanfil, the region grew 3% in the quarter, which is a combination of 2 elements. We continue to have a very solid development for our Polish entities. You will see later, but we can see now the rebound of the Energy & Cleantech business that will start -- that has started and will start to have more and more effect on our Polish operation where we produce a lot of goods for Energy & Cleantech. So that was a positive development in revenue and in profit for Poland.

Then our German market remained challenged. And there, it was a negative development, which explains this mild 3% organic growth for the overall region. But in a way, this was something that we have foreseen. And as you saw in the previous quarter, it was some restructuring costs that were already taken to prepare for that. So I will say this was no surprise to us and something that we are managing in as good way as it can be.

Then looking now at the acquisitive part, MB did start with Scanfil. As I said, it was almost a quarter, not fully, but almost a quarter that they contributed to Scanfil, and they reached a total of EUR 21 million in revenue, which means that if we look at the comparable against what they reached last year in the period, it's a double-digit growth and not with one, but a bigger number than the one. So it was a very strong start for MB Elettronica, solid level of margin that was in line with our expectation and what we have seen overall. So the first quarter, but if we compare to their performance, the previous first quarter was extremely, extremely solid. And that was driven both by customer demand, but also very solid execution.

So all in all, I think that very exciting with Central Europe. I think we have engine of growth, both in Italy and in Poland that have contributed this quarter, but will continue to contribute even in a greater way as we move forward.

Then last but not least, Northern Europe had, I would say, a very solid performance. Growth was in the range of 6% organically in the quarter. And the leverage was very positive since now we got a profit level of 6.5% comparable EBITA, which was -- 6.8%, sorry, comparable EBITA, which was a 1 percentage point improvement against last year. So that was a very positive development. A big part of our development is driven by our defense customers that are performing very well in the quarter and having a very positive outlook. But that is supported by very solid execution. So I will say maybe Northern Europe growth was not the most exciting, but a very solid performance from that region, and we really appreciate to see the incremental development we see there.

When we look now at our customer group and now it's including the customers that we -- that have joined us after the acquisition, both of MB and ADCO. We have now -- and we are now rebalancing our portfolio. Our biggest customer is now just above the 10% of the total revenue. And our next customer -- our next top 10 customers are now 43% of the total, which means that with 2 new acquisitions, we have onboarded a few very valuable customers. And actually, that list of top 10 has obviously evolved in a different way. So very nice to see that we are, in a way, spreading the risk, but also increasing the opportunity by an increased base of customer with those acquisitions.

When we -- when it comes to the spread and the split per customer group, you can see that now Defense & Aerospace was almost reaching 10% in the quarter. It will, obviously, pass the 10% when we have MB consolidating in a full quarter and now starts to be very significant and growing at a very, very high pace. Then Energy & Cleantech is also a customer group that is really taking its importance and now reaching 32% of our total revenue, which makes it very important to us and with a very good prospective of growth. And then Medtech & Life Science 18% was also -- is also a very strong performance for that customer group, where you will see later, we have high ambition and a very high level of traction currently. Finally, Industrial remain our biggest customer group, but only 41% after we have now extracted defense from that group.

Looking now at the different customer group. Aerospace & Defense was EUR 21 million in the quarter. And it's driven, as I said, by 2 elements, obviously, a very strong growth against the EUR 9 million of '25, driven by 2 elements. We have some revenue from MB, at least 2 months that are consolidated in those elements, but also a very strong growth of our existing customers. We are very active currently with the pipeline and potential deals. It was nothing material that came into that quarter in terms of new deals, but obviously, strong pipeline and strong level of activity and a very strong order book with long-term customers. I mean, the one of you that have had the chance to be a bit exposed to MB, I mean, some of our customers there in the aerospace and satellite business have a very long-term outlook. So obviously, those businesses are planned for years in advance.

On Energy & Cleantech, we had a very solid quarter, EUR 73 million against EUR 62 million last year for that segment, mainly driven by organic growth and our organic portfolio, where we have a very strong penetration and a very strong development and partnership with our Energy & Cleantech customer. You can see that also on the win deals. I mean we were slightly below the record Q4, but kept above EUR 20 million in acquired deals. This is very positive to us. I think that we can see that the partnership we have established with some of those international leaders is paying forward. And they are also the one driving us to make those long-term investment that you have seen in our factories. So very pleased with the development of that segment where we have built solid partnership, and I believe we contribute and enjoy contributing to developing the business of those partners.

Industrial, the Industrial segment, as I mentioned before, is now connected from the defense business. We had a solid development in revenue, EUR 93 million against EUR 82 million. And in order, the level of order was pretty much in line with what we have seen over the last year. There, it's obviously a more difficult business to comment. It's many different type of businesses and the business where we expect slightly lower growth, but we have a good holding of that business and also good partnership and good development.

And then last but not least, Medtech & Life Science that reached a record level of EUR 42 million sales in the quarter. Obviously, also some contribution of some of our acquired entities that has some business in that field. What is mainly pleasing to see in that business is the level of project won and deal won that was once again above EUR 10 million, which is a new level for Scanfil that we have now reached the last 3 quarters. And as I have mentioned before, I mean, the very interesting part of it is it's a very long-term partnership and long-term business that take time to get up live, but they are an area where we bring added value and where we build added value. And having this level of acquisition is good knowing also that many of those come with new major leader in their field.

So our portfolio is diversifying in terms of customers and the number of deals is growing. So it's showing a very good trend and very good development. That was for me. Kai, if you want to continue.

Thank you, and good morning. I will dive a bit deeper in the financials. And here is the breakdown of the P&L changes year-on-year on the left side is '25 and on the right side, '26. And like I mentioned, the organic growth was 6.5%, strong growth organically. Turnover coming from the acquisition was 14.1%, more EUR 27 million in euro. When consolidating the local currency, P&L to the group level, then we have some loss in translation, EUR 3.2 million and 1.7% in exchange rate, which basically cannot do anything. This is just mathematics.

Also, the inventories were growing, EUR 2 million. So in a way, the total production volume was even a bit further higher. And the cost expenses, depreciation is well in line with the volume. And then therefore, we have 6.8% of comparable EBITDA in comparison to previous year, 6.5% and EUR 3 million increase in the comparable EBITDA level.

And here is the balance sheet. You put it on the nutshell, -- on the asset side, we have goodwill and increase of goodwill and customer relations, it's about EUR 90 million. We have higher working capital also following the acquisitions, EUR 110 million, some impact organically, but mainly from the acquisitions. And then EUR 10 million more fixed asset. Totally, the balance sheet increase is a bit over EUR 200 million in comparison to the last year same time.

On the liability side, we have EUR 80 million more debt, EUR 70 million in working capital in practice than like trade payables. And then we have EUR 25 million more equity. And there is another EUR 30 million liability related to this acquisition, MB acquisition specifically.

Cash flow was very close to 0, slightly negative in the quarter. The reason is that during the last 2 quarters, we have been growing roughly EUR 20 million per quarter. So then there's strong growth organically, and that's increasing also the working capital, EUR 17 million, which is then bringing the cash flow negative. And the free cash flow after investment was then EUR 88 million. This is including, of course, the acquisitions.

Net debt, in total, EUR 130 million. Now the interest-bearing liabilities are more than EUR 150 million in total. Now the debt ratio is 1.57, totally in line with our long-term target and where we expected to be landing after the acquisitions.

Liquidity is still strong. We have signed and made another facility agreement during the Q1, and then we have EUR 200 million of liquidity available.

And key figures, expectedly, equity ratio is now lower, 43%, still on a good level in comparison to previous year. And then return on equity, we are now improving, but not having the full effect in Q1, probably 12.2%, 1% better than a year ago. Gearing naturally growing, now 39%. And then earnings per share, EUR 0.02 higher than in '25, EUR 0.15. And still reminding growing dividend since 2012 and expected to be decided and paid EUR 0.25 from the last year quite soon.

Thank you. I will hand over back to Christophe.

Thank you, Kai. So getting back to the outlook, I hinted a little bit into that. I mean we reiterate our guidance of EUR 940 million to EUR 1.060 billion revenue and comparable EBITDA between EUR 64 million and EUR 78 million. I will say that 2 elements drove us to continue with those guidance is, first, we had a strong quarter, both in the outcome and operational outcome of the quarter, which was absolutely in line with our expectation and a very strong development of customer activities gives us confidence in the future and in the development and in the target we have. So all in all, I will say we are first -- after first quarter even stronger into those guidance.

What was pleasing to see is a strong contribution from both acquisitions, ADCO and MB having a good start in the first quarter, which is pleasing because it is something sizable for us. We also keep driving a good momentum organically, both in the number we deliver, but I can also see in the background all the customer activity and discussion we are having are heading in the good long-term direction. And then we are supporting that with our -- both our continuous improvement in our operation, but also in investing in our existing manufacturing tools and space. So all in all, I think that a positive quarter, confirming the expectation and the ambition we had for Scanfil and a good first milestone for 2026 year.

With that, I will hand over to you, Pasi, for Q&A.

Thank you. Thank you, Christophe. Thank you, Kai. Now heading to the Q&A. Starting with the question about the Aerospace & Defense. In Aerospace & Defense, new customer projects won were EUR 0.9 million in Q1. Do you expect new wins to fluctuate significantly between quarters in this business area?

Yes. Absolutely. I think that's a business area -- business group where we will see fluctuation in deals because they are usually very long term. So you get a new deal and the new one and then you carry it for a very long time. So that's definitely something you are going to see. I mean in the numbers, you saw it was no restatement of the won deal for the acquired entity previous years. But if we will look at that, we will see, okay, there is fluctuation. There is very massive deal. They come in and then they carry on for years actually.

Okay. About the working capital requirements. According to the report, organic revenue growth increased working capital requirements. In some areas, delivery chains may again create challenges, like memories. Have you made any decisions during Q1 to increase working capital due to these potential challenges?

No. In the first quarter, we don't have such decisions. So basically, it was natural increase what we have in the working capital because of the volume and mainly coming through from the accounts receivables side.

Okay. Marcus from DNB Carnegie. Two questions. You highlighted that MB was accretive to margins from the start. Can you also comment on ADCO's margin level today and whether ADCO was positive or negative to the group margins in the quarter?

Yes. I think that, as you said, I mean, I think two questions. I guess the first one is also related to MB. We'll answer. Absolutely, MB had a strong development in the quarter with a positive -- I would say, a positive development in revenue and margin above what you could expect from the seasonality. So we were extremely pleased with that. I think that it's -- I think I've done many acquisitions in my life, but very few starts like rocket, which MB did. So that was very pleasing to say the least.

When it comes to ADCO, there is a seasonality effect, and there is more fluctuation of demand. So if we look at the quarter, they had a lower level of revenue that we could expect on an average quarter year-on-year, but which was normal because of the season -- as I said, seasonality that is driving fluctuation in demand. And then they were in the range of the U.S. profit, which is the level they should be in the first quarter. So I think there, it was no surprise and a solid start, but maybe less explosive than we had in MB.

Okay. About net working capital, so this might go to Kai. Second question relates to cash flow. Can you please comment further on the net working capital in the quarter and the main drivers behind it?

I think I mainly commented already that -- yes, it was mainly driven -- I mean, when looking to cash flow, cash flow then mainly driven by the organic growth. And like I said that then there is a growth of inventories and accounts payables and then the receivables, and they are more or less in line with the recent growth, and that is explaining it. Then, of course, overall, if looking at the balance sheet, then there is much larger growth in the working capital, which is coming from the acquisition, but that's another thing. But the share impact into the cash flow is coming from this growth.

Yes. Follow-up on that. Was there any effect related to precautionary inventory buildup or the measures like linked to the Middle East situation. So going back to actually the previous question, but it was no.

No.

Then Antti from Inderes. Are challenges driven by macro in Germany? Or do you have some customer-specific or internal challenges as well?

No, I think the German market is, in general, right now, more challenging in the sense that automotive industry is not in its best shape, which challenged the overall sector on the region. So a slightly lower demand in that region and probably a bit harder to have customer acquisition in that region than in other. So I think that's mainly the macro. And that we have seen and anticipated for a long time, and that's why we have acted upon it.

Yes. Antti continues. Have you seen any changes in customer behavior or forecast since the beginning of the war in Iran in March?

I think that 2 things. I mean, we see very few changes related to that. I think that it seems like whatever geopolitical happenings, our customers follow their plan and are quite solid. So we have seen very few fluctuation. There is one element that is building up now, but I don't think it's related to that is the development of energy cleantech sectors, which you could believe can be driven by that. We have a very good momentum in that one. You could hope that it comes from there. I actually think that it's a long-term trend that is just revitalized and that's not got yet an impact of what's happening in the Middle East, but it will make sense that electrification accelerate again. But I actually think that it was foreseen before that. And we saw that before the Middle East event. So the answer will be actually little impact to the development of our customer, if you look at it from a macro perspective.

Okay. Now Pasi from Nordea. Have you seen any postponements or cancellations of orders in Q1 due to the overall economic uncertainty?

As I said before, no, we have not seen any change. I think that both I will say, the delivery has been solid. It has been a quarter, I would say, unfolding really much as expected from a customer standpoint, both in terms of keeping the demand as it was supposed to be, but also placing demand forward as it should be. So the market situation we face right now is very solid for us. I mean customer changes are little and the one we see are usually on the positive side.

Okay. Thank you. We still have time for questions. So type in the chat box window if you have any questions. So let's wait for a bit.

So if you do not have any questions to the chat, you can also approach us via e-mail or give us a call. So now I hand it back over to Christophe for the closing.

Thank you. Okay. So the key takeaways for this quarter. I mean, I believe that we started with this quarter with a new chapter for Scanfil. We are, obviously, a much bigger company now that we were ending the year, both in terms of number of entities. We have welcomed we said 2 companies, but in reality, it's 6 because it was 5 in Italy. And also, we are a bigger company in terms of revenue, in terms of diversification of our portfolio with a strong position in aerospace and demand.

And from my perspective, it was very pleasing to see things in the quarter unfolding so well, I will say, with organic growth staying strong in the range of 6%, 7%, with acquired entity performing well and good interaction starting with those new customers. And all in all, delivering a solid comparable EBITDA of 6.8%, which was 0.3% above what we delivered last year, which was already a strong first quarter in terms of managing the profit.

And last, a very strong level of activities in implementing new products. It's something that continue, and we need that if we want to continue to travel at this level of organic growth, but also a very strong level of discussion with our partner on how we help them to continue their journey, which is growth as well and how we take part of it. So all in all, a solid development in the quarter that I will say, and I have said it before, and I will reiterate it again, makes us feel even more comfortable in the guidance we gave earlier in the year.

With that, I want to thank you for listening to us, and wish you a good day.

Good morning. Welcome to Scanfil's Q4 2025 report. My name is Pasi Hiedanpaa, I'm the Director of Investor Relations and Communications at Scanfil. Together with me here are our CEO, Mr. Christophe Sut, and Mr. Kai Valo, our CFO.

Now handing over to Christophe. Christophe, please?

Thank you, Pasi. Welcome, and happy to start to give you some feedback on our 2025 ended. A few key events for '25 years. And Q4 was a very active quarter, very active in many ways with our customers. We had a significant development project that we agreed with our customer, Valmet, that is a long-term historical customer that we are very happy to serve. We also had very good development in our partnership with TOMRA, as you have, I'm sure, seen, they won a significant deal in the Polish market, which, obviously, we had to produce for them after that. So exciting project and good development from that side.

Continuing on the expansion of the company in an organic way, we have also had a solid development for quite a long time in our operation in Suzhou and came to the conclusion that it was now time to expand that facility. So we have now initiated a project that will basically double our capacity in China and in our Suzhou plant that we are very proud about. So all those things were in Q4, preparing to fuel continuous organic growth.

Then in the same time, we had 2 acquisitions that we have completed. Actually, the second one was completed just after the closing of Q4. But the first one, ADCO, was completed just before Christmas, and we have now a second operation in North America, which offers also an alternative to our customers. So very happy to have ADCO part of Scanfil. And then the second one that we completed this time just passing the new year but that we worked on during the whole '25 is MB Elettronica that is now part of Scanfil. And with MB, we have the chance to have a very modern facility in South Europe, a lot of competence in med tech and aerospace and defense and very valuable customers. So a few activities that were really important in our world journey towards a more stable, global and sustainable company.

When we look at the number, I will say that the end of the year was solid. We posted organic growth of 7.6%, almost 8%, which is definitely even in line with our long-term expectation, even a bit higher. And we managed to keep the level of profitability at a solid level, 7.3% of comparable EBITA, which I'm very proud of because when you deliver this level of growth, it means that we had quite a lot of projects that were in an NPI phase, starting phase, where you have a level of cost that can be important. So balancing that with the profitability was, I think, a very good performance from the team.

We continue to develop our customer base. We signed deals for a value of EUR 59.2 million during the quarter. And you will see later, it gives us a very good development when you look at the full '25. And we had also a very solid development in the 2 segments that we have identified as key for Scanfil's future, meaning Energy & Cleantech as well as Medtech. And then in parallel, we had strong momentum in North America, where we continue to grow organically at a very high pace and where we also started in second line of electronic manufacturing that will basically double our capacity. So will support our future growth.

So I would say the numbers were solid. The number of activities were quite important and quite numerous. And that's, I think, a good combination for the quarter and for preparing the future. All in all, it resulted in earnings per share development positive. It was 40% above what it was last year, and which allowed us to propose increased dividend to EUR 0.25 that will be decided during the AGM later in the year. So many happenings but a positive and solid development in the quarter.

I mentioned the development of the revenue and the profit, I think that, as I said, I think what is important is to see that we have managed to build the base and the stability level for now many quarters in our profitability that makes us both predictable and solid and robust, which I appreciate. So I think that for me, that's something that I keep with those curves and this quarter is -- we keep -- we manage to be where we are supposed to be quarter after quarter. And that, I think, is positive for Scanfil.

When we look at our regions, starting with North America. North America had a positive development in revenue. We had EUR 13.9 million in the quarter, 19.6% organic growth for the quarter, which is a strong development. And the quarter full of activities, I mean, we had, in November, the start of our new SMT line in Atlanta, which will now be able to start to increase the production, which was, in a way, bringing some disturbances on the line. I mean, at least cost wise, we had to take some costs to be able to increase the capacity and to train people and to bring new people on board. And also, we had our ADCO friends that joined us at the mid of December, which was the time of the year where you don't really get cost to you -- don't really get revenue, you mainly get cost. So as an impact of that, the profitability was a bit lower than average but it was mainly due to those 2 elements that I will say.

For Atlanta operation in December, we were already back to a good level of profitability and a new line up and running that was creating growth. And for ADCO, I think that nothing strange in that. I mean they just came and we had just the last 2 weeks of the year, which are not weeks where you get high level of revenue. So I would say, all in all, very pleased with the development in America. Momentum, good momentum with customers, significant win in Energy & Cleantech that are now materializing in our operations, and a good perspective for the future.

APAC region had a quite stable ending of the year, an organic growth of 2.7% and a strong margin with 8.7%. That was very stable. I think there, I mean, we have good positioning with our strategy of China Plus One where we can now offer an alternative to China and Malaysia, where we get good interest. And we are starting to ramp up our Malaysian operation after we inaugurated the new capabilities in Q3. And we foresee a positive development there. And that's why we have decided to expand our future facility. I mean, we are coming to a point where we're bringing more space to support the needs of the business, which is a positive element. So I would say a solid quarter that was delivering to our expectation, and that is allowing us to continue the development of the region.

Moving to Central Europe. We had the quarter with 9.6% organic growth, which was positive. And solid EBITA, comparable EBITA of 9%. It was also a very transformational quarter because MB Elettronica will belong and will be -- from the next quarter, reporting within Central Europe. So obviously, quite a lot of activity there to finish and to close that transaction and to prepare also for the integration.

In the region, we have also initiated a plan to do some restructuring and adjustment. And here, it's just a matter of keeping ourselves up to split in terms of efficiency, and we believe that it will produce positive effect on the second half of this year. So I would say, all in all, a solid market where we see the growth of our Energy & Cleantech segment materializing step-by-step and also a region where we will have a transformation effect with MB joining.

Northern Europe. Northern Europe, we had also a positive development in the quarter, an organic growth of 7.2%, which was driven by mainly 2, I would say, 2 sectors. One is Energy & Cleantech and I have one -- for one of them mentioned, I mean, the development with TOMRA that was positive with the Poland rollout. But also our defense business was also very positive in the quarter and driving growth. And we kept the level of profitability that is good for the region. So all in all, I think it was a solid quarter for Northern Europe and a solid performance.

Looking at the impact on our customers, I mean, we can clearly see that our top 10 customers, and I have spoken many times about how Scanfil is trying to be a good partner for global leaders that want to expand across the globe. And we can see that this is materializing more and more. I mean, the weight of top 10 customer increased a little bit during the quarter, which is the outcome of long-term collaboration and development that we see materializing into new businesses. So from that perspective, positive.

If we now look at our different segments, we had a slightly negative development year-on-year in terms of revenue for our Industrial segment, which is obviously a difficult segment to read through. It's many different types of customers. But I will say it's a flattish, slightly negative development on revenue based on mainly customer market condition.

Then in terms of winning deals, I think that the quarter was at 17 million level, which was slightly below last year. But when we look at year-on-year, we had a positive development in that segment with a growth of about 15%, which is mainly due to the development of new global customers that we have brought on board and worked with over years, and that's now starting to materialize. So I would say we can have a more positive perspective for the coming years than what we had past year for that segment.

Looking at Energy & Cleantech. In terms of revenue, we had a positive development year-on-year in the range of 5%, which was good. And in the same time, we had a very strong level of won deals with EUR 28 million, which was an increase versus a record Q1. So it was a very strong development and an increase versus last year. I mean if we look year-on-year, we have won deals for about 12% more this year, which I think is showing the momentum we have. And we can see that, in particular, in Energy & Cleantech, we have built strong relationships with our customers, and they are now getting closer to us and really looking at us and how we can help them in developing their business. So I think both the growth in revenue and the growth in deals that we won during the year are a positive signal to the strategy choice we made but also positive signals towards prospective for the coming year.

Then Medtech & Life Science, Medtech & Life Science had a very strong quarter in terms of wins. I mean, for the second time, we passed the bar of 10 million of wins during the quarter. It has not materialized yet in terms of revenue. Obviously, it's a long-term effort. When you win a deal, it takes 6 to 18 months depending on the deals you win to materialize but a very positive development. And if you look at this year, I mean, we have 35% growth in deals win in that segment, which I think is also a good, let's say, good encouragement for us that have decided to develop our skill set and competence in Medtech & Life Science. So that's something positive to see that our customers are seeing that. We are also developing certification in many of our sites. China and Poland will be the leading site for that segment, and it's materializing now. So positive that things goes hand in hand and materialize together.

Finally, giving you a picture on ESG development. We set target a few years ago for how we want to land in 2030. The first one was about CO2 emission. We closed '25 at a level that is far below even our expectation for 2030, which means that we will, during this year, we work our target to something realistic. I think that it's very pleasing that we can be as efficient, sustainable company, and that sustainability also brings us efficiency. And I think it's also very pleasing when you know our customer portfolio, to see that the journey we are making is the journey they are making, and all hand in hand, we can move forward.

I think we won quite a few awards from our customers for our sustainability development. And in end with the CO2 emission, the share of fossil free energy has also reached the 2030 target. So will also have to be revised. We believe there is still progress to be done on both of it. And then employee satisfaction was also increasing this year to 72 from 70 last year. So in the journey of making the company a more sustainable and respectful company to the stakeholder and environment, we are both very excited by the outcome but also very excited by all the activities we make every day. And I'm also very proud to see that we do that in a way that is economically sustainable as well. So I think it's a nice picture and a good development for us and inspirational for us.

With that, I will hand over to Kai.

Thank you, Christophe. Good morning. I will start with the -- and go back to the profitability and comparison to the previous year. This is Q4 comparable EBITA. Q4 '25 is on the right side and the previous year is on the bar on the left side. And like Christophe mentioned, the turnover organic growth was very strong, 7.6% and EUR 16 million. In addition, we got turnover increase from M&A from ADCO, which was mentioned that we closed in the middle of the month and therefore, not that significant number but being included all in all.

And -- but have a bit like a headwind with foreign exchange rate when we translate the local currencies to our reporting currency, euro, especially coming from U.S. dollar and Chinese yuan. We lost EUR 5 million in the translation in comparison to the previous year, and that is equal to over 2%, 2.3%. Also, last year, we had like onetime in invoicing regarding the consignment inventories, EUR 14.5 million, which is not a repeatable turnover and therefore, showing that also as a negative here. EUR 14.5 million, 6.8% percentage-wise impact.

Besides the turnover organic growth, we also have some growth in the inventory, EUR 2 million, equal to 1%. And that is basically in products, which were produced and more likely shipped than on the way. But based on the delivery terms, it's not considered as a revenue, even it would be invoiced already. So the production volume was even a bit further higher in comparison to the previous year, 1% more. So in that sense, when looking at the expenses, it's a very moderate increase, very low increase in the depreciation and other expenses. So we ended up to EUR 15.5 million of comparable EBITA, 7.3%, which is very strong, coincidentally, very same as last year, it also was a very strong year, comparison year.

But stepping to the full year view, same principle here. Organically, we grew 2.6% in the full year last year, over EUR 20 million, and that was generated in practice in the second half, like Q3 was in the same level roughly than Q4. Turnover from acquisitions was 3.4%. SRX still generating inorganic growth for part of the year and then this short period of ADCO being included.

In the full year level, we had the same impact in -- coming from the dollar and Chinese yuan in the full year level impacting almost EUR 16 million negatively in the turnover and 2% of revenue. And also, we had the same consignment inventory in invoicing, which happened in the Q4 and 2% negative impact in this comparison as well. Same as what I mentioned, the inventories were increasing and then expenses in relation to the production volume. So we finished the year at the target level, 7.1% and EUR 56.5 million of comparable EBITA, a bit value-wise higher than last year and same in the percentage.

Balance sheet is no big changes. Inventories were growing a bit but organically, the inventories were declining some millions goodwill increase with the acquisition. We had very good end of the year in terms of cash. And for that reason, the cash is actually quite high, EUR 75 million of cash in hand and a bit higher than a year ago. Also preparation for the MB closing, which happened right after the year-end.

Interest-bearing debt in total, it's EUR 84 million but that's including the leasing liabilities. So excluding those, we have about EUR 60 million, a bit less than EUR 60 million of debt. And practically, we are debt-free without this leasing liabilities. Equity is representing 5 million -- EUR 5 per each share. So it's quite good level.

Cash generation, like I said, the year-end was good with the cash flow, and we ended up with the full year cash then over EUR 64 million, very strong from the cash point of view. We were able to generate from working capital, about EUR 10 million. It's a bit less than -- and that's basically the difference to the previous year, that it's a bit less than what we were able to do in the previous year. But now also, we had very -- like a positive turnover development in the second half. So it makes a bit more challenging to take the cash out there. I think it was a good result from that perspective. In the 3 years, it has been totally like EUR 220 million of positive cash flow generated, and that has been able to make possible also then to finance the acquisitions, what we have generated more with the -- more or less with the incoming cash.

Like mentioned, the debt ratio is very low still at year-end, it will be increased a bit when reporting next time but now at the level of 0.12 and EUR 10 million of net debt and -- it's -- when looking a bit back in comparison to Q3 of '24, we are now at a lower level in net debt than over a year ago. And considering that during that time, we have executed 2 M&A acquisitions and in Q4 '24 and then Q4 '25. So we have been able to finance that with those -- with the incoming cash flow. Liquidity level is good, EUR 250 million of liquidity, and we have unused credit facilities, EUR 180 million, and then EUR 75 million cash in hand.

Key figures, no big changes. Equity ratio remains relatively high, 54%. And return on equity is quite the same as the previous year. Net gearing naturally lowering still, and then earnings per share, EUR 0.04 higher, EUR 0.63 in comparison to EUR 0.59. Like mentioned by Christophe, then is also contributing for the growing dividend, EUR 0.25, to be proposed to the Annual General Meeting. And this is year #13 with the growing dividends.

All right, I will give it back to you, Christophe.

Thank you. So outlook, we -- a few weeks ago already, we gave our guidance for '26, where we see revenue going between EUR 940 million and EUR 1.060 billion and comparable EBITA between EUR 64 million and EUR 78 million. We have, during the last years, prepared and built a solid operational execution, and we believe that, that will obviously allow us to deliver those numbers during '26. We have the integration of ADCO and MB that are a focus area for us to be successful during 2026. And then also continue to drive the good momentum on organic growth that we have seen during all '25 on the order book that have come in and that have started to translate already during Q3 and Q4. So all those elements give us a positive view on '26 and allow us to come with this level of outlook.

So with that, I think that we'll hand over to you, Pasi, for the Q&A.

Heading for the Q&A. A lot of questions already in. So starting with the European MB Elettronica. MB Elettronica's growth was exceptionally high during 2025, over 20%. Do we expect it to continue in '26 or to be moderate into more normal Scanfil's organic growth level?

Yes. I think that we were very pleased -- first, I would say, we were very pleased, obviously, to see the level of performance of MB during '25 because it confirms our choice to -- of MB joining us as it could be a driver for growth. And I mean, also one of the reasons we bought MB is for the portfolio we have in aerospace and defense that we all believe can be driving a higher level of growth than average in the coming years. So from that perspective, we have a prospective of continuous high level of growth in MB during '26, which should be higher than average organic growth in Scanfil.

That was a good bridge a follow-up question actually regarding the Aerospace & Defense because ADCO and MB are actually giving us a lot of Aerospace & Defense customers. And the question follows, do we expect to report Aerospace & Defense separate customer group in the near future?

We will do that. From Q1, we will give you visibility on the development of Aerospace & Defense, as we have indicated before. So the answer is yes.

Thank you. Quite many questions regarding the NPIs because it brought some volatility to EBITA margin. Which regions saw the most NPI activity in Q4?

Yes. I would say, we have a high level of activity in NPI right now. The region that have the highest exposure are obviously Central Europe, where we have our big Polish operation, as well as North America, where we have a high level of growth that, of course, come from NPI implementation. Then there is also activities in our APAC region, where I will say, I have mentioned it, our future site keeps developing in a good way, which includes high number of NPI but also our Malaysian site has a big activity on implementing new projects.

Okay. Thank you. Will the NPI number increase or decrease in Q1, Q2? So trying to get a bit of flavor about forthcoming NPIs.

I think that what we can see is that we have still win a significant number of deals. If you look at the last 2 quarters, I mean, the number of deals we have won is important. Then in terms of load of our factories, I think it keeps it quite linear that we manage to have a level of implementation of NPI versus level of manufacturing that is equivalent. So I think there is no dramatic change to foresee in the coming quarters in the level of cost and activities related to that. We are on a trend and we're just working with it and are stable on that from that perspective.

Will 2026 be a year of integration focus? Or will you be able to complete one to two acquisitions this year too?

I think that obviously the integration of MB and ADCO is an important step for Scanfil. So we have a focus on that. In the same time, we continue to monitor the market. And I will say, a company -- that if we find a company that will fit our purpose and our strategic goals and that are at the right price, we will eventually add acquisitions. And it's a bit early to say but there is no stop even if the focus is obviously integrating the one we have got.

Thank you. Pasi asks about organic growth. Organic growth was 8% in the fourth quarter. Will it split it -- what is the split between volume and price-related growth?

I would say the majority in the fourth quarter is volume related. I think there is very little price-related growth on that one. It's mainly volume related.

Additional question from Pasi. You decided to expand Suzhou. Is there any demand coming from Chinese market or Western markets for this site in Suzhou?

I mean Suzhou today is in a high majority delivering to the Chinese market. So the demand that we have there is for the Chinese market. I mean we mainly deliver product that we had consumed on the Chinese market, in a big majority, I would say.

Maybe the next one goes to Kai about the PPA amortization in 2026. What is the -- can you give some kind of an estimate or flavor on that?

Of course, there will be, naturally a bit of growth in the MB but maybe I'm not with the numbers yet. Let's do that in Q4. But of course, MB will naturally increase part of that. ADCO, not that huge impact on that.

Maybe after Q1 report, it gives a bit more flavor about that.

[indiscernible] from Carnegie. After the recent acquisitions, do you think you need to -- time to digest? Or -- okay, this is actually the same as the previous one. I will not ask it.

Antti-Pekka Viljakainen from Inderes. Do you see demand environment improving in Europe compared to the 6 months ago?

I think that we see 2 things. We see a slight improvement in demand, but we mainly see the payback of our efforts in winning new projects. So I would say the European market is maybe slightly better but it is not something that I will say is fantastic. However, we see that the new projects we have won are translating into sales.

Okay. And continuous, what are the key variables that will determine whether you end up to the upper or lower end of your guidance this year?

I mean the key variables, they are very simple. There is one element that is about the performance of the acquired entity. I think we have expectation of a high level of growth that maybe can be even higher than what we expect. And then the second element is the organic growth we generate, I mean, transforming those NPI projects into revenue and sales in a timely manner. So those are elements that -- in a way, we have in hand to deliver.

Okay. Actually, going back to Laura's question because there was a bit of a twist in it. So about M&A, what are the availability of targets in M&A market at the moment?

Yes. I think that if you look at the world of EMS, it's a world that is in the segment we operate, which is mix, low volume industrial, still extremely fragmented. I mean there is MB type of company in every country in the world. So the availability is big. Many of those companies are family companies. So there are deals that show up, but there are also a company that might be open to a discussion. So I don't believe that there is a shortage of target. On the opposite, I think that we are in an industry that can carry an M&A journey for extremely many years. So obviously, at least '26, when I say that.

Okay. About SRX. When it comes to the acquisitions, SRX earn out and Antti has a question. What were the main reasons in SRX's performance that resulted earn-out not to be paid at all?

I think I have said it before, I mean, as I said, there is a numerous company for sales. We have a philosophy that we want to pay a fair price for the business at the moment we acquire it. And then we are absolutely open to pay extra for a fantastic performance. Then in the SRX case, unfortunately, for the seller, it has been a timing issue with some of the deals not materializing or in manufacturing during '26, which impact -- which has impacted their earn-out. But I think that from our perspective, we are very pleased with the SRX acquisition. It is still a very healthy company. It has offered us a platform for Malaysia that we are starting to capture. And in a way, those things that may not materialize in '26, at least started to materialize, and we believe will materialize -- or in '25, will materialize in the future time.

Okay. Thank you. Aerospace & Defense has been under discussion and also organic growth. Cinder has a question about our margins. Organic growth is returning on Aerospace & Defense exposure is growing. Are you aiming to increase margins towards 8%?

I think that we have a corridor there of 7% to 8%, which obviously, when we will -- when we go in an organic growth mode or when we have a growth of volume, could add towards the higher part of the corridor. However, what we have tried to balance as well is to fuel the growth. So if you look at the quarter, for example, I mean, we have, in a way, 8% organic growth, but a stable margin. And what is making the difference is therefore we put to prepare the future. And I think that for now, our focus is to remain in that corridor and make sure that we fuel the growth because we see the opportunity. So we will remain in the corridor, and we will grow the business. That's the plan.

Still time for questions, if you have any. We see it already, quite many. If not, you can always approach me, for example, to post questions separately.

One more. How do you feel about adding ROCE target to your financial targets, return on capital employed.

Yes. I mean, for now, we have not discussed to change our long-term targets. So that's always something to consider. That's something we follow even if we don't talk about it. But for now, we have no plan to change our financial target. But we can't always think about it.

Okay. Thank you. Good question. All right. Handing over to Christophe for closing.

Okay. Thank you. So if I -- for closing, I mean, maybe a few key takeaways from '24 -- '25 or in Q4 '25. We believe that for us, it was a transformational quarter in many ways, first because we have 2 acquisitions that were happening, that are changing in a way the scope of the company, both in size but also bringing a strong portfolio in Aerospace & Defense, we have been looking for. It was also an important quarter because we once more materialized a strong level of organic growth as we had already done during Q3, which is a proof of the development of our focused strategy in terms of market segment, and that was very pleasing.

And we had a business pipeline that remains strong. So from that perspective, we see it as a solid quarter that ended up with a solid level of margin of 7.3%. So from that perspective, we see this quarter as important in the life of Scanfil because it anchors the effort we did over the past years, and it pushes towards '26 in a good way.

From that, I mean, we have 2 significant acquisitions that should allow us to increase our revenue during '26, and that should also have a positive development. And in the same time, we have a solid customer base and solid customer portfolio and pipeline and backlog entering '26. So we believe that our balance sheet is strong. Our business perspective is positive, so all in place to deliver the guidelines we have shared with you.

With that, I want to thank you for joining us, and wish you a good day. Thank you.

Thank you.

Thank you.

Good afternoon. Welcome to Scanfil's Press Conference. This is about yesterday's closing of MB deal in Italy. And together here with me is our CEO, Christophe Sut; and our CFO, Mr. Kai Valo. And as usually, there will be a Q&A part and the questions will be posted on via chat, and I will be reading those out loud. So now heading to the presentation and handing over to Christophe. So please, Christophe.

Thank you, Pasi, and thanks to all of you for joining us today. Very happy to be able to comment on the opening of yesterday. Moving to the next slide and starting maybe with a reminder on our strategy. I mean, we have expressed the willingness to return to a more acquisitive agenda. It materialized last year with the acquisition of SRX. We closed during December the acquisition of 80% -- acquisition of 80% of Ecosystem. And we were happy to close yesterday the acquisition of MB Elettronica that we announced a little bit earlier last year.

And today, I will try to give you a little bit of a glance of how MB has developed since we decided to acquire them and where we stand based on that. Moving to the next slide. And going back first to what is MB providing to Scanfil. And as you know, we have expressed the willingness to buy companies that are a company in a good shape that will either provide complementary footprint in terms of localization or complementary customer base.

And I think that obviously, MB is a very nice asset that is now joining Scanfil in the sense that it's bringing all 3 elements on the table, a very healthy performance, coverage in Southern Europe, where we have today a very limited or if no footprint and also a very strong customer base, bringing in particular 2 customer segments, Aerospace and Defense and Medtech, highlighting the fact that MB Elettronica has 30% of its revenue coming out of Aerospace and Defense, which is a segment with a high level of growth.

If we move to the next slide, obviously, as I mentioned before, we have today acquired company that exactly 37% during '25 of revenue in Aerospace and Defense as one of the biggest, I will say, single customer group. Then Medtech and Life Science weigh for 7%. And then the remaining part is around industrial customers, which fits very well the way Scanfil operate. In terms of customer mix and dependency, I mean the top 5 customers are averaging about 59% of the revenue of MB. In a way, MB is transformational to Scanfil in the sense that it will modify our customer profile and the way we operate with customers since we will now have a customer group Aerospace and Defense that is more than 10% of our revenue, that is 12% of our revenue.

And obviously, MB is bringing an important contribution to that as ADCO did a few months ago and also the organic growth we are having with those customers is developing our customer mix. So I think it is very pleasing to have this new picture where we can clearly see that Scanfil has increased significantly its exposure to a segment that is showing strong growth. Moving to the next slide. We also get not only customer but exposure to Southern Europe -- you will see later that has 4 sites that have different specialization, but offer a very strong platform when it comes to having manufacturing capability in Southern Europe.

It also gives a very strong platform in accessing South European customers. So we also know that we are with having the chance to collaborate with customers that will, I am sure, appreciate also our capabilities in the rest of the country. So here, it's a very positive development. And the major site, if you go to the next slide, that is currently located out of Cortona. Cortona is the place where it all started from MB Elettronica and it's obviously a strong platform for the customer segment, Aerospace and Defense.

Also reminding you what happened in Germany, I mean, it's the site that was affected in October by a fire, which actually caused a little bit of delay in our closing just that we wanted to make sure that we had the situation under control and things were back up and running, which they are and have been now for some time. So that's very positive. Then the other side, 3 other sites, EBS Elettronica, MB Elettronica and Hi-Tech Elettronica. We have here a mix of sites, 1 -- 2 of them are sites that are very specialized in niche market, which could be related to either space or niche automotive technology and then another side that is more dedicated to industrial type of customers.

So here, we have a complementary of certification, competence and capability to serve different customer segments. Moving to the next slide. Then getting back maybe to what we believe makes sense for this acquisition. We have a certain number of growth attributes. We are getting new customer groups with Aerospace and Defense. At least we have a significant growth there. We are gaining new customers that are not overlapping our portfolio and that we will be hopefully able to develop also our [indiscernible] . It gives us access to a market in Southern Europe where we are not very present today. It is complementary in the competence. It's PCBA, box-build, strong knowledge in electronic.

I must say it's a very, very modern factory and very competent organization that is characterizing MB. On the value creation side, obviously, customers and the geographical reach and offering will be beneficial to Scanfil. We see opportunity to improve on the supply chain side since we are becoming a bigger and bigger group and are obviously benefiting from that and will allow them to benefit from that. On the employee side, it's both going to offer opportunities to our new acquired company, but also to our existing employees to develop themselves. And finally, on the service side. I mean, and they has a certain number of competence specialized in certification, for example, in Medtech and Life Science that are going to be beneficial to Scanfil, but also to the offering we can provide to our existing customers.

So quite a few synergies and strategic fit for MB joining Scanfil. Last but not least, we can also look at the performance. If we move to the next slide. And as I said, we were looking for a company that is a healthy company that we can support the good trajectory. And we believe that the development of MB during 2025 is a proof of that and I would say, [ comfort ] us in our choice with revenue of EUR 120 million, which is a growth level above 20%, comparable EBIT in the range of 10.3%, which is in the high end joining Scanfil Group with 8.6% MB in a way, demonstrated this capability to grow and that is a positive element for us.

We also believe that MB is going to continue to grow, and that's why the deal structure was built out of 2 components payment company valuation of EUR 123 million with an upfront payment of EUR 91 million and an earn-out mechanism that will actually be based on the continuous positive development of the company during '26 and '27. That was in a few words, a summary of, I would say, the situation and what we move forward. With that, I will hand over to you, Pasi, and potential questions.

Yes, not only potential. There is a question actually coming in. So about the turnover regarding Aerospace and Defense. [indiscernible] Is asking the presentation says 12% of the turnover from the first 9 months was 12%. And according to his calculations, MB and ADCO should bring another EUR 60 million in revenue. Does that mean that Aerospace and Defense on pro forma basis above EUR 150 million? I would guess that this is for the full year figures or no, actually for the first 9 months. Can you elaborate on the type and number of defense customers also in the Nordics, excluding INVISIO, who is our actually public reference customer in that segment?

Yes. I would say I think it's many questions. We'll try to comment a little bit on the defense segment here. I would say, in general, we have a customer base in defense that obviously is growing both with MB and ADCO. They have in Aerospace and Defense, several customers. So both of them bring not only one customer, but several customers that are sizable and that contribute to the growth. Then for the rest of Scanfil, as you mentioned, we have a customer that everyone knows about because we communicate together very often, which is INVISIO that we are [indiscernible] also customers that we have dealt with for a few years and some that we are starting to deal with obviously, a number, I'm not sure it will make sense, and I'm not sure I will even be able to give the exactly right number. But it's something that is growing both because of the customer we have had with us, but also because we are gaining new opportunities as we go.

Maybe still reminding about the ADCO part of -- in Aerospace and Defense, it was 40% as well. So there is a significant growth coming from these both acquisitions. Waiting for other questions. What kind of revenue level this is on -- what kind of revenue level MB could reach with the current capacity and floor space?

Yes. I think that 2 things. I mean the family has done significant investment over the past years. So you could say that we are definitely not in a situation of capacity being saturated, but it has been planned for growth. So I think that saying that probably 70% of the potential is currently exploded is probably a fair statement. I think there is definitely space for more.

Okay. Thank you. [indiscernible] is asking what is explaining the strong growth of MB despite the fire, do they still have capacity left? So it's a capacity question as well again. But what about the strong growth?

I can answer to the 2 things -- to the 2 questions. I mean the strong growth has been driven by mainly 2 customer segments, 2 customer groups. Obviously, Aerospace and Defense is the most material driver from the growth. The second one is Energy and Cleantech. And as I said, there is still space for growth because, I mean, it was investment made last year, first with the site that is close to Milano, where they transfer some of the manufacturing of industrial products to free up capacity in Cortona, but also with an extension of the Cortona site where there is a dedicated whole for Energy for Medtech, which brings also potential of growth. So those are the future driver for the growth of MB.

Okay. Thanks a lot. So typing questions, if you have questions, so now this is a perfect opportunity to ask them. So a question about the potential acquisition. So what are the targets for 2026 in acquisition-wise? Any thoughts on that?

I think that our agenda when it comes to M&A in a way has not changed in terms of what we are looking for. I mean we are still looking at complementary location. And we know that Asia was one of the areas we highlighted. Americas in general is also an area we highlighted. And then we are also looking for potential companies that have a portfolio either in Aerospace and Defense or in Medtech or Energy Cleantech. So this is things we are looking at.

Saying that in the same time, I think it's also, of course, a moment now where we will have also a focus on growing the assets we have acquired. But for the future perspective on acquisition, I mean, I would say the criteria of choice remain the same. There is still work to do digging in that area.

Okay. Question regarding the MBs growth and the growth trend, did MB growth strongly whole year 2025? Or did you see accelerating trend towards the year-end?

Yes. I think that, as I mentioned before, they made a major investment to increase capacity in Cortona, both through this Medtech and also moving -- making some move in manufacturing. And as an impact of it, it drove a growth more on the second part of the year. I think we started to see strong momentum, I would say, from the summer, slightly before the start of the summer.

Okay. We still have some time for questions. So please type in if you have any questions. We can go maybe to key takeaways and if there will be questions in the meanwhile, so we might be addressing those until after that. So let's give them a chance. So now going back to key takeaways.

Good. Thanks, Pasi. So for us, the key takeaway is, obviously, MB is bringing a strong portfolio in Aerospace and Defense with more than 40% of their revenue and obviously, a positive drive at the moment where [indiscernible] countries are pushing up their spendings and budget. We also have a good customer base. When we look at outside of Aerospace and Defense, a lot of very interesting customers, both in industrial but also in Medtech and Life Science that we believe the Scanfil footprint will be of great interest.

And then as a second element, we get access to the South European market and to a very, very good facility, both in terms of the performance, I would say, the level of the equipment and automation. So from that perspective, also very pleasing. And then last but not least, I mean, we get the pleasure to have a very talented team, very committed employees. And it's people that we have learned to know through the process and that we are very excited to finally be able to start to work and collaborate with. So I will thank obviously, the family that has been a strong driver and that we are happy to welcome within the Scanfil family, but also all the employees from MB and wish them welcome looking forward for the future.

Okay. Thank you. There was no further questions, but you can feel free to send me an e-mail or call me if you have any questions.

Thank you very much.

Thank you.

Good morning. Welcome to Scanfil's Q3 2025 Results Webcast. Together here with me, my name is Pasi Hiedanpää. I'm the Director of Investor Relations and Communications. Together here with me is our CEO, Christophe Sut; and our CFO, Mr. Kai Valo. [Operator Instructions]

Now handing over to Christophe. Christophe, please.

Thank you, Pasi, and welcome to all of you for this Q3 report. Really, really pleased to be with you today. Let me start first by giving you an update. As you might have seen, we had a fire in an operation in Italy that we are planning to close in Q4. So I felt I just give you an update on that before we go to the formal quarterly report. And fire broke in the 17th of October in one of the wing of the building where we have the outgoing good warehouse located. The good news there is now all employees are back to work and the team locally is ensuring business continuity and working with customers to restore situation as normal.

This is a company that we announced we will acquire during July, and we are still planning to close that acquisition during Q4. So that's the update on the situation there, and I felt it was good that you can get that information from us.

Moving now to the Q3 report 2025 and the key events. This is a quarter that was extremely rich in activities and happenings. We acquired significant amounts of new contracts during the quarter in the range of EUR 70 million. One of the one that we promoted during the quarter is the deal we closed Stäubli, which is a significant player in their industry and have decided to go with Scanfil as a manufacturing partner. So very pleased about that and thanking them for that.

We also continued to prepare our growth journey with SRXGlobal, where we inaugurated the modernized factory in Johor Bahru in Malaysia. We have now a fully operational factory, one of the most modern you can have, and we are already starting to ramp up some of our customers in that operation as in the same time, we are also getting a lot of interest. I mean I was myself down in Malaysia 2 times during the previous quarter and a lot of people flying from around the world to see that operation, extremely, extremely pleasing and moving accordingly to our plan.

We also continue to build a competence in our company, and I was very pleased to have Anna-Maria Tuominen-Reini joining us. Anna-Maria has a long-standing experience in supply chain. We know that supply chain and procurement is important in our industry. So very pleased to complete our management team with our competence. So a good add-on to our team.

Then we announced during Q3 the intention to acquire MB Elettronica in Italy. This acquisition is key to Scanfil future and to our strategic development. It will give us a very strong footprint in Aerospace and Defense with some very major customer in that field in Europe. So a very good complement to Scanfil today. So very pleased with those development.

And then last but not least, during August, we announced that we have received a gold rating from EcoVadis. And I think it shows -- and it, in a way, give us the comfort with all the efforts we have been doing on building a modern company I mean sometimes maybe manufacturing doesn't get the place it should deserve, but getting from EcoVadis this gold rating show that we can be a sustainable company. We are respecting our employees. We are respecting our environment. And that's in a way a proof of that. So very pleased with that development.

Moving now to some numbers related to that. And I think that in a way, the number reflected the high level of activity and enthusiasm we could see in the quarter. We landed at EUR 191.3 million of revenue, which was an increase of above 10% versus last year. And it was a mix of acquired growth, but also a return to organic growth with almost 8% in the quarter, which is, I would say, a strong performance from all our teams and very pleasing to see that the contract we had been piling over the last 12 months start to create revenue.

The impact on our EBITA was positive. We landed at EUR 14.1 million, which was an increase versus last year of 10% and a very solid margin at 7.4%, which allowed us to deliver an increase in our EPS. So I will say the financials were positive. A few other KPI or number that I think are very pleasing to me. First of all, and it's maybe the most important, we are measuring on a regular basis our NPS score. And it was actually all-time high, the outcome we got during September, landing at 54. And I think 54 NPS is, I think, a good performance for a service company, but that's where we want to be. And I think we have put significant effort to be a better partner over the last years, and it was very pleasing to see that.

We also saw a development in our employee satisfaction survey that went up 2 points, which also is going and pointing in the right direction. So from that perspective, not only the numbers or the financial numbers were good, but also the way we can measure satisfaction of our employee and satisfaction about our customers showed in a good way.

In the same time, we acquired for EUR 72 million of new contracts during the quarter, which is something that will be delivered over time. And you will see later a little bit more in detail, but a very strong MedTech and Life Science related to that. So that was very positive.

In the same time, we continue the transformation of our APAC region, having strong momentum and the transformation of our American region, where we have now become a very significant and solid electronic supplier through the transformation of our Atlanta site. So in many ways, the quarter was proving the strategy implementation.

As I mentioned before, I mean, revenue increased to EUR 191 million from EUR 173 million last year in the same quarter, and EBITA was also obviously significantly impacted, going up to EUR 14.1 million against EUR 12.8 million during the same quarter last year. So a positive development on those 2 indicators.

Looking now a little bit to our regions. Americas, we landed the quarter with EUR 12.7 million. Very, very pleasing to see that we were coming with a new quarters of growth. I mean, now 7 quarters of growth. And as I said, we started 2 years ago a journey to transform that factory to be a real player in the electronic manufacturing. And we can see now that this has taken off and is in a way, landing in a good way. Revenue is increasing, number of projects in that operation is increasing.

The pipeline is strong. The profit is in line with our expectation. And we, therefore, decided to invest in a new line in that operation. So we will add another manufacturing line that will be up and running towards the end of this year, beginning of next year to continue to support the growth.

In the same time, we are working to close the acquisition of ADCO Circuits that should be closed during Q4. And ADCO Circuits, which is located on the north part of America in Detroit will actually bring a lot of complementarity, a lot of redundancy, will allow us to secure our customers in the region and therefore, will be a perfect complement to our American strategy. So very pleasing development in Americas.

Continuing with APAC, where we also had a positive development, growing to almost EUR 54 million against EUR 42 million last year at the same time. We continue to enjoy a strong development in our operation in China, where our Suzhou operation remains a best-in-class operation and state-of-the-art operation and wins traction from customers on a continuous basis.

We were also extremely pleased with the performance in the quarter from our operation in Australia that we were actually in the top of Scanfil deliveries, I mean, in terms of growth, in terms of profitability. So very pleasing to see that this operation we acquired a year ago is proving solid results. And then last but not least, I mean, we have been working and the teams there have been working very strongly to transform our Europe operation in what we call between ourselves, [indiscernible] , meaning a very modern factory with top-notch equipment. And I was pleased to be there with customers, as I said, during Q3 to demonstrate our new capabilities there. And I'm convinced it will make a difference for Scanfil.

Central European region. For Central Europe, the quarter was a little bit of what I will call a transition quarter. I mean they had a slight decline in revenue, a 3% decline and also a decline in profit, 6.5% against 7.1%. It's always -- you could say it's always disappointing when you don't go up. But sometimes that's the price to pay. I mean, they will have a very strong first quarter, and we had to prepare for it and get the resource in place and the people in place for that. So that happened accordingly to the plan, and then we started to gain momentum during the end of Q3, but that will translate in the future.

We also had a lot of activity on the M&A front, as I mentioned before, since we signed an agreement to acquire MB Elettronica during that quarter, and the business will be actually included in that region when it's joining Scanfil.

Moving now to Northern Europe. We had very positive development in Northern Europe, moving to EUR 63.1 million from EUR 56 million last year. And a good contribution on profit with 8.6% EBITA, which is a very strong performance. I mean here, we got mainly two drivers. The first one is an extremely strong performance and development from our defense customers that grew extremely significantly. And then it was complemented by a good development from a couple of Energy & Cleantech customers that are delivered out of that region as well, which landed in a good development in sales with an organic growth in the range of 12%, which is good for Northern Europe, I will say, and also a good level of profitability.

So a positive development from that side. And I think that mixed with good cost control, it allowed us to deliver in a good way on that region.

Looking now a little bit at the customer picture. We remain with a balance that is quite close to the previous quarter, even if you can see that our top 10 customer is right now very active. And I think that it's probably the outcome of the effort we have been putting over the past years to create a strong relationship, and we have won a significant amount of deals with those customers. So what we can see is that they are moving more and more towards us. It translates in our number, and it shows also that our focus to deliver to those customers is creating growth in a good way.

Now looking at the different customer group we have. First of all, industrial was still slightly negative in the quarter. And you know industrial for us is a mix of many things. And some were very positive. Actually, defense customer, as I mentioned before, were growing extremely high double-digit numbers when some more traditional industry were more flattish or slightly negative.

The positive side was we won an amount of deal in the quarter in that segment that was very important with EUR 39 million. And it was mainly driven by one customer in the logistics sector that has decided to get closer to Scanfil and push a very bigger part of his manufacturing to Scanfil. So we thank him for that. Very appreciated, but it also shows the commitment we have had over the years to win that position with the customer. So very pleasing development.

Looking now to Energy & Cleantech, I was very pleased to see the outcome of the quarter. I mean I have said for many quarters now that I believe in Energy & Cleantech long term, even if it went through tough time after the hype of 2023. And it bounced back in a very good way in the quarter, up 28% versus where we were last year, going up to EUR 70 million. It's very pleasing to see that now all customers in that customer group are coming back to a good level of business. In the same time, they are appreciating our help. So we are discussing new projects with them, and it translated in wins of EUR 18 million of win. So good to see that the long-term dynamic of that customer group is positive and that it now start again to translate in numbers.

And then last but not least, we had a very strong development in our MedTech and Life Science business with a growth of 16%. That was also coupled to very significant wins with EUR 15 million, which if you look at historically, is an outstanding numbers. We have not had that. And I think that the reason for that is a mix of the current turnover. We have grown and developed our current customer in a good way, and we have a good partnership there and it translates in the numbers.

But the won deals also shows that now we are onboarding new customers that the effort we have made to build competence in that field to get certification to deliver to that customer group in many of our factories is now something that is getting recognized with our customers. So we got a few strong brands and name joining us during the quarter. And that I'm extremely pleased with because when we decided to create focus on that customer group, it was hoping to reach such a result.

So very pleased with that development. I will, with that, hand over to you, Kai.

Thank you, and good morning from my side also. I will start with the EBITA bridge from year-on-year Q3 numbers. And on the left side bar, you can see the EBITA last year Q3, which was very strong, EUR 12.8 million, 7.4%. And on the right side, you can see the EBITA of this year, Q3, EUR 14.1 million and even improvement from the last year. And how did that happen? The main driver is the organic growth. We made almost 8% in the quarter year-on-year. And besides that, we have a 5% growth coming inorganically, meaning SRX acquisition of last year.

So in total, it was driving the growth of 13% year-on-year. Although we have then impact translation of the P&L was causing negative impact due to the weakening Chinese yuan and USD, and that was EUR 4.3 million negative impact in the revenue. Even after that, the growth were on the level of 10.4% in total. 10.4% growth was well in line with our expenses growth 10.3%, a bit less and with a good efficiency and keeping in mind that there is activities ongoing for preparation of the new product ramp-up and for Q4 volumes.

Depreciation was eating a bit the percentage-wise and then it means the investments for the future, for instance, the investment in the Malaysia electronic line. So end result, 7.4%, very nice for the quarter. That was also supporting us to catch up for the year-to-date, and we are now here. I'm showing the year-to-date numbers in the same way. Left side is the last year, 7.1% year-to-date, EUR 40.2 million of EBITA. And on the right side, then this year, now we are year-to-date EUR 40.9 million and 7%.

And year-to-date as well, we are organically on the growth mode and overall growth over 5% in the revenue. Again, an even larger impact due to the translation differences of FX for the same reason than Q3, after which the growth is 3.2%. Anyway, it's well in line with the expenses growth and the efficiency we have been able to keep on the good level. Again, the depreciation slightly impacting to the relative result.

Anyway, good result, 7% year-to-date jump into the balance sheet, not big news here. Inventories have declined EUR 7 million year-on-year. The pace is a bit lower, but in Q3 also, we were growing a bit with the inventories for the reason that the volumes were growing and that's quite natural effect. Cash we have in hand, nearly EUR 5 million more than a year ago. Good to remember that includes the effect of SRX acquisition. So that happened in between. So we have now a bit more cash than we did before the acquisition.

That cash compared to the debt interest-bearing debt, EUR 66.4 million and EUR 66.4 million including the leasing liabilities is about EUR 28 million, almost EUR 30 million. So the debt is less than EUR 40 million from the financing. And then basically, we don't have a net debt excluding the leasing liabilities.

Equities is clearly more than half of the total EUR 550 million of assets. Cash generation for the same reason that we needed to buy the -- take some inventories in for the growth and higher volumes, then the cash generation was a bit more modest than in the past few quarters, although still clearly positive EUR 7.4 million. And year-to-date, we are now EUR 40 million of positive cash flow. And looking this last 2, 3 years, almost 3 years now, we have generated over EUR 200 million of positive cash flow. Half of that we have spent for the dividends and for the machine investments. So then there has been another EUR 100 million remaining after those expenditure.

Net debt is -- I can say that it remains low level, like I said, EUR 10 million, practically no net debt, excluding the leasing liabilities. And we are slightly below the last year Q3 level and keeping in mind that in between, we had this SRX acquisition. So basically, that has been neutralized in our net debt by now.

And in relation to the EBITDA, it's 0.14x a year ago, 0.15x. And our liquidity status is good. We have EUR 250 million of liquidity, which then, of course, consists of this EUR 50 million of cash and then we have about EUR 100 million of unutilized loan commitments and agreements and then about EUR 100 million of like overdraft or working capital facilities.

And the last page, we have the key figures here, 55% of equity ratio. It's rather flat, some variation in quarter-to-quarter, but more or less in the same level. Return on equity, nearly 13%. Gearing is reflecting the debt level and earnings per share in the quarter is EUR 0.01 higher than last year. That was all from my side and hand over back to Christophe.

Thank you, Kai. So we reiterate our guidance, no modification on that side. As I mentioned, we have a couple of focus areas. One of them is obviously the closing on the M&A we have announced in the previous quarters, and we aim for that during the coming quarter, during Q4. And then the second one is obviously, we want to continue and keep the momentum on our organic growth, both in delivering on it, but also in acquiring new contracts with customers.

And finally, we try to do that with keeping cost control and keeping control of our inventory. So that was for our Q3. Pasi, I hand it over to you.

Now heading to Q&A. Well, we ended the presentation to guidance. So let's continue with the guidance. Jakob had a question. What are the factors withholding you from narrowing your guidance?

Well, I think that for us, I think that the policy we have had is as long as we are in our guidance, we will just remain in it and not change it. I mean, for me, I think I prefer to focus on delivering than playing with a guiding number left and right. So from that perspective, we will keep the guidance as long that we are in that corridor. If we get out of the corridor, we will just change it.

Jakob continues. Is there anything else you can do on the cost side? Or will it be higher volumes required to expand margins from here?

I mean it's -- there is a double answer. There is always something you can do on the cost side. And as you know, we work with our Dream Factory program, which aims at creating efficiency. I mean we have implementation of AI in our factories and in our admin functions to improve efficiency. We work with automation. So there is always things we can do, and we do it on a regular basis.

Then it's also obvious that I think we are still at a level of occupancy of our operation that leaves quite significant amount of room. So obviously, when the programs are ramping up, you can see a positive development on EBITDA. I mean it was the case in this quarter, but there is still room there to benefit from that.

Thank you. A question regarding the growth in Americas. Scanfil's turnover in Americas is growing faster than the other regions. ADCO acquisition further increases turnover in this area, but still the market there is quite small compared to the others. Are you looking clearly higher growth in the Americas to balance turnover globally or to mitigate any problems caused by trade wars, wars or changes in custom policies?

I think it's yes on everything. First of all, I mean, we have global customers. They need support in the Americas region as they need support in the rest of the world. So that's why we decided to invest in that region. That investment has been clearly successful. It's 7 quarters of growth for that region, which is very pleasing. We have decided to invest in more capabilities just to support the orders we have got, the pipeline we have and follow. Then that's for the organic exercise.

Then as you saw, it remains a small region that has a lot of potential. So in order to support that growth, we have also looked at M&A, and we were very pleased to find ADCO that brings both a nice customer portfolio, but also very good competence in manufacturing, but also in fast prototyping. I mean they have fast prototyping capabilities, which will help us to win customer to ramp up projects. So very complementary. But definitely, I mean, we see an opportunity business-wise. There is actually a trend to co-locate, to relocate and to become more regional in the world. So Americas is definitely strongly impacted by that. Our customers trust us. So for us, no reason to not expand there on the opposite.

Okay. Thank you. Now when we are talking about the regions, so let's continue with the Europe. [ Antti ] asked about the European macro environment, and it has shown some signs of recovery. Have you seen changes in demand environment or customer forecast in Europe during the Q3 or in October?

I mean, in a way, we were expecting it to go that way. But the first thing you can see, and you saw in our report is a strong growth in Energy and Cleantech and the strong growth is in big part coming from Europe and that has either already come in during Q3 or is going to continue during Q4. So in that perspective, yes, we see a rebound on that sector.

Then the second element that is driving Europe for us is also defense that is growing very fast. And it's, I would say, only our European factory that are operating in that field. So I will say the overall business is bouncing back in Europe for our traditional markets like Energy, Cleantech and Medtech, where we are strong. And then Defense is giving, let's say, it's cream on the cake from that perspective.

Okay. Continuing actually with the Defense, what you mentioned in here. Cyndra asked, do you work with the new customer prospects in Defense in Northern Europe?

I think that we -- I mean, we -- there is 2 things on Defense. We have already nice customer portfolio. And what I mean by that is in our portfolio, we have customers that can be sizable players that don't necessarily have a sizable partnership with Scanfil. Obviously, we are talking to those ones to improve the situation. Then in parallel, we have strong manufacturing in quite a few countries in Northern and Central Europe, and it's very natural that we talk with local authorities to see how we can support them in that way. So the answer is obviously yes there.

Given the easing comparison in Q4 2025, do you think that the current ramp-ups will still enable you to show this high organic growth?

Well, I think that the -- what I am very positive with is if you look at the amount of contracts we have won over the past year, if you look at the satisfaction of our customers, I believe that we are building up a situation that will allow us to sustain our long-term target in terms of organic growth. Then it will be a quarter that will be better than others. But I think we should be able from now on to deliver organic growth on a constant and continuous basis. And we are prepared for that. I think that I was mentioning, I think I believe that Q4 will be good in Central Europe. I think we are prepared for a good momentum. I think that we will continue to see organic growth from now on.

Okay. Continuing actually, Jakob continues with the order intake numbers. Would it be fair to expect a return to order intake numbers more like Q1, Q2 2025. But do you see underlying improvement in sentiment leading order intake somewhere between Q2 and Q3 ahead?

I think it's an incremental step. I think that we have started to see that coming previous quarter. I believe it will continue. And it's a mix of the sentiment. And that I said, we have seen people returning. I mean people that had a hard time last year now are back to a good level of revenue. And then it's also mixed with us winning projects. I think that our pipeline of project has never been as strong as it is now. So it will continue to build up. Then we are in an industry where things takes time. But on the other hand, it's also for the good of it. I mean it's in a way, predictable business.

Okay. [ Antti ] asked about MB Cortona. What is the status at MB Cortona as we speak?

Yes. As I said, all employees are back and are working and manufacturing is ongoing and delivering to customers. I mean what you noticed in my comment is that it was a wing of a building that was impacted, which -- and it was a wing where we have a shipment going out from. So I would say the main building and main manufacturing building was not impacted at all. So they are working. It's obviously not fun or pleasant event to have. But for the one that have seen some videos, it looks more dramatic on the video that it is in reality.

Okay. [ Antti ] continues about the possible impacts on M&A. Does the fire have any impact on the ongoing M&A anyhow?

We are working on closing that acquisition. So we continue to work. It had an impact in the sense that we needed to understand where it was. But for the rest, I mean, the activities are going on to close during Q4, which was our goal. So there, it's nothing strange happening there.

Okay. Thank you. [ Antti ] continues about M&A and consolidation. Consolidation of European EMS market has been speeding up recently. Do you expect this to change competitive environment visibly from Scanfil's point of view in the next few years?

Yes. It's good that you have noticed that. I think for me, it means that in the next few years, we will see a couple of sizable EMS company building up. I believe that the strategy we have with a mix of organic growth and acquisitive growth is the right way to go to build that. I believe that we have strong customer portfolio, dedicated team that we have a strong financial position that helps us to carry that journey. So your answer is probably, yes, the landscape will evolve. You will see a few players emerge. And I think that Scanfil is very well positioned to be one of them at least.

Okay. Still if you want to ask questions, type in the chat box window and we'll see if we can have more questions coming in for a while. Sometimes it takes a bit time.

Okay. If there are no further questions, so handing back to Christophe, please.

Thank you, Pasi. So as a summary of this quarter and takeaways, I mean, you have seen revenue gaining speed with an organic growth of 7.8% and total revenue growing 10%, which is nice to get back to a position where we can capitalize on the efforts we have made with our customers. It impacted our profit level that was also quite strong in the quarter. You could also see that in reality, our operational performance is looking even better than it is since we were impacted by currency during that quarter and during the first part of the year. But we -- I will say that we have a good control of the situation.

In the same time, I mean, we are continuing to work on our growth plan, both organic and acquisitive. I believe that the acquisition we have announced will really contribute to build a position in Aerospace and Defense, which is a nice way to do it. We have also done major steps in building organic growth. I mean we inaugurated our new site in Malaysia or at least the modernization of the site in Malaysia. And we have announced investment in the U.S. to support the growth. And all of that is driven by the high level of contract wins that we have had in the quarter, EUR 72 million was strong.

And as I mentioned, very pleasing to see that the effort we made to focus on MedTech and Life Science paid off with a very high level of wins and new logos coming in, which was very pleasing. and all of it with a strong balance sheet that should allow us to continue to prepare the future and to make Scanfil a strong player in the EMS field. So positive development during that quarter. I want to thank you for listening to us today, and wish you a good day.

Thank you.

Good morning. My name is Pasi Hiedanpää. I am the Director of Investor Relations and Communications at Scanfil. This is Scanfil's Q2 results webcast. And together with me here is our CEO, Mr. Christophe Sut; and CFO, Mr. Kai Valo. As usually, type in your questions to the chat box window, and we will take all the questions at the end of the presentation. Now handing over to Christophe, please.

Thank you, Pasi. Good morning to all of you. Pleased to spend an hour with you this morning to walk you through Scanfil performance and activities during Q2. So let's get started. A few key events we wanted to select for the quarter. The first 2 are related to driving our organic growth. And in that perspective, I mean, it was a very active quarter. We had a few new serviceable business that we acquired during the quarter. Taking the first one, I think we are very pleased with the contract we had with Liquid Instruments that will do full outsourcing to Scanfil. Very pleased for many reasons. It's in the heart of what we want to grow, Medtech and Life Science. It's a contract we acquired for our new operation in Australia.

And from that perspective, it shows the first element of success on the development of SRX Global. So very pleasing. We had a few other wins, Amazon, you have seen and that we have communicated about before. In the same time, we have seen traction on a few markets and have continued our expansion plan. We announced early in the quarter the expansion of our capabilities in U.S., where we will add the second assembly line for electronic manufacturing, and that is now under progress. And we also completed the implementation of our first modern assembly line in our new acquired entity in Malaysia, which we will actually inaugurate with our customers in a couple of weeks from now since we will have a big opening 2nd of September with key customers.

So as you can see, the quarter was full of events that are here to drive our organic growth long term. In the same time, we continue on our acquisitive agenda and did 2 very strategic acquisitions. The first one that we announced in June was ADCO in the U.S. ADCO is a perfect complement to our operation in Atlanta. It gives us additional capacity, a new customer portfolio with strong presence in aerospace and defense, but also capabilities in rapid prototyping that we were missing in the U.S. and that our customer really will appreciate. I mean we have already interest to visit that operation as soon as the closing is done.

So very positive. And during the weekend and earlier in the week, we have been commenting on the acquisition of MB Electronica that we signed during the weekend. It is a significant step for Scanfil. It gives us a footprint in South Europe that is a very big market for our type of industry, but also gave us a significant footprint in aerospace and defense with more than 37% of the revenue of that company towards those customers. So as you can see, a lot of activities driving Scanfil for the future, both organically and through acquisition. If we look now at the numbers and the performance of our operation during the quarter, I believe we had a solid performance during the quarter.

The revenue at EUR 202.2 million was growing 3.4%, still slightly negative organic, minus 1.1%, but incremental growth versus the previous quarter. So we can see now that we are gaining speed and momentum, and that was seen in our sales. As a consequence of it, we got back to a solid performance. Our EBITDA was at EUR 14.2 million, 7%, which was a solid quarter from that perspective. We continue to win new deals with 41.7 million of deals that were won during the quarter, very active in Industry, Energy Cleantech, Medtech and Life Science. And Energy Cleantech was maybe a bit slower in acquiring new businesses, but we can see now already positive sign on seeing that segment recovery in sales, and that was the good news for the quarter.

The APAC and American region were enjoying still a very strong momentum. I mean we saw -- we have seen that for quite a few quarters and still continue to see a very positive development there, which was positive. And then finally, as I mentioned, I mean, we had the effect of increase of volume, our EBITA margin moving from 6.5% in the first quarter to 7% in the second quarter. So all in all, I will say it was good news on the customer side with good development there, acquisition of new contract. It was also a good development in the profitability of the company. And earnings per share was at EUR 0.16 in the quarter.

As you can see on the revenue and EBITDA trend, I mean, you can see that the revenue is getting back to a higher level. It was already significantly higher than the first quarter and following the projection we had for 2025. So in that perspective, the quarter -- the good surprise of the quarter was that it was not a surprise, but executed according to plan. And the same goes for EBITDA that was also increasing from previous quarter, a solid EUR 14.2 million that gives us a positive trajectory looking at the months forward. If now we look at the different regions, Americas reached EUR 11.8 million, which was a record high number, 7.2% profitability, which was also in the range of what we expect from our different operations.

I mean we have in Americas a strong customer demand, especially for electronic manufacturing. That's the reason why we have actually both announced the investment in a second line, but also decided for the acquisition of ADCO. So we have a very positive view on the American market in our sector, and it was again shown in the performance of the region during the quarter. The APAC region was also developing in a good way, a bit north of EUR 59 million in revenue during the quarter with an improving profitability. And there, we appreciate the trend. We were now back to a level of 8.6% EBITDA, which is trending up from the last 3 quarters, as you can see here. And it was driven by a very strong performance and strong demand on the Chinese market, which resulted in strong performance of our Chinese operation, but also a very solid performance in Australia, where we also have very positive outlook with the new acquired customer that I mentioned a little bit earlier today.

Then we have a high level of ambition for our Malaysian operation. And I think that now that we have completed the implementation of the investment, we can look forward at that facility also in a positive way. So very, very, very happy with what is going on in APAC region and very proud about the work that has been achieved there. Looking at Central Europe, as I mentioned in the previous report, Central Europe has a very big impact from the Energy & Cleantech segment. And the Energy & Cleantech segment in the quarter was still pretty flattish in a way. And here, the revenue was landed at EUR 67 million with a profitability that was well defended by the team at 7.3%. The positive element is that we can see that this market and mainly the project market here is showing a positive sign for the second part of the year.

So that was a positive news or positive confirmation in the quarter, which was something that we were expecting. So a good -- I would say a good development and a solid performance based on the current volume and an outlook that is more positive for our Central Europe region. And then Northern Europe. Northern Europe was also in the range of EUR 65 million with 5.7%. Here, it's a bit of a mixed bag. I mean we had the businesses that are a bit challenged when in the same time on revenue, defense is driving revenue up, which has a positive impact on the global. And therefore, I will say the overall profitability was slightly below the expectation we have for our regions, but still improving from the previous period.

We also know that in a way, our Northern Europe region has also Energy and Cleantech customer portfolio in it that will drive forward performance. When we look at the customer split, I mean the quarter was very active for our biggest customer. Our bigger customer weighted 14% in the quarter. And our first 10 customers were in the range of 58% for the second quarter of the year, which shows, in a way, the strong partnership we have developed with those key customers and the positive development and implementation in their NPI. So that was very much in line with what we were expecting. If we look at Industrial, Industrial had a positive rebound in the quarter, both versus previous quarter, but also versus previous last year when we had an increase of revenue of almost 9%. We had also a very active number of won deals that totalize to about EUR 25 million.

A few drivers in that. Obviously, aerospace and defense there is helping and driving growth significantly and also new contracts are coming in. I mean we had several contracts. They are not always super sizable, but they are impacting the overall at the end. So here, you have 2 different customers that bought a bit more than EUR 1 million during the quarter in new contract for aerospace and defense. Energy and Cleantech was still a bit, as I mentioned before, a bit sluggish, slightly negative, minus 4.4% versus last year in the quarter with EUR 64 million. The won deals was EUR 12.1 million, which was still driven by a few good customers we are driving growth with, and that was a positive element. As I mentioned before, we have positive outlook on that segment for the second part of the year. I mean it has been suffering last year and stabilizing, but we have seen sign of return.

Customer that disappeared last year because of destocking are now coming back. And what we expect in the second quarter is that project business will be in the second part of the year is that the project business will be driving the return of that segment. So even if this quarter was still a bit sluggish, I think that the outlook for the end of the year is better. Medtech and Life Science continue to grow. It was 4.4% growth against the same quarter last year for that customer group and continue to show positive traction for many of our customers. We have also a very strong pipeline on that segment with a very important number of customers. A lot of activities also to improve our operation and factories to serve those customers better. So we continue our journey there, and it's a very positive development, I believe, mainly looking at the pipeline and the opportunities we have forward. With that, I will hand over to Kai for the financials.

Thank you, and good morning. First, we look at the EBITDA development April, June comparing to the previous year same time. On the right side, you can see the EBITDA Q2, EUR 14.2 million and 7%. And on the left side is EUR 14.3 million last year and 7.3%. There is decline almost flat in value-wise and a small decline in terms of margin. The revenue was ended EUR 202 million, and there was an increase of EUR 6.7 million in the revenue. That was including around EUR 9 million of revenue of SRX. And organically, the growth was slightly negative, 1% down. Overall, 3.4% increase in the revenue, which is exactly the same share as we have a growth in the expenses. So the expenses are well under control and also including the SRX expenses.

Depreciation increased by EUR 600,000, half of that is coming from SRX investment. And then the other half is our investments for the future growth, what we are preparing for. Same view for the first half. On the right side, this year, EUR 26.8 million of EBITA and 6.8% and on the left side, 27.4% previous year same time and 6.9%. Margin-wise, flat almost and there is EUR 600,000 drop in the value resulting from the Q1. Turnover total EUR 395 million flat year-on-year. There is a slight increase in the production volume because we were building a little bit inventory of EUR 1 million finished goods and expenses growing EUR 600,000, so totally in line, a bit less than what the volume are expecting. Same with the depreciation, that EUR 1.3 million increase in the depreciation, which half is for the future growth and half coming from SRX acquisition.

Strong financial position, balance sheet in good shape, total value, EUR 535 million. Inventories were declining EUR 26 million year-on-year. Good result. Goodwill is higher, EUR 20 million resulting SRX acquisition. Cash, EUR 12 million more in the pocket. Fixed asset resulting SRX acquisition higher by nearly EUR 10 million -- EUR 8 million. And then interest-bearing debt slightly lower paid off some portion of the loans. And then equity per share was EUR 4.4. Cash flow continued very positive, EUR 23 million in the quarter and EUR 34 million in the first half. Inventory improvement continue a bit slower pace than used to do in the last 1.5 year, EUR 5 million decline in the inventories, cash flow impact.

However, good result. And then free cash flow, EUR 17.8 million in the quarter and then -- which is then actually higher than dividends we paid EUR 15 million and then EUR 27 million in the first half in total. And looking in the past, cash flow from the operations generated in the last 2.5 years is amounting totally nearly EUR 200 million over EUR 190 million in total. Net debt, good development, continued EUR 14.3 million. If considering the leasing liabilities, we are negative in the net debt. It's a little bit higher than was in Q3 last year after the acquisition of -- before the acquisition of SRX. So we are almost like neutralized that impact.

Cash and debt were already mentioned. But then we have made 2 new financing agreements during the first half of the year, totaling EUR 100 million available liquidity. And now we are ending up in total value of nearly EUR 250 million, including the previous available credit limits plus then the new agreements of EUR 100 million and the cash in hand, EUR 50 million. Net debt EUR 0.19 in comparing to EBITDA. And finally, the key figures, equity ratio is more or less the same as last year. Equity is higher. On the other hand, then also the total balance sheet value is higher, which is then lowering the percent slightly. Net gearing with a lower net debt and higher equity is very, very low.

And return on equity with higher equity value, we are a bit declining with the return on equity, and this could be expected to improve over time when -- with the organic and inorganic growth. Earnings per share, more or less at the level of last year. Thank you. I will hand over back to Christophe. And sorry, I have still maybe not probably one of the most important page, but have a dividend growth already 12 years in a row, EUR 0.24 paid for 2024. And it's 6x higher than what we did in 2012, 12 years ago. So nice development there, 1/3 of the net profit is target in average to pay out as a dividend. And now I transfer to Christophe.

Thank you, Kai. So before going to your questions, I mean, when it comes to our outlook, we remain with the same guidance that we have given previously. The reason for that is, as I said, the business has unfolded very much the way we were seeing it. And I think the signs we have remain in line with our previous estimate of the business. From our perspective, the way forward, I mean, we will have obviously focused on closing the 2 M&A that we have signed in the last couple of weeks, obviously important in the agenda. And also in parallel, continue to drive organic growth. I mean we have a quite significant amount of activity both in building capabilities, but also in customer acquisition to return to higher level of growth. So that's something that is focused looking going forward.

And then in the same time, we need to keep control of our costs and keep control of our inventory where we believe there is still room for improvement. So we'll continue that journey. We have been successful in it the last 18 months, but we believe that there is still room for improvement on inventory control. With that, I think that maybe to mention, we will have an investor and media visit 16th and 17th of September in Sieradz will be the opportunity to meet that site that is an important site for Scanfil. But with that, I think we can move to Q&A, Pasi.

Yes. So you can see in your screen a chat box window. So please type in your questions in there, and I will read those questions in here and post those to Christophe and Kai. I know that many people are still on vacation, but let's wait for a while.

There has been a few questions, maybe...

There are a lot of questions. All right. Excluding defense, how is the remaining segments in Industrial developing?

On the industrial -- I mean, obviously, the Industrial segment, the way we report it today includes defense. And I will say that obviously, defense is the driver of the growth. That's definite. But we also see a few business that are coming back to a good level. I mean if you look at our number, you can see, for example, that Asia and Americas in today's number are developing very positively. And they are developing very positively, mainly driven by industrial segment. So I will say it's not only defense that was driving the good performance. It's also other customers that were returning to more positive growth.

Thank you. [ Jakob ] continues about volumes. Taking price into consideration, what was the underlying organic volume development in the quarter?

Yes. I think that's something we should get back to maybe to Jakob.

Yes. Then within Energy & Cleantech, how are the different end markets developing some better or worse than others in Energy & Cleantech. I think that we have been mentioning project business already earlier.

Yes I think that Energy & Cleantech, I mean, it's an interesting dynamic because we have actually won a lot of business in that segment over the last 18 months that is starting to ramp up. Then in the same time, it has been a destocking effect. So we can see 2 elements. We can see that the more regular business is starting to move up forward slightly. And then on the forecast and the outlook, we have a very positive potential development of the project business to come.

Okay. Thank you. Now Mr. [indiscernible]. All new business orders were in 2024, EUR 187.5 million. Can you estimate what was the amount of turnover from these orders during the first half of the year so this far? Guesstimates asked.

Yes. Can you take it once more, maybe, possible?

All new business orders were EUR 187.5 million in 2024. And [ Jörg ] is asking that how much of those EUR 187.5 million came in, in the first half of this year?

Yes. I will say it's still quite minimal. I will say today, you could probably count on 20%, 25% of it as materialized in revenue. But I mean, the biggest part of it is still to come forward. What you should consider is that the ramp-up time is 6 to 18 months to start manufacturing of a wind contract -- and therefore, you will realize that very little of what was won in Q4 is already in manufacturing. And then after that, you need sometimes to get full speed in production, but also in the customer placing the order. So I would say it's still a minimal part of it that is getting consumed.

Yes. Questions continue around the organic growth and how do we maintain it and how do we see it. Organic growth has been negative. This comes from Pasi Väisänen from Nordea for many quarters. Is the organic growth going to be a positive figure already in Q3 2025?

Yes. I think that we have been facing a trend in the industry that has been destocking, and it's no -- I would say it's no surprise to any of you since you have been following us. Then we believe like Q3 and Q4 will mark return to positive organic growth absolutely.

Thank you. Jakob continues about MB. If MB is to meet the requirements for the earn-out payment, will this consideration to be paid only in 2027?

Yes, maybe I can -- yes, it will be paid in '26 and then part of that will then be realized paid in '27.

Pasi from Nordea. Has there been any direct or indirect effect for Scanfil in Q2 from trade war...

Yes. I mean there is impact in the sense that we have a lot of quotes that are requested from our U.S. operation. So I will say the activity of customers that are considering locating their business in U.S. is actually quite significant. Then as you know, I mean, a big chunk of our business is today produced where it's getting consumed. So it has not created a big movement in our manufacturing. It's more creating opportunities for us to ramp up production in Americas.

Continuing about the global trade [indiscernible] now the customers have had more time to adapt to the uncertainty related to global trade rules. Have you seen any changes during the Q2 in the 6 to 9 months demand forecast they have provided to you or in the behavior in general?

First of all, I would say that probably for many customers, there is still uncertainty on what will happen and how this will unfold at the end of the day. But we have not seen any dramatic change. In reality, I was mentioning that Q1 and it's also true for Q2. In a way, this year is a more stable year than previous year was even if it can look like it's a more turbulent time. So I think that as I mentioned before, things have happened pretty much the way we thought they will happen and therefore, pretty much the way the customer told us it will happen so far.

Okay. Thank you. Antti continues about the SRX actually. Could you comment on the performance of the former SRX units during the first 9 months at Scanfil? Can you elaborate a bit?

I think that it has been a very interesting journey first because it was a long time since Scanfil made an acquisition and also because it offers us capability. And I think it has been pleasing in many ways, first, in the quality of the collaboration between the team, which has been good, but also in the dynamic of the business. I mean I was mentioning before, if I look at Australia, we have had an incremental positive development from Australian operation, which was this quarter better than the previous one and better than the one before.

Also new customer acquisition. I mean, I mentioned one of them today, which is also a very good sign. So we were very pleased with that. So that was a very positive element. Then when it comes to Malaysia, it's a little bit longer-term journey, but we also validated the first step. I mean the first step was to, in a way, modernize the operation and the factory. And I mean, I was quite pleased, we'll be there in a couple of weeks, but quite pleased to hear our regional VP, Christian, that was telling me now we have a small future in Malaysia. And I'm looking forward to that. So in a way, it's happening the way we were hoping it to happen, which is positive.

Okay. Thank you. Just a second check if there are further questions coming in. And we still have a question regarding the earn-out related to SRX and the probability and at what level we anticipate that we will come up with. Are you heading to pay earn-out closer to lower or upper end of the potential range?

Yes. I would say we always hope that the best case scenario is the one that materialized. Then I mean, business can give different outcome. I mean we are only at half of the year. So there is still many things to happen. As I said, it has functioned quite well. And then we have a positive outlook to the rest of the year. Then still to be seen what it will mean in terms of earn-out, small changes can have a big impact for the seller.

Yes. Thank you. All right. Let's wait for a bit still -- there are further questions coming in. It seems that no questions. So Christophe, to the closing remarks. Thank you.

Thank you, Pasi. Thanks for listening. A few takeaways from this quarter. As I said, I mean, turnover is gaining speed, and we were now growing 3.4% versus last year. We see a business pipeline remaining very strong, and it allows us to deliver a level of EBITDA in a good level with 7%. For the future, I mean, we have, as I mentioned before, activities to continue to build our growth. The first related to other acquisitions where we need to close our acquisition. And in the same time, we have won deals that we will now have to continue to work and implement.

So I will say that, that was the positive part in the quarter was really we managed to combine in a good way our strategic activities organically and our strategic activities around M&A, which is what we said we're going to do 18 months ago. So from that perspective, things are in line and supported by a strong balance sheet where we continue to make improvement. I mean we make significant improvement in our inventory reduction. And I believe that it's something that will move forward and will continue to improve during the whole 2025. With that, I thank you for listening to us today and wish you a good summer for those -- some of you going to vacation.

Good morning. Welcome to Scanfil's MB acquisition presentation. My name is Pasi Hiedanpää, I am the Director of Investor Relations and Communications at Scanfil. And shortly, about the practicalities, there is a chatbox window. You can ask questions through that, and we will address all the questions at the end of the presentation in the Q&A session.

Now handing over to our CEO, Mr. Christophe Sut.

Thank you, Pasi, and thanks to all of you for joining us today in the middle of the vacation season, really appreciate your effort. I am today going to walk you through the news of the MB Elettronica acquisition that we released on Sunday, I'm actually sitting down in Cortona in Italy as of now. Obviously, Pasi will help me with this presentation and also our CFO, Kai Valo, is on the call. So we will try to give you a bit more clarity on what was released on Sunday.

And starting the discussion, I would like to start a little bit with our strategy and just to remind what we said now almost 1.5 years ago during our first Capital Market Day on our growth objective. And we said at the time that we will grow either through organic development, and that we have done and we continue to do. You know this year, we had communication about our investment in Malaysia that we will inaugurate in September.

We had also communication around new investments in North America. We also spoke about the acquisitive journey and believe that Scanfil needs to always acquire new customers and acquisition can bring that and needs also to reinforce its presence in the world to support our customers that have a global footprint. And that's what we would like to talk about today.

Going into the why and why we have decided to move forward with MB Elettronica as a new company for Scanfil, there is a couple of elements that, from our point of view, make a lot of sense. The first element is in willingness to develop our product portfolio, we can see, and I'm sure many of you can acknowledge it that the Aerospace & Defense segment and space is gaining traction all around Europe and all around the world, but mainly in Europe. And from that perspective, MB, with a very strong footprint, I will go back to it later, in that field, is bringing a new dimension to Scanfil.

The second element is the customer base in general. I think with MB, we are getting a new company joining us that has no overlap in customers, meaning that they have a very interesting customer portfolio that we believe we will be able to nurture across our other sites over time. So that's also a very positive element.

And then finally, as our willingness to continuously develop our footprint and our presence in the different regions in the world, we will now have a footprint in Southern Europe, which was an element missing to Scanfil in supporting our global clients. So there are three very strong rationale that drove the decision and the selection of that company to join Scanfil Group.

In terms of the customer portfolio, because it's something that I have highlighted as important, if you look at the breakdown of MB customers, I mean, the top 5 customers is a bit more than 50%, 59% of the company revenues. And it's split between three different customer segments.

If we look at what we usually talk about, Industrial is -- what we will call Industrial within Scanfil is 56% of MB. They have here already a very rich portfolio, having some strength in the transportation world, which is very interesting to us and extremely much in what we like to see in high mix, low volume.

Medtech & Life Science is 7% of MB portfolio, which is also an area of focus for Scanfil, and they have grown significantly and they have very significant projects in that field, have also improved the facility lately to acquire more customers. So a very positive element. And then last but not least, Aerospace & Defense is very strong in MB, it's 37% of the revenue with the prospective to grow to a very significant number. So very, very positive and very interesting portfolio.

With this new acquisition, we will have access to Southern Europe through manufacturing in Italy. We'll get back to it a little bit later, but it's four factories that will join Scanfil at the time of closing. This new acquisition will be reported as part of our Central European region, which will allow you to follow our company. And therefore, Central Europe will become the biggest region for Scanfil with the add-on of MB in it.

Looking at the four factories, I mean, there is today four factories for MB Elettronica. The company was founded and has its main site operating out of Cortona in Tuscany. And the site is around 350 people, 6 SMT lines. This site has a very strong footprint with the Aerospace & Defense business.

There is then three other sites that are a little bit less sizable; one in Monza, Renate; another one in Mozzate, which is close to Milan; and the last one in L’'Aquila. All of those sites are specialties and are very niche -- the last two are very niche manufacturing when the one close to Milan is rather a site that requires other customers than the mainstream customer of medtech and defense that are mainly located in Cortona.

When it comes to strategic fit, I started a little bit on that, but just to remind about that. It gives us the opportunity to long term now create a new customer group. I mean, defense is going to be very significant, Aerospace & Defense is going to become very significant for Scanfil, and therefore, will become sizable in the total. And that's something that MB is enabling joining Scanfil and is very material to us.

We will also have new customers that we can grow and develop together, which is a great opportunity for us and for them. When it comes to geographical expansion, we will now have access to manufacturing in Southern Europe. I mean, we know that we have in our global customers, quite a few that request this and that's something we will be able to offer them. When it comes to offering, I mean, they do manufacturing of PCBA and box-build, very advanced product, very advanced solution, and have very strong engineering and strong NPI team.

I think it's very pleasing to see that I think we are really acquiring a company that is in the forefront of electronic manufacturing, modern site that has been continuously improved, that is having a very high level of standards, which is very close to what we like to see within Scanfil, I mean, even better in certain aspects and the site also and the facilities that have been built to, I will say, produce much more than the revenue that the company has produced in 2024. So the company is a modern company prepared for growth.

Then in terms of value creation and what we can expect is obviously an enhanced geographical reach and offering that we will try to capture. We believe that we will also benefit from our supply chain. I mean, obviously, Scanfil is still more sizable company that can bring benefits through our network to MB Elettronica.

For employees, we believe that it's a great opportunity to create career opportunity and also to cross-learn. I mean we have already started to see a lot of things they do are very interesting, a lot of things we do are also interesting to them.

And then finally, I mean, they have a strong engineering department and design capabilities, which is also something we can leverage and create value out of for Scanfil towards our other customers. So just a glimpse, I will say, on all the benefits we get through MB Elettronica.

I will now -- we will now move to the key figures and the deal in itself. And I will hand over to Kai Valo before coming back from Q&A. Kai?

Thank you, and good morning. Yes, a few words about the key figures. So the company revenue in total last year was about EUR 100 million and being in a level of nearly 10% of EBITDA and then almost 7% of EBIT, EUR 6.8 million, very similar level than what we have recently got used to in Scanfil as well.

The total balance sheet is a bit less than EUR 80 million, and then net debt about EUR 20 million. Like I said, then the price setup is that depending on the financial performance in this year and in the next year, and there is a range, but then the minimum price is EUR 73 million and then the maximum EUR 123 million.

And the impact in Scanfil net debt is we can expect that it's about on the level [ 1.5 ], maybe a bit more, maybe a bit less. So it's not a dramatic impact on Scanfil net debt level. And we have been well prepared for the transaction. We have available credit facilities, which we can use for the payment, and then the deal is expected to be closed in -- during Q4.

Back to you, Christophe.

Thank you, Kai. I think that was the last slide of our presentation. So happy to answer questions. Pasi will take over from now.

Thank you, Christophe. All right. Let's start with the other Pasi, Pasi Väisänen from Nordea. How many SMT lines are in MB Elettronica for PCB production?

Yes. We have -- in MB Elettronica, we have 12 SMT lines. And as I said before, the main site is located outside of Cortona. And then there is another site that is quite sizable in Milan as well, close to Milan.

Okay. Thank you. Additional question actually following that. Is company focusing on assembly and box building? Can you elaborate a bit about assembly and box build?

Yes. I would say that the company, in many ways, in its activity is very similar to Scanfil. They do electronic manufacturing. So they have part of the business that is building electronic boards. And then they have also, complementary to that, building box build that also includes those electronic products. So I will say their activity is very similar to what you could see in the factory in Suzhou or in Sieradz for Scanfil.

Okay. Thank you. Let's continue with Pasi's questions. Some of the sites are relatively small. Are those all four sites profitable? And could it make sense to consolidate some sites?

Yes. I think there is actually two different profiles in them. Besides I will say the Cortona site is the volume site for defense and medtech. The site close to Milan has been ramping up and growing for some other customers. Then when you look to the other sites, I mean, the site in L’'Aquila is very specialized in some aerospace-specific technology and satellite technology. So there is a niche competence as well as the site in Renate that has also a focus on some kind of niche competence. So I would say at this point in time and looking at the growth too, consolidation is not something that we believe will come on the agenda but rather growth.

Okay. Thank you, Christophe. Antti Viljakainen from Inderes. Can you describe what kind of products MB produces in Aerospace & Defense segment?

Yes. I think that, obviously, the product they manufacture are built around electronics. There is always an electronic board in what they do. Then obviously, it's 40% of the revenue of the company. It's very sizable, and it goes into a very different subsegment, with also some confidentiality that goes around it. So we will not go into the detail of what are the exact products in it, but you can materialize it. It's electronic -- it's centered around electronic manufacturing and box build around that.

Thank you. Antti continues about the additional purchase price. Can you elaborate what is the -- in what conditions the EUR 50 million would be achieved and what is -- when it goes to 0?

I think that as we mentioned, there is two leverage in that transaction. One is a price, a base price of EUR 73 million. That is pretty much based on the realization of the company valuation based on its 2024 valuation. Then obviously, there is expectation, of course, for '25 and '26. And when those growth get delivered, it will create extra layers of potential payment for the seller that will generate an extra purchase price, I would say, in line with the growth level and lining up the multiple based on what was done before.

Okay. Thank you, Christophe. About the customer relations, and there's a question from Pasi that how big of total net sales is the biggest customer. We disclosed five largest ones.

Yes, the same way, I think that the first five customers are the ones that are weighting 60%, then they are balancing between them. Then we will not disclose in that case the revenue of the biggest customer. We will remain disclosing the revenue of the biggest customer for Scanfil, but not for single sites.

Thank you. Now jumping to [ Jakob Cederholm's ] questions. Given the large Aerospace & Defense exposure, is it fair to assume that the margin potential in the MB units on an aggregate level could be higher than for Scanfil Group overall?

I mean obviously, you could assume that defense is going to grow faster than the rest and will be beneficial to the overall company.

Okay. That was clear. Going back to continuing with Jakob, do you have any feeling how much of Industrial is automotive?

Yes. The company is very much a Scanfil-like company, meaning that, I would say, there is a little, little, little, little of automotive. It's not to be mentioned, more to be mentioned for the fun of it. There is some sport automotive, and you can easily figure it out because of the location of one of the site. But it's very tiny. It's not material in the number. It's more for the fun of mentioning it.

Okay. Thank you. That's very clear. [indiscernible] is asking about Aerospace & Defense as well. Should we expect the profitability of the Aerospace & Defense business to be at the same level than the other businesses? Well, that was kind of -- it was answered already, about the profitability in the previous ones.

If you have any questions, so now it's the perfect timing actually. So please use the chatbox window. Just a sec. There is question regarding the additional acquisition price. It was answered as well. You highlighted the need for additional production capacity in South Europe. What is your customer sector needing that production capacity in South Europe?

Yes. I mean, we have quite a few industrial customers that actually do manufacturing in Southern Europe because they serve the market. And sometimes, they need some special adaptation of products that can be needed close to the market where they deliver. We should realize that when you look at Italy, France and Spain, I mean, those are quite sizable countries. So obviously, there are things happening in those countries.

Thank you. Dear participants, there are still time for questions. So please use the chatbox window. Let's wait for a bit. If there are no further questions, so handing back to you, Christophe, for the summary.

Good. But thank you very much, first of all, to all of you to join in this short notice. And I must even maybe apologize that we disturbed your Sunday morning. I know some of you had to step in and work, thanks for doing that. Sometimes things goes on the way that they go.

But I think we are very excited that this acquisition is really making a difference for Scanfil and offering us the opportunity to enter a new geographical market, but also the segments of Aerospace & Defense in a bigger way. So really looking forward to update you on the development of that and thanking you for your time today. And hopefully, we get a chance to talk again on Thursday for our quarterly report. Thank you very much for today.

Welcome to Scanfil's Investor and Media Conference. My name is Pasi Hiedanpää. I am the Investor Relations and Communication Director at Scanfil. Yesterday, we announced the acquisition of ADCO Circuits. Our CEO, Christophe Sut, will present the acquisition in brief. We have Q&A at the end of the presentation and all the questions will be addressed there.

Now handing over to Christophe. Please, Christophe.

Thank you, Pasi. And thanks to all of you for joining with such a short notice. We really appreciate the effort you make listening to us and trying to understand what happened last night. If we move to the next slide, Pasi. Just to remind everyone, I mean, we announced a bit more than a year ago that as part of our strategy and in order to fuel growth, we will return to an M&A agenda.

And we did during the fall last year, acquiring SRXGlobal that gave us footprint and expanded footprint in Asia. And as you know, we are working as we speak, to increase our capability in Malaysia to grow that business. In the same time, we had also announced and been clear on the fact that we were looking for an expansion in America, where we have our smallest region today.

And that's what we will actually cover today since the acquisition we made yesterday is actually in the U.S. If we move to the next slide, Pasi, here, you can see the footprint of Scanfil today, where we have 3 factories that are located in Asia, 4 in Northern Europe and then 3 in Central Europe.

And once the acquisition of ADCO will have been closed, we will have in North America, 2 operations, 1 in Atlanta and a second operation in the north of the U.S., close to Detroit. If we go to the next slide and look at the company in brief, I mean ADCO is a company that was established in 1981. She has been grown and developed and been owned by the Damman family. Mark Damman, one of the brother has been and is currently CEO of ADCO. He will actually continue as part of Scanfil and keep the minority shareholding of 20% in the company for the time being.

The company is in the range of EUR 30 million revenue with an EBITDA margin of 11.4% and has a strong customer portfolio in aerospace and defense, serving American manufacturers that are either sales on the U.S. or also export and outside the U.S.

We have -- they have a focus on electronic and a strong knowledge on electronic manufacturing, 3 assembly line located on their site in Detroit and a strong team that is extremely experienced when it comes to electronic manufacturing to mastering standards in the medtech sectors, in the defense sectors and as well as automotive, which shows the quality of their quality system.

They focus on electronic manufacturing and have a complementary business on box built for Industrial customers. When it comes to the acquisition in brief, the enterprise value was established at EUR 21.7 million. We will have a purchase price based on 80% of the share, which is estimated to be EUR 13.6 million and to be paid in cash.

The closing of the deal is subject to some regulatory approval, and we expect that to be granted during the third quarter and from there, have start of having ADCO as part of Scanfil. As you will have noticed, actually, this acquisition is something that was absolutely in the range of what Scanfil can do and will actually keep our net debt ratio far below our target of 1.5 that we communicated last year, which means that we will still have firing power after that acquisition has been completed.

Going maybe a bit more to the next slide, Pasi, to some more details. All operation and staff are today based in Rochester Hills. It's 45 minutes more or less north of Detroit in Michigan. They have facilities of 5,000 square meters, where we have currently 120 employees, 3 SMT lines that are running in that operation. And actually, that factory is running in 1 shift at this time, which means that it has room for growth even within the current space and with the current equipment.

As I mentioned before, it is a very strong competence in that factory. I mean the people running those operations have long-term experience in the EMS and electronic manufacturing industry and therefore, have developed a very, very, very strong capabilities in that operation.

Moving to the next slide. So if we look at a summary of that acquisition from a customer perspective, it increased actually our penetration on what we call aerospace and defense since 37% of the revenue of the company is in that field. It will actually double our revenue in that area once the acquisition is completed.

It has also a growth opportunity in energy, Cleantech, medtech and life science. We have even a few customers that are joint customers. And I would say on those customer segments, I mean, the couple of customers we have spoken since we signed the acquisition have been very positive to the news and very supportive to the news, which is very, very positive for the future.

In terms of geographical expansion, as we had mentioned before, I mean, we have a willingness to grow in U.S. And obviously, it will more or less double our size in North America, still a lot of room to grow in North America, but it is a big step. And I believe that having that facility in the north part of the country and another one in the south part is giving us a lot of strength with our existing customer as well because it gives us the chance to have redundancy.

It also gives us the opportunity to have an expanded offering since ADCO has a Proto PCBA service manufacturing and good NPI capabilities, which will also support our Atlanta site that is developing in the field of electronic manufacturing. When it comes to the value creation piece, we get increased presence in North America and very strong PCBA experience. So that's also positive for our customers that are currently looking at localization, and that is a positive element.

As we said, they have a very good quality of operation and a certain number of certificate that are both in the field of medtech, automotive and defense that we will be able to leverage on. And then finally, but not least, they have -- we get the opportunity with new employees, new colleagues, competence and the chance to grow the business more.

One thing I didn't mention, which is still important is, of course, joining Scanfil, they will benefit of the bargaining power of Scanfil in terms of purchasing of components, which we can see also in the case of previous acquisition we have made is a very good attribute for people, for company joining us.

Moving to the next slide. In terms of positioning, I mean, this is a perfect match with Scanfil. They do high mix, low volume. They do industrial customers, medtech, life science and also energy and cleantech and they have PCBA and box build manufacturing. So totally in line with our strategy.

Next, in terms of customer portfolio, their top 5 customer weighs around 50% of the revenue of the company. And as you can see, medtech and life science is in the range of 10%. Then comes aerospace and defense with 37%. And then finally, Industrial, the way we split our business, representing half of the revenue. And then a certain number of certificates to serve those type of customers.

Moving to the next slide. Turnover for '24 was in the range of EUR 30.6 million with an EBITDA percentage of 11.4%, EUR 3.5 million, which showed the good performance of this operation that has had a long history of very strong cash conversion. So that is very positive. The production facility will not be part of the transaction and rent expenses will actually affect EBITDA by EUR 0.3 million to EUR 0.5 million per year.

Summarizing what you have seen before we can open up for Q&A. The acquisition of ADCO is a step for us to speed up the execution strategy when it comes to what we presented a year ago, both increasing our presence in the U.S. and getting a platform to grow there, but also transforming our willingness to do acquisition that fit our strategic match.

And I think from that perspective, as you have seen before, ADCO is matching perfectly what Scanfil is looking for. I think the second element is that we get here the chance to have a very complementary offering against Atlanta, both having the capability to have different location in the country to have redundancy, to have different competence as well.

They have, as I mentioned before, prototyping facilities. That's something we were missing in Atlanta that was a bit of a challenge lately. So that will be very, very positive. And also will enable us to start to have a stronger sales penetration on the market because of the size we are starting to build in North America.

So in summary, I will say we are very pleased to have signed an agreement with the owner of ADCO. And because I think this agreement is really an industrial logic between the 2 companies, Scanfil wanting to grow and develop in the region and ADCO and the family owning the company wanting to find an owner that gives a perspective to the company. So very pleased with the development.

Now we're getting to the Q&A. There are quite many questions if I start shooting those from here. First question, how has ADCO's profitability evolved over time? And what are the key drivers behind its strong margins?

I think that -- I will say the ADCO profitability has slightly improved and has been for quite a long time at a quite high level. I think there is one main driver here is I think they have first developed a very strong competence in linking high mix, low volume with prototyping, which allow them to offer a very good quality of service to their customer. I mean it was -- I was mentioning a few calls that happened last night with some of their key customers, and that's something also they confirm once more.

So I think that's a very good quality of service. And then they serve quite complex manufacturing and requesting quite a few approval and quality standards to serve those markets. So they have a good -- they are playing in a good market and bring added value to manage that complexity and such request of high quality. I would say the aerospace and defense part of the business [indiscernible] is obviously one of the driver of that profitability with all the characteristics it has.

Question actually continues. Is the current level sustainable? How do I see it?

I think that we believe that the current level has been sustained for a very long time and should be sustained in the way it is. I mean there is added value and there is a recognized good level of performance from the company. So I think that when you are on those niche market, I think you can definitely continue it. And when we talk about niche market, it's still a market that are very sizable.

Okay. Question regarding defense customers. Does this acquisition help you to increase business with old or new defense customers in Europe due to, for example, more credibility or new capabilities to serve this special segment?

Yes. I think there is 2 answers to that. I mean one of the answer is obviously, even the American customer they are delivering to have export business. So they benefit from the global trends of increase of spend of defense. Then obviously, as we are growing and you know we have already a few companies that we are serving in that field, it's good now that we have a new site that have strong competence, certification and experience. And I believe that it will help us both to build credibility with customers, but also to build the knowledge within the company.

Okay. About the lease deal what we have with the factory, will the factory itself be subject to an ordinary lease?

Yes, we will not own the -- as it was mentioned, we are not owning the property, but we have a long-term lease that has been agreed as part of the acquisition.

Additional question actually regarding the facility -- sorry, a lot of questions popping in at the same time, to keep a track on that. What is your view on the lease terms? Can you expand further in the existing property?

Yes. I think my view is very positive because I think, obviously, the family will keep owning those facilities. They have -- and Mark has definitely an interest to facilitate the expansion of the company because of his remaining ownership in it. On top of that, there is both capability to increase our revenue with the current machines because you know that there is only one [ ship ] running right now. But also there is within those facilities, a possibility of -- within that land, possibility of expansion, meaning the whole land is not used as of today for manufacturing. So there is both possibility to grow in the current factory space and possibility to expand that factory space. And that has been, I will say, taken into consideration as part of the negotiation.

Okay. About the remaining 20%, which Mark will hold, is there any earn-out related to remaining 20% of the company?

I think, obviously, the fact that we will have a 20% ownership in the company gives him the opportunity to increase the value of the company. And that's the whole construction behind it that it will remain for a period of time, and they are giving the opportunity to sell it to Scanfil at a later stage on an agreed terms.

Regarding our M&A strategy, do you prefer acquiring companies of this size, roughly 3% to 5% of your revenue? Or are you aiming for larger acquisitions?

I think that what we have said is that we aim at 10% growth on a cycle basis and half being acquisitive and half being organic, meaning that basically, we need to buy for 5% per year, if I make it very simple. That company gives us that number.

Then does it say that it's the only size we want to buy? No, we will consider a bigger company, and we are considering a bigger company. But in a way, this size is very satisfactory when we get the right price, the right profile of company and in a way, it helps us to achieve our long-term targets. So it's not a limitation, but it's a sweet spot when you find the right target.

A question regarding ADCO Proto. What is ADCO Proto? And does it directly generate revenue?

Yes, absolutely. ADCO Proto actually is a service that they offer to their customer to build prototype in pre-industrialization phase, and it's actually a service that generates revenue.

Still about the 20% seems that this is a subject for many people. Do you have an option to buy the minority stake out in the future?

Yes.

Given only one shift and procurement synergies, would it be logical to assume increased margins if you succeed getting new business there?

I think it's a question where you can answer yes, no, maybe. It will obviously depend on the type of profile we -- and type of customer we bring in. But I think at least we can hope to maintain and sustain the level of profitability.

And obviously, if we would have to increase significantly, we will also have to make investments. So I think that counting on keeping the level of profitability and increasing the revenue is already a very positive story.

Okay. A question on procurement. You said this acquisition will benefit ADCO in purchasing components. How will procurement purchasing change at ADCO post acquisition?

I mean that's something that we have started to oil very well with the SRX acquisition, where we basically review all the components that get consumed by our companies and make them benefit from our global contract. And with all the semiconductor player, we have global contracts, special payment terms and prices that are negotiated.

And you will easily recognize that when you are a EUR 900 million company or a EUR 30 million company, I mean, you obviously get different conditions. And that's usually the way we benefit from those type of acquisitions for the acquired companies.

Seems that currently to the summary. If there are no further questions, let's wait for a bit more. No further questions. And if you come up with any questions, so you can directly always contact me or Christophe or Kai as well. Now handing back to you again, Christophe, for the summary.

Thank you, Pasi. So as I said, I am very pleased of closing that acquisition. I think there is -- maybe one reason I have not fully highlighted is or highlighted in North is I believe not only a company that fit us strategically, we have met people that fit us culturally.

It has been a very constructive process, very constructive discussion, very easy to align on our joint goals and ambitions. So for me, it's probably the most important things when you do an acquisition of that type that you feel that not only we are in the same business, but we see the future the same way.

So it's a big step for us. We will double our size in North America. As you have seen also, Christina Wiklund, that is our current Chief Commercial Officer, will take the lead for that region, which will allow more focus and more customer focus in the region.

So really looking forward to that development. Thank you very much for joining us today. Very appreciative that you took the time with such short notice.