CEO statement

There is a strong focus on driving profitable growth based on the significant investments made in recent years

Record-High Order Intake

In a continued global turbulence, it is encouraging to see that the positive development already observed in the fourth quarter of 2025 strengthened further at the beginning of the year. Ependion’s order intake increased by 41 percent to the record level of 778 MSEK, driven by strong order bookings in both business entities and across virtually all focus segments and geographies. Adjusted for currency effects, the increase was 51 percent, while organically in fixed exchange rates it amounted to 32 percent.

For the Westermo business entity, order intake increased by 57 percent to a record-high 497 MSEK. Adjusted for currency effects and the acquisition of Welotec, the increase was
32 percent. Key customers within the train segment showed particularly strong development during a period that did not include any major project orders.

For the Beijer Electronics business entity, order intake increased by 20 percent to 282 MSEK, driven by solid demand from the marine sector as well as from customers operating in data centers and charging infrastructure. In fixed exchange rates, the growth rate was 31 percent. Ependion’s order backlog amounted to 1,289 MSEK at the end of the first quarter of 2026.

The higher pace of order bookings has not yet materially impacted the Group’s sales, which increased by 10 percent to 597 MSEK during the first quarter. Organically and adjusted for currency effects, sales development was stable. Westermo’s sales increased by 21 percent to 387 MSEK, while adjusted for currency effects and acquisitions sales were marginally below the corresponding period last year. For Beijer Electronics, sales decreased by 6 percent to 211 MSEK, while in fixed exchange rates sales increased by 2 percent.

As previously communicated, effective from the first quarter of 2026, the Group has changed its operating profit measure from EBIT to EBITA. See page 10 under Financial information. Ependion’s EBITA strengthened to 75 MSEK, corresponding to a margin of 12.5 percent. The improvement in profitability was primarily driven by a clearly improved margin for Beijer Electronics and by Westermo accounting for a larger share of Group sales. The negative impact from currency effects on earnings amounted to 6.5 MSEK.

Westermo increased EBITA to 64 MSEK with a stable EBITA margin of 16.6 percent. Beijer Electronics increased EBITA to 24 MSEK with a clearly improved margin of 11.4 percent, driven by strengthened gross margins and solid cost discipline.

Improved Profitability Amid Market Uncertainty

Free cash flow amounted to a negative 9 MSEK, which is an improvement compared with the corresponding period last year. Cash flow was negatively impacted by increased inventory holdings of critical components to secure delivery capability, as well as by higher accounts receivable towards the end of the quarter.

The increased rollout of data centers for AI applications has strained the global supply chain, particularly for memory chips. This has resulted in significantly higher prices and longer lead times for certain electronic components. A limited portion of the Group’s increased order volumes during the period – totaling approximately 25 MSEK, of which 15 MSEK related to Beijer Electronics and 10 MSEK related to Westermo – was driven by a small number of customers extending their order horizons due to concerns about component supply. The Group’s business entities continuously work to secure access to critical components and to offset cost increases through price adjustments.

The war in the Middle East has so far had a very limited impact on the Group’s operations. The Group has no organization in the region, but we are of course closely monitoring developments.

Well Positioned for Continued Growth

The German technology company Welotec, which has been part of Westermo since June last year, continued to perform very positively during the period. The collaboration with the software company RazorSecure within cybersecurity solutions for the railway industry is progressing according to plan, and several concrete joint business opportunities have been identified.

Within Beijer Electronics, the market introduction of the new generation of operator panels – X3 – continued to develop positively, and particularly encouraging is the significant interest we are seeing from new customers.

Within the defense segment, activities are now underway in both business entities, with the ambition to substantially strengthen our position in this segment over time.

In summary, there is a strong focus throughout the organ-ization on driving profitable growth based on the significant investments made over recent years. We note another quarter of increased order intake and high activity levels among a broad range of customers, which supports a degree of optimism even though individual quarters may show fluctuations in order bookings.

Our assessment is that geopolitical uncertainty will persist, with potential impacts on our business in the short term. However, through investments in new technology, new acquisitions and new establishments, Ependion is well positioned to benefit from the underlying growth in our focus segments. We therefore view our opportunities for profitable growth during 2026 with cautious optimism.

Jenny Sjödahl
President & CEO