The fourth quarter

• Order intake increased by 12 percent to 639 MSEK (572); adjusted for currency effects and acquisitions, it increased by 4 percent.
• Net sales increased by 1 percent to 582 MSEK (578); adjusted for currency effects and acquisitions, they decreased by 2 percent.
• EBIT amounted to 58.3 MSEK (65.5).
• The EBIT margin was 10.0 percent (11.3).
• Profit after tax increased to 44.0 MSEK (34.9).
• Earnings per share improved to 1.37 SEK (1.22).
• Free cash flow amounted to 68.1 MSEK (80.0).
• Business entity Westermo completed the acquisition of a minority stake in RazorSecure, a UK-based software company that is a leader in cybersecurity for the rail industry.
• The Board of Directors decided to add the defense industry as a focus segment within business entity Westermo.

The full year

• Order intake increased by 11 percent to 2,253 MSEK (2,039); adjusted for currency effects and acquisitions, it increased by 7 percent.
• Net sales decreased by 1 percent to 2,232 MSEK (2,258); adjusted for currency effects and acquisitions, they decreased by 5 percent.
• EBIT amounted to 232.1 MSEK (250.9).
• The EBIT margin was 10.4 percent (11.1).
• Profit after tax amounted to 146.7 MSEK (157.0).
• Earnings per share were 4.73 SEK (5.45).
• Free cash flow amounted to 148.1 MSEK (187.4).
• The Westermo business entity completed the acquisition of the technology company Welotec. A directed new share issue of SEK 300 million was carried out to partially finance the acquisition.
• The Board of Directors proposes an increased dividend of 0.25 SEK to 1.50 SEK per share.
  

COMMENTS FROM THE CEO, JENNY SJÖDAHL

“The market environment in the fourth quarter was largely unchanged compared with previous quarters of 2025, with ongoing geopolitical uncertainty continuing to affect our customers’ pace of investment. Significant currency movements also had a material negative impact on both order intake and sales volumes, and earnings during the period. On the positive side, we saw a clear sequential improvement in order intake following a weak third quarter, with order bookings recovering during the period, primarily driven by Westermo’s rail segment. In a challenging market environment, confidence in the future remains, and we are focused on building a stronger group. The investment in the UK-based cybersecurity company RazorSecure and the decision to add the defense industry as a focus segment within the Westermo business entity were the most important milestones of the period.

Order intake for the quarter increased by 12 percent to 639 MSEK. Adjusted for currency effects, the increase was 19 percent, and organically in fixed exchange rates it amounted to 4 percent. Order intake in the Westermo business entity rose by 22 percent to 432 MSEK, with positive development in the train and rail segments as well as in the Indian market and Welotec. For Beijer Electronics, order intake decreased by 5 percent to 208 MSEK, while it increased by 3 percent when adjusted for currency effects. The business entity’s core product, operator panels, or HMIs – X2 and X3 – continued to grow by 7 percent in fixed exchange rates during the quarter, fully in line with the strategy. For the full year, the Group’s order intake increased by 11 percent to 2,253 MSEK, and the order backlog amounted to 1,089 MSEK at year-end.

During the fourth quarter, the Board of Directors decided to invest in the defense sector, which will become a new focus segment for Westermo. The business entity’s sales to the defense industry amounted to approximately 30 MSEK in 2025, and the ambition is to multiply sales several times by 2030.

Ependion’s net sales for the fourth quarter were stable compared with the relatively strong comparative period last year, increasing by 1 percent to 582 MSEK. Adjusted for acquisitions and excluding currency effects, net sales decreased by 2 percent. Sales in the Westermo business entity increased by 6 percent to 369 MSEK, with growth driven by the recently acquired company Welotec. For Beijer Electronics, sales declined by 8 percent to 215 MSEK, while in fixed exchange rates they increased by 1 percent. During the corresponding period last year, sales included 20 MSEK from products that have since been phased out. The changed product mix has contributed to higher gross margins in line with the strategy.

For the full year, Ependion’s sales decreased slightly to 2,232 MSEK. Adjusted for acquisitions and currency effects, the Group’s sales declined by 5 percent. Westermo’s sales amounted to 1,378 MSEK for 2025, and Beijer Electronics’ sales amounted to 858 MSEK.

The Group’s EBIT for the fourth quarter declined to 58 MSEK, corresponding to an EBIT margin of 10.0 percent. For the full year 2025, Ependion achieved an EBIT of 232 MSEK and an EBIT margin of 10.4 percent, which was lower than in 2024. The Westermo business entity reported an EBIT of 204 MSEK with an EBIT margin of 14.8 percent, while the Beijer Electronics business entity recorded an EBIT of 79 MSEK in 2025, with an EBIT margin of 9.2 percent.

The EBIT for the period is clearly below our target, and we are of course not satisfied. It is challenging to fully offset currency effects, which had a significant negative impact on the period’s earnings of approximately –16 MSEK compared with the fourth quarter last year, corresponding to 2.8 percentage points in EBIT margin for the Group. The negative impact on volumes was approximately 6 percentage points. However, gross margins in both business entities have strengthened during the year, and we can increase volumes going forward without a corresponding increase in fixed costs, providing strong operating leverage. We continue to balance cost discipline with prioritized forward-looking investments.

Ependion’s free cash flow amounted to 68 MSEK for the period, and for the full year 2025 Ependion generated 148 MSEK in free cash flow, thanks to continued efforts to reduce working capital. The strong cash flow and the Group’s solid financial position contribute to the Board of Directors’ proposal to increase the dividend to 1.50 SEK per share for 2025.

The Group’s expenses for product development amounted to 83 MSEK, corresponding to 14.3 percent of net sales for the quarter, which is lower compared with the corresponding period last year. Development costs at Beijer Electronics are proceeding according to plan and are on a downward trajectory. During the period, Westermo launched its first cybersecurity-certified product in accordance with the EU standard IEC 62443-4-2: Viper 3000, which enables secure communication for the train and rail industries.

During the quarter, Westermo acquired a minority stake in the UK-based software company RazorSecure. The transaction and the collaboration agreement entered strengthen the business entity’s position in cybersecurity and have already generated several new business opportunities where RazorSecure’s software is combined with Westermo’s hardware. The previously acquired company Welotec has developed very positively during the seven months it has been included in the financial statements and is contributing to new business opportunities within the energy sector.

During the fourth quarter, preparations were also made for upcoming CSRD and ESRS reporting in line with current legislation, helping to integrate sustainability into our governance and performance monitoring. Welotec has been certified in accordance with ISO 14001 for environmental management.

As we now sum up 2025, I note that it was yet another year characterized by uncertainty in the form of geopolitical tensions and trade policy conflicts, which have contributed to continued cautious markets. We have worked to mitigate these effects while maintaining our focus on the future. We have continued to strengthen Ependion through investments in new technology, new acquisitions, and new establishments that expand our geographical footprint. Our assessment is that uncertainty will persist, with potential impacts on our business in the short term, but Ependion is significantly stronger today than it was a year ago. We therefore view our opportunities for profitable growth in 2026 with cautious optimism.”

INVITATION TO PRESENTATION OF THE REPORT

Today, a web and teleconference will be held for press and analysts, where President and CEO Jenny Sjödahl and CFO Joakim Laurén present the company and comment on the report.

Time: Monday, January 26, 14:00 CET

If you wish to participate via webcast please use the link below.
https://ependion.events.inderes.com/q4-report-2025/register

If you wish to participate via teleconference please register on the link below. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference.
https://events.inderes.com/ependion/q4-report-2025/dial-in

The report and the presentation will be available at the company’s website www.ependion.com. A recording of the webcast will also be available here after the event.

Welcome to join!