Q3 Interim Report: Profitable Growth During the Quarter with On-Time System Delivery

FINANCIAL RESULTS THIRD QUARTER 2026

• Net sales amounted to SEK 36.5 million (15.2) [1] [2]
• Total revenue amounted to SEK 38.0 million (16.1)
• Operating profit amounted to SEK 3.8 million (-11.8)
• Operating profit after financial items amounted to SEK 3.6 million (-12.1)
• Cash flow amounted to SEK -1.2 million (-16.9)
• Cash balance, end of period, amounted to SEK 14.1 million (12.9)
• Liquidity ratio amounted to 68% (75)
• Adjusted liquidity ratio amounted to 68% (102) [3]
• Order backlog coating systems at period end amounted to SEK 13.6 million (0) [4]
• Order backlog Coating Services at period end amounted to SEK 1.8 million (10.5) [4]

FINANCIAL RESULTS JANUARY-SEPTEMBER 2026

• Net sales amounted to SEK 58.9 million (31.5) [1] [2]
• Total revenue amounted to SEK 61.1 million (50.5)
• Operating profit amounted to SEK -20.3 million (-41.9)
• Operating profit after financial items amounted to SEK -20.9 million (-42.1)
• Cash flow amounted to SEK -23.4 million (-19.5)

BUSINESS HIGHLIGHTS DURING THE THIRD QUARTER 2026

• Delivery completed of INLINECOATER™ IC500 to HJWAVE (Korea)
• Full one-shift production resumed at Coatings Service Center China from September – increased demand following governmental approval of four-year hydrogen pilot program

BUSINESS HIGHLIGHTS AFTER THE PERIOD

• Shipment of INLINECOATER™ IC500 to LINDBERG (Denmark)
• Selected as winning bidder in Romanian public procurement process with INLINECOATER™ IC2000

[1] Net sales includes revenue from sales of metals recovered through recycling processes in Coating Services.
[2] The comparative figures for the previous year have been reclassified to present revenue from recycling of metals under net sales instead of other operating income, 2025 Q2: SEK 0.4 million, 2025 Q3: SEK 1.4 million, 2025 Q4: SEK 4.7 million.
[3] In Q3 2025 included the part of the inventory that was financed by customer pre-payments.
[4] Future agreed leasing revenue of SEK 7.9 million over 30 months for a production line leased out by the subsidiary in China is not included in the backlog figures.

CEO’s COMMENTARY

Impact Coatings reports positive net income and growth for the third quarter. During the quarter, an INLINECOATER™ IC500 was delivered and recognized as revenue according to plan, while Coating Services also contributed to sales growth. Following weaker development during the first half of the year, we are now seeing increased demand in China. Persistent sales efforts have yielded results after the end of the quarter, as Impact Coatings was named the winning bidder in a public tender for an INLINECOATER™ IC2000 for a Romanian research institute specializing in hydrogen and energy technology. Impact Coatings maintains its strategic focus on the energy sector, pursuing opportunities in both solid-oxide technology and hydrogen-related applications.

System delivery on schedule and growth in Coating Services
Net sales during the third quarter amounted to SEK 36.5 million (15.2), driven by both system sales and Coating Services. Net income for the quarter amounted to SEK 3.6 million (-12.1), and cash flow from operating activities improved to SEK -1.2 million (-16.9). The positive net income and improved cash flow reflect our continuing efforts to drive commercial activity while reducing costs and improving working capital efficiency.

During the quarter, we delivered and recognized revenue from the INLINECOATER™ IC500 ordered by HJWAVE in April 2026. In Coating Services, the larger customer order highlighted in the second quarter contributed SEK 3.6 million to quarterly net sales. The order arose in response to a time-critical customer need, and we were able to meet demand for higher coating volumes on short notice.

The delivery to HJWAVE was completed approximately three months after receiving the order, in line with our communicated timeline. Work on the next system delivery, to our long-standing customer LINDBERG within Kering Eyewear, has also progressed according to plan. The INLINECOATER™ IC500 system was shipped in October, in line with previous communication.

Increased activity in China following start of hydrogen pilot program
Following weaker-than-expected development during the first half of the year, we are now seeing increased activity in the Chinese market. In August, Chinese authorities announced five regional hydrogen clusters under the four-year pilot program presented in March, marking the start of the program's implementation phase. This development supports our previous assessment that the weaker demand was primarily a matter of timing. We communicated the developments in China and implications for the company’s Chinese operations in a press release on September 8.

Since the announcement, we have seen increased customer forecasts and higher order intake for coatings on bipolar plates for PEM fuel cells. Our Coating Service Center in Shanghai has resumed full one-shift production and has the capacity to scale up to two shifts as demand increases. It is still too early to assess the magnitude and duration of the recovery, but with the pilot program now in its implementation phase and increasing demand among our customers, we view developments in China with cautious optimism.

Broader customer base and winning bid with IC2000
Within electronics and luxury products, our efforts during the year have resulted in system orders. We have also taken important steps forward in the energy segment, with increased Coating Services order intake in China during the quarter and a positive announcement after the end of the quarter regarding the public tender for an INLINECOATER™ IC2000. We also have several ongoing business opportunities in Europe, including within electrolysis. In the automotive segment, progress toward new business remains slower, but customer dialogues are ongoing. During the quarter, we added five new paying customers, and the order backlog at the end of the period amounted to SEK 13.6 million for coating systems and SEK 1.8 million for Coating Services.

The announcement after the end of the quarter that we had been selected as the winning bidder in a public tender with an INLINECOATER™ IC2000 for the Romanian research institute ICSI is encouraging. ICSI conducts research and development within hydrogen and energy technology, and the system is intended for the development of coatings on bipolar plates for fuel cells and electrolyzers. The anticipated contract value is approximately EUR 1.5 million, with delivery planned for 2027. The statutory appeals period has now expired, and the next step is to sign the final agreement.

Our efforts to win new system business continue across all segments. Sales cycles are long, and customers' investment decisions often depend on development and qualification processes, both at the customer and further along the value chain. This makes the timing of new system orders difficult to predict.

Progress in SOFC and iridium oxide
Within solid-oxide technology, we have broadened our customer base, with a particular focus on Asia. Several leading industry players are now evaluating our technology through paid sample coatings. This is an important step in a market where extensive testing and qualification are prerequisites for bringing technology into commercial production. These processes often extend over many months, sometimes years, and affect the timing of larger volume business.

Within iridium oxide coatings, work continues together with LT Metal, focusing on joint industrialization and commercialization. The collaboration combines LT Metal's titanium-based porous transport layers (PTLs), a key component in PEM electrolyzers, with our PVD technology for catalytic iridium oxide coatings. By applying iridium oxide directly to the PTL component, iridium consumption can be reduced while simplifying the manufacturing process. We are now providing jointly developed sample components to potential customers for evaluation and qualification.

Outlook
Developments during the year have broadened our commercial base. We have secured system orders within electronics and luxury products, added new paying customers, and seen increased demand within Coating Services in China. The announcement after the end of the quarter regarding the award of an INLINECOATER™ IC2000 is another positive step in our efforts to increase system sales and strengthens our commercial opportunities within the energy segment.

Our ambitions remain higher than our current sales levels. Our focus is on developing the customer base and converting ongoing sales efforts into orders and revenue within both Coating Services and systems.

Positive net income in the quarter demonstrates the effect of cost reductions combined with higher sales volumes. This is an important step on our path to long-term profitability, although earnings are affected by the timing of system deliveries and sales variations between quarters. We have much work ahead, but now have a broader customer base, more commercial opportunities, and a lower cost base than a year ago.

Jonas Nilsson, CEO

Presentation

Impact Coatings invites investors, analysts and the media to a presentation of this Interim Report on Wednesday, October 21 at 09:00 am (CEST). CEO Jonas Nilsson and CFO Lena Åberg will comment on the Interim Report and take questions. The presentation will held via webcast in English.