Interim Report January–September 2026: Strong organic growth and significantly improved profitability

Third quarter

• Order intake increased by 12 percent to 565 MSEK (505); adjusted for currency effects, the increase was 11 percent.
• Net sales increased by 22 percent to 664 MSEK (544); adjusted for currency effects, the increase was 21 percent.
• EBITA increased to 95.0 MSEK (66.5).
• The EBITA margin strengthened to 14.3 percent (12.2).
• Profit after tax increased to 56.9 MSEK (40.4).
• Earnings per share improved to SEK 1.77 (1.26).
• Free cash flow increased to 60.1 MSEK (29.9).

Nine months

• Order intake increased by 26 percent to 2,039 MSEK (1,614); adjusted for currency effects and acquisitions, the increase was 19 percent.
• Net sales increased by 18 percent to 1,943 MSEK (1,649); adjusted for currency effects and acquisitions, the increase was 11 percent.
• EBITA increased to 254.2 MSEK (184.3).
• The EBITA margin strengthened to 13.1 percent (11.2).
• Profit after tax increased to 142.9 MSEK (102.7).
• Earnings per share improved to SEK 4.44 (3.35).
• Free cash flow increased to 91.0 MSEK (80.0).
• Operating profit measure changed from EBIT to EBITA.

COMMENTS FROM THE CEO, JENNY SJÖDAHL

Earnings performance demonstrates the operating leverage from higher volumes

“Ependion continued to develop positively during the third quarter of 2026 despite continued uncertainty in the external environment. The improvement was broad-based and encompassed order intake, sales and profitability in both business entities. Particularly encouraging was the strong organic sales growth, which contributed to record-high EBITA.

The Group’s order intake increased by 12 percent to 565 MSEK during the quarter. For the Westermo business entity, order intake grew by 12 percent to 343 MSEK, primarily driven by continued strong development in the important energy segment, where several markets and product areas showed good order growth. Order intake in the rail segment was weak during the period, consistent with the seasonal pattern observed in the third quarter in recent years. For the Beijer Electronics business entity, order intake increased by 11 percent to 223 MSEK, driven by increased demand in the marine segment and manufacturing industry. At the end of the period, the Group’s order backlog amounted to 1,240 MSEK.

The strong order intake during the first half of the year resulted in high delivery volumes in the quarter. Sales increased organically by 22 percent to 664 MSEK, with broad-based growth across both geographies and focus segments. For the Westermo business entity, sales increased by 30 percent to 434 MSEK, while sales for Beijer Electronics grew by 10 percent to 230 MSEK.

The strong sales performance, combined with healthy gross margins and continued cost restraint, contributed to an increase in the Group’s EBITA to 95 MSEK for the period, a new record level. The EBITA margin increased to 14.3 percent. The positive earnings performance demonstrates the inherent operating leverage in the business as volumes increase. Westermo’s EBITA rose by as much as 61 percent to a record 81 MSEK, corresponding to an EBITA margin of 18.7 percent. Beijer Electronics’ EBITA increased to 31 MSEK, with an EBITA margin of 13.3 percent, marking the third consecutive quarter of margin improvement for the business entity.

Currency effects were limited, with a positive impact of approximately one percentage point on both order intake and sales, while EBITA profit was positively affected by 3 MSEK.

Free cash flow doubled to 60 MSEK, despite elevated inventory levels, high accounts receivable and investments in increased production capacity for Westermo. Inventory levels continued to be adversely affected by the increasingly strained situation in the component market, where uncertainty regarding future developments has increased. Both business entities are working intensively to secure access to critical components and, to the extent possible, offset cost increases through price adjustments.

During the quarter, sustainability efforts focused on the environmental impact of products, including a more systematic approach to carbon footprints, as well as preparations for the EU’s new packaging regulation. In addition, Westermo and Beijer Electronics launched a global training program on occupational health and safety risks, and two young employees from Beijer Electronics participated in the final of the UN’s Young SDG Innovators sustainability program.

Ependion’s focus going forward remains on profitable growth by realizing the potential of recent years’ investments in new technology and new markets. Welotec, which has been part of Westermo since its acquisition in June 2025, continued its strong performance and contributed to strengthening the Group’s position in the rapidly growing energy sector. The work to continuously identify and evaluate potential complementary acquisitions is continuing, as is market development in the defence segment.

In summary, we saw continued positive development during the period despite a turbulent external environment. With strong sales and earnings performance, we are gradually moving closer to our financial targets. As at previous reporting dates, our assessment is that geopolitical uncertainty will persist, with potential short-term effects on our business. Through focused investments and clear strategies, the Group is well positioned to benefit from the underlying growth in our main segments, both in the short and medium term. Following three strong quarters, we are confident about the remainder of the year and our ability to deliver profitable growth for the full year 2026.”

INVITATION TO PRESENTATION OF THE REPORT

Today, Ependion will host a webcast and teleconference for the press and the financial community, during which President and CEO Jenny Sjödahl and CFO Joakim Laurén will present the company and comment on the report.

Time:       Friday, 23 October 2026 at 14:00 CEST

To participate in the webcast, please use the following link:
https://ependion.events.inderes.com/q3-report-2026/register

To participate in the teleconference and ask questions verbally, please register using the following link. Upon registration, you will receive dial-in details and a conference ID to access the conference.
https://events.inderes.com/ependion/q3-report-2026/dial-in

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

Welcome to participate.