Good morning, and welcome to the NX Filtration 2025 full year result webcast call. Please note this conference is being recorded for the duration of the call. Your lines will be on listen only. However, you'll have the opportunity to ask questions after the presentation. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand you over to the CEO, Floris Jan Cuypers, to begin today's conference. Thank you.
Thank you very much for your introduction, and welcome to our full year 2025 results webcast. In the call, we also have present my colleagues, CFO Jan Feie Zwiers and COO Michiel Staatsen. We will present our key highlights, strategic progress, and the full year 2025 financials. Now over to the highlights of full year 2025. Our total revenues for 2025 ended on EUR 14.1 million, which is a growth year-on-year of 28%. In the second half of year, we saw our year-on-year growth be 45%. Also, in line with our strategic plan, we are working on our funnel of OEM, OEM partners, and we significantly improved that funnel.
For our flagship hollow fiber nanofiltration products, we grew the OEM funnel for with 20 OEMs during the year to a total of 180 OEMs. We also saw OEMs progressing towards more advanced stages. Our gross margin was ending at 59.1%, which is a continuous reflection of our strong technology position. On the flip side, we have been relentlessly working on our cost and CapEx sides. We lowered our operating expenses while in parallel growing the business, which resulted in a step up in our normalized EBITDA from -EUR 17.4 million in 2024 to -EUR 13.8 million in 2025.
Then our cash position ended the year at EUR 28.5 million because we have fully invested in our new factory and the large part of our CapEx is behind us, and we continue to expect our cash position to be sufficient to fund our growth ambitions into the future. Here, we also reiterate our medium-term objectives, which we stated is a revenue growth of, on average, 50% per year, sustained strong, strong gross margin s, and realizing EBITDA break-even operations . Then, if we go into the revenue growth in the second half of 2025, we saw that the total revenues in the year were EUR 14.1 million, which is an increase of 28% year-on-year. Also, in line with what we have communicated end of year, in the announcement there.
Of course, we saw a relatively slow start of the year for the first half, 12% year-on-year growth, which was impacted by evolving lead times and schedules of the projects of our OEMs and end customers. We did see significantly increase in the second half of the year, with year-over-year revenue growth for the second half being 45% year-over-year. We see the growth both in our clean municipal water segment as well as in our sustainable industrial water segment. We have also seen in our commercial team, yeah, a clear, enhanced focus with a fierce focus on filling the pipeline and also converting together with our OEM partners. This execution discipline leads also to give more clarity in our sales performance and more grip in how we steer our conversion across the various regions.
We see also a nice split between the revenue of our sales of goods, where Asia plays a big role, and also Europe and North America have a significant share in our sales. Also, we see multiple OEMs maturing and moving to repeat orders. I will now hand over to my colleague, Michiel.
Thank you, Floris Jan. I will zoom in on our OEM partners, with whom we are progressing towards smart, sustainable, and recurring water treatment solutions with our breakthrough hollow fiber nanofiltration membranes. For smart industrial applications in food and beverage, or for cooling water or water recycling, but also for sustainable municipal drinking water and wastewater recycling applications. You might recall the visualization on this slide from our CMD, in which we project a typical trajectory we follow together with our OEM partners. We start on the left side in the technology selection phase to get our technology qualified for real-world application in the first project realization phase, up to the installed base, where we are striving together for repeat order projects and recurring replacement business.
As you can see in the graph, not only did we increase the total number of OEM partners we are working with to 180, but also we were able to convert 8 additional OEMs into the installed base phase, while also increasing the number of OEMs in the first project realization phase. This means that we were able to broaden our base to drive our all-important future repeat business from. For instance, with respected OEMs like such as Veolia in Europe and Ceramed in India. Despite the fact that this funnel reflects our nanofiltration offerings only, I also want to mention that we are gaining traction with our competitive ultrafiltration and microfiltration membranes, with important customers such as H2O Innovation in Canada and VA Tech Wabag in India, with large blue brewery groups, but also with large soft drink producers.
In these markets, we benefit from short cycle sales cycles with replacements in existing membrane systems. But we also see traction increasing in refill projects, both with our UF and MF membranes. In 2026, we will maintain our focus on progressing with our customers further through the funnel, but also on further strengthening our base with our repeat customers, while driving for largest, larger projects simultaneously. If we reflect on 2025, looking at our ESG impact, we now covered our sales numbers and trusted customer base. But what does it mean in terms of real impact? How were we able to help with challenges around water scarcity and water quality around the globe?
With our UF and HFNF, hollow fiber nanofiltration , membrane treatment membrane modules sold, we enabled the production of 649 billion liters of clean water, filtering out viruses, bacteria, color, plastics, pesticides, hormones, medicine residues, and even PFAS from polluted sources such as rivers, lakes, and wastewater streams. And with the application of our hollow fiber nanofiltration membranes, instead of conventional membrane tech, treatment technologies, we are helping our customers save over 6,000 tons of CO2, through avoiding 11.6 million kilograms of wastewater treatment chemicals. And these are impact numbers that we are, at NX, are very proud of. These numbers are very motivating for our whole team. We're working on driving these numbers up with great dedication.
On the right side of the slide, you do not only see where in the world this impact is being made, but also the number of full-scale HFNF, hollow fiber nanofiltration projects, that we have sold so far, which is over 80, meanwhile, underpinning our global reach and our market leading position in this technology. Now to you, Jan Feie Zwiers.
Thank you, Michiel. In the next two slides, I will take you through the financials of 2025. I will start with a summary of the profit and loss. In 2025, total revenues amounted to EUR 14.1 million, an increase of 28% compared to 2024, and in line with our expectations at the end of 2025. Strongest growth in Asia and North America, following our strategy to increasingly target our efforts towards sweet spot product market combinations. Revenues in the second half of 2025 grew by 45%. Gross margin remained strong, with 59%, consistently reflecting our strong technology position. 2025 was a transition year in terms of cost and CapEx reduction. We completed the transfer of all our activities to our new factory and launched various efficiency programs.
We also narrowly focused our research and design activities to further cement our broad and competitive product portfolio across all three product ranges. These efforts have already resulted in lower operating costs in 2025, while simultaneously growing the business with 28%. As a result, normalized EBITDA loss decreased by EUR 3.6 million, from EUR 17.4 million in 2024, to EUR 13.8 million in 2025. Our FTEs slightly decreased to 158 at the end of 2025, versus 169 at the end of 2024. We benefit from efficiencies resulting from our larger scale operations, and continue to proactively align our cost levels to the timing of realization of our growth. Therewith, controlling our path towards the break-even operations . Now to the balance sheet.
We are fully invested in our new factory, with 2025 CapEx in total of EUR 6.4 million. This is mostly related to finalizing and consolidating our operations in our new factory. The CapEx is 75% lower than in 2024, and further reductions are expected for 2026. Working capital amounted to EUR 70.2 million, versus EUR 40.5 million at the end of 2024. This increase was primarily driven by a reduction in payables. At the end of 2024, our payables were temporarily higher due to the outstanding CapEx invoices related to the construction of our new production plant.
Our cash position at the end of 2025 amounted to EUR 28.5 million, compared to a cash position of EUR 53.4 million at the end of 2024. We continue to expect our cash position to be sufficient to fund our growth ambition well into the future. Now I hand over to Floris Jan.
Thank you, Jan Feie Zwiers. That brings us to the last slide of this webcast, where we also make clear the levers underpinning our growth ambitions into the future and medium term. We continue to expect our cash position to be sufficient to fulfill that. If you look at the points on the outlook, we reiterate that our medium-term objective to grow our revenue on average with 50% per year, combined with, in the medium term, to sustain strong gross margin s. Combined with the OpEx to further exploit operational efficiencies, like we showed also during 2025, to bring us to align our cost levels to the timing of realizing our growth.
Furthermore, in CapEx and working capital, we will see further reductions in CapEx, we expect, with limited maintenance costs in the coming years and further optimization of working capital, mostly related to inventory reductions. Based on above business plan and levers, we continue to expect our cash positions, position to be sufficient to fund our growth ambitions well into the future. With our strong customer focus, disciplined execution, we will deliver on our objectives in the coming years. We see the underlying fundamentals are moving in our favor, and with our relentless focus, we are working very hard every day to provide clean water to industries and communities across the globe. Now, I hand over to the moderator for Q&A.
Thank you, sir. And as a reminder, if you would like to ask a question, please press star one on your telephone keypad. If you change your mind and want to withdraw your question, please press star zero, sorry, star two. And please ensure your lines are unmuted locally, as you'll be prompted when to ask your question. So again, to join the queue for question, star, star one, please. The first question comes from the line of Usman Tariq from ABN AMRO – ODDO BHF. Please go ahead.
Hi, good morning, team. Thank you for the opportunity. Just a set of two small questions. Number one, could you comment on the dynamics of the growth per segment? So sustainable industrial water was up 23%, whereas the municipal water was up 29%. So has there been some impact per segment? Or what has been the dynamics for the year? And my second question would be on inventory. So there was a write-down on inventory. Could you just comment, was it a particular membranes or was it hollow fiber nanofiltration, or was it ultrafiltration? Or if you could comment on it, that would be great. Thank you.
Yeah, maybe let me, Floris, let me comment on the segments. Well, what we see is that in both segments, so municipal as well as industrial, we see growth. As you know, we have also diversified our portfolio, with still the flagship, of course, being hollow fiber nanofiltration, in which we see very strong traction. But also our broadening of our portfolio in ultrafiltration with launches of new larger surface areas filtration up to 65 square meters and deals with VA Tech Wabag, et cetera. We see also the industrial sector becoming more important. In that industrial sector, we serve ultrafiltration, but also hollow fiber nanofiltration for industrial water. So both segments continue to be very important. And also one side note is that we see also our sales teams pitching for ever larger deals.
So the average deal size is also increasing step-by-step as we keep investing in our new product launches and offering. But maybe I hand over to you, Feie, also for the second piece.
For the second question about the write-down of some of our inventories. As part of our accounting procedures, we, on a regular basis, review our inventory levels and the absence of some of the inventories. For one product, we had to write down those inventories. From a prudence perspective, we took a provision that products highly certain will no longer be sold in the future. That's the reason why we took an inventory provision for that specific product.
All right. Thank you. From my side, that would be all. Thank you for the opportunity.
Our next question comes from the line of Kristof Samoy from KBC Securities. Please go ahead.
Yes, good morning. Thank you for taking my question. Sorry to be maybe the party pooper on this conference call, but I have trouble in gauging your outlook statements. So you reconfirm medium-term revenue growth of 50% on average. You reiterate that liquidity at NX Filtration is not an issue in the medium term. Why are you so certain about this? Why, what gives you comfort in reiterating these statements, given the fact that we've had four profit warnings in the past? Is it because you have a solid backlog? Why don't you disclose it then?
If we say 50% revenue growth on average, I mean, we had roughly 25% last year, so are we heading for 75% growth this year, then? Thank you.
Well, thank you for that, Floris here. So, we indeed see underlying that the fundamentals are moving in the right, direction. So, we have sharpened our execution discipline on the commercial side, including changes there, but also in terms of operations and cash preservation. You saw our OpEx going down, and very selectively, we will continue to invest in CapEx, but at lower levels. This provides us with more grip and the ability to be more agile. Also, indeed, our guidance in terms of on average 50%, annual growth, that path, is sufficient with our current cash position to deliver that, that path towards break-even EBITDA. Of course, on average, 50% can mean in a year, 60% or 70%, but also 35% or 40%. That's correct.
But we do think that our grip and also measures that we are taking and can take provide us with yeah view through on that path.
Hmm. Okay. Thank you. But you understand that we might be a little bit critical with regards to these targets, given the track record in guiding revenues in the past?
Yeah, I understand your question, but I also think if you look at both the grip and the commercial side, the OE funnel progress, but what we see in terms of average deal size that are being pitched in combination with a turnaround in OpEx, which went down close to EUR 2 million last year, and we are continuously looking at how to bring that further down, and also cash preservation in terms of CapEx and working capital management, that on both sides of the metal, we are aggressively, yeah, hunting it down.
Okay.
That and with that track, also for us, it's very clear also for this year that we are well-funded, there's no emission needed, and that's for us crystal clear.
Okay. Thank you very much. I have no further questions for now.
The next question comes from the line of Christoph Greulich from Berenberg. Please go ahead.
Good morning, and thanks a lot for taking my questions. It's two from my side, please. The first one is coming back to the guidance revision back in December. Could you provide a bit more color on what exactly has changed or came different compared to the initial expectations for H2? And then also, on the project which have been affected by changes in phasing and timelines, what's the latest status of that? Is there any update here that you could share? And then the second question would be with regard to the outlook on the OpEx side for 2026. Towards the end of your prepared statement, it sounded like you see some further scope or potential for operational efficiencies.
Just wondering what we can expect on the cost base in this year. Should we kinda assume that to be more or less stable, or do you think that could go further down? Thank you.
Yeah. Let me answer the first question and feel free to chip in, and then the second piece will be answered by Jan Feie. So if you look at in the 2025 year, all of us, the sales teams, but also the board members, are closely involved in our OEM contact directly, and that we saw in that sense, also shaping up the level of grip and transparency on the stages, on all the factors of the proposals together with the OEMs towards end customers. As you can imagine, we see step by step our average deal size increasing, also the pitches and the proposals that we make.
But at this level of revenue base, you can imagine that a proposal which involves EUR 1 million, if that moves from one half to the next half or to the next year, it has a significant impact. Particularly in the first half, we saw that happening, and in the second half, we saw it pick up in line with our guidance. But, indeed, our average size of deals is increasing at pitches, but it has a significant impact at this revenue size of our company.
To add to that, Floris Jan, the projects that were pushed over the end of the year, which we were aiming for, to get in in 2025, these projects were not lost. So very often these projects, it's a matter of timing. So we have them on our radar for to turn into real projects and orders in 2026. So that, that's an important addition, I think.
Indeed, and if you take the operating costs as well, what we experience is due to the transfer of all the activities to one location, that we have significant benefits from a cost point of view. So that is one dimension. Due to the fact that we have that new facility, also from an operation side, there are still some further efficiency gains which we can realize. And if you take our size of our indirect organization, then in the years to come, we can benefit from that, we can leverage on that organization, and that means that we will require, in the medium term, no significant increase in terms of operating expenses. Yeah?
Very clear. Thank you.
We currently have no questions coming through. So as a final reminder, if you would like to join the queue for question, please press Star one now. We'll allow a few seconds. We seem to have no further questions, so I hand back over to you for closing remarks.
Yeah, thank you, moderator, and thank you for the interaction. Thank you for your participation. As stated, we are relentlessly focusing on our commercial execution, as well as our adaptability in terms of cost and CapEx. We have a strong customer focus and disciplined execution, and we see good underlying fundamentals moving in our favor. So we continue to work with relentless focus to provide great technology solutions for clean water, for industries and communities across the globe. Thank you so much, and we'll talk to you next time.
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