Good morning, and welcome to Norbit's fourth quarter and full year 2025 presentation. As you will see, 2025 was another record year for Norbit. For a growth company, records are meant to be broken, while the focus must remain on what can be improved. It's a privilege to be part of an organization that continuously seeks improvements and aims higher. Let's dive into the numbers. For the full year of 2025, we delivered NOK 2.5 billion in revenues. That's an increase of 43% from 2024. The profitability improved, so we had an EBIT of NOK 555 million, representing 22% EBIT margin. Earnings per share came in at 6.32. That's 61% increase from the 3.93 in 2024.
The executive board of the company has proposed a dividend of 5 NOK per share. So we'll give you some more details around that in Per-Kristian's financial presentation. Looking into the quarter, the fourth quarter is also the best quarter in the company's history with 42% revenue increase compared to Q4 2024. Segment Connectivity and PIR contributed to the growth. EBIT ended at NOK 178.4 million. It's a 33% EBIT margin. So looking into the segments, generally, fourth quarter is the trend is that that's the best quarter for Oceans. This year, Q4 came in slower than expected. Comparing to a strong Q4 2024, we see a decrease of 21% with revenues of NOK 213 million.
The decline year-over-year is explained by lower sales of security solutions and sub-bottom profilers and less budget flushing during December than the year before. We could also mention that the NOK 75 million security project won in 2024 still it is not recognized any revenues on but an export license is received. The margins in the quarter came in at 26%, down from 37% the year before. For the full year of 2025, it's a quite good development, as you can see, where we came in with NOK 878 million in revenues. The sonar sales has a good development, especially the WBMS sonars launched during the year has contributed to the growth.
During the quarter, we have also announced or released some new products, the WINGHEAD X and also a WINGHEAD B59S. So that's a long-range sonar enabling surveyors to do sub-bottom profiling on deep waters. So that's examples of how we continue to expand our product portfolio to also increase the addressable market. So in Connectivity, it's also a record Q4 with 190 million NOK in revenues. That's an increase of 25%. Though we did expect higher revenues, so it's been in the quarter, delivered less GNSS onboard units on our first 160 million NOK revenue contract.
Part of this has slipped into Q1, and this is related to a slower ramp-up of the assembly line for the GNSS Onboard Unit than planned for. The line is now running on a satisfying level. EBIT margin in the quarter came in at 28%, slightly below the 29% in Q4. For the full year of 2025, it was 19% revenue increase, up to NOK 614 million, and EBIT margin came in at 27%. Also for Connectivity, you see on the revenue mix that the main contributor to the growth is a satellite-based tolling, whilst also tachograph enforcement modules contributed a bit, and subscription and e-toll. The standard onboard units were shortly declining.
During the quarter, we also received a new contract to be delivered first half this year, over 160 million NOK. It's the same scale as the contract won last year, and this continues our journey together with Toll4Europe for GNSS Onboard Units. Finally, vertical Product Innovation and Realization. In this segment, we see a continued strong increase in demand from defense and security sector, and the revenues came in at 408 million NOK, compared to 150 million NOK the year before. EBIT margin is at 22%, compared to the 14% the year before.
For the full year, the segment has delivered one, so slightly below NOK 1.1 billion, which is a 100% increase from 2024, and EBIT margin is at 19%, compared to the 10% in 2024. And as you can see, a quite significant part of the revenues is from defense and security clients. The automotive share has declined also in 2025. We're phasing out some product lines there. Industrial also some decline and has freed up some capacity. R&D services has increased from NOK 84 million to NOK 100 million. We've during the quarter also announced two significant orders towards European defense and security clients, one of NOK 120 million and one of NOK 170 million.
Majority of these orders are scheduled to be delivered in the first quarter of 2026. We expect a continued strong demand from defense and security industry also in 2026, and that's the reason why it's been important for us during 2025 to take measures to increase our capacity. We spoke about the capacity increase in our Røros factory earlier, where we so just before summer installed a new SMT line said from the supplier, Japanese supplier, to be Europe's fastest SMT line. That served us well the second half of last year. Expansion of the Sarpsborg factory is completed.
You see the picture here, where it's now also increased SMT capacity in Sarpsborg, going from two lines to three, and this new third line has double the capacity of the two previous lines. This facility is built from a local municipality at attractive terms. And so we rent for eight years and have an option to buy later. So these strategic investments in capacity enables us to take advantage of the growth we see coming going forward. So with that, I'll leave the floor to Per-Kristian to take us through some more details in the financial figures.
Hmm, thank you, Per Jørgen. I will spend some minutes walking you through the highlights of the quarter. Revenues came in at NOK 791.1 million. That's up 42% from the corresponding period of twenty twenty-four, with Connectivity and PIR contributing to the growth. Oceans reported a 21% decline in revenues. EBITDA for the quarter was NOK 224.8 million, representing a margin of 28%, and this compares to NOK 182.4 million and a margin of 33% reported in the fourth quarter of 2024. Operating profit: NOK 178.4 million, translating into a margin of 23%, and this compares to NOK 145 million and a margin of 26% in the fourth quarter of 2024.
Net finance expenses were 11.3 million NOK, largely explained by 8.8 million NOK in net financial interest expenses. Tax expenses: 35.6 million NOK, while net income for the period was 131.5 million NOK, translating into an earnings per share of NOK 2.05.... In the fourth quarter, Oceans delivered 21% revenue decline. Revenues declined in lower sales of surveillance solutions, sub-bottom profilers and more muted end-year spending effects on sonar sales, comparing this to fourth quarter of 2024. Gross margin was down three percentage points on depreciation of the dollar versus the Norwegian krone and lower sales of sub-bottom profilers and security solutions, which are accretive to our gross margins in Oceans. Partly offsetting these effects were declining operating expenses, including payroll of 4.4 million NOK.
The EBIT ended at NOK 56.2 million, down from NOK 98.7 million in the same period of last year. Connectivity reported an increase in revenues of 25%. The increase was explained by deliveries of the GNSS Onboard Unit to Toll4Europe. Expectations for the growth was, however, somewhat higher in the quarter, as only half of the contract, the NOK 160 million contract for deliveries to Toll4Europe, was recognized in revenues, with the remaining half set to be delivered in the first quarter of this year. Gross margin fell one percentage point, while operating expenses, including payroll, increased NOK 6.8 million year-over-year. Depreciation amortization rose primarily due to starting amortization on the GNSS Onboard Unit project. EBIT result for the quarter was NOK 53.2 million, up from NOK 43.9 million in the fourth quarter of 2024.
PIR posted a significant improvement in revenues of 174% from the fourth quarter of 2024, primarily driven by increased demand from the defense and security sector. Gross margin came down seven percentage points on higher share of high-volume manufacturing. Payroll and operating expenses increased NOK 15.7 million on new hires, wage inflation, and activity-related costs. The EBIT result was NOK 88.1 million, up from NOK 20.4 million in the same period of 2024, demonstrating strong cost discipline and scalability of the robotized production setup we have. Next, balance sheet and financial position. Property, plant, and equipment, including rights-of-use assets, increased NOK 59.8 million in the quarter. This was primarily driven by capitalization of lease commitments of the Sarpsborg factory expansion, as Per Jørgen mentioned, which was completed in December. The remaining increase was driven by CapEx investments for machinery equipment for continued growth.
Intangible assets rose NOK 19.1 million, explained by R&D investments, partly offset by amortizations. Trade receivables were down NOK 25.3 million in the quarter, despite a significant sequential increase in revenues, benefiting from attractive terms from our non-recourse receivable financing. Inventories increased NOK 41.2 million in the quarter, and inventories rose sequentially due to sourcing of components to prepare for continued high activity in the defense and security sector in PIR. Net interest-bearing debt stood at NOK 364.5 million at the end of December, an increase from NOK 320.5 million at the end of the pre-previous quarter, primarily explained by a dividend payment.
Our equity ratio was 46% at quarter end, down from 50%, at the end of the third quarter, on payment of, as mentioned, the NOK 191.4 million krone dividend announced in, November. Improving working capital efficiency has been a key focus area for us, and in 2025, we made further steps, despite having to increase the inventories by close to NOK 300 million due to an activity increase within defense and security in PIR and purchasing components for the GNSS Onboard Unit project, which was not fully delivered last year. As for the fourth quarter, our net working capital ended at 20% of last twelve months' revenues. This compares to 23% heading into 2025. The main drivers have been, continued high focus on increasing inventory turnover through improved inventory management and reducing days of sales outstanding.
I'm impressed by our colleagues who have been able to more than double the revenues of NORBIT since 2022, with only 25% increase in the nominal working capital level needed to deliver on that growth. Heading on into 2026, we expect that working capital will show fluctuations from quarter to quarter, given the combination of anticipated growth, long lead times on certain components, and short delivery cycles. This is particularly evident for PIR towards the defense and security sector, where the delivery cycle is quite short. In the fourth quarter, we continued to strengthen our liquidity position with NOK 150 million through an increase in the multicurrency overdraft facility, so that our available liquidity, as measured in cash and undrawn credit facilities, stood at NOK 785 million as per year-end.
In the fourth quarter, net interest-bearing debt to EBITDA ended at 0.8, a marginal increase from prior quarter. Our balance sheet continues to remain rock solid and provides for a strong financial platform to deliver on our capital allocation framework, allowing us to invest, pursue strategic acquisitions, as well as distribute dividends to our shareholders. On that note, due to our strong balance sheet, our financial position, and solid outlook, the board resolved yesterday to propose a dividend of 5 NOK per share, equal to 79% of the net profit for the year. We are currently below our long-term target range for the financial policy, and thus, the dividend reflects the principle of returning excess cash to the shareholders by adjusting our leverage position to the lower end of the range, still providing ample room for growth, both structurally and organically.
Yesterday, the board also made certain smaller adjustments to the dividend policy, in which the amended policy is to pay at least 30% of the net profit after tax, with the intention to pay out any potential excess capital, as evidenced in the quarter, for the financial year 2025. The board also intends to propose to the general meeting an authorization to pay additional dividends in the second half of 2025, subject to considerations made under the dividend policy. Lastly, cash flow for the quarter. Cash flow from operations was NOK 215.1 million, explained by an EBIT of NOK 224.8 million, net decrease in the working capital of NOK 9.3 million, taxes paid of NOK 7.2 million, and NOK 11.3 million in net finance expenses.
We invested NOK 70 million in the quarter, explained by NOK 39.5 million in R&D investments and NOK 27.5 million in investments in machinery and equipment. Investments for the full year were in line with the updated forecast provided in August. For 2026, we expect that the R&D investment level will be around NOK 110 million, and investments in fixed assets are expected to be around the same level. Investments in R&D are expected to decline primarily due to the GNSS Onboard Unit project completing. While investments in fixed assets are driven by capacity additions to continue to fuel the growth. Cash outflow from financing activities was NOK 130.4 million in the quarter, primarily explained by NOK 191.4 million dividend paid, partly offset by an increase in debt in the quarter.
With that, I'll give the floor back to Per Jørgen again, who will give you the outlook.
Thank you, Per-Kristian. So looking into 2026, we see that we once again are on a trajectory where we might be able to reach our four-year ambition plan one year early. So in February 2024, we laid out a target to deliver revenues about NOK 2.75 billion in 2027. So our outlook for 2026 has built support that we have an ambition to deliver more than NOK 3 billion Norwegian kroner in revenues in 2026. And our ambition is to do that with margins larger than and better than what we delivered in 2025, which came in at 22%. In addition to this, we continue to explore value accretive acquisitions to add on to this, which is a purely organic revenue target.
So the more short-term outlook, first quarter is generally a slow quarter in Oceans. 2026 looks as it's a good start, and our target now is that we will deliver in the range between NOK 210 million and NOK 230 million in the first quarter. In Connectivity, we expect to deliver revenues in the range between NOK 215 million and NOK 240 million. This growth is driven by GNSS Onboard Unit deliveries. In PIR, we have a slightly broader range, so we expect to generate revenues in the range between NOK 270 million and NOK 390 million in the quarter. The orders are secured for the upper part of the range.
The reason for the broad range is that there is some uncertainty on some orders sliding into next quarter due to timing effects related to qualification of some key components. The strong outlook in the first quarter is, as mentioned before, driven by deliveries to defense and security sector. So with that, I think we can look into the Q&A part.
We have one question on working capital. So, net working capital as a percentage of revenue has improved significantly. First, how much of this improvement would you consider structural versus driven by the current growth momentum? And second, should we expect the ratio to behave if revenue growth were to normalize, and what trend are you seeing in the underlying drivers, such as DSO and inventory days? So, with respect to the first question, I would say that the improvement is much more driven operationally, financially, rather than structural or through the growth momentum itself. Optimizing working capital is always a puzzle that needs to be resolved, and bits and pieces needs to come into place.
It's not driven by the growth itself, and it's neither structural. With respect to the second questions, if growth were to normalize, depends a little bit on what the definition of normalize is. But if we didn't grow the business, we wouldn't need the significant inventory positions we have also. So in that respect, you can assume that actually the working capital efficiency should improve from where we are today. A question for you, Per Jørgen.
Mm.
Let's see here. Yeah, so, appreciate, it's been a short time since the release, but if you have any color on how the response among customers on the WINGHEAD X has been so far, that would be helpful. Also, if you could share some comments on your expectation for this product, given the success of the WBMS through 2025.
Yeah. So, we have delivered some WINGHEAD X. We have some purchase orders at our desk of the WINGHEAD X. So we expect WINGHEAD X to be a good contributor for our revenues also in 2026. That said, the WINGHEAD is addressing a more high-end market than the WBMS. So, the WBMS part, the other sonars, is expected to continue to be a larger part of the total sales than the WINGHEAD. But it looks like the market also in the high end finds it attractive to buy a platform where they later can tick off and get the software functionality to get additional functionality as their need evolves.
Okay, more questions here on Oceans. In Oceans, you call out that the year-on-year decline reflects lower sales of security solutions, sub-bottom profilers, and more muted year-on-year spending effects. What do you see as the key driver of the lower sales on security solutions?
Yeah, that's a good question. And, I mean, the need for more security solutions underwater is still there. And we see that there is mature opportunities, and as I've heard myself say many, many times, it takes more time than we expect. So as simple as that.
On the WINGHEAD X and B59S, can you help us understand what pockets of the market you are now more competitive in? Is this primarily deep water? And also you state, increasing the addressable market for ocean exploration, is this primarily commercial applications, or do you see scope for meaningful applications within defense as well?
Yeah. So for the B59S, it's exactly as the one asking the question indicates that this is addressing more deep water solutions. NORBIT has primarily been focused on shallow water applications. And now with this B59S being our first deep water sonar, it enables surveying capacity also on much, much deeper water. And on the Winghead X, that's addressing a more high-end professional inspection market than the WBMS. So it's so the resolution of the images you get is higher, and this is mainly due to half a degree of opening angle, whereas you on the WBMS has one degree.
Let's continue with Oceans. Also in Oceans, you state export license received for the NOK 75 million security project, and no revenues recognized so far. Should we start to see this recognized in 2026? If yes, how will the phasing look throughout the year? Well, we haven't communicated anything on timing with respect to that contract. And it also remains a level of uncertainty on that. So, what we can say is that in the guiding that we have provided for 2026, the target of more than NOK 3 billion in revenues, we have not included any revenue recognition on this project, so that remains an upside in terms of the numbers we have provided.
Mm.
With respect to Oceans, how should we think about Oceans in 2026? Was the softer Q4 revenue due to a structural demand shift or mainly a timing issue related to weaker year-end spending?
Yeah. So, I think if you look on the full year, it's still good growth on the sonar sales. It was somewhat less than we were planning for on the security and on sub-bottom profiling. And the year-end spending in December were less than we expected, based on experience from previous years. Seeing the activity as it is now and our planning for next year, Oceans and Connectivity are expected to be contributing to the growth in addition to PIR. So, yeah.
Yeah, and I don't think we see any structural shifts in the demand in Oceans. Sonar sales will fluctuate quarter to quarter, and if you look on the year as a whole, in 2025, sonar sales were up close to 20%. So, so, and yeah, it's been a good start to 2026 as well.
Mm-hmm.
Lastly on Oceans, how has WINGHEAD X been received, in terms of orders, revenues year to date compared to the WBMS in the same period in 2025?
Yeah. So I think it's still in early days. As I said, we have done some deliveries, we have some orders, but we expect to see more of this going forward. So in the high-end market, the selling process is a little bit more time-consuming than it is in the WBMS part. So, yeah. So not much more to add to that as of today.
When should we expect to see a clear shift in Oceans sales mix towards Innomar, security projects? Well, first of all, security projects and sub-bottom profilers will also fluctuate quarter to quarter, but we also expect that both of these will have a meaningful contribution to the growth in 2026 within Oceans. It's a bit challenging to predict how this will evolve from quarter to quarter, but in the sub-bottom profile part, we're at least seeing a significant activity increase in Q1 compared to Q4. So, I think we're also there into a reasonably good start for 2026.
Mm-hmm.
Okay, let's jump to PIR. How diversified is your client base within PIR, and do you expect your customer base to broaden going forward?
That's a good question. So during 2025, on some few clients, we were able to scale a lot, and that has, of course, then, increased the customer concentration in the segment. But what we see today is that it's a broad range of clients being eager to have a partner that could be a scaling partner. So the demand for technology made in Europe towards defense and security sector is very strong and increasing. So we expect to broaden the client base in PIR in that vertical going forward.
In PIR, you haven't announced any large contracts here to date. How should we think about visibility for the full year 2026? I think we also stated previously that the time from us receiving a contract or an order in PIR within defense and security to the time that we need to deliver on that contract has narrowed quite substantially. And, we're experiencing cases now where we receive a contract, as evidenced actually in December, when we received a contract where we had to deliver in first quarter.
So, lead time is very short, and we need to build preparedness together with the customers in order to buffer up the stock, in close collaboration with them, to make sure that we are ready to deliver in a very short time window. And that is also why we're building capacity at the factories, so that capacity itself is not the bottleneck. So while we don't have much visibility in the PIR segment in the second half, when it comes to defense and security, our expectation is that, as we have presented today, is that we will experience strong growth in 2026 compared to 2025.
Mm-hmm.
In PIR, could you give an indication of the growth pace by customers in defense and security? How concentrated is the growth, broad-based or on one or two large clients?
As I think, as I indicated, the customer concentration has been quite high in 2025, so the growth is on few European clients. And going forward, we expect to continue to be a scaling partner for this, but it's a lot of interesting leads we're working on that we expect we should be able to broaden the number of clients also in that space.
Okay, lastly, on PIR, how should we think about margins evolving over 2026 as we work our way through the capacity expansions? Well, we haven't necessarily given a guidance on margins in the segment and the different segments. But we have invested, as you rightly point out, in capacity expansion through 2026, and we will continue to invest in 2025, and we'll continue to invest in 2026. I will not comment specifically on the margins, but we have no intention of reducing the margins. So, for us, we need to make sure that we have high utilization. And that's been a key factor driving the margins in 2025.
And if we continue to uphold good pace on the revenue growth in PIR, I'm sure also that that will affect have an effect on the margins. Moving on to connectivity. When you look at the market share Toll4 Europe, how should we think the NOK 160 million contract for H1 deliveries fit into the total addressable base of total Toll4 Europe?
Yeah, so I think I don't want to comment on the total base of the client. I guess what we could say, I see that's a question also there, how much of the first NOK 160 million GNSS onboard unit contract has been delivered so far? So I think we've stated that approximately half of that was delivered in Q4 and half sliding into 2026. So, yeah.
In your 2026 revenue target, where do you expect the strongest growth to come from, and what segment mix do you anticipate?
So I think we haven't given any split on that, but we expect all segments to be contributors to the growth in 2026.
Let's see here. Can you say something about the timeline for revenues from other opportunities within connectivity? What are your ambitions here?
Not sure I got the question right.
Can you say something about the timeline for revenue from other opportunities within connectivity? What are your ambitions here? So-
Yeah, so I mean-
Broadening the-
Yeah, so we're continuously working on broadening product offering, and both product offering and broadening customer base. And what we see is that in 2026, the growth will primarily be from products we already know. But going further from that, I think we would expect to see meaningful contribution also from products not existing in the product range as of today.
On supply chain constraints, are you building a buffer of own inventory, and are you seeing customers accelerating orders to secure products, or are they pushing it out in time due to price hikes on, for example, memory?
Yeah, that's a, it's a very good question, and I think this price hikes on memory, for instance, coming from Samsung shifting the allocation of their capacity to make more memory fitting for AI engines has generated some waves. And in our supply chain, we have two expressions we use. So one is security stock, and one other is opportunity stock. And I think that's on our executive level now and in dialogue with clients. We take some measures what kind of levels should we be at, and what should we secure, and what should we wait with? So this is continuously monitored, and actions are being taken.
Yeah. But we're not seeing any acceleration of the revenues due to the situation on certain components.
No.
This final question is maybe a little bit more in line with what you already answered, but you mentioned all the market opportunities within connectivity in your report. Are you mainly targeting the transport sector, or are there opportunities elsewhere?
Yeah, so I think when we changed the name of the segment from ITS to Connectivity, that was for a reason, for ITS, Intelligent Traffic Systems, and going to Connectivity, we have broader ambitions. And I think what we really want to do is to utilize our core competence in microwave communication RF technology to contribute solving challenges also in that domain. And we are in dialogue with several clients having needs for equipment where we can contribute creating something new that could be this expansion of the Connectivity segment. And also what we're doing now commercially is that we're lifting up some of the references that has been a little bit hidden for some years.
I think we mentioned that before, maritime military antenna systems that we've been doing, approaching the market together with another Norwegian company, Comrod. We see increased interest in Europe for these kind of technologies. And also with it towards the clients, we're showing some references where NORBIT in the past has developed some radar equipment. We have some radar stuff today we deliver also, and some equipment towards air navigation systems. So using these as references, building on the momentum, that will be the broadening of connectivity on a longer perspective. But as said, in 2026, the revenue generators are the products you already know.
I think that was the final questions.
Good.
Thank you all for once again taking the time today.