Good morning, welcome to our Q1 2026 presentation. It's now been seven years since we listed NORBIT on Oslo Stock Exchange. Many of you have followed us through the whole period. Thank you for your engagement and trust. The one-to-one meetings during this quarterly presentation days, they adds fuel to our motivation to continue to explore more. Thanks. Okay, let's dive into the number. First quarter 2026 once again demonstrate the strategy of having uncorrelated verticals. Three verticals, having completely different market drivers. Two out of three performs very well. One segment is partly slower than the comparable period last year. With this, we are able to deliver top-line growth of 40%, where segment Connectivity and PIR contributes most to the growth.
EBIT in the period ended at NOK 156 million, resulting in a EBIT margin of 21%. Into the segments. In Oceans, first quarter 2026 ended with a decrease of 12% compared to Q1 2025. The year-on-year decline is very much explained through some lower sales of sonars towards rental companies. In Q1 2025, we had several summing up to three large orders in that sub-segment. Per Kristian will comment more on that also later during our presentation. This quarter, the EBIT margin in Oceans ended at 25%. And as you see, as I commented, the decline is based on lower WINGHEAD sales.
As you can see, Q1 2025 compared to 2024 was particularly strong on that part of our business. Also, we have during the last weeks announced that we're now in some exclusive negotiations related to an acquisition. It's a company that fits very much to our criterias for add-on acquisitions, where we'd like to see clear synergies. We'd like to see that there is a relevant fit when it comes to technology and market. We'd like the acquisition to be accretive to all the shareholders. It's been many questions and many guesses what kind of company and who this could be. We are working now to conclude the due diligence, and we will finalize an SPA. When everything is ready, we will give you more flavor to this.
It's a very positive add-on for NORBIT when everything is concluded. Connectivity, first quarter of 2026. Connectivity had a new record quarter, NOK 211 million in revenues. That's a 45% growth since Q1 2025. This is very much as expected, driven by sales on our newest Connectivity product, the so-called GNSS On-Board Unit. So this is units used in trucks for satellite-based road toll collection, where we have a strong position working with some of Europe's leading companies in that field. The EBIT margin ended at the 27%, more or less at the same as it was the same quarter last year.
Looking into the different product lines, as you can see, standard onboard units is exactly the same as Q1 20 25. It's a decline in tachograph enforcement modules. We've been in a period where it has been some retrofit of tachograph units. It's expected to get back to normal, even if maybe Q1 is regarded to be somewhat lower than what we would expect to be normal going forward. Satellite-based tolling units, as I told you, is the main driver of the growth from NOK 17 million up to NOK 106 million in revenues. Very important contribution. The final segment, Product Innovation and Realization. Maybe to remind those of you that has not followed us that closely.
In NORBIT, we focus a lot on doing tailored technology into some selected applications. The technology we work with should be hard to create, so it motivates the engineers. We are very cautious that when we invest money in R&D, it should be market-driven, meaning there should be a identified need and someone that would be willing to pay for us to sell these products based on this technology later on. When we were building NORBIT, the changes we did back in 2008 to 2012, when we acquired some factories to get the capabilities of manufacturing into our own operation, ensuring we are in control of our own destiny, we chose also to continue to do some contract manufacturing.
Out of the total manufacturing capacity, a little bit more than half of that is used to make NORBIT-branded products. The remaining part is sold on contract manufacturing terms to other industrial clients. R&D services, this contract manufacturing is what we report in the Product Innovation & Realization segment. It's been a very interesting journey in the PIR segment. It's been a very steep growth, more than 100% from Q1 last year. We delivered NOK 339 million in revenues. With an EBIT margin of 20% compared to the 14% the same quarter last year. As we've said, this is very much driven by strong demand from defense and security related clients.
We've had some higher degree of other industrial automotive clients in the past. Some of that we have chosen to scale down, free up capacity, and also optimize what we do and allocate the resources where we see that we could get or build most value for our clients. And as we said during the last presentation in Q1, we also opened our new expansion of the Selbu factory and have added more capacity on assembly lines. We have announced during the quarter a new award, a NOK 150 million contract to an undisclosed European client in the defense and security sectors.
This order is to be delivered in the quarter we are already headed well into, so second quarter of this year. With that said, I'd like to allow Per Kristian to give you some more flavor to the financial figures.
Thank you, Per Jørgen. I will spend a few minutes walking you through the financial highlights of the quarter. First quarter started out well with high activity across our business segments. It was a solid step in the right direction in order to move us towards the target for this year's plan. In short, revenues were up 40% year-on-year. EBIT margin came in at 21%. We continued to strengthen our working capital efficiency, where free cash flow conversion was 105% in the quarter, leading us to reporting a 36% pretax return on capital employed for the quarter.
Revenues came in at NOK 732.1 million in the quarter, an increase of 40% from the corresponding quarter of 2025 and 45% in constant currency as both the U.S. dollar and the euro depreciated against the Norwegian krone. Gross margin was 53%, down from 62%, partly as a result of segment mix. With a higher share of revenues, coming off the PIR segment in this year's quarter, and also partly due to lower realized margins in Connectivity and PIR, which I will revert to more on the next page. EBITDA for the quarter was NOK 201.8 million, representing a margin of 28%. This compares to NOK 162 million and a margin of 31% in the same quarter of 2025.
Operating profit was NOK 155.9 million, translating into a margin of 21%. This compares to NOK 127.4 million and a margin of 24% in the same quarter of 2025. Net finance expenses were - NOK 12.5 million, largely explained by NOK 9.5 million in net interest expenses, while tax expenses were NOK 32.4 million. The net income for the period ended at NOK 111 million, translating into an earnings per share of NOK 1.73. In the first quarter, Oceans delivered 12% revenue decline. Foreign exchange headwinds impacted the top line. The decline in constant currency was 5% year-over-year.
Revenues declined partly due to lower sales of WINGHEAD sonar, as first quarter 2025 was an unusually strong quarter for WINGHEAD sales to rental companies, into which three orders totaling NOK 40 million in deliveries ended in last year's first quarter, all of which did not materialize in this year's first quarter. When adjusting for these orders and foreign exchange, the activity and growth in the end markets outside the rental were actually quite healthy compared to the same period of last year. The gross margin was down 1 percentage point. Payroll expenses increased NOK 1.5 million, while operating expenses was up NOK 4.6 million on freight, sales and marketing and travel expenses, in addition to higher allocated group costs.
The EBIT ended at NOK 50.8 million, down from NOK 81.4 million in the same quarter of last year. Connectivity reported an increase in revenues of 45% and 48% in constant currency. The increase explained by deliveries of the GNSS On-Board Unit to Toll4Europe. Revenues fell a tad short of expectations as some deliveries were moved into the second quarter this year, creating some timing effects on the results in this year's quarter. Gross margin fell 5 percentage points, partly explained by product and intra-segment revenue mix, partly as a result of weaker euro against Norwegian krone, as well as price increases on certain raw material components. Employee benefit expenses were up NOK 6.2 million on new hires and wage inflation, while operating expenses was up NOK 4 million on higher activity-related spending.
The EBIT result for the quarter was NOK 56.4 million, up from NOK 41.5 million in the first quarter of 2025. PIR posted a significant improvement in revenues of 111% from the first quarter of 2025, primarily driven by increased demand from security and defense. Gross margin came down 6 percentage points on higher share of high-volume manufacturing. Payroll and operating expenses increased NOK 12.6 million on new hires. The EBIT result was NOK 66.8 million in the quarter, up from NOK 21.8 million in the same period of last year, demonstrating strong cost discipline and scalability with our robotized manufacturing setup. Next, balance sheet and financial position. Property, plant, and equipment, including right-of-use assets, increased NOK 6.4 million.
It was partly driven by investments in machinery equipment, as well as a smaller expansion of the floor capacity at the Røros factory. Intangible assets rose NOK 5.3 million, explained by R&D investments, partly offset by amortizations. Trade receivables were down NOK 49.4 million in the quarter, following a sequential revenue decline and strong cash collections in the Oceans segment. Inventories declined NOK 17.1 million in the quarter. Quarterly fluctuations in the inventory level must be expected given the anticipated growth, short delivery cycle, and what is becoming a more challenging market for some supply market for electronic components.
Net interest-bearing debt stood at NOK 204.2 million at the end of March, a decrease from NOK 364.5 million at the end of 2025, following strong cash flow generation, as well as a depreciating euro, impacting the euro term loan in Norwegian krone. Our equity ratio was 50% at the quarter end, up from 46% at the end of the fourth quarter on a positive net profit. In the first quarter, we continued to create additional financial flexibility by extending our revolving credit facility to July 2027. We also added two one-year extension options to the facility. We also entered into agreement to amend the repayment terms on our term loan in which no repayment is made if the net interest-bearing debt to EBITDA ratio is below 2x .
At the end of the quarter, our ratio stood at 0.5x , down from 0.8x at the year-end. Our available liquidity measured by cash and undrawn committed credit facilities stood at NOK 921 million. Our financial position creates a strong platform to deliver on our capital allocation framework, including distributing dividend in May as proposed by the board of directors, as well as accelerating growth through acquisitions with the use of our balance sheet. Lastly, cash flow for the quarter. Cash flow from operations was NOK 212.6 million, primarily explained by an EBITDA of NOK 201.8 million. A net decrease in working capital of NOK 52.5 million, and taxes paid of NOK 41.7 million.
We invested NOK 56.4 million in the quarter, mainly explained by NOK 35.2 million in R&D investments and NOK 21.7 million in investments in machinery and equipment. The investment level for the full year is reiterated. Cash flow from financing activities was NOK 93.7 million in the quarter, primarily explained by repayment of debt and leases. I will then give the floor back to Per Jørgen, who will give you the outlook section.
Thank you, Per Kristian. Looking into the future, we started this year with announced ambition of delivering revenues in excess of NOK 3 billion and with an improved EBIT margin compared to the 22% achieved in 2025. We today reiterate that, based on the outlook we see today, we remain firm at that ambition. Looking into the short-term outlook, we expect Oceans to deliver in the range between NOK 210 million and NOK 250 million in Q2. Oceans is the segment that has the highest degree of seasonality out of our three segments. Usually, Q1 is the slowest. Last year, Q1 was a very strong quarter. Q2 is typically quite busy quarter.
Q3, a little bit slower again, some holiday season, and Q4 is usually the strongest. But we expect to deliver in the range of NOK 210 million-NOK 250 million. Connectivity is expected to continue to grow based on deliveries on GNSS On-Board Units. Our guidance for today in Connectivity is a range between NOK 225 million-NOK 250 million. The strong demand from defense and security remains in PIR, and we expect based on this and other orders to deliver between NOK 370 million-NOK 390 million in the second quarter.
That being said, we are, as earlier announced, now in a phase which is the most motivating part of being allowed to work in the management team of NORBIT. We are framing a new 4-year ambition plan, and looking very much forward to meet you again in August, where we will lay out these 2030 ambitions. I think with that, we could go to the Q&A session, Per Kristian .
A fair few questions on Oceans. Can you help us understand the underlying trends in the Oceans segment? Both Q4 and Q1 came in a softer than expected despite strong comparables, with FX acting as a drag. Q2 guidance points to - 4% year-on-year growth, +2% FX adjusted. Should we interpret this as a sign of weakening end markets share loss, or are there temporary company-specific factors driving the slowdown?
We are satisfied with the development in the underlying markets. We think our position is still strong in the market. As you mentioned also, of course, there is some currency effects. Maybe the most is, as we tried to explain that in Q1 2025, three orders from rental companies came in in the same quarter. In sum, that was around NOK 40 million. Our intel says that the utilization of the assets from the rental companies are high. In this business, I mean, in Oceans, we are delivering quite high-value products. When one or two or three large orders is in a quarter or out of a quarter, that affects the numbers.
Adding to that, if, so really this, at least from the bigger rental companies, these orders, when they come are quite large. Predicting the timing of when these orders will arrive, even into a period of six months is quite challenging. The purchasing patterns are also quite difficult to assess. First half in 2025 was a significant period for buying assets from us by the rental companies. This is slower in this first half.
At the same time, as I mentioned in the presentation, if you adjust for that and foreign exchange, you see that the underlying growth actually on, in the older markets is in the range of 15%-20% compared to last year. It's still a quite healthy market. Yeah, that's maybe the summary of Oceans. Could you provide more details on the add-on acquisition? Specifically, where is the company located? Which products it adds to your portfolio, and what synergies do you expect to realize? What's been the historical margin profile?
I think when it gets to this, we're not going to disclose anything more today. I see, there is some attempts to solve this equation. I'm guessing which kind of company this is. If we undisclose one more unknown, maybe it's getting possible to solve the equation. I think we pass on that.
Yeah. Again, maybe a question along the same line as the previous one. The midpoint of the Q2 guidance for Oceans appears to imply mid-single-digit organic growth. Could you elaborate on where you are seeing relative strengths and weaknesses across end markets? Are supply chain constraints currently affecting your ability to deliver on demand? Maybe the last I think we have answered the first question already.
Yeah. When it comes to the supply, we experience increased price on and elevated lead times, especially on memory circuits. I think it's fairly known. It's nearly that they talk about it in the kindergarten now. What we have, I'm very satisfied that we, during the last years, has been able to build up a strategic supply chain organization, moving from being more a procurement to a strategic supply chain. I think that's been important for us now. We don't have many products with the challenges related to memory circuits, and we've been able to take good precautions and secure material as needed.
Could you provide an update on market traction for the deep sea sonars?
I think this market is still for us a new market. We have delivered some initial orders. I think it's not a lot related to these deep sea sonars in the the the numbers. We don't expect that to be as high as shallow water either. It's a different use case. I guess with some more references and good data to provide to the clients, we will squeeze ourselves in and take over a position in that niche application as well.
Could you provide an overview of the typical average selling prices across your sonar portfolio? Bottom profilers and forward-looking sonars. I don't think we need to go into the specifics. What we have stated in the past is that, we have, broadly speaking, two platforms, the WINGHEAD sonar and the WBMS platform. The WINGHEAD sonar is a bit more expensive than the WBMS platform. What we have said before is that, you know, on these platforms, there are multiple variants of different sonars with different specifications tailored to different applications. Some of these sonars are quite expensive. Some of them are a lot cheaper.
The price on our sonars could range on this platform from anything to, from NOK 1 million- NOK 4 million. There's a quite big spread, which is why it's difficult to comment on average selling prices. Okay. A question, maybe on, y eah, let's stick to Oceans. Can you give some color on the FX impact on your Q2 guidance? Also, how has customer response to the new WINGHEAD product releases been so far? How do you expect sales from this product category to develop through 2026? Yeah, let's start with that question.
If you start with FX, I could comment things related to the WINGHEAD.
If you look on the guidance we've given now, it's in Oceans NOK 210 million-NOK 250 million. That compares to around NOK 239 million in Q2 2025. If you look at the basket. Generally in Oceans, we sell in euros and in dollars. If you look at the basket of around 50/50, it's around 8% impact on currency in Q2 on the negative side. That's reflected in the guidance that we've given.
Yeah
Maybe you will say something about the WINGHEAD.
Yeah. I think when it comes to the WINGHEAD, what I want to comment is that we are also I mean, we introduced this WBMS X starting with the WBMS, and then also doing that on the WINGHEAD. When this week, we announced a new feature, possible for our X, so our sonar clients having X sonar, which this is a 3D point cloud viewer going in a web browser, allowing the surveyor to get time feeling of the data while collecting the data. I think one thing is that we want to get some revenues also on these new add-on features.
I think these kind of new features also is a sales enabler, going forward. We continue to do this kind of tailoring of features to both strengthen our offering compared to competition, but also to open up for new use cases.
Okay, moving to Connectivity. What is the gross margin on the new GNSS On-Board Unit compared to the rest of the product portfolio? Are contracts structured in a way where we're able to offset component prices if these remain a headwind ahead?
I think this is a question which is quite specific and, given that there could be, as I mean, towards other players in this market not very eager to disclose these details on commercial reasons. It's, I mean, you could see that the GNSS On-Board Unit represents quite a high share of the total revenues in Q1. So giving some indication if you do the math based on that.
A question on iData. Could you provide a postmortem on the acquisition of iData and reflect on the key lessons learned? At the time of the acquisition, iData was acquired for EUR 14.5 million , with reported revenues of EUR 5 million and EBITDA of approximately EUR 1.9 million. While part of the consideration was settled through the issuance of around 1.2 million NORBIT shares. With the share currently trading at NOK 2.25, how does management evaluate the long-term value creation of this transaction in hindsight, both strategically and financially, and what aspects of the thesis provided or proved correct or incorrect?
Not sure if I got the question right, but when it comes to the acquisition of iData, this has been an important part of building Connectivity into what Connectivity is today. iData has for a very long time been a service provider to Europe's leading so-called EETS providers. Sorry about the very specific terms, but in supporting and collecting road tolls in this GNSS-based tolling in the Hungarian market, adding to NORBIT's reliability and NORBIT's proven knowledge making us relevant in that domain. An indirect part of this has been building the positional momentum to become a GNSS On-Board Unit provider as we are now.
Looking specifically on iData, on the lesson learned, it's that what we expected is that it takes some time to align on culture and gain momentum to be relevant for each other. We've learned that what we expected on that part took some time. Today we are very happy with the setup. We're happy with the ambitions. This part of Connectivity also brings into our discussions now on where we're heading towards 2030 with Connectivity.
Okay. Some questions on foreign exchange. Can you remind us of your FX hedging policy please, both on assets, contracts, cash flow, and liability side? What are your assumptions for your 2026 guidance? When it comes to foreign exchange, I think it's worthwhile repeating that even though a significant part of the revenues in Connectivity and in Oceans are euro, and in particular for dollars in Oceans, based, there's a lot of raw material costs that are purchased in U.S. dollars.
You need to reflect that also in terms of the strengthening of the krone, Norwegian krone that there is an offsetting balance here in which raw material prices are bought at a lower price in Norwegian krone over time converted into the loss. Even though we have some impact on the top line, you also get you balancing piece on the raw material side. Largely we are long euros. And we are relatively neutral in U.S. dollars, maybe actually on tad on the short side.
Which is why we don't typically do short-term hedges in the currency portfolio. We do offset the EUR exposure on the liability side in which we have a EUR 38 million term loan, which creates a balancing act both on the interest and the balance sheet.
EUR 38 million.
EUR 38 million.
Yeah
on the FX. With regards to assumptions for 2026 guidance, I don't think I want to be very particular on that. We came out with the guidance to you in February. I think it's fair to assume that the developments we've seen in the foreign exchange market over the last months is something that we could not necessarily predict. Okay. Some questions on the guidance on margin. In your 2026 guidance, you uphold your estimate that the EBIT margin will improve versus 2025. Over the last quarters, we have seen a decline, partly because increased weight on your PIR business.
Could you give some more color on what will make your EBIT margin target hold? Again, we are reiterating our guidance for this year, targeting an EBIT margin above 22%. We are three months reported into the year. I think it should just note the guidance that we've given. Also worth mentioning that the EBIT margin in PIR was 20% this quarter. It's been a demonstration in cost discipline and scalability in the operations. We continue to stick with the guidance. That's also what's been reported today. One question on margin to you maybe, Per Jørgen, again. Are you worried about the pressure on margins due to higher costs going forward?
I think, we are continuously monitoring what happens in the component market. As you said, a lot of the expenses are in foreign exchange and the same with the revenues. We are very cautious about cost. We take very seriously any kind of employment, not only the new employments, but those also already done many years ago to ensure we have the right people on the bus and to ensure to have them in the right seat.
I think that's how we like to continue to build the company and keep a strong culture for allocating the money where it can really help us grow and deliver in a way which is fruitful for all relevant stakeholders.
Margin question in Oceans. Is 25%-26% margin the new normal in Oceans going forward, or do you expect margins up to 35% again? I believe the 35% margin referring to our EBIT margin in Q1 2025.
I think it's difficult to assess the quality of the margins in Oceans based on one quarter alone. What we have said in the ambition plan that we have set out is that the EBIT margin in Oceans should be in the range of 25%-30%. Over the recent period, we've been delivering in the higher end of that guidance. We haven't commented specifically on the margins in general today. That is something that we will report on and maybe also give some more color on when we present our long-term ambition plans in August. What are the current bright spots in the Oceans portfolio? How has Ping DSP developed over the past two quarters, and what's your thoughts on it going forward?
Yeah. It's important to remember that as we mentioned, we have three uncorrelated business units inside each business unit. As, for example, also Oceans, there is different kind of products that has some different underlying drivers. Ping, also the acquisition we did of Ping DSP, continuing that as Ping DSP and NORBIT company has been very good. I think we've seen that by allowing this company to work closely with the broader NORBIT global sales and distribution platform has been good. I think also that for this company having a strong technology complementary to the rest of the NORBIT sonar portfolio, just by being a NORBIT company in the brand recognition has also helped to support growth in that part.
Do you include FX adjustments in your longer term contracts, such as the tachograph contract with Continental and the agreement with Toll4Europe? When it comes to, you are referring to some of our contracts in the Connectivity segment. These contracts are largely euro-based. These are European clients, and I am not sure what FX adjustments would refer to, but contracts are regardless based in euros. If you view AUVs as a key growth opportunity going forward, Oceans segment, assuming so given the potential acquisition, which products or sensors do you feel are currently missing from your portfolio to fully capture this opportunity?
That's a nice try to get one more known in this unknowns. But, I think we've said in the announcement on this acquisition that it's a company with technology relevant on AUVs and ROVs, so.
Good. There was one final question on the acquisition. But I think you already said w hat you needed to say. With that, I don't think there's any more questions from the listeners.
Okay. Thank you for your time today, and see you in August.