Hello, and welcome to today's presentation with Midsummer CEO, Eric Jaremalm.
Okay.
Today's presentation will be held in English. I will now hand over the word to Eric for the presentation, and then I will be back for some questions afterwards. The floor is yours.
Thank you very much. Hello, everybody. Today, I have caught a little bit of an autumn cold, so I hope my voice will keep going for the whole presentation. Otherwise, bear with me during this presentation of the Q3 report for Midsummer. First, I will go through the numbers. The net sales in Q3 was a record high for Midsummer, first time over SEK 100 million , and it ended up at SEK 104.6 million for net sales. We had a gross profit of SEK 32 million , and an EBITDA of around SEK 8 million. A slight loss for the operating numbers at -SEK 3.7 million for the quarter. Then if we look at the first nine months, Q1 to Q3, we have net sales of SEK 240 million. Also, that is record numbers for the company.
We have a gross profit of SEK 84 million and EBITDA of SEK 37 million . For the nine months, we have an operating profit of SEK 7 million. If we compare the Q3 results from 2026 compared to one year ago, we are more than doubling the net sales. The gross profit is more than three times higher. Also, the EBITDA is going from minus to plus. If we look a little bit more long-term and the development of Midsummer's net sales and EBITDA, the total rolling 12 months net sales is gradually increasing quarter- by- quarter, as you can see in this graph. For the last 12 months, we are almost at the sales figure of SEK 300 million . Of course, this is also record numbers for the company.
Also, if we look at the EBITDA rolling 12 months numbers, you can see that we have been able to, from quite large losses in last year, we have been able to have a steady growing and positive EBITDA margin from this year onwards. The reason why I am holding this presentation in English today is that in Q3, we also started traded on the Cboe Europe, which is Europe's largest stock exchange by value. It is based in Netherlands, but it is a subsidiary of the Chicago Board Options Exchange. What we hope is that with being listed also on Cboe, that we will get higher liquidity in the share and more foreign shareholders. Otherwise, during Q3, we have three main events that I would like to highlight.
The first one is the binding agreement that we have signed with PT Metalogika, which is an Indonesian company, and it is to set up our first production hub in Southeast Asia. It will initially be a 20 MW factory, but we are already building and scaling it towards 200 MW. A second important event during the quarter was that we finally could release our partnership with US Steel and its 100% owned subsidiary, SteelX Solar Power, where we are introducing our solar panels integrated in their module houses that they are building for the U.S. market, both for the residential and commercial areas. Finally, I also want to highlight our biggest single solar panel order to date from Green Energy Group in Denmark. It is for a 5,000 sq m installation in a refugee camp in South Sudan that is financed by the United Nations.
If we look into a little more in detail about our partnership with PT Metalogika. What we have signed with them in September was that is a investment in industrialization framework agreement, which sets up the plan for a 200 MW solar production site, two hours east of Jakarta. The site is already in place, and we are preparing now fully for the design of the factory and also the final negotiations before getting the first order of equipment for this site. Indonesia is a very interesting market. It is the biggest market in Southeast Asia and it is also the market in Southeast Asia that is most focused on solar. The new president in Indonesia, he has announced a 100 GW solar program, and they want that partly to be produced inside Indonesia.
This project is very much aligned with the latest policies in Indonesia and we see very high potential with this project. Then regarding our collaboration with SteelX Solar Power, it is very interesting because we believe that the U.S. market is very well suited for our products. We are together with SteelX Solar Power, then offering housing solution both for residential area and for the commercial buildings. US Steel is a very old company. It has been around for more than 120 years, but they have been mainly focused on commodity steel. But lately they have been bought by Nippon Steel, and they have received a lot of new funding that they are putting into new areas. What they want to do is that they want to get closer to the end consumer, both from business- to- business point of view, but also business- to- customer.
One of those projects is they have developed their own steel houses and steel building structures, both for data centers, warehouses, but also for residential houses in especially areas with a lot of hurricanes and typhoons, et cetera. Their buildings are very sturdy and strong, and our very durable solar panels is a perfect fit for the electricity needs of these buildings. If we look a little bit about the U.S. market and why we believe it will become so important for Midsummer. The solar prices in the U.S. is much higher than the global normal levels, both solar panels due to high tariffs or more or less restrictions on Chinese solar panels being imported into the U.S. Both the solar modules are sold at a much higher price, but also the installation and other costs are also quite high.
They have for that sense, we can be very cost efficient and cost effective and be the cheapest choice for many type of roofing where it is not so easy to put silicon panels. Except for SteelX Solar Power, we are also working together with Sunflare, another U.S. partner, where we are serving the RV market and the mobility applications. Mobility applications is also an area where we believe we have a very strong future going forward. I will come back to that a little bit later. U.S. it is the second largest solar market in the world. We believe that it will grow further now with very high electricity demands from data centers, electrification of the industry, et cetera.
Of course, over time, the idea is to set up also local production in the U.S. because when we ship from Europe as we do today, we have tariffs, which are fluctuating, but they are 10%-15%. That a way to get rid of those tariffs would be to have local production in the U.S. As I have explained before, and also write a little bit in our Q3 report. We are now gradually going forward with our plan for this asset light production capacity increase that we are doing locally in many different areas in the world. For our European market, we have our Italian factory where we are increasing the production capacity. We are at this moment going from one shift to two shift, and we are also doubling the amount of DUOs running in full production.
This means that we will, in the beginning of next year, have four times the production output from the factory compared to what we had this summer. In Colombia, as you know, we are working with Saab, and we are gradually building the equipment for the new factory in Colombia. In the U.S., we have released this cooperation with US Steel. In Southeast Asia now, we will start our work together with Metalogika to build the Southeast Asian market. If we look a little bit more into Colombia, what are we doing there at the moment? We are working very hard with building the market, and that is very successful. We are winning customers both for residential, commercial, and industrial projects. We are also signing up many suitable EPC partners and other type of distribution channels, both in Colombia and in neighboring countries.
Actually, we have reached some milestones in Colombia already that we haven't been able to do yet in Sweden. For example, we have fully banked finance deals and also a PPA scheme with one of the local Colombian banks. They are now willing to finance 100% of the solar projects that we are selling to a customer, which means that for the end customer, the installation and investment into the Midsummer solar panels becomes cash flow positive from day one. If we look a little bit regarding this example with Yazaki, which is a sub-supplier to the car industry, it's actually one of the biggest automotive suppliers in the world. They have a factory outside Bogotá, and they are investing in our SLIM panels onto their roof.
This project is financed then through Banco de Bogotá, and this means that Yazaki can get the full financing from Banco de Bogotá. Because of how much they can lower their electricity bill, this becomes cash flow positive for the customer from day one. Apart from Colombia, we have started a cooperation with Tetra Pak and their PolyAl material for making lightweight rooftops that can be of any flexibility and size. It's actually that roof material that Tetra Pak is using, it's recycled material from their milk cartons. That roofing material that they make is a perfect fit for the Midsummer flexible solar panel. Here we have installed our solar panels on a pathway in Bangkok, and the picture is from the inauguration of that pathway. Then, as I also mentioned before, we had this order from Green Energy Group in Denmark.
It's 1,300 BOLD panels over a 5,000 sq m installation. It's actually a peacekeeping mission and a refugee camp with over 100,000 people living there, and they have today only access to electricity through diesel generators. It's very difficult to get diesels into the area, which means that they have a lot of blackouts in their electricity. By making this solar installation, we will make sure that they have constant and safe and stable electricity. The reason why our panels were chosen for this program is both the very lightness of the panel and the durability, which makes it much easier to get the panels to site without them breaking on the way.
It's very difficult to ship the silicon panels to these kind of areas because when you have vibrations from bad roads, et cetera, you get micro-cracks in the panels, and they stop working. That is the main reason, and also, of course, that these solar panels will be put up on roofs that are very, very poor. It wouldn't be possible to put the silicon panels onto the rooftops as we are doing in this project. If we look a little bit in general about our solar panels business, we have continuing very strong order intake during the third quarter, and apart from what I have explained so far, we also see very large interest in the mobility segment, not only in the U.S., but also in Europe.
And what is very interesting in that is that these are more bespoke panels, so we custom-made them for the customer, and we can also take a higher price. It is a very different pricing mechanism for these type of panels compared to the mass-produced rooftop panels. That means that we are gradually increasing the average price of the wattage for the panels that we produce. We are also, as I said before, thanks to this additional demand, we are ramping up the Bari factory quite quickly now, and we are soon 50 people working in Bari. Also this means that with the higher volumes, we are also decreasing the costs quite a lot. Compared to the beginning of the year, we have decreased the production cost with about 20%. Finally, just to make a brief final explanation of the quarter.
Revenues are up 130% compared to a year ago. It is a rolling 12 month record net sales, highly improved EBITDA. We received our largest solar panel order to date from Green Energy Group, and we have also released new partnerships in the U.S. and in Asia, with SteelX Solar Power and PT Metalogika. We made our largest solar panel installation in Colombia at Yazaki Plant. And we are increasing sales in the mobility segment and also with differentiated pricing so that we are improving the price mix of our panels. Finally, we are also quadrupling the production in Italy to meet the increasing solar panel demand. And that was all I had for today, and my voice is almost okay.
I think your voice sounded good, actually.
Thank you.
You have nothing to do it. We'll now go start with the Q&A here.
Okay.
We have a pretty large number of questions, so I think we'll get straight to it here.
Okay.
In the CEO statement, you mentioned increased demand in Europe for solar solution in the mobility product segment. Can you give a concrete example of such a solution and explain the value it brings to the customers?
Yeah, I can. There is a little bit of a difference of what we're doing in the U.S. and in Europe. So in the U.S., we are mainly selling to RVs and caravans and for the outdoor B2C customer, so to say. Even though, of course, we are selling to the manufacturers of the RVs. In Europe, the focus is more on B2B and the small lorries and trucks. It is mainly to cover the 12 volt battery and the 24 volt battery because a big problem today all over the world, I would say, is that these small trucks that are running around in the city delivering different packages to customers, they are using a lot of electricity.
They have a lift that goes up and down every time they are going to move in and out a package, which means that these 12 volt batteries and 24 volt batteries has a tendency to discharge. If they are not charged for a certain time, they usually break. That is a cost that with the help of a solar panel on the roof of the vehicle, then you avoid that problem. Actually that investment of putting a solar panel on the roof is actually cheaper than to fix the battery one time.
One time, yeah.
It is an investment that really makes sense. The issue that we see is that this has been tested with silicon solar panels before. But the problem is that they also break because of the vibrations when cars are running on the roads. It needs to be a thin-film solution that can withstand a lot of vibrations. And it's also special certification tests that is different from the rooftop market. With these kind of vibration tests that only the CIGS panels can pass.
All right. Looking a little bit long term, how large could this product segment become, would you say? Which geographical markets are the most interesting?
I think it is a very big market. I think almost all trucks and also, I think I had the same problem with my electric car, actually. The small battery broke, and I needed to have it replaced. So I think it is something that is needed on all vehicles, I would say. So we are mainly focusing on starting with Europe, but I believe over time it will be worldwide. We have similar discussions in Colombia as well.
I understand. Two important developments during the quarter were new partnerships in the U.S. and Indonesia. Starting with Indonesia here, can you tell us a little bit more about your plans here?
Yes. We are working very closely with our partner in Indonesia. They are very well renowned. The people that we are working with, they have been running factories for Bosch and SKF in the past.
Some large players.
Yeah, exactly. I am very confident that regarding setup of the factory and also running the factory, they are the optimum partner for us, I would say. What we are doing now is that we are finalizing the drawings for the factory. We have already bought the land, or our partner has bought the land. For us, we are mainly supplying the technology transfer to them. But of course, they will be buying the machines from us, and they will become a production partner similar to what Saab is in Colombia.
All right. Turning to the U.S. then, how does the American market differ from the Swedish market, and why did you choose to partner up with SteelX Solar Power?
Yeah, I discussed a little bit about that-
Yeah, yeah
In the presentation, but I think the key is that we have a very good product match. Their rooftops and our solar, it fits very well.
Yeah.
Their steel roof is very similar to the SLIM roof that we are doing here in Sweden. We had already a product that they had seen, and they could see that this would be perfect for them in the U.S. We have also made some installations with another partner in the New York area before, so we already have SLIM installations in the U.S. that they have seen. For that reason, I think they chose us to work with. For us, it is of course really good to have a strong industrial company like US Steel. We feel that we are too small to sell on the U.S. market ourselves.
Yeah.
Every state is different and have different regulations. We believe that using the sales force of US Steel will be very helpful here.
Sounds reasonable to have a local partner as well.
Yeah, absolutely.
Turning the spotlight to Sweden a little bit here, the planned facility in Flen was canceled on September 1st here, and the EU funding was declined. Are there any remaining closure costs, repayment obligations, or impairment that could affect the second half of 2026?
No, there is no cost related at all to that. We have not taken any investments there whatsoever.
Shifting country a little bit here again.
Okay.
How many of the DUO machines ordered for the Colombia factory have been completed, delivered, and installed on site? What remains to be done before the facility becomes operational, so to speak?
Yeah. As always, when we get questions about the Colombia and the customer there, we are not allowed to say so much. What I can say is that we are building the machines for the first 50 MW, and all of that goes according to plan. Regarding what is discussed down in Colombia between the Colombian government and our partner, we cannot disclose anything about.
I understand. Maybe you could describe the overall payment structure and revenue recognition principles for, so to say, large scale machinery deliveries.
Yes. In general, let's say that we have a large machine order. Then the revenue recognition is according to IFRS 15, which means that we revenue recognize according to the progress of the project. For us, that means that when we take the cost for the project, we also take the revenue. For example, now in Q3, we have high revenue and also cost related to that.
Yeah.
For the payment structure, it's a little bit different. We are getting paid through milestones that we negotiate with the customer. The payments are not related to the revenue recognition, but it follows slightly the same, but little bit later. For example, during Q3, we have had quite a lot of cost, but we have had very little milestones reached. Actually, milestones were reached, but the payments fall out in October. Actually the cash flow is quite negative in Q3, but on the other hand, we have more than SEK 70 million in invoices that are that are going to be paid, and more than 50 of those are paid in October. We also have 30 million in what is called contract assets, which is also something that we will soon invoice, but haven't invoiced yet.
I understand. Talking a little about costs here. How does the company use hedging to manage foreign exchange risks when machinery and panels sales are contracted in currencies such as SEK or USD?
Yeah. So it's a case by case-
Yeah
Situation that we have to look into the, what kind of deal it is and what kind of currencies that we are using. Luckily for us now, we don't have any big orders where we have a difference between the currency we are getting and the costs we are creating. I would say overall, our income in SEK and EUR and USD are quite similar to our cost in those three areas. At the moment, we don't do any hedging, actually, and we don't need to do it. But of course, with more customers outside Sweden and large plans for setting up production partnerships in different areas, this is something that we always have to look into.
As of now, you don't have to think about it, but maybe in the
But as of now, we are not. Yeah. For now, no, but maybe in the future.
Yeah.
Yeah.
You have talked a lot about America. I think this is the last question about it here.
Okay.
Would the North American market be supplied to export from the Bari factory in long term, or are you evaluating the possibility of establishing a local manufacturing in the U.S. together with partners?
Yes. Today, actually we are supplying for the rooftop in the U.S., we are supplying from Bari. For the mobility applications in the U.S., we are supplying from Sweden. That is how we imagine the setup will be in our European production, that we will do the rooftop solar panels in the Italian factory, and we will make the more bespoke mobility solar panels in Sweden, where it's more hands-on. You need to change different things between each panel. So for now, we are supplying the U.S. from Europe, but we don't think that is optimal because of tariffs and instability regarding tariffs. That's also the view of our partners in the U.S. over time, we for sure have the plan to set up local production in the U.S..
To finish up here with the last question. Midsummer Automation is a new business area. What do you hope to achieve with it?
So we just started up Midsummer Automation this year. So we have employed a Sales Manager for the area. He is called Andreas Runsten. He is very experienced and has been working with sales of equipment for a long time. We call this the automation area. It is really machines and automation solutions for different kind of production lines that is not related to thin-film solar cells. So the idea is over time to build up additional business lines, where we can utilize our deep knowledge in sputtering and vacuum technology and automation. So it is a long-term project. I am not expecting that we will have a lot of sales, I don't think in the first half of next year either, but over time, I think it will become an important market for us.
Oh, perfect. That was the last question. Thank you so much, Eric, for joining us here today, and we'll see you at the Q4.
Thank you.
Just want to mention here as well that this presentation will have Swedish subtitles tomorrow, and if your question hasn't been answered, we will send them over to Eric and his team so they can look at it. Thank you.
Thank you.