Welcome to the QleanAir Q1 2026 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the question-and-answer session, participants are able to ask questions by dialing pound key five on their telephone keypad. If you are listening to the presentation via webcast, you can ask written questions using the form below. Now, I will hand the conference over to speakers, CEO Sebastian Lindström and CFO Fredrik Sandelin. Please go ahead.
A warm welcome to the QleanAir investor presentation for Q1 2026. My name is Sebastian Lindström. I'm the CEO of QleanAir, and joining me in today's call is Fredrik Sandelin, CFO at QleanAir. Fredrik and I will go through the presentation and then open up for Q&As towards the end. Starting off with the numbers for Q1. We closed a good quarter, but a quarter with significant headwind when it comes to foreign exchange. We delivered SEK 114 million in sales in the quarter, which meant a decline in reported numbers of 2.3% versus last year. As I said, we had a strong headwind on the currency side. In constant currency, we grew 10.6% in the quarter.
We had some help on the U.S. Cleanroom side from the Curexa settlement. Even taking that into account, we showed growth for the quarter. More importantly, Cabin Solutions grew 5.7%, and Air Cleaners grew 13.4% in constant currency. Our new products, focused on solutions for critical problem areas of the industry are continuing to drive growth and to mitigate the difficult market conditions. Our recurring revenues were SEK 63 million, which, from a reporting in Swedish krona, looks far below last year's SEK 68 million. Again, in constant currency, we showed growth to SEK 72 million. Our gross margin remains strong and healthy.
All product categories are now above the 60% mark, thanks to a high rate of renewals on the air cleaning side, products targeting more critical problem areas of our customers, and the cost improvements we made over the past two years in supply chain in Europe, and overall in the U.S. Our EBITDA margin of 13.1% was behind last year's 14.3%. Taking out the benefit of Curexa settlement and adjusting negative currency effects and periodization effects, we slightly improved. Cash flow was - SEK 5 million, even though we improved balance sheet items like inventory, accounts receivables. Fredrik will take you through this in more detail in the financial section. When it comes to EPS, our EPS was SEK 0.24 versus SEK 0.18 last year. Summoning up the first quarter, our underlying business is developing well.
We continue to hold our strong gross margin that we have improved significantly for both Air Cleaners and Cleanrooms over the past two years. In Q1, we had an extra push from the settlement with Curexa, which allowed us to release reserves which we had in our balance sheet back from 2024, when, in our view, Curexa breached the contract. This helped compensate for the two cleanroom projects that had been delayed from Q1 this year to the first half of 2027 and for the negative currency effect and periodization effects on personnel cost from 2025. As we now enter into 2026, we have reviewed our financial targets and now have established new targets that we feel better line up with our plan going forward.
The previous targets were to achieve an average annual organic sales growth of approximately 10% or a range of 7%-13%, and to achieve an EBIT margin of 15%-20% in the medium term, and a target bit of between 30%-50% of profits for the year to be paid for dividends. The new targets are to organically grow sales by more than 5% and to achieve an EBITDA margin of 15%-20% in the medium term, and a cash conversion rate that, over time, shall amount to at least 80%-100%. The goal is still to distribute dividends of between 30%-50% of profits for the year, whilst considering, of course, the company's long-term development potential.
We see that our rental model is gaining ground, and we have a pronounced focus on strengthening that part of the business. This brings with it three natural consequences. Reported sales grow more slowly than the underlying business, as revenues under the rental model are accrued over the contract period instead of being taken directly at the time of sale. Hence, we adjust our growth rate from 7%-13% to above 5%. Secondly, EBIT during the growth phase is burdened by increasing depreciation. The faster we grow the contract base, the more EBIT is depressed despite the strengthening of the underlying profitability through the rental model. An EBITDA target will therefore be a better match. Last but not least, through the cash conversion that we have added, we want to show that we've succeeded in converting earnings into cash flow.
These three new targets together address exactly this dynamic. The growth target of above 5% reflects reported sales in a mix where a growing share is accrued. The EBITDA margin measures underlying profitability without the depreciation effect, and the cash conversion of 80%-100% confirms that profitability is translated into cash flow. In our focus going forward, we have a clear target to grow both the Air Cleaner business significantly and the Cleanroom business in the U.S., whilst protecting our strong position in the Cabin Solutions. Our rental model with our product categories, Air Cleaners and Cabin Solutions, is developing well, and we intend to strengthen this further. We've been at this for the past three years, and step by step, Air Cleaners is developing in share. For a particular quarter, it may not be that visible, but year-over-year it will for sure grow.
In 2025, we started to report our product categories in more detail. We've been very focused on driving the gross margin on both Air Cleaners and Cleanrooms. It's now great to see that we managed to bring both categories to a gross margin level above 60%. Within air cleaning, this is step-by-step improvement, is driven by both an improved service business and the increased level of renewals. Our subscription model will continue to drive Air Cleaner margin going forward. The cleanroom category had tailwind in the form of Curexa settlement. As we already informed in the year-end call, we had a rescheduling of two cleanroom projects in Q1 of this year that we will do in 2027 instead. We knew that Q1 would be lower.
Just to note on those two projects, it's with a long-standing customer that have several cleanrooms with us. It's something totally outside of the actual build of our cleanroom; they have made the upfront payment of about 60% of the amount already. The market environment is still uncertain out there, we maintain a high activity level. As seen here on this slide, shows a sample of where we've been pushing our solutions to help and support new clients and grow our business in the past quarter. Notably, the higher degree of digital marketing. We've made investments during 2025 to optimize our website towards SEO and tailoring to the needs of AI and AI bots. We clearly see an uptick in lead generation for Europe and Japan, where we already initiated the program.
We have, in Q1, started the same journey for our Cleanroom business in the U.S. and expect to deliver a new digital approach to this market by the end of Q2. The high activity level cuts across all regions from Japan in the east to the U.S. in the west. When it comes to our focus, our systematic transformation program is on track with our three prioritized objectives: cost control, sales efficiency, and customer focus. Summing up the quarter, the key steps taken were within cost control. You can clearly see we manage our cost, both personnel, adjusted for the periodization effects, as well external services cost are well below last year. We continue our value engineering focus within Cabin Solutions to improve our competitiveness in the Cabin Solutions markets, especially in Europe.
When it comes to sales efficiency, we've shifted more mandate and accountability from the central organization to our regions, ensuring a clear customer focus in everything we do. The increased regional activity level shown on the previous slide is proof that this is working. We've started our journey to improve our efficiency through AI tools, both internally and in customer-facing processes. When it comes to customer focus, we have, in the past quarter, concluded our third annual regional workshops together with the regions, identifying gaps in our offering today and identifying new areas for product exploration to continue to fuel our growth for the future and build our strategic plan for 2027 through 2030. We have a number of new initiatives we will be working on for the future. Before handing over to Fredrik and the financial section, let me summarize the key takeaways from my perspective of the quarter.
We continue our transformation work to increase our growth. The focus on critical application areas has been key in this, and the currency-adjusted growth of 5.7% in Cabin Solutions and 13.4% in Air Cleaners is proof of this, and we do this with a maintained or increased product margin. We believe that by following this path, we will be able to grow our Air Cleaner business in the next 3-4 years to be a significant part of our product mix. We have aligned our financial targets with this plan and to support this plan. With that said, I hand over to Fredrik.
Thank you, Sebastian. Let's now have a look at the numbers. Our strategy is to increase our recurring revenue, and they are already at a relatively stable over time rate, as you can see on this chart. Here we have the quarterly sales since the beginning of 2023. Last quarter, revenue was SEK 114 million, slightly ahead of last quarter and slightly behind the corresponding quarter one year ago. Adjusted for the negative currency effect we had in the quarter, revenue was SEK 128 million, a currency-adjusted increase of 11%. The negative currency effect in the quarter was SEK 15 million, and that was a result from a stronger Swedish krona in relation to all our other currencies. The main effect comes from the Japanese yen, the U.S. dollar, and the euro.
For the Japan, the Japanese yen only, the negative currency effect is close to SEK 11 million. The yen is almost down 25% in value against the Swedish krona since the start of 2023. Here we see the quarterly split between recurring revenue from sales of agreements to finance companies and revenue from product sales. We have a stable rental revenue with high margins from units we hold on our balance sheet. The revenue split is primarily affected by the decline for recurring revenues because of the cancellations from the German schools that started in 2024. Now, there are very few of these contracts left on their books. The decline for recurring revenue is, of course, also affected by the negative currency effect for mainly the Japanese yen, over these years.
I would like to highlight that our base renewals have come back to more normal levels in Japan. These renewals typically follow a three-year cyclical pattern. To understand how this affect the present, you must go back three years and look at the sales to finance companies at that time. We continue with our quarterly numbers. Here we see that our recurring revenue model supports a strong gross margin. Gross profit and gross margin are stable over time at a high level. Gross margin is close to 70% for most of the quarters since start of 2023. The stable gross margins are also supporting our EBITDA performance. We have a new set of financial targets that Sebastian mentioned before. As you can see, the trend for the EBITDA and EBIT margins follow the same pattern.
On this slide, we now see the rolling 12-month numbers. Recurring revenues are driving gross margin. You can see that revenue is stable. The relative share of recurring revenues are stable. We have a stable gross profit. The gross margin is stable and at the high level. For the last two years, they have been in the range from 66%-76%. Also on the rolling 12-month basis, you can see that the stable gross margin support the EBITDA margin. We are now back on a level of more than 15% after a couple of years with lower margins. Our strategy is to increase recurring revenue and increase the number of units that we have on our own books. On this slide, you can see that since second half of 2024, we steadily increase EBITDA, operating cash flow, and our cash conversion rate.
Now we have an EBITDA that is generating cash. The operating cash flow for the quarter is - SEK 5 million compared to a +SEK 2.3 million in the corresponding quarter last year. The difference mainly consists of the adjustment of non-cash items related to the Curexa settlement, where we recognized revenue that was released from a previous provision where the cash was paid during 2024. Another factor is the underlying result in the American operations, as two planned installations of cleanrooms have been postponed to first part of next year. Both inventory and accounts receivable have been reduced compared to same quarter last year. We have a stable financial situation. Net interest-bearing debt continued to be on a lower level, and we amortize around SEK 40 million per year on our term loan. Equity to total assets ratio continue improve.
Now we are at 38.5%. With that, I hand it back over to you, Sebastian.
Thank you, Fredrik. To close off the session in front of the Q&A, what we do at QleanAir is important. We dedicate our work to improve the health of people, the quality of products, and the performance of processes. We do so throughout our three product categories: Cabin Solutions, Air Cleaners, and Cleanrooms. Looking at the amount of clean air that is delivered through our solutions, we estimate that QleanAir solutions out there cleaned over 23.2 billion cubic meters of indoor air in Q1. It matters, as air pollution is a key challenge for human health, people die prematurely from exposure to polluted air, and we spend an important part of our lives in indoor environments. Indoor air can often be more polluted than outdoor air. With that, I hand over to the Q&A.
If you wish to ask a question, please dial pound key five on your telephone keypad. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Anders Roslund from Pareto Securities. Please go ahead.
Yes, good morning. I have a question regarding the change of business strategy to go from sales of rental contracts to pure rental business. How quickly will this transformation be implemented?
When it comes to the different ways that we sell our products, we basically have three, right? Either we sell the product like just normally a product sell, or we sell what we call RPG rental product, where we sell a rental contract, and we have the products on our books, or the third way is that we sell a contract to a finance company. What the changes we're making is that when it comes to the third version, selling to finance companies, we are limiting that to Japan. We're only selling rental purchase contracts to finance companies in Japan going forward. Otherwise, when it comes to the rental purchase contracts overall, it is the biggest part already in the European market.
Most of the product sell is really within the Cleanroom business. The Cleanroom business, we don't foresee to change that because a cleanroom is more of a fixed installation and not something that you easily remove and move to another client, which is typical for the rental model. In Europe, we will just strengthen and even more focus on the rental product model. Felt a bit complex answer there.
Yeah.
You're getting at.
I was more looking towards the Japanese business, that you still rely on selling rental contracts to the finance companies. Will you try to change also the Japanese business, or will that remain? In that case, that won't be such a big change in your overall figures.
So over-
If you continue to-
Of course, when you look at our past performance and following our performance over the years, with the finance company sales that we have in Japan, you really have to look back three years, like Fredrik mentioned, to understand how sort of the cyclicality, if you will, on that business is developing, how many contracts are up for renewal in a certain year. We will try to keep that a bit more steady, not expand that side, but rather expand what we do over our own books.
Okay. The Japanese business will not be that impacted from this strategy change. It's more that you confirm a strategy you already have started to implement.
Yeah. We make a clear message that we're not intending to grow the finance company sales in Japan.
Okay.
I think that's an important thing to carry with.
Going back to the underlying business here, it seems that Japan has held up relatively well and the major, if we look sequentially, the major hit is in Europe, where you had a quite strong outcome in the fourth quarter of SEK 56 million, and now it's SEK 48 million. Sequentially, you fell significantly in Europe while you increased in Japan and the U.S., and that I assume is more or less the Curexa settlement. I mean, the SEK 11 million you mentioned there is also reported as sales. My question is simply that it seems that your European business has lost momentum sequentially here. Yeah. Okay. Sorry, I can't hear anybody.
Maybe-
Hello?
Yeah
Are we back?
Yeah, I hear you. I hear you, but can you hear me?
Yes, I can hear you.
Good
But I think I'm to touch the mute button unfortunately, on our end. Sorry for that.
Okay.
Looking year-over-year, Europe is stable. In constant currency, we're about even. What's really important in Europe, I think, is the growth that we're seeing in Air Cleaners, and that Germany is turning into growth after having been a very, a quite tough market for us in the past one to two years, really. I don't see that we're, you know, losing momentum. I think we have an effect in Q4, of course, of finishing the year and that had some effect. I feel that we have a great activity level. I feel that our new products are gaining ground, and so it's not the feeling I have that Europe sequentially sort of has lost momentum. Absolutely not.
You had a very strong outcome in Europe in Air Cleaners or overall in Air Cleaners. You had almost SEK 27 million in sales in the fourth quarter For Air Cleaners, now it's down to 23. I haven't seen such a seasonality. Usually, I can see that in other businesses, but.
I think we are becoming a bit more, you know, driven by sales. We have a totally different focus on sales, and that also drives stronger finishes over year. You know, when you come to the finish line. We have a different type of focus in the company of reaching that target, if you will.
You will be a little bit more seasonality in your figures then. Could that to be and explain why? The Air Cleaners business is more industrial. That type of seasonality could be seen in manufacturing industries.
What drove the strong Q4 was really the French market, which was super strong in the fourth quarter. I don't think that we should see a change in seasonality, so to say. I'm merely saying that I don't see any lack of momentum in the European business, rather the opposite. I feel very comfortable about the performance of the teams into 2026.
Okay. How about you have indicated that sales in Japan will be a little bit better in the first half of the year 2026 and then fall back a little bit in the second half of the year, versus the first half. How should we look upon the Japanese development here?
You will still, when it comes to Japan, have an effect on the how strong the renewal base for certain quarters is on the finance company side. If you, like Fredrik mentioned, you look back three years, we're talking about 2023, where we had strong renewal base in the finance company through Q1, Q2.
You can make that deduction that we have that benefit also with us in Q1, Q2 in 2026. I think what's really important when it comes to Japan is that for the first quarter, we're also increasing our new cabin sale. Of course, you have the effect of the renewal base and how that cyclicality all the way back to when the new legislation came in Japan back in 2020. You have that effect, but we're also adding more and more new business also within the cabin solution side. I think Cabin Solutions, if we just look at new business versus last year, we grew in the neighborhood of 10%, new business.
Okay, that's good.
I think that's the most important for us is how we get new customers on board on our subscription models, how long they stay with us and that we keep churn, which we didn't mention in the call, but the churn has come down significantly from last year. I think that just shows w e have now washed out most of the COVID effect from our performance.
Well, that's good. Coming back to Cleanrooms, you've had an impressive order intake and for a number of quarters now. I just wonder how your delivery pace, I mean, you missed out two orders that were postponed. If in, if you didn't have the Curexa settlement, the outcome would've been quite disastrous for the first quarter in Cleanroom. How should we see on the delivery pace now going forward into the second and the rest of the year?
In the year-end call, I alluded to that we see the second half in the U.S. to be really strong. Of course, given our size of organization. It's getting quite tight for the second half. We have a good feeling that we will be able to compensate for the two projects that were moved into 2027. I agree with you, there is a clear pickup in the order intake. I think it's a combination of us being more focused on a certain sector and thereby having more success. Overall, it's very positive in the U.S. on the order intake side and the pipeline.
That means that you will have another relatively, because if you, from the SEK 18 million you delivered in sales in Cleanrooms, if you exclude the SEK 11 million.
You have some SEK 7 million. Will you see another weak second quarter, or will you pick up something here, and then the ending of the year will obviously be strong?
We try not to make too much forward-looking statements in this, but I remain at the second half being the stronger part for the U.S. Cleanroom business. I think what we experienced in Q1, we're in the project business, these things will happen. It's the business we've chosen to be in. I think we have been quite safe from those kind of instances with projects that are being postponed. Those things will happen in this type of business. When I look at the pipeline as we go through it with the team, I think we have a good chance of closing that gap.
The second half of this year and then into next year will be the harvesting period here. If we're looking at the gross margins here. You could see that the gross margins of, in Cabin Solutions has slightly down around 73%, around last year and down to 71.8%. It's a slightly lower gross margins in Cabin Solutions.
This ties in to the discussions on the new financial targets and so forth. When we grow, and we have good growth in Japan in the Cabin Solutions, of course, we get more, that also holds back the gross margin a little bit.
Okay.
If we sell to a part of that business to a finance company, then we get a bit higher share. I don't see any decrease of the quality of earnings, so to say, within the cabins. We will have some shifts. I don't see that we're on a path given this a little lower for this quarter.
Okay. M aybe this is a better level reflecting, a little bit, the new strategy that the higher share will come from rental income instead of selling. The clean room business is a little bit lumpy here, and it's difficult to interpret, given that you had such a sizable compensation for the Curexa deal. Could we expect around 60% gross margins going forward, or should it be in the range 55%-60%, or what should we look at?
I think you, if you look back at the 2025 numbers, right? We were at this 60% level. For the particular quarter, of course, the gross margin level achieved in the U.S. was, well, that's in all aspects, in top line and end gross margin, was heavily affected by the Curexa settlement. If you look back to 2025, you see that we've done that climb of gross margin up to the 60% level.
Okay. That's excellent. What about your new financial targets here? You are taking down the sales target from 10 to 5% or above 5%, I should say. The EBIT range from 15%-20% to an EBITDA range of 15%-20%. Now you call your term targets midterm. Is it something you could revise, or is midterm the same as long-term?
What we have said is medium- term. That should be the same as it was in the former ones.
Okay. The old ones were also medium- term.
Yeah
Targets.
Yeah, that's correct.
In fact, the length of the targets are not changed. It's still midterm targets.
Yeah, it's still medium- term in both of them.
What's about that you taking down the growth target from 10% to above 5%? What should we read into that?
I think first of all, these targets have been with us since we did our IPO back in 2019. I think when you look at the growth target, which is actually 7%-13%, and so 10% sort of the midpoint in that, I think that we don't want to have a target where we drive away from the rental purchase, the rental model, so to say, and drive more product, normal product sales or more finance company sales because I think for the quality of earnings in the rental model is much higher. We're simply trying to reflect and get the align the goals of internally and externally, so to say.
Okay. I was looking a little bit at Air Cleaners and Cleanrooms sales target. Now you're being organically, at least delivering maybe 20% here for 2026. Also 2027. How should we look at, about that or now, when Air Cleaners started, as I see it, a little bit on the slow side in the beginning of this year? You're also mentioning that Europe remains. Yeah, you're a little bit cautious about growth in Europe, which is a strong Air Cleaners market.
Well, I think Europe for the first quarter over last year in constant currency grew 6.1%, right? I think that is above that range. If we look overall at Air Cleaners in constant currency, we grew 13.4%.
Yeah
So the underlying operational drive is there, and it's happening.
Yeah
When you look at the target on the top line, you have to consider that, of course, we have a large portion of our business still in the Cabin Solutions market. We definitely I read your analysis on QleanAir, and I think you're quite right that we need to be in at a much higher rate on the Air Cleaners side. I think the 13.4% that we had in underlying growth this quarter shows that we are doing the things that we need to have such growth that we in two, three, four years, Air Cleaners is a much more significant part of our mix.
That's why I'm saying that the historic target is not impossible to reach if Air Cleaners and Cleanrooms are growing 15%-20% while Cabin Solutions is more flattish.
You feel the target is a bit low? Is that what you?
No, I don't.
I think in combination.
You can call it that. Not me
In combination with having more going towards the rental model, of course.
Yeah
We accrue more of the sales growth rather than taking it at the time of sale. It's a combination of the two.
Okay. Yeah. T he cash flow issue: how will you proceed with that for the remainder of the year?
I hand that to Fredrik.
I mean, the what the reason behind the declining cash flow is mainly coming from the U.S. Cleanroom business, and these are more of one- time effects. One is the movement or the postponement of the two Cleanrooms that were scheduled to be done or starting in the first quarter this year. Second, we had a Curexa settlement in the first quarter. We don't think that the rest of the year will be affected by this.
Okay. You could say you could take the negative cash flow was taken here in the first quarter.
Yeah
You got the correct physical payments in the first quarter?
No. The physical payment was made in 2024 already. We took the revenue recognition this quarter, but the cash didn't come this quarter.
Or at least the lion part of the cash came in 2024.
Yeah.
There was an additional piece in the settlement, but that was more limited.
Yeah.
Okay. That's why you couldn't offset the weak sales in U.S. Cleanr oom's business. You had to take that on the cash flow side.
Yeah.
You built up all the, all the equipment, so that will be ready for delivery then next year.
Yeah.
Okay. I think that was all the questions for me this time.
Thank you, Anders.
Okay. Thanks a lot.
Thanks.
Thank you.
There are no more questions at this time. I hand the conference back to the speakers for any written questions and closing comments.
There are no written questions. If there are no other or further questions, I would like to reiterate. Our approach to operational and strategic development is very systematic. We have a clear focus to grow our Air Cleaners business to become a significant part of our revenue base in the next 3-4 years. We stand out in the market with a very attractive rental model, and we have aligned our financial targets with our focus on strengthening this part of the business. We have a targeted go-to-market approach, and for quarter one, we delivered an underlying growth in constant currency of 10.7% and at a margin above 14%. Thank you for your participation and interest in QleanAir, and we wish you a great continuation of the day. Thank you.
Thank you.