Earnings call transcript: Norbit Q2 2025 sees strong revenue growth, stock rises

Norbit ASA reported robust financial results for the second quarter of 2025, with significant revenue growth and a positive market reaction. The company’s earnings per share (EPS) exceeded forecasts, contributing to a notable increase in stock price. Norbit’s revenue for Q2 reached 684 million NOK, marking a 63% increase from the same period last year, building on its impressive 20.83% revenue growth over the last twelve months. The stock price rose by 3.98% following the announcement, reflecting investor confidence in the company’s performance and future prospects. According to InvestingPro data, Norbit has delivered an exceptional 149.6% return over the past year, significantly outperforming market benchmarks.

Key Takeaways

• Norbit’s Q2 revenue increased by 63% year-over-year, reaching 684 million NOK.
• The company’s EPS of 2.06 NOK surpassed the forecast of 2.05 NOK.
• Norbit’s stock price rose by 3.98% after the earnings release.
• The company launched new products and expanded manufacturing capacity.
• Revised 2025 revenue target set at 2.5-2.6 billion NOK.

Company Performance

Norbit demonstrated strong financial performance in the second quarter, driven by significant growth in its defense and security sectors. The company’s revenue increased by 63% compared to Q2 2024, and its EBIT margin stood at 25%. Norbit’s focus on innovation and expansion in manufacturing capabilities has positioned it well within niche technology markets, emphasizing tailored solutions for specific applications.

Financial Highlights

• Revenue: 684 million NOK, a 63% increase year-over-year
• Earnings per share: 2.06 NOK, exceeding the forecast of 2.05 NOK
• EBIT: 174 million NOK, with a 25% margin
• Net income: 131.4 million NOK

Earnings vs. Forecast

Norbit’s actual EPS of 2.06 NOK slightly exceeded the forecast of 2.05 NOK, indicating a positive earnings surprise. This marks a continuation of the company’s trend of outperforming market expectations, contributing to the stock’s positive movement.

Market Reaction

Following the earnings announcement, Norbit’s stock price increased by 3.98%, closing at 206.5 NOK. This rise places the stock near its 52-week high of 228 NOK, reflecting strong investor sentiment and confidence in the company’s future growth prospects. InvestingPro analysis indicates the stock is currently trading above its Fair Value, with a PEG ratio of 0.54 suggesting reasonable pricing relative to growth. The company maintains a moderate debt level with a debt-to-equity ratio of 0.43, contributing to its "GREAT" overall financial health score.

Outlook & Guidance

Looking ahead, Norbit has revised its 2025 revenue target to 2.5-2.6 billion NOK, with an expected EBIT margin of 25%. The company plans to continue its expansion in the defense and security sectors and explore value-accretive acquisitions. Norbit’s focus on innovation and manufacturing capacity expansion is expected to support its growth trajectory. With a strong return on equity of 29% and analysts forecasting continued sales growth, the company appears well-positioned for future expansion. Access the complete Pro Research Report and detailed financial analysis through InvestingPro to better understand Norbit’s growth potential.

Executive Commentary

"We continue to strengthen the foundation for further profitable growth," said Peder, CEO of Norbit. He emphasized the importance of being self-contained in technology and highlighted the significance of attracting and nurturing top talent to drive the company’s success.

Risks and Challenges

• Potential supply chain disruptions could impact production timelines.
• Market saturation in certain segments may limit growth opportunities.
• Macroeconomic pressures, such as currency fluctuations, could affect financial performance.
• Increased competition in the defense and security sectors poses a challenge.
• Regulatory changes in key markets may impact operations.

Q&A

During the earnings call, analysts inquired about the impact of US tariffs, to which Norbit reported no significant effects. The company also noted strong interest in its underwater security solutions and reaffirmed its commitment to defense technology development. Executives highlighted the ongoing focus on talent acquisition as a critical factor for future growth.

Full transcript - Norbit ASA (NORBT) Q2 2025:

Peder, CEO/Presenter, Norbit: Good morning, everyone, and welcome to our q two twenty twenty five presentation. Before we begin, I I want to thank our customers and investors for the trust they place in us, and, of course, all the dedicated teams in Norbit for once again allowing me to present a new record quarter. By delivering tailored technology to carefully selected applications across segments, markets and geographies, we continue to strengthen the foundation for further profitable growth. This momentum gives us confidence to raise financial targets for this year. We’ll return to that in the outlook section.

First, let’s have a look on the q two numbers. As said, q two is a new record quarter, both when it comes to revenues and profits. Having a goal of remaining a growth company, we need to continue to deliver record quarters. The revenues came in at 684,000,000 NOKs, which is a 63% increase from the corresponding quarter in 2024. The EBIT ended at 174,000,000, representing an EBIT margin 25%.

For the first half year, we have delivered a total north of 1,200,000,000.0, which is 46% from 2024, up 46% of course. The EBIT came in at 302,000,000, also representing a margin for the half year of 25%. So a little bit from the segments. So in the oceans segment, driven by strong sonar sales from the new VBMS X sonar that we talked a little bit about on the previous quarter. We have delivered revenues of $239,000,000, which is an increase of 22% from the 195,000,000 we delivered in Q2 twenty twenty four.

The EBIT margin in the quarter ended at 36%. For the half year, revenues came in at $472,000,000, which is an increase of 49%, with a EBIT of 36% compared to ’28 for the first half. So, as as mentioned, we’re very satisfied seeing this, new sonar, this IVBMS X being well, taken by the customers and being an important part of this growth. So when you look into that revenue split in the categories that we’ve been using for a while, The VingHead sonar has increased for first half year this year to a 104 compared to 70. All the other sonars, excluding vignette and excluding the guard point for the underwater security, has has been lifted from 205 to 277,000,000.

Sub bottom profilers, being the InnoMAR technology, yielded 50,000,000 NOKs in revenues. In the security, we report 10,000,000. As talked about earlier, we still see a lot of interest, strong demand for new solutions for underwater surveillance. We see that our product offering is regarded relevant, but getting to orders takes much more time than we like. The good thing is that it’s not that we’re losing any contracts, it’s just that the projects are not concluded.

Yeah. Connectivity. This is the second best quarter ever for connectivity. Revenues up to 170,000,000 compared to a 101 in in q two. And the main increase is on onboard units and on enforcement modules for tachographs.

And with the top line getting up, the margins follows. So the EBIT margin is at 32% compared to the 20 in q two twenty twenty four. When you look on the margins in connectivity and oceans, They’re very much in the same scale and this is the two segments where Norbit delivered own proprietary technology out in the market under our own branding. So we’re expecting to be able to get margins on this level based on that. For 2025, total revenues of 316,000,000, and a total, EBIT margin of 31%, up from 25% in 2024.

So looking on the on the revenue split, as you see, compared to, first half twenty four, its growth on onboard units, that’s the tolling units used for passenger cars. Enforcement modules for tachographs is doubled following a change from the European Union in the in the demand for this kind of technology in in in trucks in Europe. And also enforcement modules related to satellite based tolling has a good growth. The subscription and e toll is at par with what it was 2024. So final segment, as we’ve talked about before, oceans and connectivity, it’s an orbit proprietary technology.

We use a big portion of our manufacturing capacity to create our own products. Spare capacity has been offered on contract manufacturing terms to some key selected clients. As the demand for technology made in Europe has been growing, and especially in the defense and security sector, we’ve seen that we’ve been able to position ourselves as a partner for scaling for some of these customers also. So it’s by far a record quarter for the PIR segment, $293,000,000 NOKs in revenues. That’s more than a 100% up from the same quarter in 2024.

That being said, we are not fully satisfied with this, because we are a bit short on what we were planning due to some delay in some incoming component. EBIT margin up to 20%. This is largely driven by a higher revenue base and operational leverage

Per Christian Abelischal, CFO, Norbit: also

Peder, CEO/Presenter, Norbit: getting so if you if you look on the revenue split, so automotive, as we’ve talked about earlier also, we have chosen to reduce our exposure towards automotive and focus more on some key selected industrial, defense and security and others. So it helps also on the margin when you stop doing some business where there is very bad margin and replacing that with more margin in the right scale. And of course, this shows the scalability. Think we’ve talked about investments in capacity. We presented that Norbit has installed Europe’s fastest S and T line, so for assembling electronic components on circuit boards.

Without those investments, this would have been quite difficult. Yeah. What what else? So in total, first half in the product innovation and realization segment, 454 millions in revenues. EBIT margin for first half year on 18%, up from eight.

We’ve also announced in the quarter an order from a European client in the defense and security sector at the value of 125,000,000 for delivery in q four twenty twenty five. Yeah. And I’ve already commented on the on the split. So with that, I think I leave the floor to Pekka Lisjan to go into some of the more details in the finance.

Per Christian Abelischal, CFO, Norbit: Thank you, Luca, again. I will spend some minutes walking you through the financial highlights of the quarter. And starting up to sum it up, we are delivering record high revenues and results in the second quarter and the first half of the year, reporting strong growth across the three segments and improved margins. In only six months of this year, we have delivered 90% of what we achieved in net profit for the full year 2024, showing both scalability and operational leverage as we grow. Cash flow generation was strong and cash conversion was equally strong, and we have continued to improve our working capital efficiency.

Our balance sheet remains rock solid, enabling us to act on our capital allocation framework, and as will elaborate on, we are increasing the financial targets for the full year. As for the second quarter, revenues came in at 684,400,000.0 kroner, an increase of 63% from the corresponding quarter of ’24, with all three segments contributing to that growth. EBITDA for the quarter came in at 210,700,000.0, representing a margin of 31%. This compares to 131,900,000.0 in second quarter twenty four and with the same margin level. Operating profit was 174,200,000.0 translating into a margin of 25%.

This compares to 101,800,000.0 and a 24% margin reported in the corresponding period of last year. So far this year we have delivered an EBIT margin of 25%, that’s up from 17% in first half twenty four. Net finance expenses were negative 1,400,000.0, explained by net interest expenses of 8,600,000.0 and 7,600,000.0 in foreign exchange gains, following appreciation of the euro and depreciation of the US dollar against the Norwegian krone. Tax expenses were 41,400,000.0 while net income for the period was 131,400,000.0 translating into an earnings per share of 2.06 kroner. In the second quarter, Oceans delivered 22% revenue growth and 11% adjusted for Inomar, which we acquired July.

Sonar sales were strong, particularly in Asia. Europe and Americas had a low single digit decline compared to the same quarter last year. Slightly slower sales in The US were mostly offset by growth in other countries in The Americas. After the introduction of tariffs by The US Administration, we have not seen any significant slowdown on our sonar sales to The US, and quarterly fluctuations must be expected as is quite normal in this industry. We continue to maintain our focus on maturing opportunities in The US, including protecting our margins.

Ocean’s gross margin were largely stable year over year and in line with prior quarters. Payroll expenses increased 14,700,000.0, of which Inamar explained roughly half of that increase, with the remaining difference largely explained by new hires and wage inflation. Operating expenses was up 6,200,000.0, primarily due to Inamar, increased use of external consultants and activity related costs. The EBIT for the quarter was 86,700,000.0, up from 79,700,000.0 in the same period of ’24. Connectivity reported a revenue increase of 67%.

This was largely driven by more sale of onboard units and tachograph enforcement modules. Gross margin fell two percentage points due to revenue mix, while payroll expenses rose 4,000,000. The EBIT for the quarter was 55,200,000.0, up from 20,800,000.0 in the 2024. PIR posted a significant improvement of revenues of 118% from the second quarter of last year, primarily driven by increasing demand from the defense and security sector. Gross margin was down four percentage points on higher share of high volume manufacturing, while payroll costs increased 6,700,000.0 on activity level in manufacturing.

The EBIT was 59,600,000.0 in the quarter, that’s up from 17,800,000.0 in the same period of last year. Next, our balance sheet and financial position. Property, plant and equipment, including our rights of use assets, increased 14,900,000, following investments in machinery equipment and lease additions of new production equipment net of depreciation. Intangible assets rose 17,400,000.0, explained by our R and D investments with high activity ongoing on the GNSS OBU in the quarter. Trade receivables were up 12,800,000.0, explained by a sequential revenue growth, while inventories increased 26,000,000 in the quarter on sourcing of components for the GNSS OBU, which is expected to be delivered in the fourth quarter of this year.

Net interest bearing debt stood at $274,000,000 at the June, an increase from 191,800,000.0 at the March, following our dividend payment of 190,900,000.0. Our equity ratio stood at 50%, down from 52% at the March. After a structurally challenging period in the value chains in 2021 and 2022, requiring us to build significant safety stock, we have been dedicated and structured in our approach to increase our working capital efficiency. Our progress is quite clear and demonstrated by our nominal working capital level, at the end of the second quarter was at the same level as what we reported on at the 2023. This is even considering the substantial revenue growth we have observed in that period.

As per the end of the quarter, our net working capital ratio stood at 20% last twelve months revenues and 15% second quarter revenues analyzed. Strong focus on inventory optimization, improved credit terms and sale of receivables have all contributed to this development. But as always, more work is yet to be done and working capital will fluctuate given the anticipated growth and delivery schedule. In the second quarter, we had several financing initiatives ongoing, which are partly also still ongoing. We extended the maturity on our revolving credit facility to 2028 in the second quarter.

We were also able to considerably reduce the margin on all our loan facilities from the previous level, which was a blended average of 160 basis points, which lowered our cost of capital further. And we are currently also in advance discussions to increase the limits on some of our facilities with focus on strengthening our flexibility. Our balance sheet continues to remain rock solid. The second quarter, our net interest bearing debt to EBITDA ratio increased to 0.6 post dividend payment and our liquidity position stood at $725,000,000 kroner at the June. Lastly, cash flow for the quarter.

Cash flow from operations was 186,100,000.0, explained by an EBITDA of 210,700,000.0, a net decrease of 13,000,000 in working capital, taxes paid of 36,600,000.0 and 1,400,000.0 in net finance expenses. We invested 45,100,000.0 in the quarter explained by 33,100,000.0 in R and D investments and 12,100,000.0 in investments in machinery and equipment. The R and D investment level for this year is expected to be maintained in the third quarter and the new guidance for the year is 130 to 140,000,000 from previously around 100,000,000, while investments in machinery and equipment are raised to 120,000,000 for the full year, up from 110 previously. This is due to build capacity to meet this year’s increased revenue target. Cash outflow from financing activities was $2.00 7,000,000 in the quarter, primarily explained by 190,900,000.0 in dividends paid to the shareholders in May.

With that, I conclude the financial part of the presentation. I will give the floor back to Peder again, who will give you the outlook statement.

Peder, CEO/Presenter, Norbit: Thank you, Abelischal. So I I think with with the momentum we have now, and I mean we were we were also challenged by a lot of investors after presenting q one that we should comment on the outlook that the outlook we had for the full year 2.2 to 2,300,000,000.0 seemed conservative. We agreed it seemed conservative. We wanted to have some more work to be done to to really have something underneath when presenting the numbers. We like to have a certain certain control.

So but I’m I’m very happy that based on the positive outlook supported by high activity in all three business segments that we now can communicate that our revised financial targets for this year is to deliver revenues in the range of 2.5 to 2,600,000,000 with EBIT margin in the range of 25%, which is the level we currently is running. We also should add that we continue to explore value accretive acquisitions to add on to the organic growth as communicated when we presented the 2027 targets. Looking into more short term, q q three, as, you might recall, oceans has a certain seasonality. Q one and q three is typically slow quarters and where where q four is is often the strongest is a certain budget flushing effect in in q four. In q three, there is some holiday season.

In q one, it’s not the best for surveying on inland waterways and lakes, etcetera. The The northern part of the world, they’re frozen. So these are some of the elements in the seasonality. We expect revenues to exceed 180,000,000 in Oceanus in the quarter and in that it’s not recognized any of this security project that we have announced where we’re waiting for some export license prior to to collecting the money. There’s a 75,000,000 NOKs, so we’ll tell you when that’s sorted out.

In connectivity, we expect to deliver in the range between 120 and 130,000,000 NOKs. In the fourth quarter, we expect a pickup where we will deliver most of the volumes on this new GNSS onboard unit contract having a value of 160,000,000. For the PIR segment, it’s high activity, good leverage on the new investments. We expect to deliver in the range between $2.20 and $230,000,000, and the outlook is that q four should be a new record for the segment. So, we need people to to, not have the the alarm in the morning

It needs to be a quarter to six to to conclude rest of the year. I think that concludes the official part of the presentation, but we’re open to take some questions. So if if there is some questions posted on the web.

Moderator/Question Facilitator, Norbit: Thank you. First, let’s see if there are any questions, here in the room. No? Let’s move on to the questions online. What actions have driven the successful development of Ping DSP post acquisition?

Peder, CEO/Presenter, Norbit: So I think, the company is built on something that fits very well with the Norbit DNA. This is a passion for creating technology that makes life easier for someone that needs to explore something. And so the Ping DSP sonars is typically a good piece of tailored technology for for surveying in shallow waters. Very competent small team that created this and very happy to see that the synergies that we wanted in in this acquisition, you saw that it was a good technology, it’s a good product, that’s an extension to help us broaden our product offering and we wanted the Norbit go to market platform to to help grow, and that’s really been a success.

Moderator/Question Facilitator, Norbit: Thank you. Looking at product mix development, is there any reason gross margins should decline in 2026? If not, are there other factors that would prevent EBIT margins from remaining flat or even increasing from 2026 onwards?

Peder, CEO/Presenter, Norbit: Yeah. I think we haven’t said much about 2026 yet. So I think we’ll we’ll come back to the 2026, but we have no intention of of of taking measures to reduce our margins.

Moderator/Question Facilitator, Norbit: Are you able to provide any color on which segment you see the most scope for inorganic opportunities?

Peder, CEO/Presenter, Norbit: I think what we’ve what we’ve said on that in the past is still valid that for inorganic growth on strategic acquisitions we prioritize to acquire companies that brings either technology synergies or market synergies or both. We prioritize to do acquisitions where it fits with this carefully selected applications, demanding technology in some kind of niche market with good scalability in our scale. And we need to believe that we can have a good cultural fit. So I think that’s the priority. So we don’t acquire to get some more, of the manufacturing capacity, etcetera.

That’s that’s better growing organically.

Moderator/Question Facilitator, Norbit: Thank you. Is the reduction in the, revenues in the PIR segment, related to the delayed component, is the revenues, delayed to the third quarter?

Per Christian Abelischal, CFO, Norbit: With this particular so the reference to the 15%, that that’s delayed to third quarter. Yes.

Peder, CEO/Presenter, Norbit: So the revenues are kept. It’s a timing effect.

Moderator/Question Facilitator, Norbit: Good. Thank you. Could you give some guidance on on m and a? How is the m and a funnel looking? Indication of size m and a?

Preference for any BU specific for m and a?

Peder, CEO/Presenter, Norbit: So I I don’t think we have anything to share specifically on that, but as we’ve said before also, we have built up in house capacity to work systematically on M and A and we see that having industrial economists living the Norbit life helping to explore and build up an interesting list of leads that we turn around and work with, is quite helpful.

Moderator/Question Facilitator, Norbit: What is the current pipeline for ocean security looking like?

Peder, CEO/Presenter, Norbit: Yeah. Maybe you’d like to comment on that, Pheidhestion.

Per Christian Abelischal, CFO, Norbit: Well, I I don’t think we need to go into to details in Pacific when it comes to numbers, but what what we can say is that the the pipeline is surprisingly large. And as said, you know, these are rather large projects that take time to mature. And it’s a combination of governmental projects or and private projects. Some of these projects are also linked to a bigger project. They’re not necessarily only buying the surveillance sonar system, but they’re also buying other types of systems as well.

And, you know, we are maybe just a part of that, which means that a lot of decisions have to have to be made, and given that these projects are are quite big in total also, it means that these generally take a lot of time to mature. So but, I mean, we we remain patient. We really believe that this market will grow. And and, you know, I can also remind you that, you know, we didn’t really have a good start to last year either when it came to winning new security projects, but but we announced quite big orders at the end of the at the end of the at the end of the year. So so I’m I’m hopeful that we will also see growth in in in the security market in in second half of this year, and then and then hopefully, it can grow that even further over the next years.

Peder, CEO/Presenter, Norbit: And may maybe we could also say that we see especially strong interest in the The Middle East and Europe. And it’s not difficult to understand that either.

Moderator/Question Facilitator, Norbit: You. I noted your comments about investments, CapEx in q two and the full year 2025 in the report. What do you consider to be a normal CapEx over sales in percent? We

Per Christian Abelischal, CFO, Norbit: have made some communication regarding our R and D investment level. What we said, the longer term, will likely fluctuate between 35% of our revenues. When it comes to investments in machinery and capacity at the factories, certainly depends on how much we are growing. I think this year we have taken a lot of investments to build up our machinery capacity. And we will see next year what we will prioritize.

But what I can say is that we have a fantastic return on those investments. Not being capital constrained and putting our capital to work in terms of what we see are the best opportunities and that gives us good returns is something that we will continue to prioritize.

Peder, CEO/Presenter, Norbit: Maybe a quick add on to that also if you allow me, and that’s I think exactly as Per Christian says, it’s not capital. That limit is the limiting factor, but we really need also to see that we are able to manage all these projects. I mean, what we’re creating is not very easy. It’s it’s very demanding technology we’re creating. So you need to set up a group of engineers really being very clever engineers, and you need to be able to manage that in a way inspiring them to set new world records in creating stuff up to the limit of what the the law of nature and physics allows us.

And that’s why with this high return on capital, why don’t we double that? We have the capital, but we don’t have the human resources suddenly to do a double. And we want to grow that steadily to safeguard the culture in this as well.

Per Christian Abelischal, CFO, Norbit: And and first half this year, our R and D investment is around 6% of our revenues. Think it’s also worth mentioning that a lot of those investments are currently put into the GNSS OBU project, and that’s not generating revenues for the first half. So when we invest, you expect that these investments will have a long term growth. But over time, a target of three to 5%, which we have said in the ambition plan towards ’27. And then when we come up with a new plan, we will also set new targets for that.

It’s a good question.

Moderator/Question Facilitator, Norbit: It is. Can you give some color on defense security use cases for your multibeam sonars?

Peder, CEO/Presenter, Norbit: This is a bit tricky because a lot in this domain you’re not allowed to talk about. But I think we’ve mentioned before, in the Danish news, was a lot about a US company being one of our clients, a company SailDrone, delivering special drones to do autonomous surveying. They are delivering some kind of services to the Danish Navy. It’s not disclosed what they do, but I could try to guess. And what I guess is that they, with these drones, they go in a certain area and map, and then they go again to do change detection to see if something in this area is changing.

Is there some new objects or something, which which is a relevant use case. So so maybe that’s that’s the best example today.

Moderator/Question Facilitator, Norbit: Thank you. You have a great year within PIR, and guide for a very strong end to 2025. Would you say that we are in a ramp up phase within defense and that you expect, growth in the coming years?

Peder, CEO/Presenter, Norbit: I mean, we’ve been talking about this trend of made in Europe, made in Norway for many years. First, when we spoke about that, I think the trend was driven by that in the Western part of the world, we see that it’s risky to buy Chinese technology. We stopped buying Chinese base stations in the cellular network. If you don’t want to do that, the devices using the cellular network maybe should be from the Western part as well. So and, next level of this is, suddenly it happens that Europe sees that maybe we should it’s not only China which is a challenge, there is another challenge.

We need to be self contained on technology. And then you have on top of that increase for defense and security. So it’s sort of two trends building up on top of each other. And I’m glad we started to do investment to to scale up. Last Friday, I was touring the new factory coming up in the expansion of our Celbu factory, doubling the floor space, more than that.

And I think that will be a very good investment also, especially since it’s the local community paying for it.

Moderator/Question Facilitator, Norbit: Any guidance on the effect of tariffs on the business?

Per Christian Abelischal, CFO, Norbit: Well, I think I made some comments on that in the presentation. So and to reiterate that, we’re not seeing a sort of March slowdown, at least not in the second quarter of the year. And as I said in the presentation, I mean, the sonar business can be quite lumpy, so just singling out one quarter and trying to isolate the effects on that is pretty hard. So we need to have more data points in order to accurately understand how the tariffs are affecting the sonar sales. But what’s on the positive side again, we see that a country such as Canada is certainly offsetting much of the decline we saw in Q2.

So sort of Americas in general remained largely flat or to a low decline single digit, which sort of shows that there is a lot of diversification, both in terms of products, markets, and geographies when it comes to the sonar side. But The US is still an important market for us, and we will continue to have a big presence in The US when it comes to focus on growing that that that business. So so nothing has changed in that, and and as I also mentioned in the presentation, we will continue to protect the margins. And it’s not like

Peder, CEO/Presenter, Norbit: suddenly a lot of US suppliers of the same technology as we supply. I mean, that that’s also the beauty of working with high-tech in some kind of niche related applications.

Per Christian Abelischal, CFO, Norbit: Yeah. And maybe a nuance to what I earlier mentioned also, it’s it’s so the The US exposure we have is primarily in the oceans domain. So so in terms of PIR and connectivity, we don’t have that exposure. But I think also on the tariff side, if you look on the sonar business, most of our competitors are also found in the European Union and in Europe. So so they are facing, you know, the the same tariffs as as we are at at the moment, which means that the the competition has the same level still.

So so, again, I don’t think a lot has changed, but we need more data points to accurately have some some some good statements on on that development over time.

Moderator/Question Facilitator, Norbit: Good points. Will the proportion of defense PIR demands continue to grow to be a larger proportion of the business over time?

Per Christian Abelischal, CFO, Norbit: So the difference between the PIR segment and connectivity and ocean, so, you know, is that in oceans and connectivity, we have our own product, our own intellectual property, and with higher returns and better margins. So strategically, we are allocating capital towards those two segments. And as said, we’re using that spare capacity to grow the PIR segment. Within the PIR segment, we are working towards some key selected customers, which means that they are very well prioritized in our business. So if they are scaling, we are also scaling with them.

So we’re not out there chasing new clients all of the time. And I think that’s maybe a big difference to our business compared to some of the peers. So we’re focusing on sort of the core clients we have, and then we will see how much they will grow. I hope they really succeed, because if they do, then we will succeed. So that’s also what you see in the numbers for this year with the substantial growth that we have in the PR segment.

Peder, CEO/Presenter, Norbit: I think also in this strategically, we’ve not focused that much on growing this, but getting better control on the working capital, making this part of the business more capital light. It’s the context has changed. So that’s why it now also instead of just saying we will use spare capacity, it’s really worth investing to build some capacity to to to work work, and allocate capital to that as well. So

Moderator/Question Facilitator, Norbit: Good. How is activity progressing in tailoring sonar solutions for AUVs such as those used by bedrock exploration?

Peder, CEO/Presenter, Norbit: Yeah. So Bedrock is a company we know very well, and we continue to tailor increased capacity on existing sonars and we also tailor new technology for new solutions not being disclosed yet. So, yeah, I’m not sure I have much more to add to that.

Moderator/Question Facilitator, Norbit: That’s okay.

Peder, CEO/Presenter, Norbit: I think if you look on the web page, there are certain videos with some of these mentioned clients showing some demo on how how this is used.

Moderator/Question Facilitator, Norbit: Could you indicate what the negotiated increase in the financing facility would look like and what the current utilization of the facility is?

Per Christian Abelischal, CFO, Norbit: Well, in terms of utilization, that’s pretty pretty easy to tell. So we have three facilities. The term loan is fully drawn, which is what you see in the balance sheet today. The other two facilities have not been drawn on, and they are 200,000,000 on the RCF and $350,000,000 on the overdraft. So we still have quite we still have a pretty good capacity on those.

When it comes to the margin, unfortunately, I can’t really comment more than what we stated in the presentation that it’s been considerably reduced. So that’s that’s what I can tell.

Moderator/Question Facilitator, Norbit: Is it possible to say something more about the reception of the WBMSX product?

Peder, CEO/Presenter, Norbit: Yeah. I think, what what more to say? I think so maybe I could remind you what’s new with this product. Maybe that could be be relevant. So with the WVBMS X, we have created a platform where it’s possible for the client to buy a base kit and then after starting using it, could buy on extra features by upgrading software.

This is new in this industry. It’s quite common in the daily life on some consumer stuff, but this is new in the industry and it looks like the market has received that that very well. So in in the in the growth numbers we’ve shown, a good part of that, comes from from this. Yeah.

Moderator/Question Facilitator, Norbit: Are you actively avoiding Chinese components in the development of your security products?

Peder, CEO/Presenter, Norbit: We we have a clear strategy on supplier selection and component selection. But as the industry is set up today, a lot of Chinese elements are in a lot of different components. It’s not that you have a lot of ship manufacturers in in Europe. So probably we will see changes to that also going forward both in Europe and and in the in The US. But we we really pay attention to that and and carefully select.

Moderator/Question Facilitator, Norbit: Thank you. Do you see opportunities to build on your experience in defense relevant technologies to create new products?

Peder, CEO/Presenter, Norbit: Yes. And I think especially we see that in the long perspective it would be relevant in the connectivity domain where I think we’ve spoken about that before also where we see that over, core, skills within, wireless secure communication, and some references we have in the past where we’ve delivered to some military applications that there could be, more opportunities, and maybe, we would have done more on that, if the organic growth on the existing base would not have been as good as it is now. Good.

Moderator/Question Facilitator, Norbit: Final question for now. Is it difficult to find employees with the winner mentality that Norbit has?

Peder, CEO/Presenter, Norbit: I think getting the right people is the most important thing the management could focus on. And then seeing that we could create an environment where they could really build and and and blossom as as as professionals. And this is this is not just a matter of finding, convincing, and recruiting. I think it’s the one thing, I mean, lot of our investors know that for me, the bible is some of the books of Jim Collins and he speaks about this the right people. And it’s not only having the right people, but having the right people in the right seat.

So we continuously also consider if someone should be allowed to do something slightly different than they’ve been doing up till now. And sometimes in this also you see that brilliant colleagues is not the right in your company anymore. So then it’s more right for them to work somewhere else where they could could grow again. So, yeah. It’s not easy.

I think if we said this were easy, we probably would do a lot of mistakes.

Moderator/Question Facilitator, Norbit: True. There are no further questions online, so unless there are any more questions in the room? No? Then that concludes today’s q and a session.

Peder, CEO/Presenter, Norbit: Okay. Thank you. And then I’d like to to thank you all for taking the time and, and listening to our presentation. And, we’ll go back and explore more and see if we could deliver in the future also.

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