CTEK AB (publ) ($CTEK)

Welcome to CTEK Q1 Report 2026. [Operator Instructions] Now I will hand the conference over to the speakers CEO, Henrik Fagrenius; and CFO, Thom Mathisen. Please go ahead.

Thank you, operator, and a very warm welcome and good morning to CTEK's Q1 report earnings. Today, during the presentation is me, Henrik Fagrenius, I'm a CEO. And together with me, I have Thom Mathisen, CFO. And as usually, I will start with a brief recap of what CTEK is before we drill into the numbers. So CTEK was founded more than 25 years ago in a small village called Vikmanshyttan in Dalarna by the Swedish inventor, Bengt Wahlqvist, who made the first smart battery chargers. So that's where we have built our company on those intentions. We have today 2 different technologies. We have our Low Voltage technology and we are selling that in the consumer segment, in client brand segment, in professional for workshops and also in Power Solutions. And the other technology that we have is for EVSE, that's for charging of electrical cars, and we're mainly selling that into destination chargers. We have divided our company in 2 divisions, the Consumer divisions that are responsible for the sales to different -- lot of different channels like e-commerce, Amazon and normal retailers and wholesalers, and we are targeting globally markets. The other divisions is Professional division where we are focusing on our B2B business. That is mainly our OEMs, big sport car manufacturing and car manufacturers and also for electrical car charges, parking operators and destination. That's also a global market for us when it comes to client brand. We are very proud that we have been chosen by more than 50 of the world's biggest and most prestigious car manufacturers. They are using our chargers and put their brands on it. Here, you can see that we are in the premium segments and a lot of our products are sold to the same customer segments and chargers and boosters are sold in a range of different segments. And then our new adjacent Power Solution is sold also to some of the same customers and EVSE destination chargers is mainly focusing on parking operators and destination charging parking garage. So digging a little bit deeper into the first quarter of 2026. Despite a lowering revenue, we increased our gross margin and our profitability. And we had a very healthy cash flow, which helped our financial situation and our net debt ratio is going down to SEK 0.8 million. We have also in this report, said that we are doing a strategic review of our EVSE business. The background to that is that as we mentioned in the Capital Markets Day last year, we are moving into 2 adjacent segments in the Low Voltage business that is Premium Boosters and Power Solutions. Now after a while when we have been working in that, we see that there is large potential for us in both segments and we want to focus our limited resources into that. At the same time, we see despite the leading EVSE product portfolio, we see a weakening sales development. Our main market is Sweden, and that is, at the moment, a bit saturated and there is needed to focus more in Germany and U.K., and we believe that our focus could be better spent in the Low Voltage segment. So we are starting a strategic overview, and we believe that we, as a company, can create high long-term value by fully focusing on our Low Voltage business. And with the financial stable situation that we have now, we are fully prepared to invest both organically and through M&A into this field. If we look into the quarter 1, we had a very good profitability and especially gross margin. That comes from bigger sales -- larger sales in the Premium Charger in the consumer segment. The Consumer division growth with 9% organically, which I think is good for the market condition that is today. We see that our new products that we have introduced are very warmly welcomed by our customers. And -- we continue to invest in the Consumer division. In the Professional division, we saw lower sales, depending on a weaker EVSE performance, but also a very strong comparative quarter for the Low Voltage client brand, where last Q1, we have the first deliveries to a new motorcycle company. But we see a lot of interest into the new products like our CS ONE Generation 2 with WiFi for our client brand customers. So long-term, it looks good there as well. With that, I leave the word to you, Thom.

Yes. And so digging a little bit deeper into the financials, I first go through the divisions. And our largest division is the Consumer, now standing for 76% of the net sales. And here, we managed, as Henrik just mentioned, that we increase organically with 9%, driven by the new product launches and the positive development across several regions around the globe. We continue with high adjusted EBITDA, which amounted to SEK 57 million or just about 40% and that is driven by both a good product mix, including the good margins and the new product launches and also a good geographical mix. And on top of that, good cost control and relatively low OpEx. Continuing with Professional division, standing for 24% of our turnover in this quarter. It declined organically as the reasons as Henrik just mentioned, the continuous weak EVSE market but also the strong comparison quarter for the Low Voltage part of the Professional division. So by that, much lower turnover, we cannot manage to keep positive EBITDA. So -- but the negative EBITDA is purely related to the lower revenues. Then one of our major focus areas for now and back in time as well is the cash flow and CapEx going forward. And we had strong cash flow this quarter. We had operating cash flow of plus SEK 61 million and also after the CapEx still SEK 54 million in positive cash flow -- net cash flow. The CapEx, as you see in the graph on the lower part of the slide is pretty low in the quarter, and that stems from that we just finalized at the end of last year, 2 large product development projects and now are in start-up phase where we don't capitalize in this first quarter and going into new project development projects. So the 4% is not a representative value. I believe we will go to the 6%, 7% as from quarter 2 and onwards. But the strong cash flow has also meant both in quarter 4 and now in quarter 1 that we have increased our available cash and also did another amortization of SEK 50 million in the quarter. And again, with a low net debt ratio now below 0.8%. We feel that we are in a good financial situation and well prepared for also M&A activities going forward. So with that, I hand over to you again, Henrik.

Thank you, Thom. So just to conclude the Q1, despite a continued challenging market environment and lower revenue, we managed to keep up the gross margin and our profitability and we also grow 9% in our very important Consumer division. We had a lot of successful product launches, and we look forward to seeing them developing. And we also then released that we will do a strategic review of the EVSE business in order to better be able to focus our resources on our core Low Voltage business. With the strong financial situation we have, we are prepared to invest both organically and in M&As to increase our focus there. And we are following our strategic path towards our financial targets. And with that, operator, I open up for questions.

[Operator Instructions] The next question comes from Sofia Sorling from DNB Carnegie.

A couple of questions from my side. First of all, within the consumer division, you mentioned that the strong sales were driven by product launches. Would you say that it's an effect also from the Premium Boosters? Or is it mainly from Low Voltage?

Sofia. We have started to launch our boosters and sold in Q1. It's maybe not a material part of the sales in Q1, but we see definitely all of our new products, both in our new charger segments are very positively received by our end consumers.

All right, you expect rather a boost in sales from Premium Boosters in Q2?

The Premium Boosters that we so far have introduced is in the higher price and not the volume boosters that will come later this year or beginning of next year depending on how the development work is going. But of course, we will -- we expect an increasing sales of the booster, but the real boost in booster segment will come when we introduce the volume models.

Okay. I understand. And regarding product launches, do you have any new product launches during 2026.

Yes. We have a road map now for 2026, 2027 and onwards. So we are continuing to invest in new products, absolutely.

Okay. Yes. And a question on the strategic review for the EVSE segment. Let's say that you -- the result of the strategic review will be that you will divest the EVSE operation. How is that -- yes, in how would that be -- or my question is how integrated is the EVSE operation now in all in terms of your business and how easy will it be for you to, in that case, divest this operation?

As we mentioned, we are just starting the strategic review now and now decisions are taken, but the EVSE business is a business of its own. We have separate development department. We have separate support department. We have separate sales department. Of course, we are also sharing some functions, but I would say that it's an own business and standing by itself.

Okay. Yes. And within the Professional division, so you mentioned a weak EVSE segment. But I can also say that the -- within the Low Voltage business is also the net debt has declined quite significantly compared to Q1 last year. How would you describe the underlying demand within low voltage within the Professional division? And how do you see that business or demand developing going forward?

That's correct. We had a very strong comparison quarter. Q1 last year, we made our first deliveries to a new customer, the European biggest motorcycle company and they were filling their pipes. So that was a big boost last year. So it is strong comparison figures. But the professional client brand business is a bit going up and down between the quarters depending on when the OEMs are putting in very big stock orders. So if I look at it overall, I call it -- it's my knowledge, we are not losing any market shares, more the opposite. We are upselling with our new models. So we are transitioning from old platforms into new platforms, which is also increasing the revenue and profit. So I have a very bright view of the client brand also going forward. But then, of course, everything is dependent on market sentiments and how well they are selling their cars as well.

Yes. I understand. And a question on the gross margin, which is -- yes, which increased significantly within the Consumer division during the quarter? And what would you say is the main driver behind that margin improvement? And also how to think about that margin? And -- yes, is that a sustainable gross margin in your view? Or it's just like a really strong one this quarter?

It is a really strong one, and it is depending on, I would say, mainly 3 things. We have the product mix effect. We have a regional mix effect and we also have an effect of new products introduction. So I think we are not guiding into too much of how exactly the gross margin will look forward. But I think this one is very strong. We have improved it now for many quarters, but if it will be as strong as quarter 1 going forward, I dare not to say.

Okay. And a follow-up question on that. Given the increased sales from the Premium Booster, would that dilute the margin -- the gross margin in your view? Or do you expect to have a similar pattern as the Low Voltage business.

It has definitely at least a similar margin as our Low-voltage business.

[Operator Instructions] The next question comes from Mattias Ehrenborg from Redeye.

Mattias from Redeye. Obviously positive to see a strong Consumer segment once again. I was just wondering a bit about the regional performance in Germany and the Luxembourg. I noticed that both regions were down quite significantly year-over-year. How much of this is driven by professional volumes or channel effects like Amazon versus underlying demand, would you say?

Yes. To start with this, that we have divided that we've separated out Luxembourg is an accounting question we need to do that to follow the audit practice. So with that, it's no big secret that Luxembourg is related to Amazon, and you can see there a decline. And that is just the reason that the buying pattern from Amazon is a bit change versus last year. The out sales from Amazon is going well. So it's just a prioritization effect of the quarters. Otherwise, we can see that you also say that German market is having a little bit of a challenge this first quarter. And we have not lost any customers, it's not that, but we have -- not had the best performance during this quarter. Some issues with on our bigger customers reorganization, et cetera, have impacted. But otherwise, we believe that we will see stronger quarters going forward also in Germany.

Okay. That was a good answer. I was just wondering a bit about client branded volumes because I noticed that in Q1 last year, you had -- you made big deliveries in Q1. I think, to a German customer, if I'm not mistaken. And has that impacted the comparative numbers at all for Germany as a region?

Yes. Absolutely. It's also a big part of that.

Okay. And then regarding market conditions in general. I know that the development in the Middle East can't be helping, for sure, regarding the end consumers pricing power and risk and so on. How would you describe the demand conditions across the Consumer Professional segment during this quarter? Has it changed anything during the last quarter in terms of behavior or demand patterns?

We had a strong growth in Q1 in the Consumer segment with 9% organically, which I think is very strong considering the market situation. So of course, with all the turbulence that is occurring. It's not helping the consumer sentiment. But in Q1, we saw a strong organic growth in Consumer segment. And I would say in the client brand, it -- the decline there has more to do with phasing and a strong comparison quarter than any underlying lower demand.

As you mentioned, the Consumer segment was very strong once again in the quarter. Would you say that there has been any shift relative -- if we look at the first half of the quarter compared to the second half? Or is it quite evenly spread?

In the quarter, I would say it's quite evenly spread.

Yes. Okay. Excellent. If we move over to your M&A progress, you had mentioned earlier that you have outlined on M&A strategy. Could you provide some sort of update on how this is progressing? Are you seeing solid pipeline? Or have you moved into more concrete discussions or what's the current status?

As we mentioned at our Capital Market Day, we will be looking mainly in the Power Solution area, and we are working on our pipeline as we speak. And we are not going to reveal any, how far we are in those discussions, but we are working with them.

Okay. And final question from my side, possibly the biggest takeaway from this report, at first, on the consumer segment is the EVSE strategic review, as you mentioned. I know it's still early days, but could you elaborate on sort of the key options you're considering and perhaps some sort of expected time line, that's a bit tricky one.

Yes. As you said, it is tricky, and we have not made any decisions right now, but we are doing the strategic overview. We believe that we have an extremely strong product offering. One of the absolute best destination charges on the market, now also certified for the German market. And we have had strong -- or we have a strong sales organization based in Sweden, but the Swedish market are at the moment a bit saturated. So we see slower sales there. We don't see that we are losing any market share or something like that, but we see that there is a slower market. And we recognize that in order to get the full potential, we want to investigate if there is any partner or any other company that maybe have a better structure in Germany, U.K. to leverage on that and get out our very good products.

Okay. That makes good sense. So we will continue to monitor that. Thank you very much for your answers. And that was all for me.

Thank you, Mattias.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you, operator, and thank you very much for taking the time and listening in and talk to you next quarter. Thank you very much.

Thank you.

Bye.