FINANCIAL RESULTS THIRD QUARTER 2025

• Net sales amounted to SEK 13.7 million (31.7) [1]
• Total revenue amounted to SEK 16.1 million (23.0)
• Operating profit amounted to SEK -11.8 million (-6.7)
• Operating profit after financial items amounted to SEK -12.1 million (-6.5)
• Cash flow amounted to SEK -16.9 million (-20.5)
• Net cash, end of period, amounted to SEK 12.9 million (65.1)
• Liquidity ratio amounted to 75% (131)
• Adjusted liquidity ratio amounted to 102% (199) [2]
• Order backlog coating systems at period end amounted to SEK 0 million (2.0) [3]
• Order backlog Coating Services at period end amounted to SEK 10.5 million (3.9) [3]

FINANCIAL RESULTS JANUARY-SEPTEMBER 2025

• Net sales amounted to SEK 29.7 million (67.5) [1]
• Total revenue amounted to SEK 50.5 million (55.2)
• Operating profit amounted to SEK -42.1 million (-27.2)
• Operating profit after financial items amounted to SEK -42.1 million (-26.2)
• Cash flow amounted to SEK -19.6 million (-54.6)

BUSINESS HIGHLIGHTS DURING THE THIRD QUARTER 2025

• Production 24 hours a day, six days per week, at Coating Service Center China to meet increasing order volumes – surpassing in September 2025 the previous year’s volume
• Highest order intake for Coating Services from North America and Europe since Q2 2023
• Continued delays in system orders negatively impact results – intensified work to strengthen liquidity and increase efficiency

BUSINESS HIGHLIGHTS AFTER THE PERIOD

• Strategic shift to drive increased sales by broadening applications areas, e.g., SOFC for data center power
• Board proposes capital increase of approximately SEK 87 million via a rights issue

[1] Metals for electrolysis are from Q3 2025 not reported separately and are included in the net sales and order backlog numbers.
[2] Includes the part of the inventory that has been financed by customer pre-payments.
[3] Future agreed leasing revenue of SEK 9.9 million over 42 months for a production line leased out by the subsidiary in China is not included in the backlog figures.

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CEO’s COMMENTARY

The third quarter of 2025 was characterized by a still challenging market, with continued delays in system orders negatively affecting net sales and liquidity. We see continued interest in our solutions with several new customers and customers who have taken further steps forward in their evaluations. Coating Services delivered robust sales growth and a stronger order backlog. To drive sales, we are broadening our offering to new application areas, such as solid-oxide fuel cells (SOFC) for data center power generation. The company’s planned new share issue announced today is part of this effort.

Share issue
Throughout 2025 and especially during the third quarter, the company has worked along several dimensions to secure liquidity and avoid the need for new equity capital. For example, we have reduced staff substantially, stream-lined the handling of precious metals and other inventory, strengthened the purchasing function to reduce cost of goods sold, initiated loans in our Chinese subsidiary at attractive terms, and more. Our continuous liquidity planning has been tied to a forecasted flow of system orders, which have unfortunately been delayed as time has elapsed. In the vast majority of cases, our assessment is that these delays are due to a broad trend in industry to postpone major capital investments, which we see and hear about in the automotive industry, in luxury products and in parts of the energy sector where we are active. We have been able to conclude in only two cases during 2025 that we lost business to competing suppliers.

The proposed new share issue, which is described in more detail in separate documentation, should be viewed as a means for the company to bridge a challenging period, while creating opportunities to commercialize solutions that open or expand exciting new markets, for example in natural gas-fueled SOFC power generation for AI data centers.

As a shareholder, I will participate in this new share issue along with several of the company’s board members. We see great opportunities for Impact Coatings to create long-term value for all shareholders.

Net sales
Net sales for the third quarter amounted to SEK 13.7 million (31.7). As in the previous quarter, the decrease is mainly explained by the continued lack of system deliveries. We remain convinced that prolonged investment decisions are mainly due to market uncertainty, not lack of demand. The positive development in other parts of the business supports this conclusion.

Sales outside of coating systems grew more than 30% compared to the previous year. In Coating Services in China, we surpassed already in September last year’s total production volume in number of plates, reflecting the growing demand in the regional industry linked to hydrogen. At the same time, increased commercial interest in North America and Europe has driven the order backlog in Coating Services, which at the end of the quarter amounted to SEK 10.5 million for the group.

China is the world leader in the deployment of trucks and other commercial vehicles powered by fuel cells. We are proud that our Premium FC coating has been well-received by the market and we continue to develop it to meet the needs of OEMs and fuel cell system manufacturers. By establishing a subsidiary already in 2022, we have built a strong regional presence in China with the capacity to deliver both technology and volumes as the market grows.

Net sales for the rolling 12-month period amounted to SEK 72 million, negatively affected by the lack of system deliveries so far in 2025. The increased volatility in revenues underlines the importance of our ongoing work expanding the revenue base and reducing the company’s dependence on single machine orders. We continue to prioritize initiatives that strengthen our presence in emerging markets and develop new offerings, with the goal of creating more sustainable and balanced growth in the future. Our long-term ambition remains firm, and we are continuously adapting to meet changing market conditions and increase business stability over time.

Sales development and new opportunities
The increased Coating Services order backlog reflects continued underlying demand for our services even if major investment decisions are still delayed. Activity during lead generation and sales development is good, and we continue to win new customers that test our solutions. At the same time, relationships with existing customers are growing stronger, as they advance their evaluations of our solutions.

We are creating new opportunities in both established and new segments. Among other initiatives, we are increasing development collaboration with players to grow our relevance in energy applications. Our innovations with iridium oxide are expanding our offering in electrolysis, while our high-performance coating methods for solid oxide applications (SOFC/SOEC) position us in fast-growing application areas with broad industrial potential, such as power to data centers, fueled by natural gas. We are also working on new application areas, such as electromagnetic shielding for advanced defense technology, an area where we see that our coating technology can offer valuable functionality. Together, these activities show that our position in the market is growing stronger and that we can generate revenue in diverse application areas.

Outlook
The business has developed more slowly than we anticipated earlier. Customers have delayed capital investment decisions, reflecting global uncertainty that affects many industries. It also means we have had to pivot away from certain hydrogen applications that lack commercial viability.

At the same time, we see clear signs that our long-term investments are bearing fruit – not least in Coating Services, where interest is increasing and volumes are rising. We have also taken important steps to control costs, increase operating efficiency and lower our break-even point.

We are persevering through a challenging period, confident that our underlying strengths remain and that we have unique, competitive solutions that will help Impact Coatings achieve profitable growth in the long term.

Jonas Nilsson, CEO

Presentation

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Impact Coatings invites investors, analysts and the media to a presentation of this Interim Report on Tuesday October 21 at 09:00 am (CEST). CEO Jonas Nilsson and CFO Lena Åberg will comment on the Interim Report and take questions. The presentation will be held via webcast in English.