W5 Solutions

Significant events during quarter 3, 2023

• On 25 September, W5 Solutions entered into an agreement to acquire all shares in Box Modul AB.

Other important events during quarter 3, 2023

• On 3 July, W5 Solutions received a genset order worth MSEK 15 from SAAB.

• W5 Solutions exhibited at DSEI, an international defence trade fair in London.

Significant events after the end of the period

• On 3 October, W5 Solutions completed the acquisition of Box Modul AB. In connection with the closing, the Board of W5 Solutions decided on a directed share issue of 1 293 046 shares to the seller of Box Modul AB.

FINANCIAL OVERVIEW

JULY–SEPTEMBER 2023

• Operating income for the quarter amounted to MSEK 78.4 (27.6), an increase of 184%.

• Profit, EBITA, for the quarter amounted to MSEK 6.4 (3.1), an increase of 106%.

• Cash flow from operating activities amounted to MSEK 6.8 (-21.3).

• Orders received during the period amounted to MSEK 38 (21) with an order book at the end of the period of MSEK 229 (217).

Comments from Daniel Hopstadius, W5 Solutions CEO

Continued strong growth – for the foreseeable future
The third quarter has been characterised by an intensive period of significant and profitable growth. Our cash flow development is positive, and our long-term order book continues to grow. On a rolling twelve-month basis, our net sales have exceeded MSEK 340, with organic growth of over 50% and EBITA of approximately MSEK 50, clearly demonstrating our successful growth. Given the market situation, there is reason to expect continued long-term and stable growth for the foreseeable future.

Our market is growing strongly, driven by an increasingly uncertain global environment with conflicts and unrest within and outside Europe. Customer demand for defence and security solutions is increasing further, as many now have greater investment resources. We are currently in a situation where we have the opportunity to sell more than we have the capacity to deliver. That is why intensive work is underway to accelerate production in our business areas at an ever-faster pace.

Strengthened Nordic presence and international reach
The acquisition of Box Modul is a strategic piece of the puzzle in our expanding business. It is already clear that their mobile solutions are experiencing an increasing demand. The ability to quickly establish a presence and just as quickly end operations is critical, especially in the field. The company’s modules are cutting-edge and have been designed to seamlessly adapt to standardised logistics flows, enabling fast and safe deliveries to the places where the need is greatest.

The addition of Box Modul to our Group significantly broadens the product portfolio, for example, in mobile control centres, power supplies and training centres. This strengthens our basis for continued growth both in terms of net sales and profitability. We intend to continue developing our ability to offer complete and tailored mobile solutions to our customers in the future.

Through selective acquisitions in recent years, our presence in the Nordic region has been substantially reinforced while we have established a more robust global network and thereby improved our international reach. A significant consequence of this development is that W5 Solutions has strengthened its relationship with several NATO countries.

Significant power supply order boosts confidence
One agreement I want to highlight from the last quarter is an order from Saab for genset installations in connection with container and vehicle assembly. Here, our mission is to deliver a reliable power supply that can handle extreme conditions, such as high altitude, intense cold, and low signature. This example perfectly illustrates how our solutions, equipped with contemporary capabilities and technology, meet and exceed the high demands of our customers.

Subsidiary named a Gaselle company – impressive organic growth
One of our subsidiaries, W5 Solutions Production AB, has been honoured with the “Gazelle Company” award by Dagens Industri. This prestigious award ranks the fastest-growing companies in Sweden’s 21 countries. Only a fraction, less than 1 percent, of Sweden’s limited companies meet the requirements to qualify as fast-growing companies that generate the most new jobs. Between 2019 and 2022, we have impressively shown an organic growth of a full 427 percent. I want to warmly congratulate and thank the whole team for the outstanding work that has been done.

Alongside this recognition, our media presence has increased significantly. During the past quarter, W5 Solutions has received attention in several media outlets. The awareness of who we are and the value we create for our customers is spreading further, and we can feel justifiably proud of the impact we have in the industry and society as a whole.

Intensive conclusion to the current year
We look forward to a continued intense working period in the last quarter of the year. The fourth quarter is traditionally our busiest delivery period. The acquisition of Box Modul will start to make itself clearly felt in the coming quarters and is expected to have a positive impact on both our net sales and profit.

Our work has an extraordinary impact on creating a safer future, and every employee plays a central role in shaping it. As a high-tech organisation, our daily mission is to develop solutions that strengthen our defence and increase civil security. Here, we are given not only the opportunity to grow and develop personally but also to be an integral part of something bigger and actually make a real difference. I find constant inspiration in the commitment of my employees and the crucial work they do, which constantly reminds us that, together, we have the ability to shape a safer tomorrow.

The Interim report is available for download at https://w5solutions.com/investor-relations/