Interim report
Page 1
Interim report Q3: July – September 2025 The Q&A will be held Monday, October 20th at 08:08 CEST. Questions can be sent in at QA@teqnion.se or live. Join by clicking here.
Page 2
Interim report Q3: July – September 2025 Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 2 About Teqnion Teqnion AB is an industrial group that acquires stable niche companies with good cash flows to develop and own with an eternal horizon. The subsidiaries are managed decentralized with support from the parent company. We operate in the majority of industries with leading products, which gives us good resistance to economic fluctuations as well as solid industrial know-how. For us, it is central to focus on profitability and long-term sustainable business relationships. The company’s shares, TEQ is listed on Nasdaq First North Growth Market. Short form report TEQ 2025 Q3 Yes, the turnaround has been slow, but clear improvements is being shown in operational profit and free cash flow for the quarter. FCF amounted to 59,8 MSEK (17,7). EBITA is up to 67,8 MSEK (41,5) and EBITA margin increased to 14,9% (10,9%). Net sales got to 455,6 MSEK (381,8) which is up 19% whereof 1% is organic. Goodwill impairment hits the EBT line with -73 MSEK, therefore EPS is -1,31 SEK (1,59) and profit after tax -22,5 MSEK (27,5). Excluding the impairment the same metrics show EPS of 2,94 and profit after tax of 50,5 MSEK. More work with more improvements is coming. - Johan Steene, CEO and founder Teqnion financial development, MSEK 2025 Q3 2024 Q3 Δ% 2025 YTD 2024 YTD Δ% FCF excluding acquisitions 59,8 17,7 +238% 82,8 31,8 +160% EPS (SEK) -1,31 1,59 -165% 3,06 4,83 -37% Diluted EPS (SEK) -1,31 1,59 -165% 3,06 4,82 -37% Profit for the period -22,5 27,5 -182% 52,6 83,1 -37% Profit before taxes -4,7 34,1 -114% 86,0 100,1 -14% EBITA 67,8 41,5 +37% 154,5 124,5 +24% EBITA margin (%) 14,9% 10,9% -- 11,6% 10,7% -- Net sales 455,6 381,8 +19% 1 336,3 1 163,3 +15% Net debt / EBITDA R12* -- -- -- 2,0 1,2 -- RoE R12 (%)* -- -- -- 7,7 20,4 -- Events during the quarter • Birketts Bogmats Ltd was acquired. • HT Servo Ltd was acquired. Events after the quarter • Reward Catering liquidation procedure. • Goodwill impairment of 73 MSEK in Q3. * When calculations have been based on 12 months, they are only visualized in the YTD columns
Page 3
Johan’s thoughts Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 3 Hi Teqniåns, Teqnion has now completed its strategic overview with the goal of building a more profitable, robust, and scalable group for the years ahead, as previously communicated… …that’s not how a Teqnion letter begins. It doesn’t feel right. But what are feelings? Just chemistry in the brain, unpredictable and often unhelpful. And for quite some time, we’ve felt frustration, anger, and shame over weak returns and our inability to live up to the high ambitions that drive us. Now, though, I feel something new. A tiny hint of pride. Not because things suddenly are resolved, far from it, but because we didn’t let those emotions take over. We turned them into fuel which has powered change. The group is larger than ever, and the potential to continue scaling both profitability and growth lies right in front of us. “It’s the shame that hurts the most, you know, but shame, it’s in the mind. You can turn that faucet off whenever you want to. Rough business becoming a man, ain’t it? Beats the alternative though... come on, let’s go to work.” - Lloyd, TV show Yellowstone, S1E5 What is the purpose of Teqnion? When things are rough, we turn to the fundamentals even though they might seem trivial. Keeping focus on what truly matters. Even though the world is complex and there are countless factors and feelings at play, it helps to answer “what is the purpose of Teqnion?”. This to ensure that we are optimizing against the one goal that matters the most – create the highest possible return for shareholders over the long-term. That sentence is important. Every word that is in there. Please read it again and spend a second to reflect on the words that are not in there. Now, keep that in mind while reading this letter. Long distance driver We chase our goals through two main daily priorities. We acquire companies and we make companies better. A few efforts fall short, others exceed expectations. Since Teqnion is a collection of niche companies, some will always do worse than expected and some will do much better. Like a stock portfolio, only we get to steer the outcome. That’s our game. Have we been good at playing it? You decide. There are a few interesting measures that can help judging the long-term track record: • Cash-flow to external capital ratio: For the long-term shareholder it matters if the current (and future cashflows) have been achieved with little or a lot of external equity capital. Teqnion has over its lifetime taken in ~290 MSEK in external equity capital and has on R12 an FCF of 129 MSEK, giving us a ratio of ~45% (240 MSEK if you dangerously extrapolate Q3 numbers, turns that ratio to ~83%) • Portfolio evaluation: We price our acquisitions based on the assumption that we get our money back in five years. Therefore it is natural that we evaluate our cohorts (not individual companies) based on this measure. - In the short run, last 5 years, we are tracking ahead of this target (which includes Reward Catering which was acquired in 2022). How can that be? While the Reward Catering saga clearly was a mistake, we have a few companies from the 2021-2023 cohort that are currently spitting out 1/3 - 1/2 of their purchase price in free cash flow per year. The 2024 - 2025 cohort is so far also tracking towards their target but most of them were acquired so recently so there are not enough statistics. - In the longer run it becomes even more interesting. Yes, we do have a few companies where we are struggling, but we know what we are optimizing for and there are no holy cows. There are also numerous companies that were acquired many years ago, where we have slowly developed them to something great – subsidiaries that generates several times their original purchase price in free cash flow per year. COMMENTS FROM THE CEO Game on, Solna style.
Page 4
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 4 Johan Steene CEO and founder Stand firm. Be brave. Keep it simple. Teqnion our subsidiaries COMMENTS FROM THE CEO We prefer to not adjust figures, but this time we will do an exception and therefore highlight it here. To bring the underlying operations into the light, you’ll find charts on pages 6-7 and 11-12 showing both adjusted and unadjusted numbers. Don’t expect us to continue with this practice in the future! СлаваУкраїні! • Internal capital efficiency: Even though extrapolation is scary, it is helpful for this very exercise. In the quarter we made roughly 60 MSEK in FCF excluding acquisitions. With the same pace, that translates to 240 MSEK per year. The total balance sheet after goodwill impairment is 2 063 MSEK and total equity is 852 MSEK, which would translate to an FCF/total asset ratio of 11,6% or an FCF/total equity ratio of 28%. You as shareholder or potential shareholder are of course the judge of whether these metrics (or every other metric you chose) are good or not by voting with your hard earned money. Turnarounds seldom turn around… … apart from those that does. I am not going to say that we have fixed everything, because we have not. I am not going to say that we never will have dips again, because we will. However, what I can say is that the operational improvements that we have implemented during the year have finally started to show in the numbers this quarter. The improvements come most clearly from bettering the Sweden businesses. At the same time we have acquired better companies and the UK side of things has continued to march on steady. The actual actions have of course been different for the various subsidiaries in the group. For some, we have installed a new CEO to right the ship, for others we have together with the CEOs developed clear action plans to be implemented and in certain cases, we have become more operational. It’s challenging but the results make it worth it. We are not done yet. On the tough side we’ve also made a larger goodwill* impairment this quarter that removes 73 MSEK from the balance sheet. Goodwill must be tested regularly for impairment, and each portion is assigned to the cash generating units (CGUs) expected to benefit from it. Over the past few months, we’ve reviewed our companies and their status. Several have turned the corner thanks to our incredibly hard-working colleagues. However, we identified impairment needs in the CGUs Hem1 and Reward Catering. The impairment affects this quarter’s result, but not our cash flow. In fact, the measures we’ve activated for these entities should improve cash flow by 18–24 MSEK over the coming year. A sharper structure To climb from the plateau described in the previous report, we’ve refined how we work and how we’re organized. Teqnion is now implementing a new governance structure with two divisions, the Nordics and the UK, each led by a segment head reporting to me and Daniel. This setup strengthens accountability, scalability, and local market insight. We’re also adding a sourcing office in China to help our companies achieve higher product quality at lower cost, and a central shared services team to drive business development projects across the group. These support structures are already partly up and running and the few initiatives already implemented so far are expected to contribute at least 10–15 MSEK annually. Our purpose remains crystal clear and unchanged. We support our growing, cash-generating companies and continuously reinvest the capital they generate into new, fairly valued acquisitions with even better financial expectations than the ones we already own. We’ve plenty to do and our motivated team knows that nothing comes for free. But the direction is set, the culture is intact, and the momentum is back. We’re only at the beginning. And that’s what makes the future bright. Run far, be nice! *I wrote an overly long text on goodwill in the Q1 2024 report, if anyone’s curious...
Page 5
5 House of Teqnion Acquired 2025Acquired 2024 or earlier OUR SUBSIDIARIES Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se
Page 6
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 6 Financial development for the group (1/2) 56 56 72 83 115 176 179 197 296 580 659 920 1 325 1 476 1 567 1 740 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 R12 Net sales, MSEK 2 3 4 8 10 22 13 17 36 36 57 103 138 161 119 104 73 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 R12 Profit before taxes, MSEK FINANCIAL OVERVIEW Goodwill impairment of 73 MSEK takes R12 EBT down to 104 MSEK Acquired companies in 2025 has contributed with ~191 MSEK 177
Page 7
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 7 Financial development for the group (2/2) 162 240 219 299306 344 287 388 352 384 340 400382 400 382 404406 475 456 Q1 Q2 Q3 Q4 Profit before taxes, MSEK Net sales per quarter, MSEK Order backlog*, MSEK 9 27 25 4135 37 27 4037 40 38 46 25 41 34 18 47 44 -5Q1 Q2 Q3 Q4 298 340 349 388 451 487 503 435457 495 483 426 485 511 471 399430 523 572 Q1 Q2 Q3 Q4 Parent company’s cost as share of net sales, % 2,1 1,7 2,1 1,51,4 1,3 1,3 1,0 1,4 1,3 1,3 1,31,4 1,4 1,3 1,2 1,7 1,5 1,1 Q1 Q2 Q3 Q4 * Order backlog can give a rough indication of future sales but is far from a perfect crystal ball. The operations of our subsidiaries varies greatly – some companies have visibility over a year and some have only spot sales. 21 22 23 24 25 FINANCIAL OVERVIEW 21 22 23 24 25 21 22 23 24 25 21 22 23 24 25 21 22 23 24 25 21 22 23 24 25 24 22 23 24 25 21 22 23 24 25 21 22 23 24 25 21 22 23 24 25 21 22 23 24 25 21 22 23 24 25 21 22 23 24 25 21 22 23 24 25 21 22 23 24 25 21 22 23 24 25 Goodwill impairment of 73 MSEK in Q3 2025 68
Page 8
8 Liquidity and debt Liquidity and debt Liquidity and debt Our net debt has increased during 2025 due to nine acquisitions. The net debt in relation to EBITDA has increased from 1,2 to 2,0 compared to Q3 2024. There is still headroom to our financial target Net debt / EBITDA < 2.5. During the quarter, we utilized the accordion feature under its existing credit facility, increasing the available commitment to 575 MSEK. Comment FINANCIAL OVERVIEW Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se Group in summary 2025 2024 2024 MSEK 30 Sep 30 Sep 31 Dec Liabilities to credit institutions 502,6 297,9 302,3 Lease liabilities 139,6 155,8 163,9 Total interest-bearing liabilities 642,2 453,7 466,2 Cash and cash equivalents 139,5 174,0 196,0 Net debt 502,6 279,7 270,2 Net debt exl. leasing liabilities 363,1 123,9 106,3 Net debt / EBITDA 2,0 1,2 1,3 Vicky and Belle in collaboration showcasing the new-gen platform at Professional Recovery Tow Show in the UK.
Page 9
9 FINANCIAL OVERVIEW Wipeboard: New thoughts and insights will be presented here each quarter Total losses have been reduced from Q2 to Q3… … while the companies that made a profit in Q3, made more than in Q2… ... and the 9 companies acquired in 2025 are adding nice profits -27 -18 -8 2025 Q2 2025 Q3 2025 Q3 excl. Reward Catering & Hem1 EBT , MSEK Operational improvements for underperforming companies have started to clearly show in the financials during Q3. Losses in Q3 are ~35% lower than Q2 and ~70% excluding Reward Catering and Hem1. While there always will be some companies that underperform during a certain quarter, we believe that there is still much to do in this respect. 59 83 2025 Q2 2025 Q3 EBT , MSEK Companies that were in our portfolio for the full duration of Q2 and Q3 2025 and were profitable in Q3 have increased their profits with ~40% compared to Q2. We will of course always try to make our companies better and better but as with all numbers – please don’t extrapolate. 6 19 25 2025 Q1 2025 Q2 2025 Q3 EBT , MSEK The 50 MSEK that these acquired companies have added for Teqnion in 2025 have an EBT margin of 25%. The range of the EBT% for the 9 is 14-45%. Note that the 9 acquired companies were acquired during varying times during the year. Note that graph 2 and 3 are not additive as some of the acquired companies in graph 3 are also shown in graph 2. As previously communicated, Teqnion has 3 parts (2 engines and 1 brake): 1. Acquisitions: Continue to acquire better and better companies. 2. Companies that perform: this is the bulk and we will support them to grow organically. 3. Companies that don’t perform: we are continuing to shrink this part to acceptable levels.
Page 10
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 10 Business philosophy and financial targets Teqnion is always in movement. We always start from people and relationship building when targeting profitable business in well- defined industry niches. The mission is to invest our money today so that we have even more money tomorrow. It is a simple goal that is easy to measure. We keep to what we understand and what is tangible. We don’t try to predict how the world will change – we are not smart enough for that. We focus on what will not change including human behaviour. We acquire good and specialized companies that are driven by grounded coworkers. During the journey we try to have fun and develop our methods and strengthen our team. If we run astray (which we will continue to do), roll up our sleeves , learn something and continue moving forward. Our sustainability plan is that Teqnion always should grow. Sustainability for us means that we of course need to take care of the environment and our globe’s finite resources at the same time that we shall grow our profits over time. With good profits we can make the right decisions and continuously strengthen our relations with colleagues, customers and suppliers. Teqnion shall always continuously create value for the society so that we can capture part of that value. No mater in which direction and intensity the macro winds are blowing, we move forward. Teqnion wants to go far. We are only in the beginning of our journey. It is therefore that we guard our culture ferociously. Our leadership team is ridiculously loyal to the company. We are a small team with experience, winner instinct and a never say die attitude. * By the same… our subsidiary HT Servo can supply aerospace and defence companies with DC motors, velocity transducers, position transducers, motor control electronics, high precision actuators, submersible motors and high precision ball bearings etc. CREATE SHAREHOLDER VALUE. When we have stability and earn good money, which is a state we do what we can to always be in – then we focus wholeheartedly on growing the earnings per share, which is the measure that over time most clearly drives the share price. In practice, in means that we acquire further profitable industrial product companies with great people, low business risk and wonderful cash flow – at a fair price. The last piece in important. To acquire wonderful business can be both value creating or value destructive, depending entirely on the size of the money pile you give up. We focus on the long-term and leans on the compounding effect of our capital by effectively allocating your capital – we are stewards of it. We don’t work with forecasts or annual targets because we never want to be in a situation we will be forced to make a deal for the sake of making a deal – that creates shortermism. We prefer a time horizon of 5 years in which we want to have doubled our earnings per share. Our ambition is higher and our true time horizon is much longer. We have just left the staring line. Our journey will be long. This page has been written with the hope to clarify what we prioritize for Teqnion. We invite all on the same wavelength along for our grand adventure. /TEQ-team SURVIVAL ABOVE ANYTHING ELSE. ALWAYS. As individuals we are always prepared that anything can go south at any moment. This means that we never take risks that we cannot afford to lose. Even if the upside potential in Excel shows an off-the chart RoIC, we would rather sell mission-critical velocity transducers to the defence industry rather than to hope to hit the jackpot on the next mystery Labubu.* We ensure that we can always be part of the game, no matter the times. In essence: we will never put us in a debt situation that would hinder us from being in the driver’s seat. CREATE VALUE AND CAPTURE VALUE In order for Teqnion and our subsidiaries to have a clear right of existence we need to create value for our customers and their customers. By loving sales and always focus on customer value we can translate the move of physical products to sales with good margins. By always focusing on customer value creation, a symbiosis is created between us, customers, suppliers and the society where value is created and shared. That is sustainability. Our simple way of measuring our right to exist is our operating margin. Why would we exist if no one wants to pay for our products, services and solutions? We never want to grow for the sake of growing. We only like our topline to go up if it is driven by profit expansion. Teqnion is the anti thesis of Silicon Valley’s hyper growth philosophy and our mantra is ”if they come – we build”. The focus on profitability motivates us to really focus on each krona in expense. As the old Swedish saying goes: “varje sparad krona är en tjänad krona”. FINANCIAL OVERVIEW
Page 11
4,95 6,84 7,54 5,58 3,80 2021 2022 2023 2024 2025 R12 Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 11 Follow-up of financial targets 1. STABILITY 2. PROFITABILITY 3. SHAREHOLDER VALUE To never risk permanent loss of capital and ensure that we can grow sustainable we believe that we need a financial stability as a basis for everything that we do. This goal should always be in place. Financial target 1: Net debt / EBITDA < 2,5 We always work grittily with our profitability. Focus is to always strive for projects and acquisitions that will help us raise the bar. Financial target 2: EBITA margin > 9% When target 1. and 2. are in place we put our whole soul into creating long-term shareholder value through increasing the earnings per share. This is primarily achieved through acquiring new niche companies at good valuations. Financial target 3: > Double EPS every five years* 0,7 1,2 0,7 1,3 2,0 2021 2022 2023 2024 2025 R12 <2,5 11,5% 11,0% 11,6% 9,6% 10,3% 2021 2022 2023 2024 2025 R12 > 9% * The red line shows the level of EPS needed per year to double the EPS compared to 5 years ago. EPS doubled FINANCIAL OVERVIEW Excluding the goodwill impairment of 73 MSEK, the EPS would land on 8,05 sek vs target of 6,50 8,05
Page 12
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 12 Share price and earnings per share since IPO Share price (closing price) and earnings per share (EPS) in SEK Our conviction is that our share price in the longer perspective will follow our earnings per share*. That is the reason our focus in on increasing the earnings per share. The graph above shows the historical connection. * Actually, we believe that share price more closely follows TCFpDSeM&ABPRSISR&D or Total Cash Flow per Diluted Share excluding Mergers and Acquisitions, Borrowing, Principal Repayment, Stock Issue, Share Repurchase and Dividends. But for simplicity, let’s track EPS instead… FINANCIAL OVERVIEW 0 1 2 3 4 5 6 7 8 9 0 50 100 150 200 250 300 EPS R12, sek Share price, sek Share price EPS R12 Excluding the goodwill impairment of 73 MSEK, the EPS would have been 8,05
Page 13
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 13 Our 10 most recent acquisitions Acquisition Completion Net sales * (according to press release, MSEK) HT Servo Ltd 2025 September 60 Birketts Bogmats Ltd 2025 September 70 Norlin Polymers (UK) Ltd 2025 May 30 MITAB i Forsbacka AB 2025 April 65 Edurus Gravstenar AB 2025 March 45 Thermasolutions International Ltd 2025 March 35 Merridale Ltd 2025 February 35 Awarded 2U Ltd 2025 February 35 Midlands Special Fasteners Ltd 2025 February 30 UK Lanyard Makers Ltd 2024 July 20 We continuously and tirelessly meet new companies (100-150 per year) but only a few passes all of our screening criteria. Legend has that it is easier to win the Euro jackpot than being acquired by Teqnion. Our pace of acquisition will vary during the year and between the years – we will never acquire a business for the sake of acquiring something. For a deal to be reached, the company needs to show high quality & have a good culture in place. At the same time, we need to agree with the vendor on a price tag that we are both happy with. ACQUISITIONS * Note that the net sales according to the press release is the average of the last 3 years. The numbers have been rounded to the nearest 5 MSEK. Great restaurants are powered by Kema.
Page 14
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 14 TEQ Group Management Johan Steene Teqniån since 2006 CEO, founder and board member Born 1973 M. Sc. Mechanical Engineering, KTH Outside of Teqnion: runs far Holdings: 861 471 shares + 6 000 options Daniel Zhang Teqniån since 2021 CXO Born 1989 B. Sc. Business Administration and Economics, SSE Background: McKinsey, Bain and Textilia Holdings: 108 000 shares + 0 options PEOPLE Jonathan Alexandersson Teqniån since 2024 Chief Controlling Officer (CCO) Born 1993 M. Sc. Business Administration and Economics, Kau Background: Authorized Public Accountant from PwC Holdings: 850 shares + 3 000 options Teltek C80 checkweights in action to ensure that every can has the right amount of content at Dugges.
Page 15
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 15 Teqnion consolidated income statement and statement of comprehensive income FINANCIAL REPORTING MSEK 2025 2024 2025 2024 2025 2024 Q3 Q3 YTD YTD R12 Calendar year Net sales 455,6 381,8 1 336,4 1 163,3 1 740,2 1 567,0 Operating costs Change in inventories of PIP, finished goods and WIP -5,4 1,1 4,3 6,1 -9,5 -7,7 Raw materials and consumables & Merchandise -222,6 -212,2 -708,7 -638,4 -925,2 -854,8 External costs -45,2 -32,7 -134,1 -99,9 -170,6 -136,3 Employee benefit costs -100,3 -83,5 -320,0 -271,9 -420,9 -372,7 Depreciation and amortization -91,1 -16,4 -126,0 -45,2 -145,3 -64,4 Other operating income and expenses 2,6 2,6 27,0 8,8 34,7 16,4 Total operating costs -462,0 -340,9 -1 257,6 -1 040,4 -1 636,8 -1 419,5 Operating profit -6,4 40,9 78,8 122,9 103,4 147,5 Financial income 9,4 -0,2 30,5 4,3 36,7 10,5 Financial expenses -7,7 -6,6 -23,2 -27,0 -35,7 -39,5 Net financial items 1,7 -6,8 7,3 -22,8 1,0 -29,0 Profit before tax -4,7 34,1 86,0 100,1 104,4 118,5 Income tax -17,8 -6,6 -33,4 -17,0 -39,1 -22,7 Profit for the period -22,5 27,5 52,6 83,1 65,3 95,8 Other comprehensive income for the period Translation differences for the period -19,1 -2,0 -61,0 14,5 -49,8 25,7 Total comprehensive income for the period -41,6 25,5 -8,4 97,5 15,5 121,4 Owners of the parent -41,7 25,4 -8,5 97,3 15,4 121,3 Non-controlling interests 0,1 0,1 0,1 0,2 0,1 0,1
Page 16
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 16 Teqnion consolidated balance sheet FINANCIAL REPORTING 2025 2024 2024 MSEK 30 Sep 30 Sep 31 dec Assets Non-current assets Goodwill 985,6 724,0 731,3 Other intangible non-current assets 61,0 25,9 27,9 Buildings and land 27,0 12,9 12,8 Equipment, tools, fixtures and fittings 37,5 27,2 26,6 Right-of-use-assets 140,0 157,3 165,6 Other receivables 0,4 0,4 0,4 Total non-current assets 1 251,5 947,6 964,5 Current assets Inventories 316,6 268,6 261,6 Trade receivables 258,5 216,5 231,1 Tax assets 21,3 15,9 8,7 Accrued revenue 20,6 12,6 19,2 Other receivables 26,5 15,2 17,6 Prepaid expenses and accrued income 25,9 26,3 23,1 Cash and cash equivalents 139,5 174,0 196,0 Total current assets 808,9 729,0 757,3 TOTAL ASSETS 2 060,3 1 676,9 1 721,8 2025 2024 2024 MSEK 30 Sep 30 Sep 31 dec Equity Share capital 1,2 0,9 0,9 Other capital provided 289,8 288,9 294,7 Translation reserve 86,7 14,5 16,7 Retained earnings including profit for the year 442,7 529,8 545,7 Equity attributable to owners of the parents 850,4 834,1 858,0 Non-controlling interests 1,4 1,4 1,3 Total equity 851,8 835,4 859,3 Liabilities Non-current liabilities Liabilities to credit institutions 502,6 275,2 302,3 Non-current lease liabilities 98,4 114,2 116,2 Deferred tax liabilities 46,1 35,5 34,3 Other non-current financial liabilities 127,3 68,6 30,5 Other provisions 3,9 4,6 4,4 Total non-current liabilities 778,2 498,0 487,7 Current liabilities Liabilities to credit institutions 0,0 22,7 0,1 Current lease liabilities 41,2 41,6 47,7 Other current financial liabilities 85,7 59,3 84,4 Trade payables 144,7 107,8 119,5 Tax liabilities 14,2 11,6 11,8 Invoiced revenues not worked-up 4,4 4,5 6,5 Other liabilities 73,5 41,9 45,3 Accrued expenses and deferred income 66,7 54,3 58,8 Total current liabilities 430,4 343,4 374,8 TOTAL EQUITY AND LIABILITIES 2 060,3 1 676,9 1 721,8
Page 17
Teqnion consolidated statement of changes in equity Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se FINANCIAL REPORTING Attributable to equity holders of the parent company 2025 2024 2024 MSEK 30 Sep 30 Sep 31 dec Opening equity (1 Jan) 858,0 733,9 733,9 Total comprehensive income for the period -8,5 97,3 121,3 New issues - 2,8 2,8 Option premiums 0,9 - - Closing equity 850,4 834,1 858,0 2025 2024 2024 Outstanding shares 30 Sep 30 Sep 31 dec Average number of shares outstanding before dilution YTD 17 165 756 17 149 885 17 153 696 Average number of shares outstanding after dilution YTD 17 166 558 17 180 756 17 160 449 Number of shares outstanding at the end of the period YTD 17 165 756 17 165 756 17 165 756 Average number of shares outstanding before dilution Q3 17 165 756 17 165 756 -- Average number of shares outstanding after dilution Q3 17 165 756 17 180 756 -- Equity attributable to: Owners of the parent 850,4 834,1 858,0 Non-controlling interests 1,4 1,4 1,3 851,8 835,4 859,3 Yes. This is the same picture as last report, but the message is worth to iterate one more time.
Page 18
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 18 Teqnion consolidated cash flow statement FINANCIAL REPORTING 2025 2024 2025 2024 2025 2024 MSEK Q3 Q3 YTD YTD R12 Calendar year Operating profit -6,4 40,9 78,8 122,9 103,4 147,5 Adjustments for non-cash items 91,1 12,6 96,3 34,7 108,4 46,9 Interest and other financial items, net -6,1 -6,5 -19,4 -18,7 -21,7 -21,0 Paid tax -12,5 -12,5 -50,8 -48,7 -53,5 -51,3 Change in working capital -5,0 -9,8 -12,0 -42,0 4,3 -25,8 Cash flow from operating activities 61,1 24,7 92,9 48,2 140,9 96,2 Net capital expenditure in non-current assets -1,4 -7,0 -10,1 -16,5 -12,1 -18,5 Company acquisitions and divestments -149,7 -54,9 -302,0 -112,3 -310,3 -120,7 Cash flow from investing activities -151,1 -61,8 -312,1 -128,8 -322,4 -139,1 Net issues - - - 2,8 - 2,8 Option premiums paid 0,1 - 0,9 - 0,9 - Dept/repayment of debt, net 94,6 35,3 168,8 47,3 150,1 28,5 Dividend paid to non-controlling interest - - - -0,5 - -0,5 Cash flow from financing activities 94,7 35,3 169,7 49,7 150,8 30,8 CASH FLOW FOR THE PERIOD 4,7 -1,8 -49,6 -30,9 -30,7 -12,1 Cash and cash equivalents at the start of the period 137,4 176,8 196,0 199,8 174,0 199,8 Exchange differences in cash and cash equivalents -2,7 -0,9 -7,0 5,1 -3,8 8,2 Cash and cash equivalents at the end of the period 139,5 174,0 139,5 174,0 139,5 196,0
Page 19
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 19 Parent company income statement and statement of comprehensive income FINANCIAL REPORTING MSEK 2025 2024 2025 2024 2025 2024 Q3 Q3 YTD YTD R12 Calendar year Net sales 21,7 14,2 59,9 40,0 76,4 56,5 Operating costs External costs -3,2 -1,3 -7,5 -4,0 -9,0 -5,4 Employee benefit costs -5,1 -2,9 -15,4 -15,0 -20,3 -19,9 Depreciation and amortization 0,0 0,0 -0,1 0,0 -0,1 0,0 Other operating income and expenses 2,0 0,2 2,2 -1,1 1,2 -2,1 Total operating costs -6,3 -4,1 -20,8 -20,0 -28,2 -27,4 Operating profit 15,4 10,2 39,0 20,0 48,2 29,2 Profit from investments in group companies 9,1 0,9 45,6 17,6 69,9 41,9 Financial income 7,7 -0,3 26,6 0,4 33,4 7,2 Financial expenses -4,4 -4,2 -12,7 -21,0 -25,0 -33,4 Net financial items 12,4 -3,6 59,5 -3,1 78,3 15,8 Profit after financial items 27,9 6,5 98,5 16,9 126,6 44,9 Appropriations - - - - -10,4 -10,4 Group contributions - - - - 53,7 53,7 Income tax -4,0 -1,1 -11,1 -0,3 -21,0 -10,2 Profit for the period 23,9 5,4 87,5 16,6 149,0 78,1 Other comprehensive income for the period Other comprehensive income - - - - - - Total comprehensive income for the period 23,9 5,4 87,5 16,6 149,0 78,1
Page 20
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 20 Parent company balance sheet FINANCIAL REPORTING 2025 2024 2024 MSEK 30 Sep 30 Sep 31 dec Assets Non-current assets Equipment, tools, fixtures and fittings 0,1 0,2 0,1 Participations in group companies 1 551,6 1 068,6 1 059,8 Other receivables 0,2 0,2 - Receivables from group companies 0,0 0,0 0,2 Total non-current assets 1 551,9 1 069,0 1 060,1 Current assets Trade receivables - - - Receivables from group companies 109,2 12,7 66,6 Tax assets 9,8 6,6 1,0 Other receivables 12,4 0,0 0,0 Prepaid expenses and accrued income 0,5 0,5 0,4 Cash and cash equivalents 12,4 78,3 103,0 Total current assets 144,3 98,0 171,0 TOTAL ASSETS 1 696,2 1 167,0 1 231,1 Liabilities Non-current liabilities Liabilities to credit institutions 499,6 271,5 298,5 Liabilities to group companies 138,8 85,0 62,5 Total non-current liabilities 638,4 356,5 361,0 Current liabilities Liabilities to credit institutions 0,0 22,4 0,0 Liabilities to group companies 37,3 12,6 36,5 Trade payables 0,2 0,4 0,3 Tax liabilities - - - Other liabilities 3,0 2,8 2,6 Accrued expenses and deferred income 6,4 6,6 6,7 Total current liabilities 46,9 44,8 46,1 TOTAL EQUITY AND LIABILITIES 1 696,2 1 167,0 1 231,1 Untaxed reserves Tax allocation reserves 95,8 85,5 95,8 Total untaxed reserves 95,8 85,5 95,8 Contingencies Contingencies for acquired companies 213,0 128,0 114,6 Total contingencies 213,0 128,0 114,6 2025 2024 2024 MSEK 30 Sep 30 Sep 31 dec Equity Restricted equity 2,2 2,2 2,2 Unrestricted equity 699,9 550,1 611,6 Total equity 702,1 552,3 613,7
Page 21
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 21 Note 1 Reporting principles Teqnion applies International Financial Reporting Standards (IFRS). This report is created in accordance with IAS 34 and RFR 1. The parent company applies RFR 2. The group and the parent company have the same accounting principles and assumptions for calculations as in the latest annual report. There are no newer by EU adopted IFRS standards or IFRIC statements that are applicable for Teqnion or would have any significant effect on the group’s profits or financial position. All numbers are stated in millions SEK (MSEK) if nothing else is specified. Roundings of numbers occur which can result in that the sum of the parts not always is the same as the total. For a more detailed description of the accounting principles that have been applied for the group and the parent company in this interim report, please see note 1 in the annual report for 2024. Note 2 Risks and uncertainty factors Please review the annual report for 2024. No new material risks or uncertainty factors have been identified since the publication. Note 3 Transactions with related parties Transactions with related parties are described in the annual report for 2024 in note 25. No new types of significant related party transactions have taken place during the period. Note 4 Financial instruments– fair value accounting Conditional payments for acquisitions presented as fair value in the balance sheet. Fair value is based on a discounted cash flow model where anticipated payments two years or longer from now have been discounted to present value. 2025 2024 2024 MSEK 31 Sep 31 Sep 31 Dec Opening book value 114,6 120,8 120,8 Acquisitions during the year 169,9 46,0 46,0 Consideration paid -40,7 -34,1 -42,4 Reclassified via income statement -21,5 -10,2 -17,8 Interest expenses 1,9 1,3 1,6 Exchange rate differences -11,2 4,1 6,4 Closing book value 213,0 128,0 114,6 Other financial information FINANCIAL REPORTING Always be safe with Surge Protection Devices.
Page 22
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 22 Note 5 Business combinations Acquisitionscompleted in 2025 During 2025 the following acquisitions have been completed; Midlands Special Fasteners Ltd, Awarded 2U Ltd, Merridale Ltd, Thermasolutions International Ltd, Edurus Gravstenar AB, MITAB i Forsbacka AB, Norlin Polymers (UK) Ltd, Birketts Bogmats Ltd and HT Servo Ltd. On 4 February 2025, Midlands Special Fasteners Ltd was acquired. Based in Walsall, is as the name suggests focused on supplying special fasteners for challenging applications. MSF was born out of the simple idea of solving customers' difficult challenges when it comes to finding special fasteners no matter if the application is holding together components in outer space, engines in supercars or keeping submarines intact. On 20 February 2025, Awarded 2U Ltd was acquired. Based in Herefordshire is one of UK's leaders when it comes to providing corporate customers with custom-made awards. The company is handling every step of the process in-house, from design to final production. The success of the company stems from their customer-centric focus, long-proven reliability and creativity. On 4 March 2025, Merridale Ltd was acquired. The company is one of the UK's leading commercial fueling system providers. They design, manufacture and install complete ranges of fueling equipment from a single pump to a total turnkey package. The Merridale range includes fuel pumps, fuel management systems, tank gauges and ancillaries that are suitable for anyone from small operations to large fleets with multiple depots. On 21 March 2025, Thermasolutions International Ltd was acquired. The company was founded with the idea of increasing energy efficiency in supermarkets and the retail industry. The company has evolved into a leader in the design and manufacturing of high- quality refrigeration products for supermarkets, hospitality and restaurants. Located in Northamptonshire, the company supply both the UK and international markets. FINANCIAL REPORTING On 24 March 2025, Edurus Gravstenar AB was acquired. Located in Malung and Stockholm, with roots stemming back to 1999 is the market leader in Sweden within the niche segment of dimensioned stone industry. The company mainly provides headstones, stone figurines and second name engraving to and through funeral homes. The success of the company stems from its reputation of always delivering the right quality at the right time, its operational efficiencies and its understanding of customer needs. On 2 April 2025, MITAB i Forsbacka AB was acquired. MITAB has been a trusted provider of cremation installations since 1995, supplying advanced furnaces and related equipment across the Nordic region. With deep expertise in design, construction, and installation, MITAB supports both new builds and renovations of crematoriums. On 24 March 2025, Norlin Polymers (UK) Ltd was acquired. Norlin is a Bolton based specialist compounder of technical polymers for primarily medical device and pharmaceutical applications across Europe. The compounds are all bespoke and mixed to each customers' unique product needs, legal guidelines and regulations, including the FDA. On 10 September 2025, Birketts Bogmats Ltd was acquired. Birketts Bogmats Ltd is a UK- based, family-run business specialising exclusively in the supply of hardwood timber bog mats. From their depot in Stratford-upon-Avon, they support industries including construction, civil engineering, plant hire, and energy with dependable ground protection and temporary access solutions. With years of experience that stems from 1974 and a strong focus on customer service, Birketts have built a reputation for reliability, straightforward dealings, and consistent product quality. Their hardwood mats are widely used across the UK on infrastructure projects, utilities, and environmentally sensitive sites, ensuring safe and efficient access even in the most challenging ground conditions.
Page 23
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 23 Note 5 Business combinations Acquisitionscompleted in 2025 On 24 September 2025, HT Servo Ltd was acquired. HT Servo counts many of the UK's leading aerospace and defense companies among its customers, who choose to procure their motion components - from velocity and position transducers to brushed and brushless DC motors, electro-mechanical actuators, and precision gearing systems - thanks to the company's technical expertise, robust and reliable solutions and service-minded team. The company has roots from the 1980's and the current form was established in 2001. Acquisitions completed in 2025 Completion Acquired share, % Net Sales, MSEK* Midlands Special Fasteners Ltd 4 February 2025 100 30 Awarded 2U Ltd 20 February 2025 100 35 Merridale Ltd 4 March 2025 100 35 Thermasolutions International Ltd 21 March 2025 100 35 Edurus Gravstenar AB 24 March 2025 100 45 Mitab i Forsbacka AB 2 April 2025 100 65 Norlin Polymers (UK) Ltd 28 May 2025 100 30 Birketts Bogmats Ltd 10 Sep 2025 100 70 HT Servo Ltd 24 Sep 2025 100 60 *) Average of the last three years before acquisition (rounded) FINANCIAL REPORTING MSF got you no matter if you need M5 x 16 12 Point Flange Bolts Titanium Grade 5, 1/4"UNC FlexLoc Nuts 304 Stainless, M6 x 18 Torx Head Screws Aluminium 7075 Blue Anodized or 10 x 20 Hexagon Flange Bolts Titanium Grade 5.
Page 24
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 24 Goodwill is collectively justified by the expected future profitability, the business model, the skills and commitment of the staff, and the organizations' culture of business acumen and drive. The goodwill is not tax deductible. Contingent consideration is defined per acquisition and divided into two or more parts and is dependent on future results achieved in the respective companies during the period from February 2025 to August 2028 at the latest. All contingent considerations have a fixed maximum level. The fair value of the contingent considerations amounted to 146,7 MSEK at the acquisition dates of the specified acquisitions. Initially, contingent considerations are valued at the probable outcome. Acquisition-related costs for the year's acquisitions, which are reported under other external costs, amount to 2,5 MSEK. Note 5 Business combinations Assets and liabilities acquired in 2025 The acquisitions completed in 2025 have the following effects on the Group's assets and liabilities. The purchase price allocations have not been finalized as the Group has not received finalized information from the acquired entities. Any adjustments in connection with the final acquisition analysis are not expected to have a material impact on the Group's results or financial position. The assets and liabilities included in the period's acquisitions according to the purchase price allocation are as follows: FINANCIAL REPORTING Preliminary purchase price allocations Fair value MSEK Intangible assets 35,4 Tangible fixed assets 26,8 Inventories 44,9 Trade and other receivables 64,7 Cash and cash equivalents 131,9 Provisions 0,0 Deferred tax -12,8 Trade and other payables -93,4 Net identifiable assets 197,5 Goodwill 365,1 Considerations 562,6 Of which paid in cash 388,7 contingent consideration 146,7 deferred payment 27,2 Impact on the income statement January-September 2025 MSEK Net sales 190,8 EBITA 49,6 Impact on the income statement if the acquisitions been part of the Group from January 1, 2025 MSEK Net sales 315,7 EBITA 76,2
Page 25
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 25 Looking for the next dream team! CONTACT AD We love talented entrepreneurs and are constantly on the lookout for more nice companies with great people that want to join kindred spirits and build the best company group on earth. Do you know someone that has a company that could be interesting for us, or have you built one yourself, please contact Daniel (daniel@teqnion.se or +46 721 555 695). If it is interesting enough for a meeting, we will send you a small gift of gratitude for your advice. Our preferred holding period is forever. WHAT ARE WE LOOKING FOR? • Stable earnings level of 10-30 MSEK post tax (real money, we don’t believe in adjusted EBITDA). • Proven profitability of at least 15% on the bottom line (bold forecasts and turn-arounds are not our cup of tea). • Great return on capital (we want to use cash flow to acquire new nice businesses – not to buy new machines or inventories). • Product companies that are leaders in a clear niche that do not compete with price. • Clear moats so that the companies can thrive for the decades to come. • Driven and ran by grounded individuals that want to continue to develop the company. • Simple and easy to understand business model. If it is complicated, we walk away… OTHER INFORMATION Always on the lookout for lovely entrepreneurs with high integrity.
Page 26
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 26 Definitions RoE R12 Net profit for the period on a moving 12-month basis divided by average shareholders’ equity calculated as the average between opening and closing balance during the period. FCF excluding acquisitions Free Cash Flow for the period excluding payments to vendors for company acquisitions and divestments Change in inventories of PIP, finished goods and WIP Change in inventories of products in progress, finished goods and work in process EBITDA Operating profit before depreciation and amortization. EBITA Operating profit before amortization. EBITA margin EBITA divided by net sales. Shareholders equity per share Shareholder equity, including holdings without controlling influence divided by number of outstanding shares by the end of the period. Net debt Interesting bearing liabilities less cash and cash equivalents Net debt/EBITDA Net debt by the end of the period divided by EBITDA on rolling 12 months basis. Organic growth Changes in net sales excluding acquisitions and divestitures compared to the same period the previous year. Earnings per share (EPS) Net profit for the period attributable to owners of the parent divided by the average number of shares outstanding. Diluted EPS Net profit for the period attributable to owners of the parent divided by the average number of shares outstanding after dilution. R12 Rolling 12 months Parent company’s cost as share of net sales Total cost for the parent company, excluding cost for variable pay and accounting currency effect divided by the group’s total net sales. Contingent earnouts Payments for acquisitions that will be paid out contingent on that the vendor and/or the company performs according to certain pre-determined future goals. The total purchase price including the conditional payments are included in the balance sheet according to purchase price allocation. In the case that the contingent payments become higher or lower than estimated, cost or revenue will be recorded under “other operating income and expenses” in the income statement. This income or cost has no cashflow impact. OTHER INFORMATION
Page 27
Teqnion AB (publ) • Dalvägen 14 • 169 56 Solna • www.teqnion.se 27 Financial calendar 2025 Q1 interim report 23rd of April 2025 (Wednesday) 2025 AGM 23rd of April 2025 (Wednesday) 2025 Q2 Interim report 19th of July 2025 (Saturday) 2025 Q3 Interim report (this report) 18th of October 2025 (Saturday) 2025 Year-End report 14th of February 2026 (Saturday) 2025 Annual report 21nd of March 2026 (Saturday) 2026 AGM 23rd of April 2026 (Wednesday) 2026 Q1 Interim report 23rd of April 2026 (Wednesday) All reports will be published on Teqnion’s website: www.teqnion.se/investor-relations/finansiella-rapporter/ Psst… On https://www.teqnion.se/investor-relations/presentationer- och-diskussioner/ or via the QR code you can learn a little bit more about Teqnion through different company presentations and interviews in podcasts and text… Bull or bear? No matter which we trot towards the horizon. For more information, please contact Johan Steene, CEO, 073 333 57 33, johan@teqnion.se Daniel Zhang, CXO, 0721 555 695, daniel@teqnion.se To send in questions to the Q&A, please use QA@teqnion.se Review This report has not been reviewed by the company’s auditor. Certified Adviser Redeye AB OTHER INFORMATION
Page 28
Teqnion interim report Q3: July – September 2025 Get the infrastructure projects done with bogmats from Birketts! https://www.birkettsbogmats.com/