Hexagon Purus Stock

Welcome to Hexagon Purus Q2 2026 presentation. My name is Mathias Meidell, and I will be moderating from the studio in Oslo. As usual, I'm also joined by Group CEO, Morten Holum; and Group CFO, Salman Alam.

The agenda for today includes highlights from the quarter, a company update, the financials and the outlook. We will end the presentation with a Q&A session. So please feel free to enter your questions via the function on your screen.

With that, I'll pass the word over to you, Morten, who will take us through the highlights of the quarter.

Thank you, Mathias, and good morning, everyone. Thanks for joining our webcast this morning. The key developments in the second quarter were: number one, revenue and other income was NOK 146 million, roughly in line with last year when excluding the divested revenue of NOK 38 million following the sale of the U.S. Aerospace business unit in Q1.

Number two, we had good order intake, both on the Hydrogen Infrastructure side and the BVI side, and we have good visibility for the second half of the year. Finally, number three, we executed further workforce reductions in Germany, and we are now into the final stages of the operational restructuring to align the cost base to the current market environment.

Let's go into the details. Starting with revenue. On the left, we recorded NOK 146 million in revenue in Q2, which is 25% lower than the same quarter in 2025. But Q2 '25 included NOK 38 million in revenue from the U.S. business unit that we divested earlier in the year. Adjusting for that, revenue in Q2 was down only 6% versus last year.

On the right, EBITDA was minus NOK 102 million in Q2, which is significantly better than the minus NOK 161 million in Q2 last year, but still negative. This is driven by lower revenue in the quarter, partly offset by the lower fixed cost base that we now have after the cost reductions that we have executed since Q2 last year. Also note that EBITDA for this quarter includes NOK 17 million of restructuring costs related to the latest workforce reductions.

The overall revenue mix continues to shift towards distribution. Revenue from Hydrogen Infrastructure made up more than half the total revenue in Q2. This is up from only 8% in Q2 last year, driven by higher volume of distribution units. On the opposite side, we had lower revenue from Hydrogen Mobility this year compared to last year, driven by softer activity for transit bus applications.

The low revenue share from other applications compared to last year is a result of a combination of lower volume in the Industrial Gas segment and the absence of U.S. Aerospace revenue following the divestment of that business unit.

Looking at the year-over-year revenue bridge when adjusting Q2 last year for the divested revenue, the revenue comparison is mainly impacted by 2 key movements. We had significantly higher Hydrogen Infrastructure revenue in Q2 this year, but also lower transit bus revenue compared to last year. This is similar to Q1 and consistent with what I said at the time that this is a pattern that is likely to continue in the coming quarters.

On the battery electric mobility side, we had lower volume in Q2 compared to last year. The volume in this product area is still on a low level, but expected to pick up in the second half of the year. We have 12 Hino trucks in the order book for the second half and also a number of hydrogen systems and battery packs to Toyota North America.

Finally, other applications is now mainly the industrial gas product area and volumes there were also somewhat lower than last year. This is a business that moves a bit up and down depending on general economic conditions.

The order book at the end of Q2 was NOK 523 million, which is 13% higher than last quarter. Most of the order intake in the quarter was in Hydrogen Infrastructure and in BVI. Around 83% of the order book is for execution this year, around 15% for '27 and the remainder in 2028. As you also see, the split by application where the Hydrogen Infrastructure is the largest component, followed by Hydrogen Mobility, which again is a mix of transit bus, rail and heavy-duty truck.

With the current order book, we have good revenue visibility for the second half of the year and gaining increased comfort for 2026. We also have an active pipeline with many ongoing customer dialogues that hopefully will be converted to orders in the coming months and improve the visibility for 2027.

Since the end of 2024, we have gained a material positive impact from restructuring actions, taking out capacity costs to align the overall cost base with the market environment. In Q2, we implemented further workforce reductions in Germany. Since '24, we have taken out more than 50% of the total workforce through reorganizations, capacity reductions and structural changes.

We're moving into the final stages of the operational restructuring and the overall process of aligning the cost with the current market environment has reached an advanced stage, and we expect to see the impact of these actions increasingly materializing in the numbers over the coming quarters. Those were the main points for Q2.

With that, I will hand the word over to our CFO to go through the financials. Salman?

Thank you, Morten, and good morning, everyone. Taking a step back, the second quarter was, as we indicated at the time of our first quarter results, a relatively soft quarter in terms of activity. Revenue was NOK 146 million, reflecting continued weakness in transit bus and industrial gas as well as delivery timing that remains weighted towards the second half of the year.

On the positive side, hydrogen distribution contributed strongly to revenue in the quarter, and we ended the quarter with NOK 308 million in cash. Order backlog was NOK 523 million, representing a 13% increase from the first quarter -- and following the recent workforce reductions in Germany, our group headcount will now be more than 50% below 2024 levels.

As we move through the remainder of 2026, we expect these actions to become increasingly visible through a structurally lower operating cost base, materially reducing the revenue required to breakeven.

Moving to the details of the quarter. Revenue was NOK 146 million, down 25% from the same quarter last year. This comparison includes the divested U.S. Aerospace business units. If we exclude that, the like-for-like comparison was more stable and revenue was 6% lower this quarter. The underlying picture is same as in recent quarters. Hydrogen Infrastructure is growing year-over-year, while transit bus and industrial gas remains on the weaker side.

Year-to-date, reported revenue was NOK 551 million, which is up 30%. That figure includes the NOK 134 million that we had an extraordinary gain from the 2 structural transactions announced in the first quarter. If we exclude that gain, year-to-date revenue was NOK 417 million, which is more or less even with 2025, but delivered on a smaller structural footprint than last year.

On costs, cost of materials was 56% of revenue, which is up from 52%. The increase is mix where we had a higher share of distribution units, some of them with below normal contribution margins and a lower share of revenue from the industrial gas business.

Payroll was NOK 126 million, which includes NOK 17 million of restructuring costs related to workforce reductions. If you exclude those restructuring costs, payroll was NOK 109 million, which is down 28% year-over-year and down another further NOK 26 million from the underlying level in the first quarter of this year.

Other operating expenses were NOK 41 million against NOK 101 million last year. The prior quarter included several nonrecurring items. But even against a clean base, this is a materially lower run rate, reflecting genuine reductions in professional fees, engineering, IT and facility costs. EBITDA was minus NOK 102 million against minus NOK 161 million last year, although still negative, it represents an improvement despite lower revenue. The EBITDA, as mentioned, this quarter also includes NOK 17 million in restructuring costs.

Moving below the EBITDA line, depreciation and amortization was NOK 44 million, which is down from NOK 66 million in the same quarter last year and reflective of a lower asset base following the divestments that we completed earlier this year. The share of loss from associates was NOK 5 million, which represents our minority interest in the China joint venture.

Finance income was NOK 20 million, which is mainly currency effects and interest on deposits. Finance costs were NOK 85 million, where the large majority is noncash payments on the 2 outstanding convertible bonds. Tax was immaterial as the group is not in a taxable position, leading to a net loss for the quarter of NOK 215 million against NOK 272 million in the same period last year.

Turning to our segments. The Hydrogen Mobility and Infrastructure business is our European cylinder and systems business out of Kassel in Germany -- Kassel and Weeze, Germany, together with the industrial gas activity. Following the reductions implemented in Kassel earlier in the year and in Weeze now in June, the segment's capacity and cost base are now better aligned with the demand picture we're currently seeing.

HMI revenue was NOK 129 million this quarter, down 21% as reported. But adjusting for the divested U.S. business, revenue grew 3% year-over-year. Hydrogen Infrastructure delivered revenue of NOK 80 million, which is 5x the level of last year, driven by deliveries of distribution systems to industrial gas and energy customers.

Hydrogen Mobility was NOK 21 million against NOK 88 million last year, with transit bus accounting for essentially all of that decline and which has been consistent with the muted expectations that we've communicated for bus throughout the year. Other applications, including industrial gas came in at NOK 28 million, with industrial gas down about 30% year-over-year on continued weaker German industrial demand.

EBITDA for the segment was minus NOK 52 million against minus NOK 76 million last year, and that includes NOK 15 million of restructuring charges. Year-to-date on reported numbers, EBITDA has improved from minus NOK 219 million to minus 116 million. The improvement is mainly cost driven and the full run rate effect of the recent workforce reductions in Weeze will come through from the fourth quarter and 2027.

Order coverage in Hydrogen Infrastructure improved during the quarter, and the second half now is quite well covered by firm orders. The commercial priority for the segment is to convert ongoing dialogues into orders for late 2026 and 2027 delivery as well as executing on the current order book.

Moving to North America and the Battery Systems and Vehicle Integration business. This is a business operated at Kelowna, Canada and Dallas, Texas. The operational focus for the business is similar to last quarter, executing on the 14-truck Hino order that we received earlier this year as well as hydrogen and battery systems deliveries to Toyota. At the same time, we continue to evaluate strategic options for the business.

Revenue for the BVI segment was NOK 16 million this quarter, down 35% year-over-year. The quarter comprised delivery of 2 Class 8 battery-electric trucks to Hino together with sublease income from the Dallas facility. The remaining trucks under the Hino order received earlier this year are scheduled for delivery over the coming months and hydrogen and battery system deliveries are to Toyota are similarly weighted towards the second half.

We've also added some temporary labor during the quarter to prepare for these deliveries, which impacts gross margins in the quarter.

EBITDA was minus NOK 21 million against minus NOK 31 million last year and minus NOK 46 million year-to-date against minus NOK 85 million. That's mainly the cost reductions now also flowing through for this segment. Delivering on the Hino and Toyota commitments in the second half is the most important operational item for the segment in the remainder of 2026.

Going to the group balance sheet. Total assets ended the quarter at around NOK 2.8 billion, and this is slightly down from the first quarter, primarily reflecting the net loss for the period, which was -- but which was partly offset by positive working capital development. Property, plant and equipment was NOK 629 million, which is broadly stable on normal depreciation and minimal additions.

Inventory was NOK 382 million, down NOK 7 million from the prior quarter with deliveries in HMI partly offset by a build in BVI ahead of second half truck and battery system deliveries. Trade receivables were NOK 180 million, down NOK 58 million on strong collections and cash then ended at NOK 308 million at the end of the second quarter.

On the other side of the balance sheet, the debt component of the convertible bonds stood at approximately NOK 1.9 billion and continues to grow mechanically with the payment in kind interest accrual. Total equity was NOK 41 million at quarter end, which is equal to an equity ratio of 1% versus 9% at the end of the first quarter and 33% a year ago.

The development in equity reflects the loss for the period and the accrued interest on the convertible bonds. Our liquidity position supports continued operations on a going concern basis. Then we are, in parallel, actively pursuing measures to strengthen the company's equity and financing position.

Moving to the cash flow statement. Net cash flow was minus NOK 56 million in the quarter. Operating cash flow was minus NOK 47 million and consists of the operating loss in the quarter, partly offset by the NOK 57 million working capital release and other noncash items. Cash flow from investing was again this quarter very limited at minus NOK 2 million, and that's deliberately being restrained as similar to what we saw in the first quarter.

Financing effects absorbed around NOK 7 million, which is essentially lease payments of NOK 12 million, partly offset by positive currency effects.

We'll end the financial section with a look at recent cash flow development. As this page illustrates average quarterly net cash flow when you exclude capital raises and the proceeds from the sale of the U.S. Aerospace business has improved consistently since 2023.

In the first half of 2026, average quarterly cash outflow was NOK 56 million, representing a reduction of more than 80% compared with 2023. There are 3 main drivers behind this development. The first is a structurally leaner cost base resulting from the restructuring measures implemented over the past 18 months. The organization is now materially smaller and the business, therefore, requires significantly less revenue to reach breakeven.

The second is a structurally lower capital expenditure profile. The major investment phase is behind us and ongoing capital requirements are now primarily related to maintenance or highly selected either customer or regulatory-driven investments.

Then the third and final driver is working capital release, where we've converted inventory into sales, and we continue to have normal and good cash collections from customers. We'll continue to work to get closer to both EBITDA and cash breakeven going forward, but it's encouraging to see that we're on the right track and progressing roughly along the lines of expectations that we set out earlier.

With that, I'll hand back the word back to Morten for the outlook.

Thank you, Salman. Let's move on to the outlook and talk about what we see ahead of us. The overall market situation has not changed significantly during the quarter. However, we do have better revenue visibility for '26, and we have several live customer opportunities that we're working on. Starting in HMI, in Hydrogen Mobility, we expect the transit bus activity to remain materially below last year. This is no change from Q1. That's mainly driven by customer capacity constraints.

In Hydrogen Infrastructure, the increased order intake during the quarter has significantly improved the revenue visibility for the second half of '26. We're now mainly working on 2027 opportunities. On the right for BVI, we also have a good order book for the second half of the year. In addition to truck deliveries to Hino, we will produce hydrogen systems and battery packs for Toyota North America. We expect significantly higher revenue in BVI in the second half of the year compared to the first half.

Taking a step back, we have largely executed according to the plan we made back in early 2025 to create a clear pathway to a more sustainable operational and financial profile. With a significant change in market environment, it's been important to align the capacity and the cost base with the -- at any time prevailing market conditions. Over the past 18 months, we have taken out more than 50% of the total workforce.

Along with the other cost reductions and structural measures we have taken, that has significantly lowered the breakeven point for the group. We have also worked on the overall business portfolio to sharpen the strategic focus, divest non-core applications and prioritize capital allocation more strictly. This has put us in a much better position as we now shift focus more towards the fourth point in this picture, strengthening the balance sheet and capital structure.

Our overall priorities remain unchanged. Number one, revenue. We need to execute the current orders that we have in our order book for '26 and build the order book for 2027, which is usual for this time of year. Number two, cost and liquidity. We've come a long way on cost, but we'll continue to work on our cost base to lower that further. We need to manage cash carefully to ensure that we maintain sufficient liquidity. On the current plan, we expect to have sufficient liquidity coverage for at least 12 months ahead.

Finally, number three, capital structure. We're working on addressing the convertible debt and restructuring the balance sheet to obtain a stronger financial position for the years ahead. We're continuing to work our way through a demanding period, focusing on what we can control and taking the necessary steps to maintain sufficient liquidity while we restructure the operation and the balance sheet.

Although we have taken a lot of necessary steps, we're not yet where we need to be, but every step brings us closer to the sustainable future that we target, and we're diligently working our way there.

That concludes the presentation for today, and we'll now open it up for Q&A. Mathias?

Thank you, Morten and Salman. We've gotten one question from [ Knut ]. It is a 2-parter. So I'll start with the first part to you, Salman. Could you elaborate on the structural measures being considered for the convertible bonds? Should existing shareholders expect significant dilution?

I think generally, what we can say on the convertible bonds and the financing position of the company as a whole is that we're looking to refinance those convertible bonds and then that refinancing can take many different shapes and forms, and we'll have to come back to the details of that when we're ready to talk about that.

Yes. Then the second question is, what is the current status of the Type 4 cylinder certification in China? What steps remain? And do you still expect certification in 2026, Morten?

Yes. We are at the final stage of that certification process and expect to be cleared for sales in the domestic Chinese market by the end of this year.

Thank you. It seems like people are more interested in being out in the sun. There was a quick Q&A round. Thank you both for presenting today. Then I wish you all that follow us here today a good summer, and then we'll see you again next time. Bye.

Thank you.

Hi, and welcome to Hexagon Purus Q1 2026 Presentation. We are sorry for the delay. My name is Mathias Meidell, and I am the IR Director of Hexagon Purus. I will be moderating from the studio in Oslo.

And from the studio, I'm also joined by Group CEO, Morten Holum; and Group CFO, Salman Alam. The agenda for today includes, as usual, highlights from the quarter, a company update, the financials and the outlook. We will end the presentation with a Q&A session. So please feel free to enter your questions via the function on your screen.

And with that, I will pass the word over to you, Morten, who will take us through the highlights of the quarter.

Thank you, Mathias, and good morning, everyone. Thanks for tuning into our webcast today. Let's start by looking at the key developments in the first quarter. Number one, revenue improved year-over-year. Headline revenue, including one-off gains from transactions, was NOK 405 million, 76% higher than last year. On a like-for-like basis, excluding the one-offs, underlying revenue of NOK 271 million was 29% higher than Q1 last year.

Number two, we took steps to further reduce costs in Q1, executing additional workforce reductions across the Group to better align the cost base with the current market environment. Number three, we completed the divestment of the U.S. Aerospace business to SpaceX. And finally, number four, we signed a financing agreement with CIMC Enric for the joint venture in China.

All-in-all, an active quarter where we took several decisive actions that extends the liquidity runway and improves the cost position of the company. The impact of this will be increasingly visible in our accounts in the coming quarters. Starting with revenue on the left. Headline revenue of NOK 405 million, 76% higher than last year.

That figure includes an extraordinary gain of NOK 134 million related to the divestment of the U.S. Aerospace business and the deconsolidation of the China JV following the funding agreement with CIMC Enric since our ownership percentage is now below 50%.

Organic revenue in the quarter was NOK 271 million, which is 29% higher year-over-year on a like-for-like basis, mainly driven by higher volume in Hydrogen Infrastructure. In the middle, EBITDA in the quarter was NOK 1.6 million compared to minus NOK 242 million in Q1 last year and minus NOK 99 million in Q4 '25.

The Q1 EBITDA was also positively impacted by the extraordinary gain from the U.S. Aerospace divestment and the China JV deconsolidation. Adjusting for that and other restructuring one-offs, we had underlying EBITDA in Q1 of minus NOK 90 million. Then on the right, we exited the quarter with an order backlog of NOK 463 million, which now excludes the Aerospace business following the successful completion of the sale to SpaceX.

More on that in just a few pages. The underlying overall revenue mix has shifted somewhat towards distribution. Excluding the revenue resulting from the one-off gains from divested and deconsolidated businesses, Hydrogen Infrastructure made up the largest part of revenue in Q1 at around 37% of the total. This is a significant increase from Q1 last year, driven by higher volumes of hydrogen distribution units.

The other applications category was almost the same size as Hydrogen Infrastructure. And this was positively impacted in Q1 by the 2 months of Aerospace revenue we had in the quarter and the delivery of a maritime fuel system. The lower relative share of Hydrogen Mobility was driven by lower revenue from transit bus in Q1. Looking at the year-over-year revenue bridge, we had higher revenue from Hydrogen Infrastructure in Q1 this year compared to last year, NOK 101 million this year versus NOK 42 million last year.

Hydrogen Mobility revenue declined by NOK 38 million due to lower activity in transit bus. We expect transit bus sales to remain below 2025 level for this year in total. So this is a picture that is likely to continue in the coming quarters. We also had lower volume in battery electric mobility. But here, we expect things to look better in the coming quarters as we now start delivering on the 14 truck order that we received in January.

Revenue in other applications grew by NOK 28 million, driven by higher volume in Aerospace and the delivery of the hydrogen fuel system for maritime applications. Given the divestment of the Aerospace business, the year-over-year comparison will not be like-for-like in the coming 4 quarters. The order book stood at NOK 463 million at the end of Q1.

And as you can see, we now have highlighted the divested businesses in previous quarters for comparability purposes. The order book gives us decent near-term revenue visibility, but less visibility for the second half of the year. And in total, we still consider the size of the order book to be lower than what we need to break even with the current cost base.

So besides continuing to work on lowering our cost base, our efforts are now mainly focused on converting our active customer dialogues to firm orders. There are many small and large players in Europe positioning themselves in the hydrogen space, and we have several ongoing customer dialogues that will hopefully be able to convert into firm orders over the next few months.

As an example, in March, we received a sizable order for distribution modules from a large European energy company, and they're going to use these modules to transport molecules to a network of refueling stations that's being built. And we're now in dialogue with them for potential follow-on orders for 2026 and beyond. And as of Q1, almost 90% of the order book is for execution in 2026 and the rest mainly for '27. We have made good progress on the portfolio review across all 3 main areas.

And Q1 '26 is the first quarter where we start seeing the impact of the restructuring actions and portfolio changes that we have done over the past year. While the market environment remains demanding, we have strengthened the liquidity position of the company and our cost base is better aligned with demand than it was 12 months ago.

We're now focused on rebuilding the commercial momentum, lowering the cost, optimizing the business portfolio and reviewing the capital structure. Starting with costs; we see a significant impact from the restructuring activities we have taken over the past year. And these are now also starting to be visible in the numbers. We have adjusted the overall workforce in the Group in several steps.

It's now down by almost 50% compared to where it was at the end of 2024. This has significantly reduced capacity costs and lowered the breakeven point. We're quite far along on this journey, but we will still continue to review the current operational footprint and organizational setup to ensure proper alignment between revenue and costs. We successfully completed the sale of the U.S. Aerospace business to SpaceX in March, which strengthened the overall liquidity position of the company.

We received net proceeds of NOK 98 million in Q1, and the remaining $2.5 million is expected to be received in Q1 2027, subject to the fulfillment of the earn-out criteria. Then we also signed a financing agreement for the China JV with CIMC Enric in the quarter where they will provide funding for the JV in exchange for a higher ownership share in the joint venture.

China remains strategically important for us. It's the largest and most active hydrogen market globally and has the most competitive supply chain for materials and components. So it's been important for us to secure continued exposure to this market.

However, it's also necessary for us to minimize cash outflows in the current situation. So we're satisfied that we have found a way to remain engaged in China, continue to develop the JV and nurture the good relationship we have with CIMC Enric. And we have secured our rights to reestablish the original ownership level later on.

So these were the main points for Q1, and I'll now hand it over to our CFO to take you through the financials. Salman?

Thank you, Morten, and good morning, everyone. The first quarter marked an important step in our restructuring and repositioning process with the announcement of several operational and financial measures. The full effect of the restructuring program, which we launched last year is not yet reflected in the numbers, but the quarter included several important milestones, as Morten touched on, including the sale of the U.S. Aerospace business and the refinancing framework for the China joint venture.

We also, during the quarter, recognized further restructuring costs, primarily related to workforce reductions in Germany and North America, and we continue to review and will actively optimize our cost base and operational footprint also going forward. Compared to a year ago, we're now operating with a materially lower cost base, a leaner portfolio and a stronger liquidity position compared to the back end of last year.

In the first quarter, underlying revenue increased by 29% year-over-year on a structurally adjusted basis. Payroll expenses were down about 30% on a restructuring adjusted basis, and we exited the quarter with NOK 364 million in cash and an order backlog of NOK 463 million. Looking ahead, we remain focused on continued cost discipline, liquidity management and improving order intake with the objective of moving the business toward profitability at activity levels closer to what we're currently seeing in the market.

Looking at the specifics, reported revenue in the quarter was NOK 405 million, which is up NOK 76 million compared to the same period last year. The reported figure includes NOK 134 million in an extraordinary gain from the 2 transactions that we completed during the quarter. These -- both of these transactions were done or cleared at a premium to the carrying values that we had.

The first was the sale of the U.S. Aerospace business to SpaceX. And then the second was the financing framework for the Chinese joint venture, which took our ownership level to below 50%. We were -- given that the transaction is cleared at a premium to their carrying values, we were able to recognize a gain related to those transactions. Stripping that gain out and putting Q1 2025 on a like-for-like footprint, underlying revenue was NOK 271 million, which is up 29% year-over-year.

The growth this quarter is coming from Hydrogen Infrastructure. It is coming from Aerospace up until the 1st of March and Maritime Applications. Operating expenses were NOK 404 million. The reported cost of materials ratio of 40% is flattered by the extraordinary gain that we had in the quarter. And on an underlying basis, it was closer to 60%, which is broadly in line with what we've seen in recent quarters.

Payroll was NOK 163 million, but includes NOK 28 million of restructuring costs. Excluding restructuring costs, both in Q1 '25 and Q1 '26, payroll was about 29% lower year-over-year as the workforce reductions that we've implemented in the past year has started to flow through. Other operating expenses were NOK 78 million, which is also down year-over-year despite including certain nonrecurring items, which indicates a lower underlying cost base also for that line item.

Reported EBITDA then ended at positive NOK 2 million, which includes NOK 92 million of net items affecting comparability. Underlying EBITDA remains negative, but the trajectory is improving. So the cost base is lower than when we started 2025, and the gap to breakeven is narrowing as the cost actions flow through. Below EBITDA, depreciation and amortization was NOK 58 million, which is in line with the run rate following the Q4 impairments.

The share of loss from associates was NOK 3 million, which reflects our minority interest in the China joint venture. Finance income was NOK 19 million and was predominantly driven by foreign currency fluctuations and received interest income on bank deposits. Finance expense was NOK 134 million, of which NOK 68 million is related to noncash payment in kind interest on the 2 convertible bonds that we have outstanding.

A further NOK 8 million relates to lease liabilities and other interest-bearing debt and the balance is coming from foreign currency. Tax expense was negative NOK 1 million as we're not in a taxable position at the Group level and net loss for the quarter was NOK 172 million against NOK 385 million in the same period last year.

Turning to the segments; as a reminder, HMI is our European Hydrogen Cylinder and Systems business, including the industrial gas activity that we have in Germany, and the U.S. Aerospace business leading up to the 1st of March of this year. HMI delivered year-over-year revenue growth and improved profitability. The growth was carried by Hydrogen Infrastructure, where order conversion in the quarter was solid.

Hydrogen Mobility, which is predominantly transit bus and industrial gas were both softer, which is consistent with the expectations that we've communicated for both of these segments in 2026. Capacity costs remain under review, and we will continue to align the footprint with the market situation. The segment's revenue, so HMI's revenue in the quarter was NOK 227 million, which is up 24% year-over-year on a structurally adjusted basis.

Hydrogen Infrastructure was NOK 101 million in the quarter and made up 45% of the segment's revenue. That was up 140% year-over-year. We delivered 13 distribution modules in the quarter to various industrial gas customers. Hydrogen Mobility revenue was $57 million, which is down 40% year-over-year, where transit bus is accounting for the majority of that decline.

Other applications, including Industrial Gas and the divested Aerospace activity was NOK 69 million. And industrial gas alone was down about 45% year-over-year, which is reflective of the somewhat weaker German industrial demand that we're seeing. EBITDA was negative NOK 64 million against negative NOK 143 million in the same period last year, but includes NOK 30 million of items affecting comparability, which is predominantly the restructuring costs from the German workforce reductions.

So there is an underlying improvement in profitability, which reflects the higher activity combined with the 2025 cost actions that we've taken. However, the segment is not yet profitable, and the path to breakeven depends on continued order intake and conversion and also maintaining cost discipline.

During the quarter, we secured a multiunit distribution order from a major European energy company, which provides reasonable backlog coverage through the second quarter and partial coverage into the second half. Visibility beyond that is contingent on the current commercial dialogues that we're having are progressing and are converted to firm orders.

Moving to North America and our BVI business, so the Battery and Vehicle Integration business. This segment was restructured in January, and that program is now complete. Our focus in BVI is on executing the 14-truck Hino order, which provides operational continuity in the first half of 2026, while we continue to evaluate strategic options for this part of the business.

We continue to market our Class 6 and Class 8 programs, and we were continuing to get positive feedback from the field. The U.S. heavy-duty market remains slow overall, but the recent data points have been more constructive. So we're seeing that the U.S. truck sales are picking up and the higher oil and gas prices has again sharpened customer focus on diversifying away from internal combustion.

So we're seeing renewed interest in alternative drivetrains, including battery electric in North America. In the quarter, BVI revenue was NOK 17 million, which is down 34% year-over-year. We had the vehicle delivery to Hino, battery system deliveries to Toyota Motors North America, and we also received sublease income from our Dallas facility.

EBITDA was negative NOK 26 million against negative NOK 54 million in the same period last year, and that includes NOK 6 million of restructuring costs related to the January workforce reductions. The improvement in profitability reflects the cost reductions that we've taken in 2025 and so far in 2026.

Moving on to the Group balance sheet; the financial statements, as mentioned, include the consolidation effects from the U.S. Aerospace divestment and the China JV financing. And therefore, the balance sheet is not fully comparable to that of last year or to Q4 2025. Total assets ended at NOK 3 billion in the quarter against NOK 3.5 billion at year-end with the 2 structural transactions accounting for a net basis reduction of NOK 401 million.

Property, plant and equipment was NOK 648 million, with the underlying base broadly stable on normal depreciation and no significant capital additions in the quarter. Inventory was NOK 388 million, which reflects the revenue activity and delivery during the quarter and trade receivables came in at NOK 238 million, which is down sequentially on strong cash collection from customers. Cash and cash equivalents ended at NOK 364 million.

On the liability side, the period year-over-year changes mainly reflect the structural transactions and the payment in kind interest accrual on the convertible bonds. Total equity was NOK 255 million, which is equal to an equity ratio of 9%. The equity ratio is at a low level, but the actions that we've taken, the structural transactions and the cost reset have strengthened liquidity.

It's reduced capital intensity and has also extended the liquidity runway. At the same time, we're reviewing the Group's capital structure, including the 2 outstanding convertible bonds. Moving to the cash flow statement. Operating cash flow was negative NOK 44 million in the quarter as the operating losses we had in the period was partly offset by noncash items and an NOK 86 million working capital release.

Investing cash flow was NOK 119 million, of which NOK 98 million reflects proceeds from the SpaceX divestment. We're still -- we still have NOK 2.5 million in an earn-out, which we are expecting to receive in the first quarter of 2027. CapEx was NOK 1 million and capitalized product development was NOK 4 million, both deliberately restrained in line with our cash preservation focus.

Financing and FX absorbed NOK 33 million in the quarter, resulting in a net cash flow of positive NOK 42 million and a closing cash balance of NOK 364 million. To round off the financial section, the cost base is materially lower compared to what it was a year ago and compared to the levels we saw in 2024 and liquidity is extended. The work to reduce costs will continue, and we're also calibrating our operating model to deliver profitability at activity levels close to where we're operating today.

With that, I'll hand it back to Morten for the outlook.

All right. Thank you, Salman. So let's move to the outlook and talk about what we expect ahead of us. The overall market situation has not changed materially since the last quarter. We're still operating in a market that has opportunity, but with limited medium-term demand visibility. The order book does provide decent visibility in the short-term. And although we have several interesting customer dialogues ongoing, we still need to convert those into firm purchase orders for the second half of the year.

Looking at the different product areas, starting with hydrogen mobility on the left, transit bus has developed quite well over the past 2 years and is gaining momentum across several countries in Europe as a complement to battery electric buses for routes with extended range requirements and in local markets with either challenging topography or climate conditions.

While we expect the overall market to remain strong, our transit revenue in '26 will be significantly lower than in '25 because of capacity constraints at some of our key customers. As with other product areas, we have good order visibility in the next few months, but more limited in the second half of the year.

In Hydrogen Infrastructure, it's a similar story on visibility, good near-term coverage but limited firm coverage over the second half of the year. Based on the current customer indications, we see good potential in the second half of the year and could end up with more volume than last year.

But of course, we need to convert those indications into firm orders. On the BVI side, we scaled back the operation significantly in Q1, and we're working through the truck order that we received in January, which will take us through the summer. And then we're working on opportunities for the remainder of the year. The U.S. truck market is starting to pick up again after a very weak 2025.

And with diesel prices in California approaching $8 a gallon, there is renewed interest in alternative technologies, including battery electric solutions. We've got more Class 6 trucks going into demos and customer trials now, and we're hopeful that we can convert some of those into purchase orders in the coming months. Our overall priorities remain unchanged: increase the order book, drive down costs and maintain sufficient liquidity.

We've done a lot on the cost side. And although there is more to do, we need to secure sufficient orders for the second half of the year to get the operation to breakeven level. And in addition to stabilizing the operation, we're also working on reviewing the capital structure to ensure that we can obtain a more sustainable balance sheet going forward.

We're working our way through a demanding period, focusing on what we can control and taking the necessary steps to maintain sufficient liquidity while we restructure the operation and simplify the overall structure. We're not fully where we want to be, but I think we are well on our way.

The markets for our solutions have been challenging for a while, with market participants appearing to step away from climate ambitions and increasingly preferring trusted solutions with solid commercial track record, technologies that are in the money today. However, the war in the Middle East serves as a stark reminder for many countries and regions of the downside of being dependent on imported hydrocarbons for their basic energy needs.

So there is a renewed interest in renewable energy and alternative energy carriers, hydrogen included, as a strategic measure to achieve energy security and energy independence. So the energy transition, it's much less centered around sustainability in a climate sense, although the actions needed to achieve energy independence also contributes positively towards meeting climate ambitions, but it's more centered around sustainability from an energy security perspective.

Regardless, this will likely make renewables more attractive for investors. We saw that funds flow into renewable ETFs in April was the highest it has been since 2021. In the short-term, this doesn't change our day-to-day priorities. Our job remains the same.

But more focus on renewables and the energy transition does give reason for optimism around our future business because it should impact regulation and both private and public capital allocation over time. And in this landscape, our technologies will be increasingly relevant.

So that concludes our presentation for today, and we will now open it up for Q&A. Mathias?

Thank you, Morten and Salman. So let's just jump straight into it. So the first question is to you, Morten, and it's from [ Peter ]. What can you tell us about the ongoing certification process of your cylinders in China?

The simple story is that the ongoing certification is ongoing. We have seen in China that the -- it has taken a while. It's taken a lot longer than what we expected going into this. We see that the regulatory environment and the requirements have been changing quite a few times. And so it's hard to estimate a time for receiving the final certification, except to say that we are good on our way in the process.

Thank you, Morten. And another one for you from [ Christoph ]. I guess you touched upon it now at the end, but do you see an increase of orders out of the oil price rise due to the Iran conflict?

I think it's too early to say if we do receive -- I mean, there's a time lag from these things happening until you actually see the results flowing in, in terms of orders. What we see is a lot of requests and a lot of dialogues with customers that are looking for alternatives. So -- but I think it's too early to say whether this will result in a large inflow of orders in the short-term perspective. But I do believe it's going to have a positive impact.

And then a last question here at the end from [ Frank ] is also to you, Morten. Are there any new or additional business areas where your systems can be used?

We're specialists in carbon fiber composite pressure vessels. And they have applicability far beyond the business segments and product areas which we are in today. So -- and there are numerous other things, defense being one of them.

And I think that so far, we have been looking into other market segments than what we're in today. But that's also a timing as to when you will be able to enter these markets. There's a qualification period for most of these types of pressure vessels. So -- but there are definitely other areas that we could enter.

Okay. Thank you. So that was the last question of the day. So with that, I'd like to wrap up at the end and say thank you to Morten and Salman, and thank you to everyone that has listened in today and wish you a good day.

Thank you.

Hi, and welcome to Hexagon Purus' Q4 2025 Presentation. My name is Mathias Meidell, and I am the IR Director of Hexagon Purus. I will be moderating from the studio in Oslo. And from the studio, I'm also joined by Group CEO, Morten Holum; and Group CFO, Salman Alam.

The agenda for today includes, as usual, the highlights from the quarter, a company update, the financials and the outlook. We will end the presentation with a Q&A session as usual. So please feel free to enter your question via the function on your screen. And with that, I would like to pass the word over to you, Morten, who will take us through the highlights of the quarter.

Thank you, Mathias, and good morning, everyone. Thanks for joining our webcast this morning. 2025 was a challenging year. Looking back, we had 4 key points: One, after a long period of significant growth, the activity in '25 dropped dramatically, driven by significant market uncertainty that was amplified by regulatory changes, tariffs and geopolitics. That resulted in lower demand and weaker revenue compared to 2024.

Number 2, we took decisive actions to adapt the operating model to a new market reality to reduce the cost base and protect liquidity. Our primary focus in '25 was to align the cost base with the near-term expected market conditions. Number 3, we also undertook an extensive review of our entire business portfolio to assess our options to improve capital efficiency to extend the liquidity runway and to preserve flexibility to support long-term value creation.

And finally, number 4, we made focused efforts to diversify the customer base across our core applications, and we're able to broaden the customer portfolio. We saw the positive impact of that now in Q4, where the uptick in volume was driven by several new hydrogen distribution customers. More on that in the outlook section.

After a challenging start to the year, we saw a significant uptick in Q4. On the left, you see that revenue for the quarter was NOK 468 million, representing an 18% increase year-over-year and an 85% increase from Q3 '25. The main driver for the revenue increase was significantly higher volume in transit bus, hydrogen distribution and aerospace. The higher volume also translated into improved margins. EBITDA for the quarter was minus NOK 99 million, including NOK 76 million of items affecting comparability.

These are primarily related to inventory revaluations and impairments. That means that the underlying EBITDA margin was minus 5% in the quarter, significantly closer to breakeven. So, we see the positive impact of higher volume and a leaner cost base. And to the far right, we exited the quarter with an order backlog consisting of firm purchase orders of approximately NOK 728 million, more than 90% of which is for delivery in '26. I'll come back to that in a minute.

Overall, we're happy to see the uptick in volume in Q4 and happy to see that the cost measures we've executed are having a positive impact on profitability. Looking at revenue composition, Hydrogen infrastructure made up the largest part of revenue in Q4 with a share of 42%. This is a decrease in relative terms from Q4 last year despite the strong sequential growth from Q3 '25.

Transit bus continued to increase its relative share in Q4 compared to last year with a 10 percentage points increase, and the 6-percentage point increase in other applications is driven by higher aerospace activity in the quarter. So, for the full year, we ended at a revenue composition consisting of 29% distribution, 36% transit bus and 27% other applications, which is a mix of industrial gas bundles and aerospace, that's a significant mix shift from last year where more than half the business was in hydrogen infrastructure.

Looking at the full year revenue bridge, we had significantly lower revenue for hydrogen infrastructure. Very low volume in the first half of the year. In fact, we had more volume in Q4 alone than in the first 3 quarters of the year, around 60% of the full year volume came now in Q4. So, hydrogen infrastructure is the key reason for the year-over-year revenue decline, driven by delay in new green hydrogen projects and delayed commissioning of the significant customer fleet additions that we sold in 2024.

Hydrogen mobility declined by 13% from last year, where strong growth in transit bus almost offset the loss of the heavy-duty truck volume that we had in '24. On the battery electric mobility side, the volumes and movements are small, but the 9% increase is related to deliveries of battery electric trucks to Hino throughout the year. These are trucks that will be used for test and validation purposes and for customer demos.

In other applications, the main growth driver was aerospace, which compensated for lower demand for industrial gas bundles. And then to the order book, we went into '26 with NOK 728 million in orders, of which 92% is for execution this year. In terms of product areas, the 3 largest areas are hydrogen infrastructure, hydrogen mobility and other applications, where the largest part of the latter is aerospace. These figures are from the beginning of the year, so they don't include the 14-truck order from Hino that we got in January, amongst others.

Looking at the overall situation, we have satisfactory demand and revenue visibility through Q1 and parts of Q2. We're encouraged by the customer dialogues we're currently having and see that there is potential for growth in '26, but the market is still uncertain. And at the current run rate, the order intake is below what we need to break even.

We made good progress on the portfolio review that we initiated last year. It's taken time, but we're getting traction on the different initiatives. We've been looking for ways to strengthen our financial position and extend the liquidity runway while preserving future optionality to support long-term value creation. We've had a strategic review ongoing for the BVI business, we have looked at the different parts of the HMI portfolio, and we're working on the China JV.

Since last quarter, we've made progress that will materially impact the company going into 2026, both in terms of capital efficiency of the business and the liquidity runway.

So, let's start with the BVI business. Now I want to give some background for the actions that we took now in January. Over the past years, we have built an industry-leading technology for battery electric heavy-duty mobility. This has been tested and validated on several customer platforms. And those that have followed us for a while will remember that we signed some very significant agreements with OEMs a few years back when the expectations were that vehicle electrification would scale quickly. So based on those signals back in the day, we scaled up, built a great organization and invested in sizable manufacturing capacity. And then the market turned.

Over the past 12 to 18 months, the uncertainty around regulation and tariffs, in particular, has materially changed the near-term outlook. And we're sitting with significant capacity that can't be utilized. Looking a bit forward, we believe in the future of truck electrification and the strong positive feedback that we're getting now from the customer demo programs, we're confident that the technology that we have is competitive and attractive. But it's challenging, if not impossible, to get the business in its current form to profitability short-term. So, in response to a weaker and more uncertain market in North America, we initiated a strategic review of the BVI segment back in June, evaluating the full range of operational, structural partnership and transaction alternatives.

The dialogues we have had as part of that review leads us to conclude that it's unrealistic to execute a value-accretive transaction in the current market environment. But at the same time, we believe that fleet electrification will materialize, albeit on a longer time horizon. And we're confident that the technology we have developed has substantial medium to long-term value potential. So, in response to a weaker and more uncertain North American market, we initiated that strategic review back in June. Again, as I talked about, the full range of operational, structural partnership and transaction alternatives we had under discussion.

So, we decided now to operate the BVI segment scale back to a minimum level to align with the current market condition while preserving long-term strategic optionality. That means that we had to scale back the operations around 2/3 of the workforce have been let go, and we are going to consolidate our footprint to the Dallas facility, leaving the Ontario and also eventually going out of the Kelowna facility over time. We will take a restructuring cost of approximately NOK 0.7 million now in Q1 2026.

As part of that, we have also renegotiated the battery cell supply agreement, eliminating the overhang of the NOK 12.9 million in prepayment that was there. And since all the CapEx now has already been taken, we will retain the ability to quickly scale back up again when demand is growing. So, in January, we received an order from Hino for an additional 14 Class 6, 7 and 8 trucks with expected delivery towards the end of the second quarter and the beginning of the third quarter of '26.

Given now the significant cost reductions taken, this is expected to allow the BVI segment to operate at close to cash neutral levels in aggregate through mid-2026. A key enabler of that is the fact that a substantial portion of the components is already sitting in our inventory, which limits the need for additional working capital to complete these vehicles. And then again, with the renegotiated Panasonic contract, which eliminated the outstanding prepayment, the overhang related to that has been removed.

Last week, we signed an agreement to sell 100% of the shares in Masterworks, our Westminster business unit to SpaceX. The Westminster business has performed well during the past years, partly due to significant growth in demand for cylinders for aerospace applications. Aerospace used to be a small part of the business but has recently become the dominant driver of revenue in our Westminster unit. The space exploration sector is growing rapidly due to falling launch costs and higher demand for satellites, both for commercial and national security purposes.

Along with that growth comes a preference from the aerospace customers to secure full control of critical components like high-pressure cylinders by bringing the competence and the manufacturing capacity in-house. Because of that, we believe the future of our aerospace business is best developed under an industrial owner with a dedicated aerospace focus. The transaction with SpaceX secures a good industrial home for the Westminster business, while it significantly strengthens our financial position and allows us to focus more narrowly on our core strategic priorities and to reduce risk.

I also want to mention a few words on China. The Chinese market remains strategically important for us, representing the largest global market for hydrogen-related mobility and infrastructure solutions and the most competitive supply chain for materials and components. Market has developed slower than expected. It took longer than we thought to establish operations there. And there have been frequent changes in regulatory requirements to qualify for local certification. But it remains the most active hydrogen market in the world today.

So, we have a manufacturing plant that's operational. We have validated the process, the product and the quality by manufacturing cylinders for our European infrastructure market there last year. And we're now in the final stage of the process to receive certification for the local market. But at this point, the JV is not yet generating profits. So, to manage our liquidity situation, we've engaged in discussions with CIMC Enric regarding potential financing alternatives for 2026. We're seeking ways to minimize our cash contribution while maintaining the JV's operational continuity and market presence.

And in parallel, we are jointly exploring opportunities to simplify the joint venture structure to improve cost efficiency and execution speed with the main purpose to secure our competitiveness in the Chinese market. We're well aligned with our JV partner, CIMC Enric. So, I'm hopeful that we will be able to conclude on a solution within a reasonably short time frame. So that was the company update, and I'll now hand it over to our CFO, who will take you through the financials. Alam?

Thank you. All right. Thank you, Morten, and good morning, everyone. Let's have a closer look at the fourth quarter 2025 results. In the fourth quarter of 2025, we posted revenue of NOK 468 million, which is 18% higher compared to the same period last year and 85% higher than the third quarter of 2025. The increase in revenue is primarily due to strong contributions from transit bus and aerospace applications. And compared to earlier this year, hydrogen infrastructure also recovered and contributed strongly to revenue in the fourth quarter.

Full year 2025 revenue amounted to NOK 1.144 billion, representing a 39% decline compared to the prior year. The main driver of the year-over-year revenue decline for the full year was softness in hydrogen infrastructure, which had a very solid 2024. Operating expenses ended at NOK 568 million in the fourth quarter. The cost of materials ratio was 72% in the quarter and was inflated due to inventory write-downs, which amounted to approximately NOK 67 million in the quarter. When excluding these effects, the underlying cost material ratio was close to 59%.

When looking at the full year cost material ratio the underlying cost material ratio was close to 56% which is lower than the average that we've seen in '23 and '24, predominantly, due to the fact that hydrogen distribution infrastructure made up a significantly strong revenue in 2025.

Payroll related expenses were NOK 135million which is about 21% lower compared to same period last year. Other operating expenses were NOK 95 million in the fourth quarter, which is up sequentially from the third quarter driven by higher activity-related costs across warranty, freight, plant operations and engineering and testing, as well as about NOK 10 million of one-off items related to development write-offs and customer insolvency.

Subtracting total expenses from total revenue, EBITDA ended at minus NOK 99 million in the fourth quarter, but this includes NOK 76 million of items affecting comparability, which then includes inventory write-downs, warranty provisions, bad debt expense and restructuring costs. For the full year 2025, EBITDA ended at minus NOK 618 million and includes NOK 186 million of items affecting comparability.

Moving below the EBITDA line. Depreciation and amortization amounted to NOK 343 million in the quarter and was negatively impacted by NOK 282 million in fixed asset impairments. Of this, NOK 223 million relates to the company's BVI segment, recognized as part of the annual impairment testing based on updated assumptions and the revised business outlook for the segment following the restructuring we announced a few weeks ago. Another NOK 59 million relates to the HMI segment, which mainly reflects write-down of production equipment that is no longer in use.

Losses from investments in associates ended at minus NOK 9 million in the quarter and reflects the operating activity in the part of the China joint venture, which is not consolidated. Finance income in the quarter was NOK 24 million, where NOK 3 million was related to interest income on bank deposits and NOK 21 million was related to foreign exchange fluctuations. Finance expense was NOK 83 million, where NOK 67 million is related to noncash interest on the convertible bonds and another NOK 9 million was related to interest on lease liabilities and the remainder was foreign exchange fluctuations of NOK 6 million.

At the group level, we are not in a taxable position and tax expense in the quarter was negative NOK 2 million. Loss after tax then ended at minus NOK 508 million versus NOK 667 million in the same quarter last year.

Moving on to the segments and starting off with hydrogen mobility & infrastructure. As a reminder, this segment is the business unit that manufactures hydrogen cylinders and hydrogen systems for storage of hydrogen on board either off-road or on-road vehicles, or for infrastructure purposes such as the distribution of hydrogen from the point of production to the point of consumption. It also includes our industrial gas business in Europe and the aerospace business in the U.S. Generally, the HMI business unit delivered a strong finish to 2025, converting a sizable order backlog into deliveries through disciplined execution.

Revenue in the quarter was robust and resulted in close to breakeven EBITDA, reflecting higher activity levels and the impact of cost reduction measures implemented earlier in the year. Workforce reductions during 2025 have lowered headcount in the segment by about 30%, leaving a cost base which is better aligned with current activity. However, we continue to monitor capacity costs closely given the ongoing market uncertainty.

Looking at the segment financials. Revenue in the fourth quarter was NOK 427 million for the segment, which is up 20% year-over-year and up 83% sequentially from the third quarter. The year-over-year growth was primarily driven by higher activity in hydro mobility particularly transit bus applications as well as strong growth in aerospace. Sequentially, revenue also benefited from a clear rebound in hydrogen infrastructure activity with the delivery of 27 hydrogen distribution units in the quarter. For the full year, segment revenue ended at just north of NOK 1 billion which is down 42% compared to 2024. As mentioned, 2024 had a very solid market for hydrogen infrastructure, which was much softer in 2025 and the macro environment has led customers to extend asset utilization and delay new investments combined with a pushout of new green hydrogen projects coming online.

Turning to profitability. EBITDA in the quarter was negative NOK 2 million, which includes NOK 31 million of items affecting comparability, primarily related to inventory effects. Looking past these items, EBITDA was positive NOK 29 million, corresponding to a margin of 7%. The underlying profitability reflects higher activity levels combined with the cost reduction measures implemented during 2025. For the full year 2025, EBITDA was negative NOK 268 million, which is also impacted by restructuring items and other items affecting comparability of a total of NOK 118 million.

Moving on to the battery systems and vehicle integration segment. This is the business unit that engages in battery systems production and complete vehicle integration of battery electric and fuel cell electric vehicles for the U.S. market. As mentioned earlier today and also as announced in January, we've implemented significant cost and operational measures in the BVI segment to align the business with the current market conditions while trying to preserve long-term optionality. These measures together with the recently received orders from Hino for 14 trucks are expected to support operations of the BVI segment at close to cash neutral levels in the first half of 2026.

Operationally, the Class 8 battery electric-truck demonstration programs have been successful with vehicles tested at several leading U.S. logistics customers and very positive feedback on performance, range and reliability. That said, the U.S. market environment, the regulatory uncertainty continues to be very challenging and continues to weigh on heavy-duty electrification resulting in generally longer sales cycles and limited near-term order visibility for the segment.

Revenue for BVI in the fourth quarter was NOK 39 million and primarily comprised of vehicle deliveries to Hino and lease revenue from Dallas as we sublease part of the Dallas facility to Hino. EBITDA for the segment was negative NOK 62 million in the fourth quarter, but this includes NOK 45 million of inventory write-downs. These inventory adjustments were largely a consequence of the announced scale down of the segment, which led to a reassessment of inventory composition, bill of materials and future use, resulting in certain inventory being deemed obsolete.

Zooming out to the group level and turning to the balance sheet. The balance sheet amounted to approximately NOK 3.5 billion at year-end, down from around NOK 4 billion at the end of the third quarter. On the asset side, we saw sequential decreases in inventory due to the strong revenue development in the quarter, combined with the inventory write-downs we've already described. We saw an increase in trade receivables sequentially, which was in line with higher activity levels, while there was a larger-than-usual decline in property, plant and equipment due to fixed asset impairments in BVI and HMI, as mentioned earlier today.

Cash at the end of the fourth quarter stood at NOK 322 million, which is down from NOK 360 million in Q3. On the liability side, the noncurrent liabilities, the increase in noncurrent liabilities reflects the payment in kind infrastructure we have on the convertible bonds. Total equity ended at NOK 579 million, which corresponds to an equity ratio of 17%. The decline versus last year and the decline versus Q3 of this year is mainly driven by losses in the period, including significant impairment changes taken across the year. These impairments are noncash and reflect balance sheet adjustments where necessary.

When assessing the equity ratio, it is therefore important to consider the capital-intensive nature of the balance sheet and the long-lived asset base. At the same time, we've taken decisive actions to strengthen liquidity, reduce capital intensity and lower the cost base. And the current equity level is, therefore, not expected to constrain near-term operations.

Moving to the cash flow statement, which captures the changes in the balance sheet and income statement. Operating cash flow for the quarter was positive at NOK 14 million. There were significant noncash effects in the quarter, which combined with working capital release of NOK 69 million, brought operating cash flow into positive territory for the first quarter in about 3 years. Cash flow from investments ended at minus NOK 46 million, where CapEx towards PPE was NOK 15 million and capitalized product development was NOK 26 million. The latter number is a bit higher than what we've seen in prior periods in 2025, which mainly reflects the completion and final validation of select product and technology initiatives during the quarter, especially in the BVI segment.

Cash flow from financing and currency movements was negative NOK 7 million in the quarter, resulting in net cash flow of minus NOK 39 million and a cash balance at the end of the fourth quarter of NOK 322 million. This slide shows the clear step change that we've had in our cash profile throughout 2025. As we've communicated previously, cash outflow was elevated in the first half of the year, driven by lower revenue, restructuring costs, spillover CapEx from 2024 and limited working capital release. As expected, this improved materially in the second half, reflecting a leaner cost base, lower CapEx and improved conversion of inventory into revenue.

Looking ahead, we expect to continue to work down inventory as deliveries are executed, which should support further working capital release. This is expected to offset a significant portion of operating losses, while CapEx will remain at low levels. In parallel, we have announced several structural measures that further supports the cash profile going forward. This includes the agreed sale of the aerospace business, which strengthens liquidity through cash proceeds at closing, discussions with our Chinese joint venture partner aimed at minimizing cash outflow to the Chinese joint venture in 2026 and the recent scale down of the BVI segment with a focus on operating close to cash neutral levels until mid-2026.

Taken together, while the underlying business is still expected to consume cash in 2026, the combination of a leaner cost base, low CapEx, working capital release and structural measures is expected to meaningfully reduce net cash outflow and be supportive for our overall liquidity position. With that, I'd like to pass it over to Morten to talk us through the outlook.

All right. Thank you, Salman. Let's take a look at what we expect ahead. We're still facing uncertain market as we enter 2026 with limited demand visibility. We have more comfort in the short-term with a good order book for Q1 and decent visibility for Q2, but we still need to fill the second half of the year. This, by the way, is not an unusual situation to be in at this time of year in our business. We were more or less in the same spot last year, and we do have quite a bit in the pipeline that isn't landed yet. And with what we have done in terms of taking out costs, we do have a leaner cost base in both HMI and BVI with a significantly lower breakeven level. And we'll get a liquidity boost once the sale of the U.S. Aerospace business has closed.

But let's walk through the 3 main product areas and look at the demand dynamics for each of them. The hydrogen distribution part of our business serves 2 main customer types, the major industrial gas players and the emerging new green hydrogen players. During 2025, we have made focused efforts towards diversifying the customer base for our hydrogen distribution modules to reduce exposure to a handful of larger customers. And we saw the impact of those efforts in Q4, where demand is increasingly coming from smaller industrial gas and logistics companies, where the use cases remain a mix of traditional gray hydrogen distribution and emerging green hydrogen applications.

We remain positive on the long-term potential for our hydrogen distribution business despite near-term demand visibility being limited. It's better today than it was this time last year, but we're not back yet to 2024 levels. And while the order book visibility remains limited beyond the first half of '26, the current customer dialogues are encouraging. So, looking at the overall situation and the existing order backlog, we're planning for modest volume in '26 and currently expect the full year potential could be somewhat stronger than for 2025.

Transit bus has developed quite well over the last couple of years, driven by growing demand from municipal and local public transportation authorities across Europe and even some states in the U.S. In Europe, the hydrogen buses are gaining broad momentum across the continent, backed by strong regulatory support. The EU is targeting 100% of city bus sales to be zero emission by 2030. And hydrogen is a good complementary technology to battery electric. Particularly for routes with extended range requirements, hilly terrain or in hot or cold climates.

So we see an increasing number of bus OEMs introducing hydrogen platforms as part of their zero-emission offering, and that helps diversify our customer base and is also an important factor to drive adoption. Customers get more options to choose from and can select between different platforms to serve their needs. We continue to expect the overall market for transit bus to remain strong in the near to medium-term, but we expect to have lower volume on our side in '26 than in '25 due to capacity constraints at some of our customers and ramp-up limitations at others. Our overall order visibility then is good through mid-2026.

On the BVI side, given the current state of the U.S. truck market, we have, as I mentioned, limited visibility and limited expectations short-term. The overall truck market is weak for all technologies with fleet operators opting to prolong asset utilization and postpone fleet replacements in light of the economic uncertainty. But it's not all dark. Many fleet operators continue to pursue long-term decarbonization strategies, and there are still many state-level incentives for clean mobility available to support those who do. But we also realize that it's going to take time to get up to the required volume run rate to breakeven. So that's why we acted now in January to dramatically reduce the cost base and the liquidity needs for that business.

Operationally, the demo programs for the Class 8 battery electric truck have been very successful so far. We've had vehicles in testing at several leading U.S. logistics and distribution customers, and the feedback from these programs have been great. The truck has performed really well, both in terms of drivability, range efficiency and reliability. So with the trucks now delivered in Q4 and the ones on order, we'll be able to increase the number of demo programs and hopefully be able to convert several of those into orders. So we're focusing more short-term in this business now. With the orders received in January, we currently have visibility through the middle of the year. And we can float through that period with minimal use of liquidity.

We enter 2026 with a significantly lower cost base and an extended liquidity runway, which will better enable us to navigate through the year and manage the inherent market uncertainty. Our annualized operating costs going forward will be significantly lower. Working capital requirements are also significantly lower given that we can convert things we have in inventory now to cash through sales. CapEx will also be limited given that we have completed the expansion program and have enough capacity for the foreseeable future. On top, the divestment of the U.S. Aerospace business will increase liquidity once the transaction closes. And finally, we expect to conclude on the financing arrangement for the China JV in the near future, which we expect will minimize the cash outflow to China in 2026.

So, in sum, all of these measures strengthen our financial position and lengthens the liquidity runway. In terms of priorities for '26, they remain the same as they have been for quite some time. We need to fill the order book. So we've done a lot on the cost side, but we need higher revenue to reach breakeven. We will also continue working on balancing costs with the revenue outlook and continue to review and assess the business portfolio, looking for more capital-efficient ways to operate the company.

And finally, all this is with the overall aim on maintaining sufficient liquidity until we have stabilized the business above the breakeven level. It's not that long ago that my main worry was centered around how to find enough people to scale up the business fast enough. For the past year, we've had the opposite challenge. And when managing that challenge, we have become significantly more short-term focused.

The portfolio review is aiming to focus our operation around the most attractive parts of the business with good near-term profitability and cash prospects and avoid deploying liquidity to opportunities that are far out in time. At the same time, we also try to retain as much as we can of the future upside potential. We are the leading company in our space with a leading technology platform and leading customer positions. Markets look challenging short-term, but we're confident that our technology will be relevant in the future. So, we're restructuring our operation with that in mind.

Simplifying, taking out costs to match the market conditions short-term and bridge the time until markets recover. We're not fully there yet, but we're well on our way, working on the right things, taking necessary measures, and we will continue to operate in that same way going forward. So that concludes our presentation for today, and we will now open it up for Q&A. Mathias?

Thank you, Morten. So, we can start off with a question from Frank. Does the order book of NOK 728 million still include aerospace?

Yes, it does. So that still includes aerospace and the aerospace-related backlog from -- if you take from Q2 to Q4 of this year is about NOK 135 million.

And then a question from Johannes here for you, Morten. Why was the aerospace business sold to SpaceX instead of using the opportunity to generate orders here? How has the company supposed to make new orders now?

Yes. So, the aerospace market is attractive in itself. And you have to balance out what the future is going to look like with the opportunities that you see that you have internally. And as I mentioned, the very rapid growth in the aerospace business in general and then with the pressure vessels being a very critical component of any rocket or spacecraft.

In our dialogue with our aerospace customers, it's clear that they want to in-source this. So when we balance then what does the long-term look like, how much should we put into scaling this business up, we decided that at this time, it's probably best that, that business is developed under one of the space exploration companies, which gives, again, a good home for the business, but also for us, something that alleviates the liquidity concerns short-term.

Thank you, Morten. And then a question here from Enric. What is your annualized operational cost base going forward in 2026 approximately, Salman?

So we retain the ambition around cost cuts, as we've stated previously. So, we're still looking for NOK 350 million of savings compared to where we were at run rate at the end of 2024. So that's still the ambition for 2026.

Thank you. So that was actually the last question we've gotten today. So I'd like to thank you both for presenting. And then thank you all for following us today. And on behalf of Hexagon Purus, I would like to thank you all for spending time with us this morning, and we look forward to seeing you in the next quarter.

Hi, and welcome to Hexagon Purus Q3 2025 presentation. My name is Mathias Meidell, and I am the IR Director of Hexagon Purus. I will be moderating from the studio in Oslo and from the studio, I'm also joined by the Group CEO, Morten Holum, and the group CFO, Salman Alam.

The agenda for today includes, as usual, the highlights from the quarter, a company update, the financials and the outlook. We will end the presentation with a Q&A session, so please feel free to enter your questions via the function on your screen. So with that, I'll pass the word over to you, Morten, who will take us through the highlights of the quarter.

Thank you, Mathias, and good morning, everyone. Thanks for tuning in to our webcast this morning. Let's dive straight into it. Key developments in the third quarter.

Number one, we had sequential revenue growth. Revenue was weaker than we expected going into the quarter, and that's mainly a result of customer-driven shifts into Q4 and some execution-related issues driven by the major workforce reductions we implemented in the quarter. Number two, our underlying financial performance improved from Q2. We're now starting to see the impact of the cost measures we implemented in the first half of the year. And although we're still in negative margin territory, we saw a significant sequential improvement in Q3.

And finally, number three, we completed a second round of workforce reduction in HMI during the quarter. And the organization is now properly adjusted to what we think is the needed short term. We have lowered capacity and taken out costs to match the near-term demand outlook across applications and to enable profitability at lower volume. We expect to see some positive impact of this already now in Q4, but the majority of the effect will come in 2026.

Revenue for Q3 was NOK 252 million, down from last year, but 30% higher than last quarter and the highest revenue quarter so far this year. The positive delta from last quarter is mainly driven by higher volume in hydrogen distribution. We're also slowly working ourselves up on the EBITDA curve where volume is going up and costs are coming down. EBITDA in the quarter was negative NOK 116 million compared to negative NOK 161 million in Q2. And the Q3 figure includes a NOK 31 million charge for restructuring costs related to the personnel reductions.

On the order side, we exited the quarter with a fairly solid order book of around NOK 1 billion. So we expect to see a meaningful uptick in activity in Q4. Based on the order book alone, we have enough business in there to give us an all-time high revenue in a single quarter. We do expect to deliver a large portion of this in Q4. But given the cost and capacity reductions we have implemented, we will have to shift some of the volume into Q1 to ensure that we execute well with the required quality output.

Looking at revenue composition, Hydrogen Mobility made up the largest part of revenue in Q3, 37%, which is 10 percentage points higher than last year. Hydrogen Mobility today is mainly transit bus, which currently has good momentum. But the largest driver for the change in revenue mix is obviously the decline in hydrogen distribution compared to last year. We also see high activity in aerospace, which positively impacts revenue from other applications.

But overall, given the change in market environment, we're still in a situation where we're meeting high comparables from last year. And that's clearly visible looking at the Q3 year-over-year revenue bridge. We had significantly lower revenue in Hydrogen distribution compared to last year. We do see that volumes are slowly picking up from a very low first half of this year, but we're not back to the levels we saw in Q3 last year, and we do not expect to be there either in the near to medium term.

In Hydrogen Mobility, we had a positive impact from transit bus now in Q3. So the main reason for the negative year-over-year variance is the heavy-duty truck volumes that were there last year, but not this year. And in battery electric mobility, it's also more about last year than this year as we had a large one-off compensation payment related to the cancellation of a customer contract in third quarter last year. In other applications, we see continued high activity in aerospace, and good revenue contribution in the quarter, offset by somewhat lower activity in the industrial gas business.

At this point in time, we don't focus much on the year-over-year variances. The main driver for those is the significant change we have seen in the market since last year. And we're obviously in a very different place this year. And our focus is more on adjusting the cost base to the current market environment, reviewing and adjusting the business portfolio and reducing the cash spend.

Looking at the different application areas, the demand dynamics and the forward visibility vary between them. In hydrogen transit bus, the commercial momentum continues to be strong, driven by local and municipal adoption of public zero-emission transportation in Europe. A lot of this is battery electric but hydrogen adoption is also growing fast. Germany is the largest market and also one of the most supportive in terms of incentives. They recently announced a new round of incentives covering up to 80% of the cost difference between a hydrogen bus and a diesel bus.

So we continue to see healthy tender activity and a strong medium-term pipeline in Europe. But we have limited visibility beyond the current order horizon. So it's still too early to assess how much of this activity will materialize as revenue in 2026. We also see strong momentum in aerospace currently. We have strong demand from U.S.-based commercial space exploration companies for onboard storage cylinders in space applications.

The commercial launch activity has grown significantly, and we have a solid position with the most prominent space exploration companies in the U.S. And so with the combination of technology advancement and the new geopolitical situation, we expect the activity to increase significantly in the years ahead, and we already have a good order book for 2026. In Hydrogen Distribution, we see an uptick in activity and have a solid order book for Q4, and we believe in an attractive future for this business.

Hydrogen still has strong support in Europe. Market is obviously significantly lower than what we expected a few years ago, but it is, in fact, growing. And there are several green hydrogen projects in construction that are expected to come online in the coming years. And then remember that our business is also driven by transportation of gray hydrogen for industrial purposes, and the replacement of older steel-based technology with our newer and more efficient type 4-based trailers.

So we do expect to see a gradual improvement in demand for hydrogen distribution module from current levels in the coming years. But the visibility is still lower than what it has been in the past. We're currently in dialogue with customers for volume in '26, and we'll come back to our expectations for next year when we report Q4. The industrial gas business is mostly recurring annual customer demand for industrial gas bundles, for storing and transporting air gases for -- in industrial applications. It's typically a quite stable business, although somewhat lumpy in between the quarters. We have seen a bit lower volume this year and expect to come in at the lower end of the typical revenue range which correlates with the overall industrial activity in Germany and in Europe overall, which is also slower this year.

The battery electric trucking area is expected to ramp slower than what we previously expected. North American truck market overall is weak currently, and volumes are significantly down from last year for all technologies, including diesel and natural gas. Policy shift from the federal government has not been helpful for the energy transition, but electrification is not going away. Several states, with California in the lead, are maintaining their incentives for zero-emission medium- and heavy-duty trucking. And there are around 150 BEV-friendly incentive programs in the U.S. and Canada, corresponding to more than $3 billion in total available incentives.

So despite a lack of support from the federal government, there is significant support in many individual states. And the major fleets are continuing their electrification programs, and we see strong interest from many fleet operators to sign up for customer trials. The customer demo programs for the Tern RC8 with Hino continued during the third quarter. We have demo units operating with several leading logistics and distribution companies across the U.S., and these are customers representing beverage distribution, regional freight and logistics and large corporate fleets.

And the feedback from these programs is encouraging with drivers and fleet operators emphasizing the vehicle's drivability, range efficiency and overall reliability. So I'm pleased to see that the truck is performing really well and high driver acceptance is key at this stage, confirming the vehicle's suitability for demanding urban and regional delivery applications. And we're soon ready to launch the Class 6 program announced earlier this year. That truck is intended to carry the Hino brand and be available through Hino's extensive network of authorized dealers. So we plan to deliver the first batch of demo trucks to Hino now in the fourth quarter.

Moving on to the order book. As we entered the quarter, we had orders on hand totaling around NOK 1 billion, which is a bit down from last quarter, but actually higher than it was last year. It's split roughly equal between hydrogen distribution, hydrogen mobility and other applications, which is mainly aerospace. 56% is for execution this year. So we have good visibility for Q4. But as I mentioned earlier, we'll not be able to deliver all of this in Q4 as we have taken down our capacity as part of the cost reduction program. So some of it will be pushed into next year. It's unfortunate in some respects, I mean, we have enough orders to deliver an all-time high revenue in a single quarter. But it's the right thing to do, and it's better to get a more even volume spread across quarters.

The second round of workforce reductions that we announced in July was completed in Q3. Adding to the measures we already implemented in the first half of the year, we have reduced the total workforce by around 30% compared to 2024. And we recognized a restructuring charge of NOK 31 million in Q3 as part of this second round of cuts. The full P&L impact of the underlying cost reductions is not expected to materialize until 2026, but we will start to see some positive effects already in Q4.

It's always challenging to go through major workforce reductions. But this was important to align our cost base with expected demand and to establish a more sustainable operating structure going forward. While we have done a lot to adjust our cost base to match the demand outlook, we also continue to systematically review our entire portfolio. We have the strategic review process for the BVI business. That's still ongoing. And we're also going through the HMI business and the China JV, looking for ways to take out costs, to reduce capital spend considering both operational and structural measures.

The ambition remains unchanged. The portfolio review together with the cost measures are aimed at maintaining sufficient liquidity to bridge the company to EBITDA and cash breakeven.

Okay. That was the company update, and I'll now hand the word over to Salman, who will take you through the financials.

Yes. Thank you, Morten, and good morning, everyone. Let's have a closer look at the Q3 2025 results. In the third quarter of 2025, we posted revenue of NOK 252 million, which is 54% lower compared to the same period last year, but up 30% compared to the second quarter of this year. The year-over-year decline was driven primarily by lower revenue from hydrogen infrastructure and hydrogen heavy-duty mobility. Compared to the second quarter of this year, we saw more hydrogen distribution module deliveries and continued strong momentum for transit bus and aerospace. Total operating expenses ended at NOK 368 million in the third quarter. Our cost of materials ratio was 47% compared to 56% in the same quarter last year.

This quarter, the materials ratio was positively impacted by product mix and a onetime customer payment for which no associated costs were incurred during the quarter. Payroll-related expenses were NOK 187 million, but this includes NOK 31 million of restructuring costs related to the personnel reductions announced in July. Adjusting for this payroll expenses of NOK 156 million, which is about 20% lower than the same period last year.

Other operating expenses came in at NOK 62 million in the third quarter, which is 35% lower compared to the same period last year and reflects the effects of our cost reduction initiatives. Subtracting total operating expenses from total revenue, EBITDA ended at negative NOK 116 million in the third quarter compared to negative NOK 51 million in the same quarter of last year. Moving below the EBITDA line. Depreciation and amortization was NOK 68 million in the quarter, up from NOK 55 million in the same quarter last year, and the increase is mainly due to a higher balance of depreciable assets compared to last year. Losses from investments were stable in the quarter year-over-year at minus NOK 2 million and finance income in the third quarter was NOK 10 million, where NOK 5 million is related to interest income on bank deposits and NOK 5 million is related to foreign exchange fluctuations.

Finance expense in the third quarter was NOK 191 million, where NOK 62 million of that is related to noncash interest on the 2 convertible bonds we have outstanding, another NOK 9 million is related to interest on lease liabilities and other interest-bearing debt and about NOK 15 million relates to foreign exchange fluctuations.

The remaining amount primarily reflects a noncash impairment charge of NOK 102 million related to our investment in Norwegian Hydrogen and Vireon, reflecting mainly a reversal of prior fair value increases based on the recent market and company developments. At the group level, we are not yet in a taxable position and tax expense in the quarter was negative NOK 2 million, subsequently loss after tax ended at minus NOK 365 million versus minus NOK 149 million in the same quarter of last year.

Moving on to the segments, starting off with hydrogen mobility and infrastructure. As a reminder, this segment is the business unit that manufactures hydrogen cylinders and hydrogen systems for storage of hydrogen onboard or off-road or on road vehicles or for infrastructure purposes such as the distribution of hydrogen from the point of production to the point of consumption.

It also includes our industrial gas business in Europe and aerospace business in the U.S. The focus for HMI in the quarter has been on executing the cost reduction program to structurally lower its breakeven point and improve profitability going forward. In Germany, we have now completed the second round of workforce reductions, bringing the total reduction to around 30% compared to 2024 levels. The full P&L effect from these cost measures will materialize from 2026, although we're already starting to see the benefits of a leaner cost base from the first round of reductions in the Q3 numbers.

On the commercial side, revenue in Q3 was impacted by capacity constraints and customer relating -- related timing shifts with deliveries moving from Q3 into Q4, and we're also expecting some spillover from Q4 and into 2026. Based on the current order book, we expect Q4 to still represent a significant uptick in activity for the segment.

Revenue in the third quarter for HMI was NOK 233 million, which is down 55% compared to the same period last year, but up 42% compared to the second quarter of this year. The year-over-year decline is mainly driven by a reduction in hydrogen infrastructure revenue, which was down 75% year-over-year.

As we've also seen year-to-date, Hydrogen Mobility was the largest revenue component for the HMI segment also in the third quarter and made up about 40% of revenue. Within the Hydrogen Mobility segment, we saw continued strong activity in transit bus, which was offset year-over-year by lower activity within heavy-duty trucking. In the other application area, higher aerospace revenue was offset by lower industrial gas revenue, which in sum resulted in a flat year-over-year development. We see that the industrial gas business, which is a business linked to the overall industrial and economic activity is having a weaker year than usual as industrial activity in Germany and in wider Europe is also slower this year.

Turning to the right-hand side of the page, EBITDA for the quarter was negative NOK 47 million or negative NOK 28 million, which is equal to minus 12% margin when adjusted for nonrecurring items. While still negative, the underlying trend is encouraging. On the back of higher volumes and the leaner cost base, the segment returned to double-digit gross margins in the third quarter and this gives confidence that EBITDA breakeven is within reach as cost reduction measures take place and volumes improve.

Moving on to the Battery Systems and Vehicle Integration segment. This is the business unit that engages in battery systems production, complete vehicle integration of battery electric and fuel cell electric vehicles for the North American market. We also have a complete suite of proprietary key components required for electrification of heavy-duty trucking. The BVI organization has, in recent quarters and months, been fully focused on demonstration programs that we've been running together with Hino with several major U.S. logistics and distribution companies.

The feedback has been positive so far. And preparations for the Class 6 program that we announced in June is also underway, and we expect the first trucks to be delivered to Hino in Q4. Revenue for BVI in the third quarter was NOK 13 million and was primarily comprised of vehicle deliveries to Hino and lease revenue from Dallas. We recently entered into a sublease agreement with Hino, allowing them to use part of our Dallas facility for their own operations. This provides an efficient way to generate income from excess floor space that we do not expect to utilize in the near term. EBITDA for the BVI segment ended at negative NOK 30 million in the third quarter compared to negative NOK 21 million in the same quarter last year.

Zooming out to the group level and turning to the balance sheet. The balance sheet amounted to approximately NOK 4 billion at the end of the third quarter, down from NOK 4.3 billion at the end of the second quarter. On the asset side, most line items remained relatively stable with an increase in inventory, primarily driven by higher levels of work in progress and raw materials in preparation for an expected ramp-up in revenue in the fourth quarter of this year.

Cash stood at NOK 360 million at the end of the third quarter, which is down NOK 166 million from the same -- from the second quarter this year. On the liability side, the increase in noncurrent liabilities reflects the payment in [indiscernible] infrastructure of the convertible bonds. The equity ratio at the end of the second quarter was 26% and was down quarter-over-quarter impacted by losses after tax and the impairment charge that we mentioned earlier today.

Moving to the cash flow statement, which captures the effects of changes in the balance sheet and income statement. Operating cash flow for the quarter was negative NOK 115 million in the quarter, primarily driven by the loss before tax, which is partly offset by noncash adjustments. Cash flow from investments ended at negative NOK 34 million, reflecting that we're seeing the tail end of the capacity expansion program. CapEx towards property, plant and equipment was NOK 14 million, and capitalized product development was NOK 16 million, which relates to ongoing product validation and certain highly selective next-generation technology initiatives.

Cash flow from financing and currency movements was negative NOK 17 million in the quarter, resulting in a net cash flow of negative NOK 166 million and a cash balance at the end of the second quarter of NOK 360 million. As communicated in previous quarters this year, the cash outflow in the first half of the year has been significant. This was due to lower revenue, restructuring costs related to downsizing, spillover CapEx from 2024 and limited working capital release. We've also said that we expect the cash outflow to slow down in the second half of the year. And in the third quarter this year, we had the lowest cash outflow we've had in more than 2 years.

Looking ahead, revenue is expected to increase with a stronger weighting towards November and December. Much of the material for these deliveries is already in inventory. So as revenue picks up, we will gradually convert inventory into cash, with most of that working capital release expected in the first quarter of 2026. With a leaner cost base following recent cost reductions and continued low capital expenditure, we expect cash outflow to remain at a lower level going forward. With that, I'd like to pass it over to Morten to walk us through the outlook

Thank you, Salman. So let's take a look at what we expect ahead. We have good visibility for the rest of this year, and we expect the fourth quarter to yield a sequential improvement in both revenue and EBITDA. In Hydrogen Mobility & Infrastructure, it's a matter of execution. We have more than enough orders for '25, so it's more about how much we will be able to complete before year-end and how much we need to move into 2026. We do expect the largest portion to be delivered in Q4 and a smaller portion to be pushed into Q1 though.

We're also in dialogue with customers regarding 2026 volume expectations. For aerospace, we are fully booked for Q4 and also have a strong order book for '26. So the outlook there is good. The industrial gas business operates with a relatively short order horizon, but we expect this business to continue performing in line with the general industrial activity in Europe. On the battery electric mobility side, it will take some time to get visibility. We have a number of customer demos ongoing for the Class 8 truck, and we're planning to produce a batch of Class 6 trucks for Hino now in Q4 that will go into customer demo programs early next year. So it's a bit early.

The feedback from existing demos is encouraging, and the customer interest to sign up for new demos have been good. So we're hopeful that these demos will eventually translate into purchase orders. So overall, we have a good outlook for Q4, and we expect a further sequential improvement from Q3, both in terms of revenue and profitability, albeit with some revenue likely being pushed then into '26 compared to what you can read straight out of the order backlog for Q4.

And then we'll come back to the outlook for '26 when we report our Q4 numbers in the first half of February next year. We have now put a foundation in place for stabilization and gradual recovery. We have reduced costs significantly, and see the performance gradually improving with lower cost and higher volume. We have a good order book for the rest of this year, and we continue to review our business portfolio across all the individual components to focus our operation around the most attractive parts of the business with good near-term profitability and cash prospects.

This is not the quarter where we're demonstrating that all our challenges are solved. We're still navigating through rough waters, and in that situation, you focused first and foremost on steadying the ship and then you make sure that you start moving in the right direction and that you're gradually picking up speed. This is where we are. We had a very tough first half of the year, but we reacted quickly and forcefully in a number of areas. And this quarter, you start to see the effect of that on the cost reduction side.

Revenue is growing. We continue to grow the next quarter. Costs are coming down, margins are improving, cash outflow is getting lower. So we're on the right track. But by all means, we're still in challenging territory and have a lot more to do. Our overall target is to maintain sufficient liquidity to bridge the company to EBITDA and cash breakeven. And we're working intensively on several initiatives across the business, both operationally and structurally to ensure that we get there. We have respect for that challenge. It's not a given. But with the plan we have in place, if we execute on that successfully, we believe that we will succeed.

So that concludes our presentation for today, and we'll now open it up for Q&A. Mathias?

Yes. Thank you, Morten and Salman. So we can just jump straight into it. There is a question from Daniel Haugland from ABG to you, Salman. So 3 questions from me. Will there be more restructuring costs in Q4 versus the NOK 31 million for workforce reduction you took in Q3? Two, the one-off customer payment in revenues this quarter on my calculation, it seems to be around NOK 12 million. And the last one, given the workforce reductions are now completed, is it correct to assume that the entire cost cuts of NOK 350 million versus 2024, will have effect from year-end and thus full effect in 2026?

Yes. So I think the first question, Daniel, we do not expect any further restructuring costs in Q4. The second question on the one-off customer payment that is correct. That was NOK 12 million, approximately NOK 12 million in the quarter. And then when it comes to cost cuts, of those NOK 350 million, we said that about 60% to 70% of that is going to be payroll-related expenses and 30% to 40% is going to be other OpEx expenses. I think on the personnel side, you will start to see the full effect from the start of 2026.

We are already starting to see the effects on the other OpEx lines as well. Other OpEx was down 35% year-over-year. Payroll expenses was down 21% year-over-year adjusted for restructuring costs, but the other OpEx part of the cost reduction will also be continuous effort throughout 2026. So when you look at the full year 2026, our ambition is that costs will be NOK 350 million lower than what it was in 2024.

Good. Thank you, Salman. Then another question for you from Elliott Jones, Danske Bank. Can you provide more color as to the Q4 top line potential? The order book states around NOK 550 million could be delivered. However, you state some of this needs to be pushed out into Q1. What percentage roughly needs to be pushed?

Yes. I think our current read on that, Elliot, is about -- I would expect about 20% to 30% of that to potentially move into next year and then that we would execute on the remaining 70% to 80% next quarter.

And then a question from Thomas Martin at BNP for you, Morten. You noted you need to shift orders from Q4 to Q1. So presumably, it's fair to conclude, you're going to be at full capacity in HMI in the fourth quarter of 2025. Presumably, we should assume also that Q4 HMI revenues will be the ceiling for the foreseeable future given you just sort of reduced capacity?

I don't think it's right to think of Q4 now as a ceiling. I mean, if you take a step back, the nameplate capacity that we have remains the same. So it's not been a matter of taking the amount of operators down and you can also take the amount of operators up if you see higher demand and there is some time lag for that, but that's possible. And then I think the capacity that will -- let's take with the same amount of mining that we have now, if we move to Q4 in 2026, we'll have higher throughput than what we have in Q4 of this year, given that we're just coming out of a restructuring where there are a lot of new people, new roles and so forth. So I think it's wrong to think of it as a ceiling. .

And then another question from Thomas here for you, Salman. Is it sensible to expect a significant seasonal decline in the first quarter '26 versus the fourth quarter, '25 for HMI revenues? Or will the deferral from Q4 '25 enable you to maintain activity at peak levels in Q1 '26?

I think generally, just to comment on seasonality, Thomas, I mean, historically, first half of the year for us has been lower than the second half of the year. So I think we don't necessarily expect to change to that seasonality next year. I think one factor that will impact Q1 is the pushout that we just talked about, where there will be extra revenue coming into Q1 because the pushout is not cancellation of orders. It's just a pushout in timing. So that's the one additional effect that would come on top of the normal seasonality. .

And a question for you, Morten. There's more questions about China, so I think we can have this as the sort of catch-all question. So it's from [indiscernible]. When do you think the certification in China will take place? And what are the business impact you expect from that?

Yes, it's a good question that I've had different answers depending on when the questions have been asked. And it's been -- unfortunately, it's a bit difficult to predict. I mean if you take the history, it's -- the requirements for certification and the certification process overall has continuously shifted. So there have been new things coming in. And suddenly, we have a different set of rules.

We are in the certification process. And we -- in China, overall, right, we have produced -- first of all, the factory is up, the machinery is running. We have produced cylinders for the European market. So all of that is good. The local certification, we are hoping that we will be able to achieve that in 2026 and that we will then start to have volume going into the domestic Chinese market. And in the meantime, we're, of course, looking for how to utilize that equipment for other markets than domestic China. .

And then a question for you as well, Morten from Boris [indiscernible] Markovich. What is the plan for developing hydrogen refueling units for rail transport in Germany? .

Yes. So we already have refueling units that can also be used for rail transport. I mean we are in the rail segment. We have delivered to rail customers in Germany. We are delivering to rail customers in the U.S. as well. We have a portfolio of refueling units, as part of the portfolio review that we have done, we have decided to take a few of the more sophisticated part of the products, which have lot of development costs and long time to maturity. We've put a lot of those on the shelf but we are maintaining also other parts of that refueling portfolio, which is also suitable for rail. So I guess the short answer is we already have this. So, yes.

And then a question -- a long question from Niel [indiscernible] here. So on Slide 10, it states that the Tern RC8 is an ongoing customer demonstrations, but the truck launched May 2024 17 months ago. The CEO promised a few hundred trucks in 2025. The BVI revenue is NOK 30 million, including Dallas facility sublease income from -- to Hino. So a simple question, how many Tern RC8 units have been sold to paying customer outside of Hino and Panasonic test programs? .

So I think there's a lot of things there, just to have that said, the market that we're seeing now, following November presidential election, there's been a dramatic change in the market. So I think the expectations that we had going back in the day is -- was higher than what we see now and the ramp-up and the sales of that product is going to be slower. I mean, that's clear.

We have 6 customer demos that we have run through. Out of that of the decisions -- purchasing decisions that come out of that, the -- I think, we were sitting at around half of that yielding products. But I mean, these are very early demos that have come now the large demos ongoing won't be completed until we're into the first half of the year. So there are -- it's a handful of trucks that have been sold to paying customers at this point from the early demos that we had in Q3.

So that concludes -- that was the last question. So that concludes the session for today. So I wish to thank both Morten, and Salman, and everyone to -- that in the audience that joined us today. So on behalf of Hexagon Purus, I would like to wish you a good day, and we look forward to seeing you again soon. Thank you very much from Oslo.