For Nolato, 2025 was a year when the Group advanced its position in line with our new financial targets, despite a turbulent global landscape at times. Geopolitical tensions – and, not least, the uncertainty surrounding tariffs and trade barriers – have impacted our customers’ flows and business. At the same time, the Group’s broad geographical footprint combined with our well-diversified portfolio, with customers in many different industries, helped to limit the impact on our business. Despite strong currency headwinds, we succeeded in improving our profitability through strengthened margins. Overall, the Group stood strong in turbulent times.

"To reinforce Nolato’s advancement up the value chain, we continue to pursue an active and selective acquisition agenda."

During the year, the Board of Directors decided on new financial targets that clarify our ambition for Nolato to continue to grow with increased profitability in the long term. Over a business cycle, annual organic growth is to exceed 8%, while EBITA margin is to exceed 12%. Through efficient resource utilization and disciplined capital allocation, the objective is also for return on capital employed to exceed 15% over a business cycle. As we summarize 2025, we see that we took a significant step in strengthening our profitability and reached 14.2% – fully in line with ambitions for the year. Underlying organic growth increased by 2%, which is a step toward our long-term target of 8%. For the full year, Nolato achieved sales of SEK 9,462 million (9,664) with an operating profit of SEK 1,065 million (958), equaling an operating margin of 11.3%.

Working closely alongside customers is the key to success

Our strategy for attaining our targets is for Nolato to be the customer’s first choice of innovative partner in sustainable design and production. During the year, the Group advanced its positions. Strong presence in all regions is fundamental to our ability to serve large global customers, although the key to success is ultimately about early involvement in customers’ development processes. During the year, our organization was reinforced to better support their development work. By proposing solutions to customers that improve resource efficiency and cut both costs and carbon footprint, we can strengthen our own as well as our customers’ business. In this respect, Technical Design Centers (TDC) continue to play a key role and the organization was enhanced and expanded during the year.

In the Engineered Solutions business area, a global sales function has been established to sharpen focus on business in which our expertise and capabilities for delivering comprehensive solutions are valued. In Medical Solutions, manufacturing and assembly of complete systems – what we call “box build” – is already an important part of our business, with the Drug Delivery market area at the forefront. At the same time, we also see large potential in other areas such as consumer electronics. We also see increased opportunities for combination deals involving Materials, for example. Our advancement up the value chain is a core element of our strategy and a long-term effort that contributes to sustainably higher margins and increased growth.

To support this advancement, expansion of our facilities in Malaysia, Poland and Hungary continued. Malaysia is becoming an increasingly important hub in Asia, not least as more customers seek redundancy in their supply chains, guided by a “China plus one” approach. Poland is a large market and a fast-growing country that serves as the gateway to Eastern Europe. In Hungary, we have expanded to serve a major existing customer in medical devices used to administer medication for the treatment of overweight and diabetes. During the year, validation runs started at the Hungarian facility. According to plan, this work will continue in the first half of 2026 to ensure required quality ahead of the start of commercial production.

Strategic acquisition and sustainability agenda adds value for customers

To strengthen Nolato’s advancement up the value chain, we continue to pursue an active and selective acquisition agenda. In the past, our acquisition strategy has focused on building geographical reach to enable meeting the needs of customers on all continents. Today, focus is on complementing the existing business with new expertise in materials and technologies that strengthens our offering and enhances value added. At the same time, we are not averse to divesting operations where we do not see strategic and financial potential – in order to free up resources for areas with better long-term prospects instead.

For Nolato, structured and ambitious sustainability efforts are both a business-critical tool and an important competitive instrument. In 2025, we made clear progress – new ambitious sustainability goals with a horizon to 2030 were set, including net zero targets approved by the Science Based Targets initiative. The proportion of renewable electricity increased further during the year, now amounting to 99.9% of the Group’s total electricity consumption. At the same time, our absolute emissions in Scope 1 and 2 fell by 83% from 2024. Our ambitious sustainability work has been validated externally through improved ratings and a maintained gold level in EcoVadis, an upgraded rating in CDP and by the Financial Times once again naming Nolato as a European climate leader.

During the year, we made clear progress in terms of margin, while growth did not yet meet our long-term targets. Our business model is based on longstanding partnerships, which means that it takes time to establish partnerships and scale business. Ahead of 2026, there is a clearer shift in focus toward growth and acquisitions. With our broad business base, we are soundly equipped and well positioned to continue our growth journey – even in a global environment of persistent geopolitical uncertainty – and I look to the future with confidence. Finally, I would like to thank all our employees for their outstanding contributions over the past year. 

Torekov, April 2026

Christer Wahlquist President and CEO 

It is gratifying to see that both our business areas continue to grow organically despite a persistently challenging operating environment. At the same time, EBITA margin rose by a full 2.2 percentage points to 12.0% from the comparative quarter, meaning that we are already in line with the financial target presented at our Capital Markets Day in March. It is highly satisfying to note that strategic price adjustments, implemented cost adjustments and focused efforts throughout the entire supply chain are yielding the desired effect on a broad front, in terms of both sales and profit.

In the Medical Solutions business area, sales increased by 2% adjusted for currency in the third quarter, representing 56% of the Group’s revenues. At the same time, EBITA margin increased by 1.4 percentage points compared with the same quarter last year and amounted to 12.1%. We continue to invest in future growth by expanding our capacity in Hungary and Poland and also by establishing operations in Malaysia. The latter strengthens our capabilities for further growth in Asia, as well as our global production flexibility. In terms of Hungary and our previously communicated customer project, this is proceeding according to plan and we have already started validation deliveries in the third quarter. It is estimated that these deliveries will be at around the same levels in the coming quarters and then subsequently increase.

Engineered Solutions sales rose by 2%, adjusted for currency. Sales to the automotive industry increased through higher project invoicing and an upbeat performance for the Hygiene market area, while at the same time our previous initiatives in consumer electronics in Asia are yielding results. Materials saw lower volumes in the quarter in the Automotive segment, resulting in slightly negative growth. EBITA margin for Engineered Solutions rose by a full 1.8 percentage points to a strong 11.6%. Implemented cost adjustments, heightened capacity utilization and advanced market positions contributed to the strong margin growth.

Cash flow after investments was slightly lower than last year; note, however, that we are continuing our significant planned investments. Net financial liabilities in relation to operating profit (EBITDA) amounted to 0.6x, thus remaining low. Our acquisition strategy has, in the past, focused on extending our geographical reach to ensure that we can meet our customers’ needs on all continents – a position we have now established. Going forward, focus will shift to complementing our existing business with expertise in new materials and technologies.

Overall, we will continue on Nolato’s strategic journey with increased profitable growth in focus, based on our global capabilities that enable directing business and production to the regions that best meet customers’ needs. Besides, we have a strong financial position that gives us flexibility and enables investing both in new customer projects and bolt-on acquisitions.

It is gratifying to note that organic growth reached 4% in the second quarter, after having been negative in the first quarter of the year. At the same time, the EBITA margin strengthened by as much as 1.6 percentage points to 11.6% in relation to the comparative quarter. It is highly satisfying to note that strategic price adjustments, implemented cost adjustments and focused efforts throughout the entire supply chain are having the desired effect on a broad front, in terms of both sales and profit. The foundation for continued profitable growth has been laid and we are now making several investments for future expansion.

In the Medical Solutions business area, sales increased by 5% adjusted for currency in the second quarter, now representing 56% of the Group’s revenues. At the same time, the EBITA margin increased by as much as 1.7 percentage points to 12.6%. We will continue along our profitable growth journey with innovation and sustainability in focus, and are now investing in future growth through expansion in both Hungary and Poland, and by establishing operations in Malaysia. The latter strengthens our ability to grow further in Asia, as well as our global production flexibility.

In the Engineered Solutions business area, sales adjusted for currency increased by 1%, even though the Automotive market area continued to exhibit lower volumes. The Hygiene market area has performed positively, while our previous consumer electronics initiatives in Asia are yielding results. Materials increased organic sales by 6%. EBITA margin for Engineered Solutions rose by 1.2 percentage points to 11.2%. Implemented cost adjustments and advanced market positions contributed to the strong margin growth. Furthermore, we have recently decided to expand the business area’s production in Malaysia which will jointly house Medical Solutions’ venture. Production is scheduled to commence in the second half of 2026.

Although the geopolitical landscape and ongoing trade war create general uncertainty, Nolato stands well equipped. We have a strong financial position and a geographical presence that gives us both global capabilities and redundancy to direct business and production to the regions that best meet customers’ needs. We are thus also positive on the remainder of the current year.

Gratifyingly, our EBITA margin increased by as much as 1.3 percentage points to 11.0% in relation to the comparative quarter. Fundamentally, we have a tried-and-tested business model and it is positive that our strategic price adjustments, cost adjustments and focused efforts throughout the supply chain are bearing fruit. The Group’s net sales, adjusted for currency, decreased by 1% in the first quarter.

In the Medical Solutions business area, sales increased by 2% adjusted for currency in the quarter, now accounting for 57% of the Group’s revenues. We will continue our profitable growth journey with innovation and sustainability in focus – a strategy that is validated by us having won significant customer contracts. These factors contributed to an increase in the EBITA margin of a strong 1.9 percentage points to 12.2%.

In the Engineered Solutions business area, sales adjusted for currency decreased by 3%; as expected, this was driven by reduced volumes in the Automotive market area. Materials increased organic sales by a full 12%. This was thanks to a strong performance for new products and technological areas in Automotive, as well as support from a recovery in Telecom. A favorable product mix and cost adjustments, particularly in the Chinese operations, helped strengthen the EBITA margin by 0.6 percentage points to 10.1%.

Cash flow from operating activities was in line with the previous year, despite an increased working capital requirement at the end of the quarter. Net financial liabilities in relation to adjusted operating profit (EBITDA) amounted to 0.5x, and thus remained low. After the end of the quarter, fears of a global trade war have increased significantly. It is currently difficult to predict how events will unfold, even though Nolato is not impacted by any significant direct effects. We have production and deliveries at several locations both inside and outside new tariff areas, and can thus support and assist our customers with finding the best solutions.

At our Capital Markets Day in March, which can be viewed on our IR pages, the Board of Directors set new financial targets. Annual organic growth is to exceed 8%, EBITA margin is to exceed 12% and return on capital employed is to exceed 15%. All over a business cycle. Our flexibility, global production capacity and close customer relationships, together with a strong financial position, enable us to invest in both new customer projects and bolt-on acquisitions. The foundation has been laid for increasingly profitable growth over time.

2024 was a year marked by many steps in the right direction, with sights set on achieving Nolato’s financial targets through an even greater focus on profitable business and cost savings. Although the market featured a relatively cautious stance among customers, we improved our key performance indicators – a clear sign that we are on the right track.

Nolato’s EBITA margin rose to 9.9% with the target of exceeding 10.0%. Our cash conversion strengthened to 86%, thus overshooting the target of 75%, while our equity/assets ratio improved further to 59% – well above the target.

Nolato’s strategy is to be the customer’s first choice of innovative partner in sustainable design and production. We achieve this thanks to in-depth knowledge of our customers and early involvement in their development processes, and by our strong presence in all regions, enabling us to serve large global customers.

Nolato’s Group-wide Technical Design Centers (TDC) have been an important factor in keeping developments on the right track. In 2024, we reinforced the TDCs’ capacity by adding expertise in electronics, and opened a new Technical Design Center in Asia. With the help of the TDCs, we can guide our customers already in the design stage, providing us and our customers with competitive advantages. The ability to manage complex production also helps us to gradually increase the share of business for which we are entrusted with producing complete systems. This has so far been most apparent in the Medical Solutions business area, but is also expected to gain importance for developments in Engineered Solutions.

Merged business areas boosts potential

During the year, we formed the Engineered Solutions business area. The merger is logical because the formerly independent business areas Integrated and Industrial often met the same customers with similar needs and challenges. Engineered Solutions provides customers with a qualified development partner with global supply capabilities – a change that has already resulted in more new business dialogs about complete solutions.

Engineered Solutions had a stable performance during the year, despite a weaker market in both the automotive and consumer electronics sectors. The restructuring of operations in China continued successfully during the year. By establishing new production capacity in southern China, we have now laid the foundation for profitable and growing business. For Materials, the expansion of the business, aimed at creating long-term growth, continued favorably. Materials saw robust growth of 10% during the year, driven by a number of new projects in areas including the automotive industry, and a recovery for telecom in the second half of the year.

The Medical Solutions business area progressed in the right direction, with strengthened profitability during the year, not least thanks to efforts to boost margins n the US business. At the same time, we see potential to increase growth once the supply chain challenges that still affected the business area are resolved. Our strength in Medical Solutions was cemented through a collaboration agreement with a major existing customer in medical devices used to administer medication for the treatment of overweight and diabetes. As a result of the agreement, we are now investing in increased production capacity in our Hungarian operations. Nolato’s position is based on a long-term perspective, customer understanding and global presence. Experience gained in Medical Solutions – for example, building complex subsystems in medical technology to high quality standards – inspires other parts of the Group. At the same time, Medical Solutions can learn from the faster pace of business exhibited by Engineered Solutions. Nolato’s strength lies in the experience, knowledge and capabilities inherent in its operations as a whole.

For many of the new projects we gain and actively pursue, our global presence is paramount. In 2024, we established Nolato in India and expanded in several locations. Our acquisition strategy has, in the past, focused on extending our geographical reach to ensure that we can meet our customers’ needs on all continents. Going forward, focus will shift to complementing our existing business with expertise in new materials and technologies. We have an established and well-functioning internal process and continuously evaluate opportunities for bolt-on acquisitions.

"We look forward to the opportunities to take new steps in Nolato’s development, with our focus now on strengthen the conditions for profitable growth."

Sustainability generates new business

For Nolato, ambitious and structured sustainability work is not only a matter of detailed reporting, but also a strong argument in our discussions with customers. With in-depth understanding of materials, we can advise customers on solutions with a lower carbon footprint – an area where we are seeing growing demand. In 2024, we identified science-based emissions targets in line with the Paris Agreement, which have been validated and approved by the Science Based Targets initiative (SBTi). This is further testimony to our high ambitions in sustainability and our long-term commitment to further improving our sustainability efforts.

The geopolitical factors and megatrends that have left their mark on 2024 will also affect the business climate this year. Given these conditions, Nolato is well equipped, with a geographical presence that gives us both global capabilities and redundancy to direct business and production to the regions that best meet customers’ needs. We are therefore positive on full-year 2025. We look forward to the opportunities to take new steps in Nolato’s development, with our focus now on strengthen the conditions for profitable growth. We expect a maintained profitability improvement in combination with growth for both our business areas. I feel confident that Nolato is on the right track and would like to extend my great thanks to all employees for their tremendous commitment during the year.

Christer Wahlquist
President and CEO