Norsk Titanium AS (NORSF) Q4 2025 Earnings Call Transcript

2026-03-04 06:32:11 ET

Norsk Titanium AS (NORSF) Q4 2025 Earnings Call March 4, 2026 4:00 AM EST

Company Participants

Fabrizio Ponte - Chief Executive Officer
Ashar Ashary - Chief Financial Officer

Presentation

Fabrizio Ponte
Chief Executive Officer ...

All right. Welcome to the Norsk Titanium presentation. We are really happy that you are here today. My goal is threefold. So I will present to you, and I will -- we will discuss where is our market, where is Norsk Titanium today, but most importantly is where Norsk Titanium is going in the future.

So without further ado, let me start with a very quick refresher about Norsk Titanium. So we are an additive manufacturing company with a very, very specific and peculiar technology, which is able to deliver additive manufacturing features with mechanical properties that are equal to the forging, which is really, really distinctive in the marketplace. We are qualified in aerospace and defense, and we have a full-scale production capabilities and 2 facilities, one in North America and one here in Norway in Eggemoen, okay? So really, really established to really capture the growth that is coming ahead.

So let's talk about our market. We are targeting very technical spaces. So aerospace and defense are certainly our prime targets, including engines and a number of industrial opportunities. These markets are big and growing, okay? So -- and the drivers of this growth is basically driven by the fact that titanium supply is highly constrained. So there -- you have a number of OEMs that are looking for alternative solutions to support their build rates and growth plans, okay? So this is a very, very important factor.

Another very important factor is that these people are trying to do the job, not just by finding alternative suppliers, but companies that can help them approach this in a very cost-efficient fashion. And through our technology, they can achieve that. There is a new factor that is developing. And I think these days, you can read it certainly in the news. There is defense that is coming very, very strong. Titanium and specialty alloys are widely used in defense. And today, there is a need in air, in space and in navy to develop parts much faster and in a delocalized fashion. Of course, additive manufacturing and Norsk Titanium are really well positioned on that space. So the market is big, and the market is growing. I mean, it's not just intact, but the market is really, really growing. And this makes us very, very excited.

I'd like to bring in one of my customers and one of my lead targets, okay, so which is Airbus because the market is not just only growing and big, but we have customers and lead OEMs that are investing time, money and effort in order to in-source technologies in order to make that happen. And additive manufacturing is right there. I mean, what you see here is the Airbus web story, which came out, I think it was, late in January, if I remember correctly. And if you go in the article, you really understand what is the drive that Airbus has in order to put additive manufacturing and RPD, which is our technology at the core of their industrialization plan. And this is, of course, a very, very, very exciting for Norsk Titanium. We've been working with them for a long time, and we are in a position right now -- on a lead position there that is very fortunate, and it is going to help us to project ourselves in the future.

All right. So are we starting from scratch? No, no, we've been working in the last decade to establish our position. So this has been certainly a long development cycle with a lot of work with OEMs, especially in the engineering and in the research departments. But we have established really a very good position for Norsk Titanium. So far, we have delivered over 2,000 parts between aerospace and defense with 0 defect, okay? Nobody can make this claim at this point in time. We have also developed and delivered the world's largest additive manufacturing structural parts, which is in flying and civil aviation. We are very, very proud of that.

We are MMPDS listed. So MMPDS is the bible in aerospace and defense when it comes to material and processes. So today, an engineer can go to the handbook and can find all the data that he or she needs in order to design parts. So this is going to help us to translate parts into business in a much faster way. It's going to give us the credibility and the authority that is required by aerospace, defense engineer and industrial engineer to design parts on our data.

Last, but not least, we are qualified by 2 U.S. primes, okay? So these are -- our technology is established in defense. It has been used in what we say low-rate production modules, and the challenge will be to go into high rate. So this is the position that today Norsk Titanium enjoys, and this is really our starting point for the future. How do we build that? I mean, as I said before, we really worked hard in the last decade to develop this position. And we worked with our customers, especially in the engineering and R&D department. But going forward, we need to make a step change, and we really need to change gear, as we said there.

And how we're going to do that? I mean, we are going to build on -- we're going to -- building on what we already have, we're going to move forward, adopting a new operation -- operating model because at this point, we are in a very strong market growing. We have a very solid position. Now, we need to translate all of that into revenues and into commercial success. And how are we going to do that? We're going to do that with a really new operating model. So we're going to execute in a different way than we did in the past.

For one, we're not going to target just engineer and R&D -- the R&D functions with our customers, but we're going to target the entire spectrum of constituencies. So we are now working with procurement. We are talking -- we are working with program. When I say program, I mean the A350, the A320, the Boeing 787. So you need to work with all the constituencies on those OEMs to make it happen.

We are also very selective on who do we work with. We work with OEMs that are in markets that we consider very large opportunities. Again, aerostructures, engines, defense belong to that category. We work with OEMs that are pulling for our solution and RPD. They want to include RPD in their industrial platforms. And they have a plan with milestones that are agreed and shared with us. And at the end of the cycle, we have a line of sight to a price, which is going to be number of parts and revenues that Norsk Titanium is going to generate. So this is very, very different than in the past. But one thing is working with qualified and important customers. The other thing is how do we work with them.

And we are going to really establish what I call the customer engagement team. So this is a team in Norsk Titanium that is going to be allocated and dedicated to every single lead OEM and it's going to work hand-in-hand with them to help them go through their industrial road map and make sure that we deliver on those shared milestones. These teams are made of also cross-functional within Norsk Titanium.

So now, we have a commercial representative, which is keeping the relationship with the customer. We have the technical head, which is coordinating all the technical work that goes into helping them going through the road map. And then, we have program managers. Program managers are the people that internally in Norsk Titanium, when we win projects, they make sure that we can execute internally. They align operation, they align engineering, they align supply chain. It's complex, and you need people that are dedicated and really working in order to execute. So execution is really one of the new traits and one of the new focuses that we are going to have in Norsk Titanium.

What do we expect at the end of the cycle? Of course, we expect to win, and we expect to have good chances to realize our future road map. So strategy-wise, which is also revenue-wise, I want to make it very, very simple, okay? So Norsk Titanium is going to follow 3 legs, okay? So as we said, we are going to stay focused on the core. So again, the 3 markets, aerostructures, engines and defense, we want to work with lead OEMs on that core space.

Something very new, we are going to establish what we call the RPD ecosystem. So the RPD ecosystem is a deployment of our technology and our machines with those lead OEMs. So you can see the link between the core programs and the RPD. And last but not least, we are also going to focus on short-term opportunities. I mean, we are lucky to have a wealth of opportunities that always come in our door. We need to get better at winning those opportunities. So we have teams that are going to work on that.

So now, let me walk you -- let me go a little bit more into the details of these 3 legs, okay? So leg #1 is our core. As I said, it's aerospace, aerostructures, engines and defense. What you see here is basically our development cycle. And we are at different stages depending on the different lead OEM, okay? So what you see here, I think -- I'm sure you can recognize Airbus and the 2 primes we are working with and where we are qualified, so Northrop Grumman and General Atomics. Here, we are really at the end of the development cycle. We are on the tipping point that is going to take us into the commercial area.

Now, you go back over here, and you can see here that we are at the beginning of the journey in engines, and we are in launching with landing gear customers, okay? So this portion, which is also very important, will represent a very large opportunity going forward. So we want to make sure that, yes, we focus on the short term, and we realize the opportunity in the short term, but we don't forget that we want to get the full price that we have before us.

We have also OEMs in the middle, people like Boeing. I have to say Boeing was a very important driver for us a few years back. We are now working in order to identify a new path to work with them. We are -- as you can see here, there is a lot of Boeing here. But here, we have some work that needs to be done to take this company at the level of this other company. But we have contacts, we have the network there, and we are going to do just that. So -- and again, the short term, the long term, and here, the medium term that needs to go also in the short term. So this is how we are working on our core.

Let me go just very quickly into a couple of examples. One, of course, is Airbus. You can recognize possibly one of the slides that we used in previous additions. With Airbus, we need to do 3 things, okay? Number one, okay, we have qualified parts that are flying. We need to make them. We need to ship them, and we need to book them as revenues. This is number one. Number two, there are a lot of new parts. So we call it the Wave 3 that we need to convert into parts. So this is a big job that we need to do in order to make sure that we maximize the number of parts that will be converted to RPD. This is a lot of work that is going to take place in the near term.

And last but not least, I'm hopeful that you read the latest press release. We are placing a machine in Airbus, Germany, in order to help us to really expand and set RPD as their core additive manufacturing technology. We are going to do that with a dedicated team, again, commercial engineering and program, and we're going to make sure that here, you have a whole bunch of milestones. We want to make sure that we are going to deliver on every single one of them.

So what we do with Airbus is not going to be different than what we are going to do with General Atomics, okay? General Atomics is a very important defense prime in the U.S. We've been working with them for a long period of time. We are qualified. And now, we are in what we call the low rate production of certain devices. The challenge there using our customer engagement team will be to move from low rate to high rate. So we're going to work with General Atomics and other defense primes in order to go into their high rate productions, and we see that as a very large opportunity. So aerostructure and defense with Airbus and with a number of primes are really the biggest opportunity that we have before us in the next -- in the near term.

All right. So let's talk about the second leg, which is what we labeled the RPD ecosystem. I can tell you what the RPD ecosystem is not, okay? We are not planning to start selling machines to whoever comes to us, okay? That's not what we are trying to do. What we are trying to do instead is working with lead OEMs to help them to in-source our technology in their ecosystem and design specific ecosystems around the RPD technology.

So in the Airbus example, we're going to place the machine. And in the future, we're going to help them to really expand the use of RPD within their ecosystem. And we're going to work with them through placing machines, selling machines, licensing technology or whatever way is going to help them to really establish an ecosystem within their manufacturing universe in order to leverage our technology. We see this as a great opportunity. This is certainly a game-changer, and this is going to help Norsk Titanium to make a step change in market penetration, but also in revenues.

I want to say that we are not starting from scratch. We already have between 3 and 5 express of interest from very different customers across multiple industries to source the technology through an ecosystem. They all want to establish ecosystems based on RPD. And that's great news for Norsk Titanium.

Okay. I think this is what is happening in Airbus. I went a little bit ahead of myself. So we are placing a machine. The focus here is to help them to qualify the RPD process. So in the past, we've been qualified parts part by part. So every time there was a new part, we were working on the qualification of that specific part. What we are going to do now is qualify the process. And when you qualify the process, then you can qualify parts in a much faster way. And this is going to accelerate our go-to-market and our ability to convert parts into business. Okay. Yes, I think this was the main point.

Okay. The last leg is leg #3, which is about converting the rich pipeline of short-term opportunities that we have into wins. Norsk Titanium, because of our technology, because of the features of our technology, receives a number of leads that want to use our technology. So what Norsk Titanium needs to do is become better at winning those opportunities. So we are using basically the same operating model that we are applying to the core, and we have established a dedicated team whose job is to jump on those opportunities, work them and win them, okay?

So these are opportunities that are very different than the core. I mean, core typically, you have long-term programs, which are very complex and that requires quite a bit of time. Here, we are talking about opportunities that can be translated in 3 to 12 months, okay? So here, we have the opportunity to add to our revenue line in a relatively short period of time. Again, I always say Norsk Titanium is not in the business of tomatoes and potatoes, okay? So we always need to work hand on hand with the customer to qualify our material and to help them design the part.

But in these type of industries, we are talking about energy, we are talking about semiconductor, but it is really a multitude and a very diverse industry base. It takes 3 to 6 months from start to finish. So we expect this work stream to help us increase our top line in a short period of time. The other beauty of this is going to help -- this is going to help us to build muscles, okay? Because by working on short cycle and really jumping on those opportunities with a different attitude and pushing our platform to win those opportunities, we're going to build muscles. It's going to help also on the core.

So let me just -- I'm hopeful that I was able to give you a good view of what is the opportunity, where we are and what is our future. But I want also to give you an opportunity to understand what we are going to deliver and where you can measure Norsk Titanium. And we have 4 main milestones, okay? The first milestone is, of course, on Airbus. We -- as I said, we are very advanced in the discussion with Airbus. And this is, by far, the most important milestone that we have. What success is going to look like? I mean, we need to start to convert parts. We go back to the 3 points that I explained before. We need to be successful on placing the machine, and we need to bring this to the place that it needs to be, okay? So this is a very, very important milestone.

Milestone # 2, we need to go from low rate in defense to high rate, okay? So we are qualified. Now, the challenge is to go hand-in-hand with a number of defense primes from low rate to high rate. We need to deploy the RPD ecosystem. I mean, in the next, let's say, 2, 3, 5 years, there is a lot of work that we need to do. We are starting with Airbus, but this is going to expand to other 2, 3, 4 other lead OEMs. So this is very important. This is going to be a game-changer for us. And we need to make sure that we have a very structured road map. We deliver all the milestones in that road map.

And then last, but not least, we need to convert short-cycle opportunities. This is going to happen this year, next year and the year after. And I think we need to be able to demonstrate that we can not only get those opportunities, but win them and translate them into revenues. So this is the story about Norsk Titanium, about the market, about where we are, but most importantly is where we are going. And the difference is really about more traction from the market because I can tell you that, especially from aerostructures and from defense, we see -- and also from engines, we see really, really more traction than we saw before, especially from defense. Strong interest from our customers and from lead OEMs that have decided to include RPD in their industrial platforms. Now, it's all about execution and making sure that we make it happen. So having a new operating model that is going to enable that is fundamentally important.

Thank you for today. And I think I did okay. I'm 22, 23 minutes in, so we have another 5 or 6 minutes for Q&A. Thank you.

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