4C Group AB

Good morning and welcome to 4C Strategies Q2 earnings report. As we mark the end of the half year, we've gathered here in Stockholm today to give you a presentation of the quarterly numbers and a little bit of an outlook. And I'm joined here today by our CFO, Veronica Wallin.

Thank you, Jonas. And great to be here. I look forward to go through the Q2 numbers together with you.

and great to have you on board on the team as well. So what we'll take you through this morning is a bit of a highlight section first. I'll go through both some business highlights, some operational highlights, but also then looking into the numbers. We will then take you through the different segments around the world And then we're going to do a bit of a more of a deep dive into the actual numbers, which Veronica will lead on with a bit of commentary. And then we'll end with some comments on the outlook and how we're moving forward. So a packed agenda. And again, thank you, everyone, for joining. I know it's in the middle of the summer season here in Sweden. So really great to see people taking the time of that to come and listen to our report. So in terms of Q2 highlights for 4C, we've had quite a busy quarter. It's been quite a high turmoil, as everybody's obviously aware of, but we have done a number of... strategic participation in key events and exercises. So we've supported in our defense business 15 and more actually major exercises across the world. Some of them really substantial and notable like the Mediterranean Strike 25 and also now started Talisman Sabre and the lead up to that. in the Asia-Pacific region. Now, these are obviously the core of what we do here at 4C in terms of that global training and exercise management tool and that delivery to the armed forces. So to be able to participate in those exercises and showcase our capabilities around the world is really, really important. And we've had a very busy season in the first half and especially during the second quarter of 2025. We've also here in Sweden, we were participating in the Almedalen event, which were at the end of June, where you can see on the picture, we had really good discussions with both the head of the Swedish Armed Forces and also the Civil Contingencies Agency. And I think that event for me as well this year really cemented where we're going as where Sweden is going as a nation, how we will be able to participate in that as a company and really putting a focus on the key areas where we operate and where we have been operating for a long time within both the capability development within armed forces, but also in terms of resilience and the wider resilience requirements that's coming throughout society. So really positive discussions during that week. And I think we'll see a lot more interesting events taking place during the second half of 2025. If we then focus on our defence expansion, obviously for 4C, our defence business area is the largest revenue generating one. And we're seeing a growth continuously within that area. Now, it's important to make the point as well, and we'll come back to it again later, that we have yet to see a full convergence of the political promises and everybody's discussions around spending and how that's taking place. But we have During Q2, we have signed a new additional NATO country as a customer. We've continued on our COTS journey in the US defence space, which is key to our future growth and is also progressing well. We've also had another contract, as stated on here, but with the Swedish armed forces to develop additional capabilities together with them. And we have used our defense product in terms of training and exercise management to win a counterterrorism contract within the APAC region, which is, and I'll come back to that later as well. In addition to all of this, which has kept us quite busy, we've also really been pushing the AI first strategy, which we're implementing throughout the organization. So we are integrating AI actually into all of our products, both in the defense and the resilience space. We've announced a chief AI officer internally to make sure that we push that progress and that we continue to implement and to sort of insert AI into all parts of the organization. We have also conducted a live war game with our own products, our 4C AI assistant in a NATO country where we actually ran the full war game and saw the benefits of being able to utilize that within a live war gaming scenario. And we've made significant internal advancements on both the engineering, but also on sales and delivery about how we can harness these new technologies. So quite a busy quarter and really, I think, a lot of really good progress in terms of where we are going and how we're progressing towards our strategic objectives. If we focus in on the actual numbers, so 4C in brief for the quarter, we had yet another quarter where we achieved the highest rolling or last 12 months of sales ever for 4C, so 373 million. In Q2, that amounted to 75.6 in net sales. We saw a stable ARR between Q1 and Q2, and we also remained relatively stable when it comes to the software revenue percentage. We had a negative result of approximately 16% on the EBIT margin and that's comparative to minus 54% last year. So a significant improvement and still a positive EBIT if you're looking at it from a 12 months perspective in the LTM. What I think also is interesting, as you can see on the screen, is we've seen a continuous uptake in the interest in what we do, not only in the macro trends on the market, but also in the interest in 4C as a company being traded on the market. So you can see the shareholders are continuing to rise in numbers, which we obviously are very proud of. as well. So those are the numbers. We'll come back to them in more detail in a little bit. Veronica is going to guide you through that. But just before we do that, I'll take you on a whistle stop tour around the world with a little bit more information about our different segments. So starting in EMEA, as I mentioned, we've signed a new NATO country as a customer within the training and defence, we're in training and access management within defence. We're really excited about this one. It's an initial stage contract, which we believe will grow. It's our second additional contract within the space in the year. And we've got two additional European countries that we are right now negotiating with and looking to close within the year. So we can really start to see that the initiatives that are coming throughout Europe and the rearmament and the rebuild up in Europe is starting now to trickle through into the training and exercise domain as well. So more to follow on this. I mentioned we had a new contract just at the end of the quarter with the Swedish Armed Forces, where we will continue to support them and looking forward to also enhancing that support as we move forward. But a good call off from our framework agreement there. And as I mentioned as well, we've had a very busy quarter when it comes to deploying our tools and our tool sets on these major exercises around the world. The ones mentioned here was on an Italian aircraft carrier in the Mediterranean where the British the Royal Navy strike group which is now deployed to Asia Pacific and as part of their exercise in Australia were going through their certification and all of this was run through the products that we are providing something that we're obviously really really proud of and it also provides a significantly good shopping window to other potential customers. Shifting then to APAC Predominantly, Australia is still our main business area. We did sign, as I mentioned, an agreement with the Australia New Zealand Counterterrorism Committee. This is for our defense product in terms of running exercises and evaluating exercises. It's our first really big or significant contract with a counterterrorism unit. And I think this opens up opportunities for the future as well, but also cements our position within the public space in Australia. So really a good opportunity to further break into that area. We've talked about Talisman Sabre. That exercise is now, as we speak, ongoing. It's been a busy lead-up phase, but it gives us a good opportunity and we're looking forward to what's going to be on the follow-on from that. and also seeing a growing exercise market at large in Asia Pacific, predominantly in Australia and New Zealand. If we move to North America, we've talked a lot about over the last couple of quarters about our COTS, so our commercial off-the-shelf offering that aligns well with the sort of the macro winds which are blowing in America at the moment with a new US administration looking to buy things that is proven and that's already working. And we are seeing good opportunities coming from that. We've extended contracts with our current COTS customers. And we're also looking towards the both third and fourth quarter of 2025 to continually grow that market. And I think we're in a good position to be able to do that from a Q2 perspective. We aligned a lot of opportunities. There was still a bit of uncertainty and some challenges in decision making. in terms of the sort of the turmoil with are they going to pass the big beautiful bill or not? Now that is done and we're moving forward with that. We're also seeing a lot of the same within the resilience space. But I think now if we look forward, we used Q2 quite heavily to put us in a good position to be able to capitalize on opportunities moving forward. Finally then, in our expert services, very busy, a lot going on. We've signed contracts with the Swedish Transport Administration for a multi-year commitment in terms of helping out with business continuity and war planning. We have signed a number of new contracts at the end of the quarter as well. We've got a significant order backlog and an order book for the remainder of the year. And I think also very positively is that we're seeing quite a substantial continued increase in our average chargeout rate on our expert services. So that has grown over 20% compared to the 12 months in Q2 last year. we would have had an even stronger quarter within the expert services domain had it not been for some challenges when it comes to recruitment and to refill some of the positions which has turned over over the last year. So positive development within expert services. And really looking forward to seeing that business area grow as it is a key component in terms of continuing both what we do within that specific field, but also as a complement to our resilience product predominantly and how we expand that and extend that into further market areas. So busy area all around, a lot going on during the quarter and a lot to come as we move forward as well. So moving into the financials, and I'll hand over to Veronica, and I'll let you take us through some more details on that slides.