Addnode Group AB (publ)

and welcome to the presentation of the interim report for the second quarter for Adnord Group. I'm Johan Andersson, CEO of Adnord Group, and I also have with me Lotta Hjallarid, who's the CFO of Adnord Group. We'll walk you through the interim report for the second quarter. We will end with the Q&A and also you will find in the presentation an appendix with acquisitions, shareholders and share performers. For those of you who are new to Adno Group, I would like to inform you that our reporting currency is Swedish crowns. Before we start with the Q2 report, I would like to give you a brief overview of Adno Group. As a group, we provide digital solutions for a sustainable future. We generate sustainable value growth by acquiring new businesses and actively support our subsidiaries to drive organic growth. We are organized in three divisions. Those are design management, product lifecycle management, and process management. We believe... Sorry about that. We believe in the centralized governance structure. The companies in ADNO Group provide digital solutions for sustainable... Sorry about the mix with the technical lab, but we're back on the right slide now. The companies in ADNO Group provide digital solutions for sustainable design and product lifecycle management, management of real estate and facilities and public administration. The foundation of the group's overall offering of digital solutions consists of both proprietary and partner-owned software. We work continuously on enhancing our portfolio of proprietary software while simultaneously consolidating our offering by developing applications that can be used in combination with software from our partners. We complement this with a strong service offering based on a high level of skills, long-term experiences, and solid industry knowledge. Rolling 12 months, our net sales is close to 7 billion, and almost 70% of our net sales is recurring revenue. In the second quarter, EBITDA amounted to 110 million compared to 154 million last quarter. EBITDA adjusted for restructuring costs in the PLM division was 120 million. The weaker earnings were primarily due to lower net sales in our design management division and expenses for a structuring program in our PLM division. In design management, lower net sets were primarily due to weaker demand from customers in the construction industry, longer sales cycles, and a significantly lower share of multi-year agreements relating to third-party products. Design management also had a tough comparative quarter. The PLM division achieved organic growth, but as previously reported, work to increase profitability is ongoing. We estimate that the restructuring cost for implementation is about 20 million, of which 10 million were recognized in the second quarter of 2023. The estimated yearly cost savings is around 40 million, with full effect from first quarter 2024. The process management division reported somewhat better earnings than the previous year. In July, we also closed the acquisition of Team D3 with net sales of US$120 million. It's a natural next step after our acquisition of Microdesk in 2022. Over the past quarter, we also increased our credit line by 1 billion SEK to 2.6 billion and extended our existing credit facility. And with that, I would like to hand over to our CFO, Lotta Jaderid.

Thank you, Johan. I would like to start by sharing a few more details on net sales. In the first graph, we have set out net sales for the second quarter over the last five years. As you can see, the current quarter total 1.5 billion in net sales, corresponding to a total growth of 4%. Recurring revenue demonstrates a slight decrease compared to previous year, deriving from weekly sales of Alphadeft Solutions in the design division. Recurring revenue continue, however, to represent a considerable portion of net sales, 65%, which gives a stable foundation in our business model. As Johan already has mentioned, the portion of multi-year deals in the Autodesk business was lower than previous year. And since revenue for the entire multi-year agreement is recognized when the contract starts in accordance with governing accounting principles, a lower share of multi-year deals has an adverse effect on Netsafe's recurring revenue as well as EBITDA. It's also worth mentioning that the Netsafe deriving from Autodesk solutions can vary quite a lot over different quarters. Firstly, the contract base volume that is up for renewal differs from quarter to quarter. And secondly, new sales can vary quite significantly over time. From time to time, our partner Autodef also introduces different rebates and other incentives which influence customer behavior. The first graph also sets out that there was a growth in both license revenue and service revenue compared to previous year. The growth was both acquisitions driven and organically generated. In the graph to the right, we have set out the breakdown of net sales by geography. Sweden is still our single largest market with all three divisions operating, representing 33% of total net sales. But after the last couple of years acquisitions in the UK and in the US and the consecutive organic growth, we are now a true international group with almost 70% of net sales outside Sweden. The acquisition of Team D3 will considerably increase our group's penetration of the US market. Back to you, Johan.

Thank you, Lotta. And we will now go into further details in the three divisions of Admin Group. So looking at design management, we had a challenging quarter. Net sales decreased by 3% to 778 million in the second quarter. Organic growth was negative, amounting to minus 6%. But adjusted for currency effect organic growth was minus 9%. EBITDA decreased to 48 million and the EBITDA margin reduced to 6.2%. Design management had a tough comparable compared to Q2 2022 when we saw a growth from 40 to 80 million in EBITDA. But lower net sales and weaker EBITDA compared to previous year were mainly due to, as mentioned before, lower sales of Autodesk agreements because of a slower construction market and longer sales cycles. Due to an uncertain market, investments in construction and civil engineering projects are now increasingly being deferred. This means that although most customers are renewing their agreements, some are designing to downscale volumes. The share of three-year agreements sold was lower than previously. which also may be a result of greater caution impacted by economic conditions. We also perceive that Autodesk's change to its payment model for the three-year agreement at the end of March 2023 had a negative impact on sales in the transition to the new terms. The Adler Group company Symmetry, including Microdesk and Team D3, has now roughly 25,000 customers. New outlets contracts are signed and contracts are expired or renewed all year round. But new or renewed contracts could be different in regards to both number of users and which software and applications they cover affecting reporting net sales. Three-year contracts are typically chosen by customers with established teams and long-term projects as it assures uninterrupted workflows Essentially, no risk of losing access if missing renewal and automatic product updates. In the division, you will also find the company TRIBIA and SVG. TRIBIA are providing collaborative solutions for construction, civil engineering, and ServiceWorks Global are providing digital solutions for facility management. And that's own software, and they have stable progress in the second quarter. And as we mentioned, we have recently closed the acquisition of Team D3. And through both organic growth and acquisitions, Anna Group's company Symmetry has grown to become the world's largest Autodesk partner with a strong portfolio of complementary proprietary software related service. The acquisition of Team D3 with net sales of US dollars 120 million was a natural step after our acquisition of Microdesk in 2022. Microdesk established symmetry in the USA, especially in the AAC segment and on the east and west coast. The acquisition of Team D3 has consolidated symmetry's position in the manufacturing and process industry segment and also geographically in central USA, meaning that we are now having representation more broadly across the US and we are covering both AAC market and the manufacturing markets. Symmetry's proprietary software, such as Navi8 and Sovelia, are now an attractive offering to both Microdesk and Team D3 customers on the US market. Symmetry in total now has over 400,000 daily users of the software that we provide to 25,000 customers and services being provided by 900 employees. We expect the acquisition of Team D3 to have a positive impact on AdWords Group's earnings per share from the third quarter of 2023. I'd like to take a moment also about other investments being made. The foundation of Android Group's sustainability agenda is to deliver digital solutions for customers, enabling them to design, produce, and manage sustainable buildings, facilities, infrastructure, products, and also services for the customers and for its citizens. We do big acquisitions like Team D3 that support our sustainability agenda, but we also make early investments in area where we can get a payoff on our market presence, like Bimify, an AI solution for large-scale digitalization of existing buildings and infrastructure. BIMify is developing a digital platform for creation and maintenance of digital building models that is powered by machine learning and automated technologies. BIM models drive sustainability of the built environment and building account for 40% of energy consumption and over 90% of buildings are not yet digital. So there's a huge market opportunity out there. Other group companies like Symmetry, ServiceOS Global and Trivia has a good potential to leverage on BIMify solutions than digitalizing existing billing for our customers, enabling digital twins and lifecycle management. So with that, moving over to the PLM division, who had a solid growth in the quarter. But EBITDA was impacted by low utilization and the restructuring that we are performing. In the second quarter of 2023, net sales increased to 468 million. It was a growth of 19%. Organic growth was 13% and currency adjusted was 6%. Market conditions in Germany, UK and USA were stable in the quarter. The demand in the Nordics was weaker. The division saw continued demand for PLM systems from customers, both established companies and startups, like managing companies and managing electrification investments in the vehicle and transportation industries. The trend of customers increasingly demanding time finite leasing licenses instead of the previous licenses purchases with a perpetual right of use continued. service revenue was somewhat higher than last period. As previously reported, restructuring measures are ongoing in division to increase profitability by adapting the organization and the cost structure. The restructuring cost for implementation are estimated at approximately 20 million. 10 million was recognized in the second quarter, and we expect to recognize another 10 million in the third quarter. The estimated yearly cost saving is around 40 million, and it will have full effect from first quarter 2024 and gradually from now. EBITDA in the quarter decreased to 20 million, and the EBITDA margin went down to 4.3%. But if we adjust for the restructuring cost, it was 30 million in the quarter and the EBITDA margin of 6.4%. Then looking at process management, we continue to have an organic growth and increase the EBITDA. Net sales increased to 320 million, a growth of 8%, organic growth was 5%. Municipalities and public authorities show some restraint in terms of investment, and there were fewer tenders than in the previous year. But the division's good and well-established relationship with the large public sector customer base frequently present opportunities for recurring sales and expansion of current assignments. EBITDA increased to 60 million and the EBITDA margin was 18.8%. The division's businesses are well positioned in public sector tenders coming forward, owing to their attractive digital solutions, in-depth experience and good references. The division is continuing to invest in enhancing its customer offering. And an example of that is the partnership with S3, the global market leader in geographic information systems, software, location, intelligence, and mapping. This week, S3 holds their annual user conference in San Diego with some 20,000 participants from the worldwide. The agri-group company, S-Group Solutions, was recognized for their outstanding work with the new generation of JEO SECMA for water and sewer systems. S Group solution has applied Esri's latest technology to develop a state-of-the-art solution, which helps Sweden's municipality solve existing and future challenges in securing access to our most valuable resource, our drinking water. And with that, I would like to hand over to Lotta again.