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.

Thank you, Johan. I would like to continue with an overview of the consolidated cash flow. The operating cash flow for the second quarter amounted to 227 million, which was slightly better than in the same quarter previous year. A favorable change in working capital was the contributor to the increase. Cash conversion rate, that is operating cash flow to EBITDA, was about 90%. Already in February this year, we communicated that Symmetry's and Microdesk partner Autodesk altered its invoicing and payment terms for software agreements lasting more than one year, commencing March 27th. Payments both from customers and to Autodesk are now intended to be annual, even if the customer signs three-year agreements. This implied an initial negative effect on cash flow, but no change in revenue recognition principles, EI, revenue and cost, for the entire agreement value will continue to be recognized immediately when the agreement commences. The impact of the new payment model on Admin Group's operating cash flow was, however, limited in the second quarter of 2023. A portion of the three-year agreements reported in the second quarter were sold before implementation of the new invoicing and payment model. Additionally, several customers choose to pay for the full three-year agreement upfront, despite having the option to spread payments over three years under the new model. In summary, we have not seen the full effect of this change yet. Cash flow from investing activities in the second quarter amounted to 82 million, primarily related to development of proprietary software and earn-out payments to sellers for acquisitions made previous years. The minority investment in startup Beamify that Johan talked about earlier is also included here. Cash flow from financing activities predominantly referred to the dividend to the shareholders of 133 million, paid on May 11th, as well as utilization of the revolving credit facility by 500 million, mainly for financing of acquisitions. Another group signed an agreement to acquire Team B3 in June 2023. The acquisition was completed on the first working day of July, To be able to pay the initial purchase consideration on time on July 3rd, the loan was drawn for the credit facility already on June 30th. At the same time, we also borrowed to finance the first earner payment to the sellers of micro debts that was acquired previous year. Consequently, about 500 million increased cash flow from financing activities in the second quarter and at the same time temporarily increased the cash position. Next page, please. I would like to proceed with a few comments on the consolidated balance sheet. We continue to operate supported by a resilient balance sheet. Changes in the balance sheet during the second quarter were limited, besides what I previously described about the financing of Team D3 and micro-reference considerations. Besides that, there were no effects from the Team D3 acquisition as it was effective on July 3rd and consequently will not be consolidated into the group financial until the third quarter. Working capital showed a favorable development during the quarter. Provisions, taxes and other debt included future earn out payments depending on the financial performance amounting to about 370 million. I also would like to mention a couple of things related to equity and the addendum group share. Following a resolution by Adnogrupp's AGM in May 2023, a third long-term incentive plan for managers and senior executives was launched. In June 2001, call options for Class B shares were issued to some 40 participants. The market-valued call option premium of 19 kronor and 45 RM per call option resulted in a total purchase price of 4 million, which has been applied to the group's shareholders' equity. Each call option carries entitlement for purchase of one share. In June, the Board of Directors, supported by an authorization from the AGM 2023, decided to repurchase 180 Class B shares. The main purpose was to enable delivery of shares associated with the incentive plan. The repurchase has not yet been executed. And finally, I would like to comment upon financing and net debt position. We strengthened our financial position in June 2023 when we expanded our credit line with a term loan of 1 billion increasing the total credit line to 2.6 billion. This was an important foundation for our continued growth journey organically and through acquisitions. This term loan can be utilized for refinance of existing loans in different currencies as well as for general corporate purposes. The new loan has a three-year term with a one plus one year extension option. Most of the loans already drawn from the revolving credit facility were transferred to this new term loan, which created available credit scope in the revolving credit facility. In addition, we also exercise our option to extend the existing 1.6 billion revolving credit facility by one year to June 2026, with other terms and conditions unchanged. Net debt was on the lower side, 0.5 billion. Net debt during 12 months EBITDA was the lower one. Cash position was SEK 1.2 billion and outstanding bank loan was 1.5 billion. As previously described, the measures taken to finance considerations for acquisitions in July temporarily increased the cash position as per June. However, this did not affect the group's net debt. Consequently, we had funds of about 1.8 billion in total by the end of June, but it's available for continued growth. Available funds include cash of 0.7 billion, as well as the unused portion of the revolving credit facility of 1.1 billion. Back to you, Johan.

Thank you, Lotta. We would like to take a few minutes to address our sustainability agenda. Anna Group, we provide technology for a sustainable future. This is supported by our sustainability agenda. Our biggest contribution to a more sustainable society, we believe, is the digital solutions we offer to our customers so they can use them, for example, to perform digital simulation for the benefit of the environment and health. They can make more sustainable design choices, example, reducing carbon footprint. can design, build and maintain more energy efficient buildings and infrastructure. And as we highlighted in our interim report, I would like to introduce you to three cases that shows how we actually work with our digital solutions to support the sustainability development goals. The first example to the left is from Symmetry in the Design Management Division. Symmetry has supported easy-fix rubber products on a digitalization project to improve the utilization of technology and structural capital to promote business and sustainability targets. The new working methods established have reduced cost and increased efficiency while reducing carbon footprint. The second example in the middle is from Teknia in the PLM division. Teknia has delivered a powerful design to a robust PLM system to both valuable technology With the new PLM platform, both battery solutions have become more available and cost efficient. The third example to the right is from Forsklare Skärna. It's in the process management division. Forsklare Skärna is supporting the public transport provider Skånetrafiken with their planning tool Rebus. They will achieve greater efficiency and reliability of public transport. It means more people choose these alternatives above their own cars. just remember each journey by public transport instead of car cuts climate emissions by an estimated 90 percent you will find the full version of these cases at the annual group website and just to end the presentation before we go into q a and in this diagram you will find the how the EBITDA of Anno Group has evolved over the last 10 years. At Anno Group, we provide solutions that digitize society. We see great business opportunities in the wake of global trends such as digitalization, sustainability, urbanization and automation. Our strategy is to, with a sound risk taking, capitalize on these trends by continuously acquiring new businesses, and actively supporting our subsidiaries to generate sustainable value growth and drive organic earnings growth over time. With this strategy, EBITDA can vary between quarters and years, but Arnold Group's yearly average EBITDA growth has been 20 to 40 percent historically, where they measured over the past three, five, or ten years. Our strong financial position offers us the potential to keep delivering in line with our profitable growth strategy. Over the past quarter, we increased our credit line by a further billion and extended our existing credit facility. So with that, as an introduction and presentation to the interim report, we would like to open up for Q&A.

If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star 5 again on your telephone keypad. The next question comes from Daniel Thorson from ABG Sundal Collier. Please go ahead.

Yes, thank you very much. And hi, Johan and Lotta. I start off with the question looking ahead in design management here. You mentioned the tough comps from last year, and that is obviously true. And the comps are getting even tougher in the second half of this year, especially in Q3 last year. You mentioned a very strong tailwind from three-year licenses, which in my book should result in an even greater decline in organic growth ahead in design management. Is there anything on the positive side that I'm missing that could mitigate that?

I think just to start off with, the one thing that we're pointing out in the interim report is that there is, we could say, yes, we have a decline in the businesses. So we will not expect organic growth in the symmetry division design management as a start. But when we are pointing out the three-year deals and we're saying there are probably some impact in the second quarter from the new agreements with the three-year deals, what we're basically saying that is there are probably some customers who are probably delaying their investments as well with regards to trying to understand this. So it's both a combination of a weaker market and part of that could be affecting the three-year deals, but part of us could also be affecting that the customers sort of wait and see and see how the new agreements regarding that spans out.

Okay. So that could be some businesses coming back in Q3, actually.

Yeah.

I see. Okay. And then follow up on that one. Do you perceive that some of the decline in the quarter is company specific or is it mainly the market development? And will you in that case also look to just the cost base ahead to do anything? Any restructuring or lowering the costs here in design?

Anno Group has always been focused on the bottom line, meaning that we will protect that. But we have not initiated any bigger cost reductions in design management so far. We always protect the bottom line. So if for any reasons we will see that the decline will sort of carry on, we will, of course, take measures. But not so far.

Okay, good. In PLM then, is there a risk in the second half of the year that we will see the cycle also hitting that division and causing a negative growth rate? Or is it something in that division that should mitigate and make PLM more resilient than the sign?

Yes, I think what separates them is that it's... They are not attracting the AEC market and going for that. You will find the customer base being manufacturing, life science, and high-tech companies. And they are active in the Nordic countries and in the US, a little bit in the US, but more UK. germany we can see that most of the other like we pointed out in the interim report we the new ev companies are doing their engineering in the uk market are a growing company part of our business as well so there are differences in the end customer group i see okay

um final question then on process management the five percent organic growth was uh slightly below what i expected but are there any one-time effects in this quarter like you mentioned fewer tenders was it fewer tenders than normally or just year over year and then also perhaps a negative calendar effect on the delivery side i guess is that something that could make the growth rate come back to levels we have seen recently or is this more of a level we should expect ahead

You're true that there are some, this is a Swedish company, and there are some predominantly businesses there. So there are some calendar effects. We normally don't mention them because we think we're focusing more on the year-over-year effect, but you're true that there are some calendar effects. As you mentioned, there are a little bit of a slow in the tender announced, so probably affected that as well. But I think over time, we it will be tough to expect that this will have a 10% organic growth. If they can keep this and they do better any quarter that is good but I will not make any promises that they will sort of go on with 10% organic growth going forward.

Okay that's helpful. Yeah that was all for me thank you very much. Thank you Daniel.

The next question comes from Daniel Gerberg from Handelsbanken. Please go ahead.

Thank you, operator. And hello, Johan and Lotta. A few questions on my side as well. First on the team D3 that will come in here 7th of July. You mentioned it will give a positive impact on EPS from Q3, i.e. bottom line. But ballpark, could you say anything about how it would impact design management? For example, the EBITDA margin eroding 12 months or something backwards to just to get a bit more easier to do the modeling here.

I think if you're looking historically at that business, they are coming from, it's an entrepreneur-led organization having a healthy growth time over time. They are predominantly addressing more of the manufacturing and process automation industry. There are some AC business in it, but the majority is attracting that type of business. They are earning money and the profit margin is, if you look at the historically, we have been going around 10% on top of that of the businesses. They are not generating the 10% margin, but they have a healthy margin. And if it's probably the operating margin before any capitalization, they are probably more around 6, 7% to give any guidance of where they are performing at the time of when they sort of enter annual group. So probably 6% to give any guidance on that.

Yeah, perfect. Very helpful. And also in... And the PLM side, you do the cost savings, obviously, as we will kick in from now. The question is, did you have any tailwind from any savings in Q2 mitigated by artifacts? And do you see any reason so far in the market to expand this cost saving program any further? Or is it the ambition that you have? Do you think it will be good enough given what you see now in the markets?

I think when you do changes, it's a mix. You will lose some revenue, even though you do, and you will also have some costs. So I think we haven't seen the impact yet on the bottom line in Q2 of the restructuring program. We'll see that in Q3 and going forward. And as we are now, we don't expect to do more than what we have announced there.

If I may, a final question for me, also on process. Here we are, you mentioned, as Dennis said, some hesitancy in signing contracts. I was wondering if you could give any more details, for example, is it in case management or with EDI front, or is it more broad-based?

I think just to clarify, we don't see any hesitancy in signing contracts. It's more that we can see the number of available tenders in the public market is a little bit less this quarter. So that means that we have to work sort of more actively with our customers to make sure that we address their needs as well. So they are willing to invest still, but we can see on forward looking that this quarter it was a little bit less. And if this is a sort of indication for the rest of the year, we'll have to wait and see. But we can see in this quarter, less available tenders. But we have a long term, we don't see any changes for the second half of the year compared to the first half of the year. But it was a slower available tender, so to speak.

I see. I also just ask on that topic, do you see any you know, change budgets for these projects to be adjusting for inflation or will you have less underlying volume, i.e. if the budget stays on the same level?

We haven't, of course, we haven't had those discussions yet with the customers. Normally what happens is that you have those discussions with the big customers of the public sector during the year and see what they can end up with. So we'll have to come back to that question later part of the year. But I sort of understand your questions, but I don't have a good answer for it yet.

No worries. Thank you and good luck and have a great vacation.

Thank you.

The next question comes from Eric Larson from SEB. Please go ahead.

Thank you, operator. I hope you can hear me. I have a question on design management. If you could give some color on the demand throughout the quarter, i.e. April versus May and June, and perhaps also from a geographic perspective, if that's possible.

Thank you, Erik, for that question. Looking at what we could see, that's as we described in the first quarter, we had an organic growth, I think, almost close to 20% with regard to the sign. Entering that, of course, it was higher in the beginning, sort of the beginning of the quarter. We can see that the end of the quarter, we could see the effect. So we can see a slower demand in the later part of the quarter, both related to the construction cycle and also to the change in the, like we mentioned, going on the three-year deals as well. We can see that the slowdown was seen both in Europe and US as well, and probably for different reasons. In the US, probably a little bit more wait and see from the customers. We are still sort of making money. So it was seen both on the side of the Atlantic.

Okay, perfect. And then a question on margins. If we assume that three-year deals or the share of three-year deals remain depressed even beyond the next quarter or so, should we expect lower margins or structurally lower margins? Is that a fair assumption? Or will you sort of address that margin in that case?

No, not structurally, because it's just a timing over here. So structurally, it shouldn't be a lower margin. But as we sort of, for example, we see that we have a dramatically lower part of that will be affecting the first quarters. But by the end of it, you will probably sort of come back again. So if you're talking structurally in the business, no. Timing-wise, we would see an effect.

Okay. That's all from me. Thank you.

The next question comes from Frederick Nilsson from Redeye. Please go ahead.

Thank you. Hi. I want to continue on the discussion on the bottom line in design management. You mentioned that you do not expect any cost savings programs, although I suppose you are not satisfied with the 6% EBITDA margin. So to me, that implies that you expect some kind of improvement in demand compared to what we've seen in this quarter. Is that a fair assumption?

I think you have to look at it from different perspectives. Yes, we will, of course, we will adopt costs. That doesn't mean that we will have a sort of a big restructuring program because we are always looking at that sort of part of the DNA. And then you will have to see how long do you think that slowdown in the market will be because we have spent a lot of time hiring very good people and establishing us in the market and having the sort of the best capabilities of taking care of the customers. So then you always have to look at those type of perspectives as well. So no, we're not sitting on our hands waiting. So of course we were looking at what we can and will do with regards to hiring and all the costs. And then we also have to balance that with making sure that we are keeping our momentum and the power in the market as well with the good people that we're hiring. So it's always a balance.

Okay. And also, why do you think that ServiceWorks Global is doing better than Symmetry? I mean, both are exposed to the construction sector in some way.

Yes, but they address, it's a very different offering in different markets in that segment, meaning that ServiceWorks Global are addressing the owners and operators of the facilities in the public sector. That means that the fortification agency in Sweden is the region that operates the hospital. That means there are special purpose facilities that are to stand there for like 50 years. So that means that they have a long-term perspective. They are not affected by the cycles in the same sense. Symmetry are to a more, even though they are in construction, they are addressing more Architects and technical consultants in that market and that can varies more of a timing perspective But the facility market that the service was globally are addressing is long-term predominantly purpose-built facilities Yeah, that's true, that's my mistake I was thinking about the telegraph Okay, trivia they are Yes, they are more close to that, and you'll see some effect there. But Trebius, 90% of their businesses are in, or 80 or 90, depending on the cap, is Norway. And Norway still have a healthy market with regards to, not if you take away the condos, if you look at public buildings and offices and stuff, they still have a healthy market there. It's regionalized as well, so that has an effect.

Okay, I see. That's all for me. Thanks.

The next question comes from Aline Garten from Carnegie Investment Bank. Please go ahead.

Hi, Jo and Lotta. Aline here from Carnegie. I have two questions. And first of all, do you expect that number of active licenses will go down throughout the year compared to last year?

If you're talking about in, I guess, in symmetry with regards to design management there. Yes, if we can see, normally what happens is in a slower market is that i think the lot addressed that early on is that the customers tend to stay with us over time but what they can do is that they can adopt their number of subscriptions and actual users so if what we address is that yes so probably we will see a downfall in the number of subs seats at the customers by during the year if the slower market continues That will affect our reported net sales.

Do you have an estimation how much you think that will go down?

No, we don't have any estimate because it's dependent also on the type of contracts within the markets. No, we don't have any good expectation but overall we expect to see a slowdown in that. As we said, we don't expect organic growth in symmetry this year, and that is represented by it will be a lesser number of subscriptions. Not subscriptions, but seeds on the subscriptions, so to speak.

Would you say that the drop in sales is mainly related to the changing career contracts? Have you seen any? Can you show how much is part of that?

And I guess the question was looking at the drop in the organic growth in design in Q2 of how much that was related to sort of underlying business and how much was related to less pre-year deals. Yeah, exactly. It's both. We do see a slowdown, especially for the construction. If you decide the sort of the building construction market, you can see that there were less things from construction actually to people building things. And then also we have the, like I said, it was, as we commented, it was an effect from the three-year deals, both. And that could also have to do with the slower market still to be. And then also there were some hesitance from customers probably relating to that there are new sort of terms with the pre-year deals and then they need to adopt how it relates to them. So it could be that we sort of have a temporary effect from that as well. So it's a mix. How much is related to what is too early to say.

What I thought about was that construction, we have seen a downturn for a couple of quarters now. It was a quite big move that we have seen, so wondering how much that could actually be related to construction and if you've seen this coming from before.

Just as I commented before, we can see that in our sales figures that we saw that by the second part of the q2 we had a very good organic growth in the q1 as well so yes we addressed and see that it will come but for us it's sort of we could see that in our reported figures by the end of q2 and we and how it will pan out going forward of course we are observant to that but i don't have any good prognosis to give you on that we If that makes sense.

Okay, thank you. And one last question is that the acquisition can be true. How large share of three contracts do you estimate that they have?

If you add, I will not be able to give you a good figure of that, but I can give you a guidance in saying that if you add what we have already in symmetry and microdesk all together they will probably not change the total mix okay thank you i'll get back in line thank you there are no more questions at this time so i hand the conference back to the speakers for any closing comments and thank you for your interest and insightful questions and a lot of anything to add before we close this session no just to say have a nice summer