Addnode Group AB (publ)

Welcome to the presentation of Adnode Group's Interim Report January to September 2025. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the CEO Johan Andersen and CFO Christina Elfstrom-McIntosh. Please go ahead.

Hello everyone and welcome to the presentation of the Interim Report for the third quarter of 2025 with Adnall Group. I'm the CEO of Adnall Group and I also have with me our CFO Kristina Esler-McIntosh who will help me out today. Looking at the agenda, we will spend some time on Adnall Group, look into Q3, talk about the divisions, spend some time on the financials and the balance sheet and then we will open up for Q&A. So, Adnord Group. Our purpose is all about inclusion for a better society. We operate, acquire and develop entrepreneurial companies that provide digital solutions. For innovation and continuous development in close collaboration with our customers, we create digital solutions for specific needs. The software and digital solutions that we provide are used to design buildings, infrastructure and cities, and also the products that we all use every day, like cars and all the way to life science instruments. When things have been designed and built, it needs to be maintained with a lifecycle perspective, and the public sector has also responsibility for rules and regulations. Our digital solutions make all this possible. Talking about Our third quarter, before we go into the highlights, there are a few things that we're going to discuss earlier. But the highlights first, we can see that we have a stable market. We had a high rate of acquisition activity and improved efficiency. Our EBITDA, if we adjust for the early contract renewals that we already disclosed in the second quarter, where we had a positive effect of that, now we have the negative effect of 70 million. If we... add that back to the result, you will find that our EBITDA was 290 million compared to 200, so an increase in underlying results. We have published new financial targets that will confirm our existing strategy, and it sets also more ambitious aims in terms of growth and profitability. We have done six acquisitions, and SolidCAD, the biggest one, is expected to contribute to EBITDA with 120 million. We have also extended our credit facilities on more favorable terms to support our future growth. So when we look at our highlights Q3 2025 from a financial perspective, there are a few things that we would like to add as well. For those of you who have followed us for a longer period, you know that we had a year with new transaction model for partner software and reclassification of third party agreements. This has benefited our business, but the changes have made it more difficult to follow our performance of net sales. In this presentation, we will compare our performance with pro forma figures that have been adjusted to reflect a scenario in which the new transaction model for partner software and reclassification of third-party agreements have been in place already in 2024. This is the same pro forma that we present at the Capital Markets Day and that you also can see in our interim reports. The good news is that this is the last quarter that we have to compare with a performer to better evaluate our performance. When we present Q4 2025 and compare it with Q4 2024, it will be like for like. Starting this quarter, we are also presenting distribution of net sales on our own software, third party software and services. So with that as an introduction, let's look at the financials for Q3. As I already mentioned, looking at EBITDA adjusted for early contract renewals increased to 290 million. But you can see the EBITDA 149 million, you add the 70 and then we end up with 219 to compare with 200. And as previously communicated, as I discussed, a number of the three-year deals that would normally have been renewed in the third quarter were renewed early in the second quarter. These early contract renewals increased EBITDA in Q2 with the 70 million that I mentioned, but it has reduced EBITDA by the corresponding amount in this third quarter. However, the net impact over the year is neutral. Looking at the market trend, we have a stable business in Nordic countries, UK and the US. The German market, however, remains weak. We are still in a position where we don't have push from our customers. We have to work with our customers to make things happen. Our business model with 60% recurring revenue is a strong foundation for our business. And if you're able to look to the right, you can see that we're still on a five years progression or having a significant growth. So to sum up, it's a stable quarter. We have done a lot of acquisitions and we can see that the market is quite stable in the areas where we are. So with that as an introduction to the Q3 result, let's move to the things that we have done in the quarter as well. And one of the things that we have done is that we have held our first capital market day, at which we present the new financial targets that confirm Anna Group's existing strategy and set more ambitious aims in terms of growth and profitability. The new targets are that we will have an average annual EBITDA growth that will amount to at least 15%. That corresponds to that we will double our EBITDA every fifth year. The dividend margin should be at least 17% every year. Net debt shall not exceed 2.5 times our EBITDA. We have an unchanged dividend policy. To achieve our financial targets, we are now pursuing a plan consisting of an increased focus on business development, clearer prioritization of investments in our digital solutions, more measures to improve our internal efficiency, and we increase our capacity to make value-creating acquisitions. So acquisitions. We have announced nine acquisitions so far in 2025, which are expected to contribute total annual net sales of approximately 700 million, and it will strengthen our EBITDA margin. In the third quarter, The closed acquisition of Jelis in Norway, whose net sales for 2024 amounted to approximately 165 million. Jelis offers a no-code platform for case management and business applications. The company is now part of the process management division from Q3 and has strengthened our position as a leading player in mission-critical case management systems in the Nordic region. The acquisition of the Dassault Systèmes partner Extended Solutions with a net sales in 2024 roughly around 40 million will strengthen Teknia's offering to the Nordic manufacturing and defense industry and increase the market position. This transaction is subject to conditions and is expected to close in Q4 2025. In Q3, we have also done more acquisitions, and the three you can see on this slide is acquisitions that will strengthen Symmetry in the division's design management. Symmetry has successfully grown organically and by acquiring and integrating other Autodesk partners, supported by a strong portfolio of proprietary software and professional services. And during the third quarter, we announced several acquisitions for Symmetry, FS Solution is the fastest growing platinum partner in Brazil, providing an entry to the dynamic Brazilian market. SolidCAD is the largest Autodesk platinum partner and the market leader in Canada and is expected to contribute with an EBITDA of 120 million. We expect to close this transaction in Q4 2025. FS Solution is already included in Q3. We also made two asset deals of customer basis in the Q3 that is recognized as part of Symmetry in Q3. The combined net sales of these acquisitions to Symmetry are expected to amount to approximately 420 million. These acquisitions together strengthen Symmetry's global footprint, provide a platform for further growth in North America and Latin America, and will contribute to increased profitability and margins. We still have several active acquisition process underway and acquisition are an important part of AdnoGrowth's growth strategy and our ability to reach our financial targets. So with that, as an introduction to Q3, we'll later come back to our divisions. I would like to hand over to Christina to introduce our new credit facilities.

Thank you, Johan. And as we announced now in October this week, we have refinanced our current existing credit structure, which consists of two parts. We have a term loan, which was increased from 1 billion to 1.7 billion. We also have a revolving credit facility, previously at 1.6 billion, which is now 2 billion. And we also announced that this refinancing was conducted in a more favorable interest terms. And these two loans, the term loan and the RCF, has a tenor of three years with an extension of one plus one possibilities. We're also very pleased to announce that the Swedish Export Credit Corporation, SECO, has joined the current bank club. which consisted of Nordea and SEB in the past. And also this extension of accredited facilities supports our growth plan going forward. And I'm going to hand back to Johan.