Addnode Group AB (publ)

Hello everyone and welcome to the presentation of the Adnord Group Q1 report for 2026. I'm the CEO Johan Andersson of Adnord Group and with me I also have Kristina Elström-McIntosh our CFO of Adnord Group. So today we will give you an insight on Adnord Group, talk about our divisions, a little bit of acquisitions, touch upon AI and we will end with a Q&A. So Q1, it was a quarter where we improved earnings and we could see stronger cash flow. We delivered solid earnings growth. The companies acquired in 2025 performed well and combined with cost savings contributed to our favorable earnings performance. EBITDA was up 26% to 274 million and EBITDA margin increased to 17.9% from 14.9. Earnings per share increased by 24%. We can see the increase in cash flow for operating activities increased to 363 million compared to 203 million the previous quarter in 2025. We can also see an acquisition, Technia acquired a customer contract base in Germany. We continue to lay also the foundation for future earnings growth by continuing to implement AI, develop new offerings and optimized organizations. If we look at it from a longer perspective that you can see in the graph to the right there, we can see that from 2025 to the rolling 12 months ending this quarter, EBITDA has doubled from 461 million to 960 million. I will later walk you through Q1 by divisions, but I would like to hand over to Kristina, our CFO.

Thank you, Johan. And I'm going to take you through the net sales development from Q1 last year to Q1 this year. And we can see that net sales increased by 5% to 1,531,000,000 SEK. And the growth is mainly supported by acquisitions. And from the organic position, the currency adjusted organic growth amounted to minus 6%. And the negative organic growth was attributable to mainly design and PLM divisions. And in design division, Symmetry saw a slower market in Europe and US and lower share of three-year contracts compared to the same period last year. And as we have previously communicated, 2025 last year was one of the years where there's a lot of volume, high volume of three-year contracts being renewed. Also, the market situation in Germany, where PLM is operating, remains challenging. Looking at the acquisition, they contributed to plan and with 223 million SEK. And the integration of the new acquisitions are progressing well, and the acquired business is delivered in line with expectations. But currency movements had significant impact during the quarter and mainly the weaker US dollar had a negative impact of minus 61 million SEK in the quarter. And that relies mainly in the design division where a majority of the US dollar denominated business resides. And we're going to have a look at the cash situation and cash flow. In Q1, 2026 cash flow from operating activities improved by 79% to 363 million SEK compared to 203 last year. And this increase was mainly attributable to stronger earnings and positive changes in working capital. And this graph that we have shown past meetings show the cash conversion over the past decade where we calculate the free cash flow in relation to EBITDA for the rolling 12 months, quarter by quarter. And you can see in the pink line, we have had a cash conversion rate about 70% up to the time when Autodesk contracts allowed us to obtain the three-year payments upfront for all the three years. That changed in 2023. And now we are getting the payments yearly in advance, year by year. And you can also see the graph now reflects an upward trend in the most recent quarters in line with what we have previously communicated. And also historically observed the working capital effect and the cash conversion tends to vary between quarters. And we expect such volatility to persist going forward. And we're going to have a look at the financial position also. And as of March 2026, the net debt, including leasing amounted to 2.2 billion. It was also supported by around 900 million SEK in cash balance and the leverage amounted to 2.1 times as a result of the recent acquisitions activity. And from the facilities we currently have, we have about 800 million SEK in available unutilized capacity. And during 2025 and now in Q1 2026, we have completed 11 acquisitions, which have resulted in a temporary increase in the leverage. And we're also going to look at the return of capital employed in next slide. And return on capital employed amounted to 14.6%, so March 2026. And the many and large acquisitions that we completed last year temporarily impacted the reported return on capital. And while the results of the quiet companies are included only from the time of acquisition, and that, if you remember, is SolidCAD came in by the end of October last year. FF Solutions in Brazil in the beginning of August and Genus in Norway from beginning of July. The full amount of the capital employed is added immediately at the point of acquisition. And this timing effect creates a short-term dilution of return of capital employed, which you can see in this graph. And now we're going to go into more details about the divisions I'm going to have back to Johan.

Thank you, Christina. Some of you may know we are organized in three divisions. We call them design management, product lifecycle management, and process management. And I'm going to walk you through the development in Q1 for each of our three divisions. Before we do that, you can see that the two bigger divisions, if you look at the share of EBITDA, you will find it's the process management and design management. And then we also have product lifecycle management. So let's start with design management. And before we do that, I just want to remind you that as we January 1st, 2026, Trivia has been transferred from design management division to the process management divisions. All the comparative figures you will see today have been restated to reflect the scenario which Trivia has already been transferred in 2025. So the numbers are like for life. So there are no effect from the transfer in the numbers that we can see here. With that as a start, we can see that the design management division's net sale increased with 7% to $659 million. As Christina mentioned earlier, the weaker US dollar had a negative impact and adjusted for currency effect organic growth was minus 12% in the division. However, EBITDA increased by 7% to $158 million and the EBITDA margin increased to 24%. acquisitions in canada and brazil has developed according to plan and contributed to improved net sales and earnings in brazil growth was driven by continued investment in infrastructure and in canada we can see that customers continue to show renewed confidence in us as their partner looking at europe we can see that net sales in europe and us it was negatively impacted by a few things We had a lower volume order the subscriptions that was up for renewal. And out of those that were up for renewal, we can see that more customers than historically has chosen a one year subscription over a three year when they renew. And we can see that that trend is continuing. So that means that there are still customers with us. But with regards, as we explained earlier on that, as we are considered an agent, we are reporting the full value of the contract at the time of the sale. So if we sell a three-year contract, we boost the sales. And if we sell a one-year contract compared to having sold a three-year before, it has a negative effect in that quarter compared to that. But it means that we are still having the same underlying business value. So that's important to have with you. We can also see that there are some geopolitical changes in the world, and we have some effect also from the market. And that has probably also affected the choices from the customers, which you could imagine that in a more uncertain world, you're probably going for more for one year compared to three years if you have the options. But the number of customers have increased in Europe and US during this period. So we also have service providers globally in the division who are more focused on facility management solutions and has delivered a stable earnings performance compared with the preceding year. So if we look at long-term, this is a division that's, if you look at the graph to the right, we have moved from net sales in 2021 over around short of 1 billion to the plus 2 billion that we are today, and we increased the profit. So the trend is long-term. We You can see that in this quarter, acquisitions performed really well. And as I mentioned, net sales in Europe and US are a little bit lower than we would have liked, but the results and the margins are with us. So looking at division PLM, you can see we have a decrease in net sales to 420 million in the first quarter. If you had just for currency effect, it's minus 4%. Here we can also see that we have a trend of customers choosing subscription solutions rather than perpetual licenses. That has sort of had an effect also on top line. But the demand for PLM systems, design and simulation software, and related services from strategically important segments such as aerospace and defense remain strong. And we have expanded several customer engagements, particularly in the Nordic countries. The market situation in Germany is still challenging, and there are investment decisions regarding major projects are still being approached with caution from our customers. EBITDA has increased to 33 million compared to 4 million last year, but those of you who were with us last year know that we had some restructuring costs last year. Those have had a positive effect, and we can see the positive of that. Mornings going up, and if we... add back the restructuring cost and compare we can see the still that we have a growth in ebitda of 18 compared to the comparable quarter last year in the run rate so it's a good performance and we can see that the cost efficient measures taken have had an effect in in the business We have made an acquisition here in Q1. Technion acquired a customer base in Germany of the Dassault System software, added 80 new customers to the 6,000 that we already have here. And net sales on that customer base is roughly around 18 million, and it's something that we can add to the organization that we already have in the German part of the business of Technion. Looking at process management, continued their positive streak that I have for seven quarters in a row right now. Net sales increased by 15% to 466 million in net sales. EBITDA was up 27%, 204 million, and the EBITDA margin increased to 22.3% from 20.3. This was the seventh consecutive quarter in which the EBITDA margin improved year on year. Along with good efficiency and effective cost control, margin-enhancing acquisitions such as Genus in Norway have contributed to this earnings improvement. Sales to the public sector are still stable, but we can see that there is an uncertainty in the world, and those larger projects that we probably did more of a couple of years ago are still being approached with some pressure. And as we mentioned earlier on, TRIBIA has changed to this division and all the comparative figures have been addressed with that. And we think this is a good change. It's in line with the group strategy and it aims to strengthen collaboration between companies focusing on the public sector and digital case management and will create conditions for further growth and efficiency improvements. It also means that division process management will have a stronger node in Norway with the companies Genus, Decisive and Trivia. We have touched upon acquisitions. And as we mentioned, we had a really strong year in 2025, adding at least 700 million net sales and strength for the group. It had a good effect of that, meaning that we were able to build, for example, Symmetry to be the world leading global Autodesk partner with presence in Europe, as well as North and Latin America. We also strengthened process management with a strong Nordic footprint and acquisition on Genus in Norway. In Q1, we can see that the acquisition climate has been characterized by greater uncertainty in valuation discussions, mainly driven by AI concerns and a more complex macroeconomic EU political environment. But as I mentioned earlier, we have made one acquisition of the customer base here in Germany. And we are still continuing to look at acquisitions, but with our As we did so many acquisitions in 2025 and with the uncertainties in the world, we probably will see a slower acquisition rate this year and we expect to pick it up by the end of the year. Just to touch upon AI. AI is something that we're all talking about, something that will have an effect and is having an effect on all of us. It's an important focus area for Avner Group. We believe it enables continued innovation. It will increase customer value and our internal efficiency. We are, as a group, focused on a few nodes around software and digital solutions for engineering, design, asset management, and public sector workflows. And we think that's an important asset. Our strong customer relationships and our in-depth knowledge of the processes paired with the data created and stored in the digital solutions we provide represent a strong platform for development of new AI-based services. What is core in all our domains and the notes that I mentioned is that we have a deep domain expertise and provide software for entire workflows. We provide mission-critical systems that are embedded with our customers. We are a trusted ecosystem partner in regulated environments. We are supported by strong partnerships with, for example, Autodesk, Bluebeam, Dassault Systèmes, and Esri. That means that they are able to invest in things that we are able to provide to our customers. We also embrace AI because we believe that is something that will make us stronger in our customer value. So I believe we have a good starting point where we are. And just to give you some examples, we have, if you look at the last, I think it's three, four quarterly reports, we have presented some new AI products that just to give you a flavor of what we are talking about. And if you look at what we're presenting this quarter, for example, with the in-use connect to IoT platform, one of our customers, the machine manufacturer Altma, has been able to increase its production efficiency, cut costs, and reduce its service costs. We look at the other example with AI simplifying streamlined inspections. Then we are in Sweden and then we have a demand that you need to do ventilation controls and report it to the local authorities and the local authorities are our customers. So with the software Wing and Atom, You can automate and create an end-to-end digital workflow that enables Swedish municipalities to fulfill their statutory responsibility for mandatory ventilation inspection. This has resulted in shorter lead times, lower energy consumption, improved public health. These are two very good examples where we can infuse existing solutions with AI to provide more value to our customers. So AI is definitely enabled for increased customer value. It's innovation efficiency. The technology which is being integrated to our customer solution internal processes is an important aspect of how we create value. We as a group, do believe in decentralization, but it means that we push through a few themes to make things happen within our group. All the different companies in the group are doing a fantastic job, but what we specifically could push and help each other with is to make sure that we continue to develop AI driven customer solutions. And we are doing that by ourselves. We're doing that with our partners and it's a constant development. An important thing is this is leadership and how we make these things happen because it has an effect. So we try to work together. We push it through our executive summits. We have different meetings within our divisions to make sure that we have the right leadership to make things happen. And then also on a more subject matter level, looking at development, sales, market example, there are different networks within the group that goes over group level, but also in the different divisions to push this, to make this happen. Then we try to promote by showing good examples, for example, other innovations. I think they have 60 very good applicants and now it's down to seven in a final. Most of them are actually in production because you can see the potential in AI. They started by coding a couple of months ago and it's already now happening. It's a lot of things happening and we're trying to push for it, but we are a decentralized organization. That means that we have a lot of things happening in the group. So trying to sum this up, we can see that we are delivering on our growth strategy. We are combining organic growth with a value creating acquisition strategy. If you look for a full year perspective, even though we have a quarter with lower inorganic growth. Our financial target is to grow EBITDA with 15% year-on-year. That means that we aim to continue to double EBITDA every fifth year. Since 2016, we have a compounded annual growth rate EBITDA of 19%, and we are increasing EBITDA margin. With the presence in various regions in the industries where our digital solutions are mission critical, we have built a robust business that remains strong, even in a challenging economic climate dominated by geopolitical turmoil. Looking forward, growth and improved earnings will continue to originate from the development of new offerings, the implementation of AI and acquisitions. We will continue to optimize our organization as technology market conditions and economy changes. And the group has shown and will continue with the creativity, perseverance and commitment needed to generate value for both our customers and our shareholders. So with that as an introduction, we would like to open up for Q&A and questions.