Addnode Group AB (publ)

Welcome to this report presentation for the second quarter 2026. We will guide you through the quarter. With me, I have Christina Astor McIntosh, CFO of Admiral Group. Myself is the CEO of Admiral Group, Johan Andersson. We will the agenda for today. is that we will talk about Adnode Group, our divisions, the cash flow and balance sheet. And we will end with a Q&A where you can ask your questions to me and Kristina. And you will also find an appendix in this presentation. So we start by describing the quarter. During the quarter, our business continued to develop steadily and we have executed cost savings. So what are the key highlights in Q2 2026? Adjusted organic growth was minus 5%. Reported growth and earnings of design management were affected by the renewal cycle of three-year Autodesk contracts. As expected, this affects comparability between periods, but does not impact the underlying stable development of the business. The underlying organic growth for design management was flat in the quarter, as Kristina will explain later more in detail. Acquisitions made in 2025 in Brazil, Canada and Norway continue to perform well. Process Management Division continues to improve. EBITDA is up 26% and EBITDA margin has now improved eight consecutive quarters. The Product Lifecycle Management Division continues to deliver improved profitability and EBITDA was up 24%. Cash flow from operating activities improved to 62 million, primarily driven by positive development in design management. To increase focus on new sales and fully realize synergies from our expansion, we have done an efficiency program that is expected to reduce annual costs by approximately 100 million. Excluding cost for the efficiency program mentioned and early renewals in the comparative period, EBITDA amounted to 176 million this period compared to 168 million last period. I will come back to more details on the performance of each division and Kristina will give you more details on cash flow and balance sheet.

Thank you, Johan. I'm going to take you through the net sales development from Q2 last year to Q2 this year. And net sales amounted to 1 billion 449 million in Q2 2026. And that compares to 1 billion 457 last year. And the organic growth, as we just heard from Johan, amounted to minus 11%. And the decrease was mainly related to division design management. And I will come back into more details regarding the organic growth in design management. Also important to see here on the graph is that early renewals of 80 million SEK is included in this graph. Contribution from acquisitions amounted to 158 million SEK and the integrations is performing well and the acquired businesses are delivering in line with our expectations. and currency effects in this quarter amounts to minus seven million SEK and that's mainly related to US dollar and also lies within the design division where the majority of the USD denominated business resides. So I will now hand back to Johan for net sales by category.

Why do I believe that Adnode Group has a solid business and a strong position to grow? Adnode Group provides mission critical digital solutions with high customer retention. We are positioned in a market where digitalization, AI, and increasing demands for efficiency are driving demand among our 40,000 customers. We have longstanding customer relationships, deep domain expertise, and a high level of trust from our customers. Let me remind you that the majority of our net sales is own software and services representing the value we bring to our customers. 62% of our net sales last 12 months was from recurring revenue. We have significant opportunities to deepen our engagement with existing customers and gradually increase the share of recurring revenue. We are already seeing how AI creates value, both internally and in the solutions we deliver. and our partners are also investing substantially in AI capabilities. I would like to highlight two customer examples. They illustrate how we support customers in their digital and AI transformations. The first example comes from Symmetry and how they support the hospital of the University of Pennsylvania. The hospital was looking for better ways to handle compliance and ensure quicker patient call response times. And how did we do that? We did that by upgrading the system IBM Maximo and developing an AI driven portal with a customized chatbot. This made operational information more accessible and actionable. And it's a good example of how we help customers use AI in a practical way. The second example comes from Technia. We supported ROSENEXT to connecting its PLM and RP systems with our own technology. ROSENEXT is a developer of robotics, sensors, and physical AI. The integration improved data sharing and standardized product structures. It also created a scalable platform for future growth, enabling cloud-based upgrades. Both of these examples reflect a broader trend across our businesses. Customers continue to invest in solutions that improve efficiency, increase transparency and support long term growth. ADNO's strong customer relationships, our deep domain expertise and the data embedded in our solutions position us well to develop and deliver new AI enabled services. Look into our broader sharehold base. Two things that I would like to highlight. One thing is that we can see that the number of shareholders has increased during the quarter. We have moved from roughly 8,000 to 10,000. We also have had a change in our top 10 shareholders. As we can see, if you compare the graphs is that Robur is now no longer part of our top 10 shareholders as they have sold the majority of their shares during the period. So going through our three divisions, design management, product lifecycle management and process management. As you can see in this graph our free division is that the biggest contributor this quarter is process management. So division design management. Symmetry is the biggest company in the division. It is the world's largest Autodesk partner and the leading global provider of design and asset management solutions. We are serving more than 30,000 customers across Europe, Latin America, and North America. What are the key highlights in Q2? Net sales decreased by 11% to 560 million compared to 627 million. Saves of partner software were affected by the timing of Autodesk contract renewals and also by the new incentive model. Our own software and services continue to generate positive organic growth, plus 7% in the quarter. The big acquisition of Autodesk partners in Brazil and Canada continue to perform well. What are we focusing on now? Symmetry has had a strong and rapidly growth since 2021. It is now time to set the foundation for the next step in our growth journey. We are deploying a new organization in Europe and US with even more focus on new sales. We are realizing operational synergies of 100 million in a cost reduction program. To make these synergies happen, we have one-off costs in the quarter of 28 million. no additional costs related to the program are expected. The cost savings will have effect from Q3 2026 and we will have a full run rate effect in 2027. I would now like to hand over to our CFO, Kristina.

Thank you, Johan. And I'm going to take you through the design management, the movements of the net sales from Q2 2025 to Q2 2026. And why also explain a little bit of why the underlying business remains stable in design division while the reported net sales is substantially impacted by the renewal patterns of multi-year Autodesk contracts. and that pattern includes the timing of the renewals and also the mix between one and three year agreements. So this slide describes how the reported net sales has evolved comparing to Q2 2025 to Q2 2026. And in Q2 2025, net sales amounted to 627 million SEK. And now this year, Q2, amounted to 560. And I will describe the four parts, the organic and the adjusted early renewals, also the acquisitions and the currency effect. In summary, organic growth was negative by approximately 145 million SEK for the period. However, the year-on-year comparison is significantly affected by approximately 80 million SEK of early Autodesk contract renewals. And a number of contracts that was originally scheduled for renewal in Q3 last year were renewed earlier, already in Q2 last year. That creates a favorable comparison base in the prior year period. Excluding this timing effect, the underlying business development was more stable than the reported growth figure suggests. I'm now going to explain the minus 65 million SEK that you can see in this graph. And the negative organic growth of minus 65 consists of two major parts. Firstly, we have a positive organic growth for our own software and services. And secondly, we have negative organic growth from a third party software. And the 17 million SEK positive organic growth equals the 7% organic growth quarter by quarter. The remaining minus 82 million SEK relating to organic growth for third-party software. And that minus 82 consists of three main parts. Firstly, we have a margin effect on the Autodesk partner, the new incentive model that amounts to minus 20. We also have minus 12 million SEK coming from a product mix change where we have more one-year contracts compared to three-year contracts. Also, other third-party sales is included in this amount. And the additional 50 million SEK is regarding the renewal effects from a three-year cycle. So that means that contracts renewed three years ago can only be renewed three years later. That is minus 50, the effect. And we can also see that the big transformative acquisitions, Brazil and Canada mainly, added 86 million to net sales. And currency effects was minus 8 million, mainly related to US dollar. To summarize, our assessment is that the underlying performance of design management remains stable with flat organic growth, looking into our own software and services and considering the timing effect excluded from that. And I will now hand back to Johan to talk more about the PLM division.

Thank you, Kristina. Division Product Lifecycle Management. Teknia, the company in the PLM division, is one of Europe's largest providers of design and PLM platforms to the engineering community. And North America is also a growing market. The portfolio consists of our partner Dassault Systems, market leading platform, and our own unique product and services. What are the key highlights in Q2? Net sales decreased by 1% to 438 million compared to 444 million last year. Organic growth decreased by 4%. We have had a clear focus in the division the last 12 months to improve margins. This has been successful and we have improved EBITDA. Sadly, 8% of the people in the organization has had to left us as part of the process. This has affected service net sales as planned. Strategically important customer segments such as aerospace and defense remain strong in the month. We had a solid quarter for Nordics, Benelux and US. German market is still stagnant. EBITDA increased by 24% to 41 million. An EBITDA margin increased to 9.4 compared to 7.4% last year. Last year's cost savings has contributed to a higher operational efficiency and leaner cost structure. So looking forward, the aerospace and defense industry is emerging as an increasingly important growth market where Technia's deep domain expertise, comprehensive offering, and global service capabilities position us strongly to capture expanding opportunities. Process management. Process Management, comprising 16 subsidiaries, is a leading provider of digital solutions to the public sector in Sweden and Norway, holding strong market positions in urban planning and development, case management, and geographic information systems. Key highlights in Q2. Net sales increased by 18% to 463 million compared to 394 million last year. Organic growth increased by 2%. There is a solid demand from the public sector. We have strong market position in the public sector. Long-term experience and solid references helped us win new contracts. EBITDA increased by 26% to 93 million compared to 74 million. And EBITDA margin increased to 20.1 compared to 18.1% last year. Acquisitions and improved operational efficiency contributed to the improved margin. The EBITDA margin has improved for eight consecutive quarters. The strength of the division is a highly efficient business model driven by recurring revenue and resilient demand from the public sector. So with that, I would like to hand over to our CFO, Kristina.

Thank you, Johan. And I'm going to take you through this graph about the cash flow and the operating activities. And what you can see in Q2 now, 2026, cash flow from operating activities improved to 62 million SEK compared to minus 33 last year. And this increase was mainly attributable to changes in working capital and also mainly from design division. And this graph illustrates, you've seen it before, it illustrates the cash conversion over the past decade, which is calculated as free cash flow in relation to EBITDA. And the pink trend lines show the average cash conversion around 70% up to 2023, when we know that Autodesk changed the payment terms. Before that time, all the three years, when they signed a three-year contract, you were paid also upfront for all the three years. That changed in 2023. So now even if you sign up for a three-year contract, we take the income or the revenue for the full three years still upfront, but we only get paid one year at a time. So after that temporary headwind caused by the shift in the payment terms, we are now seeing a clear upward trend in cash conversion. in line with what we have previously communicated. And I would also like to remind you it's typical for our business that working capital movements and cash conversion fluctuates between quarters and we expect this seasonal pattern to continue. With Q2 and Q1 typically generating the strongest operating cash flow and where Q2 and Q3 are historically been the weaker quarters. And let's have a look at the balance sheet. So in this graph, we are showing our balance sheet, the net debt and the leverage. And we can see now as of 30th of June, 2026, net debt, including leasing, amounted to 2 billion 450 million, which is supported by around 700 million in cash bank. The leverage amounted to 2.5, which is a result of the acquisition activity. And the leverage remains within the group control range about 2.5 ceiling. During 2025 and into 2026, we completed 11 acquisitions, which have resulted in a temporary increase in leverage. And we are focusing on integrating these acquisitions in the business, as well as deleveraging and on our balance sheet resilience. We also expanded the facilities and currently have around 800 million SEK in available unutilized capacity. And also to add on to that, liabilities related to acquisitions amounted to 620 million SEK, of which contingent considerations are around 540 million SEK. And I would just like to hand back to Johanna for one of the final slides.

Thank you, Kristina. Anode Group's growth journey. What is the strength of our business model, making it possible to deliver a compounded annual growth rate of 19% over a 10-year period? Annel Group's business model is based on a strong combination of recurring revenue, organic growth and strategic acquisitions. We work constantly to boost efficiency and the profitability of our companies. Our financial target is to improve EBITDA with 15% yearly over time. Comparability between periods is affected by the renewal cycle of three-year authorized contracts, but it does not impact our underlying performance year over year. We have proved that we can double our EBITDA every five years. Anode Group is well positioned. We have a solid foundation for continued growth and long-term value creation supporting our 40,000 customers. With that presentation of Q2, we would like to open up for Q&A.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Erik Larsson from SEB. Please go ahead.

Hi, I have three questions. So first off, just a clarification on these 100 million in savings. When you say that half will be realized in 2026, does that mean 50 million of savings in 2026 or rather that the run rate heading into 2027 will be 50?

Yes, we expect about half of that as the program now was implemented now in Q2. We expect about half of that being realized from the H2 2026. and then the full effect will be from 2027.

All right, perfect. And then these 20 million in negative impact on net sales from the changed compensation from Autodesk. Is it fair to assume a similar number roughly in the coming quarters? I understand you want to close the gap, of course, but can we roughly expect a similar number?

As you stated, the impact in Q2 is 20 million and that number is affected our ability to do new sales and also to reach certain target. So I think that is the best estimation as we have today. We don't really see it going up. It's rather, so it's the best estimation that we have today.

Okay. And then just a final general question. I appreciate the color you give here in the presentation and And you write in the report that design has a stable underlying business with a growing customer base, etc. But obviously, it's very difficult for the market to digest that when just seeing top line and earnings. So how are your discussions in terms of increasing transparency here more, even more like sharing the share of three year deals or number of customers, etc. Just any thoughts would be interesting.

Very good question. Yes, we will continue to work on that. And part of that, we provided you with a flowchart today to see what the components were to make it available that we have a flat development in the comparison here. So we will definitely work with that going forward.

Okay, thank you very much. That's all for me.

The next question comes from Daniel Thorsen from ABG Sundahl Collier. Please go ahead.

Yes, thank you very much. I also had a question on the 20 million lower sales in the sign. I understand the mix between one and three year contracts, the timing of renewal and so on, but this changed incentive model. Did this happen in Q2 or was this known before?

The changes is from February, because it follows the Autodesk year, so it starts in February. And going back to, so we had two months in the first quarter, but as that was a new model, we needed another quarter to see the full effect of the program. So now we are in a position to provide you with a fair number.

Okay, and the practical effect is what? Is it a lower kickback for you or what is the practical effect?

Yes, it's a lower kickback and it's dependent on several factors. It's not just a percentage, it's our ability to do new sales, reaching different targets and then you get certain kickbacks. It's a live model.

Yeah okay I see and then also on the sign comps get much easier now of course in Q3 but do you still stick to your CMD comments from September last year that 26 will deliver low single digit organic growth in the sign in 26 or should we see that as history now?

I think we discussed the loss event as well. Yes, we still believe that we're going to have organic growth in Q3 and we're going to see that going forward. That has not changed with this change in margin. We still believe that we are in a low point with regards to renewal cycles, meaning that from now it should become better and you will see that in Q3. and you will see effect in Q4 and you will also see that in 2027 as this is sort of a low turning renewal rate. That means that 2027 we'll see ourselves in a better position as well.

Okay, but there is a risk that 26 full year will be a slightly negative number, I guess.

That might be, yes, for a full year. But going forward from now, you will see organic growth in this measure.

Okay, clear. And then also the final one on the sign, customers buying more one-year licenses, same as Q1. Is it because there is an Autodesk push, pushing them to do it, or is it because they want to do it for different reasons?

There are two reasons. One is that if you remember the discussion about the early renewals, that was driven by that the customer can't renew certain contracts as a three year. They must renew it as one year. So one third of the three year contracts cannot be renewed as three year. So it will automatically be renewed as one year contracts. So that's a driving force. So I think that's sort of the most predominant force that we can see. who drives it. And then you don't have any sort of incentives. Historically, you have the financial incentive for renewing as a three year contract, basically meaning a discount. There are no discounts on three year contracts compared to one year contracts. The benefit that you get is that you lock the price for three years.

Yeah. Okay, I understand. That's clear. Thank you very much.

Thank you.

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

Thank you, operator, and hi, Johan and Kristina. A couple of questions from my side as well. Starting off, a question on design. Have you seen any implication on the revenues by any changes in revenue model for Autodesk going away a little bit from seat-based into more value-based models, or is it too early to see anything from that?

When we sell to our customers, we sell subscriptions and we sell consumption-based tokens. We already have that mix in our net sales. Percentage-wise, we can see a higher growth in the consumption-based token model. So that means that basically a normal customer buys a certain amount on a subscription and then they top it up with tokens basically the consumption base for the less users of the systems to get a good mix for them.

And would you say that the net effect the year over year is with regards to total revenues is it like down, flat or up?

Or just to understand the... No, it's not down. So we can see that it's been moving and we... So we can't see the negative effect of that from the model. Sometimes the customer can go up and down depending on how many users they have. So that follows more that function.

Perfect and also on the restructuring program of optimization here in design how I guess we need to reduce some people also it will also in fact impact the sales and the R&D organization some more it's mainly in admin etc.

We're doing it for two reasons. So it's a very good question. One is the obvious that we have had a very rapid growth in Symmetry for the last five years. I think we have almost tripled that sales in five years period. And if you go back three years ago, we didn't have any operation in the US. So it was time for to realize these synergies. And those synergies you will find mostly in sales, administration, delivery, not so much in R&D because that's a focus area going forward necessarily to drive organic growth. So it means, and in that sense, the second part that we're doing is that we are transforming some of the sales operation, moving from more of a renewal-based sales to more of a offensive new sales. So it's a mix of realizing the synergies from the rapid growth and also shifting some of the sales efforts, for example, to new sales efforts and making sure that we can also get our new products and services to the market.

Perfect and my last question would be a little bit on you know communication governance and so on and we have as you rightfully showed a really good EBITDA CAGR of 90 percent last 10 years but shares now down like 75 percent in 12 months and so on and what could you have done something different to mitigate this effect some and also how to improve you know markets trust in your operations going forward?

Thank you, Daniel. It's a very good question. We can definitely do more of the communication and provide more data and more confidence for the future. So it's an ongoing discussion.

Yeah, we'll stay tuned. Thanks as well. Thank you.

The next question comes from Thomas Nielsen from Nordia. Please go ahead.

Thank you very much for taking my question. Looking at your balance sheet, you have 2,450 million SEC of net debt. You also have 542 million SEC of contingent considerations. Binding this, we would have net debt including contingency considerations of about 3 billion SEC. And when you compare this to your own 12-month EBITDA of 995 million SEC, this would put net debt EBITDA including continued in considerations at around 3.0 times, which is above your financial target of 2.5 times. So could you perhaps talk a bit about what are the covenants on your bank debt? And did you see any scenario where you would perhaps need to raise more capital given the balance sheet and how it's structured?

Yes, I'm taking that question. So we have a regular covenants in our banking facilities that we are aligned with. So that is not a problem. And also these continued liabilities are to the previous sellers of the companies. they are not interest-bearing in that sense, so not included in the reported net debt of EBITDA. So concluding on that, we are in line with our covenants and also including the continued liabilities.

Okay, thank you.

The next question comes from Fredrik Nielsen from Redeye. Please go ahead.

Thank you. Hi, Johan and Kristina. I wonder about your own software in Symmetry. How closely connected is the sales process of your own software to the sale of an Autodesk license?

Thank you Fredrik. Yes, it is. It is connected because that also what brings value to the customers seeing the customer see that we are able to use our knowledge to invest in software that provides value on top of the Autodesk platform that we are selling. So yes, it's very much connected. But having said that, we are also selling software separately as well to different customers, but it's connected. It's part of the offering and it's usually bundled to our customers in the sales process.

Okay, I see. Thanks. And I know you might not be willing to disclose this figure, but looking at the three-year deals and there's no major benefits of it left basically, is it approaching a very, very low share of sales? Could you perhaps give some flavor on that?

No, the short answer is no, it's not a low percentage. It's still a major part, a big part of the sales that we are doing, but it's a portion that are decreasing over time, but it's still a significant part of the business, the three years.

I see, that's clear. And last question from me. Aerospace and defense in PLM continues to grow well. How large is it as a share of PLM today and what's the growth rate approximately?

If you add aerospace together with defense, then you have to add what we're doing for the civilian part as well. It's almost 15% of the PLM division, one five, and it's a growing part and we are providing both the platform and services. And it's also the base of Dassault Système, our partner. They actually started as the CAD department in Dassault Aviation some 30 years ago and has developed from that. So it's a platform that is broadly adopted and used in aerospace and defense. And we've been working with customers basically since the foundation of Teknia in 1994.

Great. That's all for me. Thank you very much. Thank you.

The next question comes from Michael Lassine from DNB Carnegie. Please go ahead.

Hi. Thanks for taking my question. I have a couple of questions. The first one is if you can explain the difference between renewal-based sales and new sales. What changes do you need to implement to optimize that? and in that organization and they focused on the new sales force. Thank you.

New sales is going after new customers and you selling them the new platform and also to existing customers selling them new modules. So renewal, that means basically that what we sold a year ago or three years ago, we would like the customer to renew that. So that means that we are striving all the time to automate as much as possible of the renewal sales. both in how we go to the customers and how we do the administration of that. So it's a constant effort to automate that. And if we automate, then we have the resources that we can invest in the organization to drive new sales. So that's basically the move that we are going for.

Okay, and how long does it take for you to be aligned with this new incentive structure?

We are already in most of the parts we are up and running so we are probably a little bit we have so we will see effect of this in the second half of this year.

Okay all right and I have a follow-up on this mix shift between one year and three year contract duration for the design segment. Can you maybe repeat and clarify this underlying trend towards more one-year contracts? How fast this could develop and the magnitude and if you can go organically despite going towards more short-term contracts?

So I think just to add to what Christina described earlier, you can see in the water flow between the quarters, you had roughly 12 million of the negative organic growth that was related to the ship from three to one year contracts, to give you a magnitude of it.

Okay, so that's this quarter, but going forward, is this the run rate that we should expect or will it accelerate and what is sort of the end state here when this is sort of more in balance what do you think?

We don't believe that the three-year contracts in a near term will cease to exist and not be part of the offering we still believe that it's going to be part of our offering but what we can see is that there's a shift from going from one point of free contracts to another so it will not disappear we can see the shift and right now we can see that one third of the con as I described earlier we will one third of the contracts will probably move away as they can cannot be renewed so we we will see a shift of that going forward okay and this is sort of a baked into your

plan to grow EBITDA over time and so you will manage this despite this? Yes, we will.

Yep, we truly believe that and we have shown over the year that we have a really adaptive organization who can handle these things that we have done the last 30 years. So we truly believe that.

Okay, thank you.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Thank you all for listening to our presentation and they're all good questions. Thank you.