Addnode Group AB (publ)

Hello everyone, and welcome to the AdMob Group report for Q3 2026. I'm Johan Andersson, CEO of AdMob Group, and with me I also have our CFO, Kristina Elström-McIntosh. Today we're going to talk about our third quarter, 2026, give an introduction to that, and some further clarity, and then we'll end up with a Q&A. You will also see some supporting slides in the appendix. For those of you who are new to Abnode Group, I would like to start with a short intro. We provide software and digital solutions in selected niches. Our 20 companies are organized in three divisions in order to support each other and take advantage of synergies. The three divisions are process management, product lifecycle management, and design management. Our software and digital solutions help build a more sustainable and efficient society, from solar and planning and building permit software for the public sector in the process division, to digital solutions for designing, building, and managing infrastructure and products, including lifecycle management in our division's design and PLM division. We are building ADNOD Group on three competitive strengths. Our domain expertise in selected niches, that we provide mission-critical software with high switching costs, and that we are the trusted partner to our customers. Anode Group has about 40,000 customers, net sales of 6 billion, a business model with 62% retiring revenue, and we have a healthy EBITDA margin of around 16%. We are active on five continents. The majority of our business are in Northern Europe and North America. And we have done 96 acquisitions since the inception of Adnode Group in 2003. So, looking at Q3. Q3, we had organic growth, acquisitions, and cost efficiency initiatives that contributed to a significantly improved earnings in the third quarter. Net sales increased by 10%, of which 3% was organic growth adjusted for positive currency effects. EBITDA increased with 68% to 250 million. All three divisions improved EBITDA and supported that EBITDA margin improved to 17.4%. Operating cash flow improved with 73 million. Please observe that the third quarter is the lowest quarter of the year as we get most of our prepayments in Q4 and Q1. We also secured the largest single contract for owned software in ADNO Group's history in the quarter. We acquired Space Intel, an AI-enabled software for facility management, and increased our investments in BIMify and in-use. When comparing with the last year's Q3 in 2025, This observed that renewals of some Autodesk agreements was made by customers in the second quarter instead of as expected in Q3. This boosted Q2 last year with roughly 80 million net sales with the corresponding negative effect in the Q3 last year with a zero effect for the full year. So it was just a change between the quarters. But as you can see in the graph to the right, showing net sales in EBITDA from 2021 to the rolling year-to-date 2026. Anode Group is now back to year-on-year growth for both net sales and EBITDA. Rolling 12 months year-to-date, net sales was almost $6 billion and EBITDA was $970 million. I will now move to the performance of our three divisions. For you that are following Anno Group regularly, we usually start with design management. But today I'm going to start with process management to the left. For process management, net sales increased by 6% to 417 million. Organic growth increased by 4%. As I described earlier, Sutiga, a company in the division design management, secured a strategic contract when the city of Stockholm selected our standard solution for building permit management. The contract has a total order value of roughly 100 million over a period of 10 years. It confirms the division's strong market position. EBITDA for the division increased by 16% to 100 million, and EBITDA margin increased to 24%. acquisitions and the improved operational efficiency contributed to the improved margin. The EBITDA margin has improved for nine consecutive quarter, demonstrating division's ability to combine both growth with increased profitability. And now division design management individually on the slide. Net sales increased by 21% to 595 million. The model for both software and service remains strong in the U.S., where investments in data centers are a key driver of growth. The comparative figure for the preceding year, as mentioned, was impacted by renewals of Autodesk agreements. EBITDA increased by 84% to 122 million, and EBITDA margin increased to 20.5%. The improvement in EBITDA was driven by a combination of easier comps as described, organic growth, acquisitions, and efficiency measures implemented in both Europe and US. The efficiency program that started in the second quarter has been completed. It will reduce the cost base by about 100 million on an annual basis, with about half of that reduction expected to take effect in the second half of this year and the other half in the first half of 2027. And finally, Division Product Lifecycle Management. Net sales were unchanged at 436 million. Organic growth decreased by 3%. Strategically important customer segments such as aerospace and defense remain strong in demand. We had a solid quarter for Nordics, Benelux and the United States. The German market is still stagnant. EBITDA in the division increased by 10% to 46 million and the EBITDA margin increased to 10.6%. We have a clear focus for the division to improve margins. This has been successful and we have improved EBITDA. For example, you can see that the full-time employees are 14% lower compared with Q3 last year. The aerospace and defense industry is an increasingly important growth market for the division, where Technia's deep domain expertise, comprehensive offering, and global service capabilities position us strongly to capture these expanding opportunities. And we are diversifying in Germany from automotive to aerospace and defense and other customer segments. And just to stop for a few seconds, I mentioned this record deal with the city of Stockholm, valued at 100 million. It's a clear testament that our customers are investing in software that we can support with them over time. It's our largest own software deal per year. It also manifests the strong position that we have in the market for the public sector and the technical department municipalities in Sweden. It's also something that adds to our base of recurring revenue, as this is a 10-year contract, meaning that we will have a recurring revenue of roughly 10 million from this contract for the next coming 10 year. So I think it's a good testament to the good work and the market position that we have in Division Process Management. So we also made some investments in the quarter. We are investing in technology and AI to leverage our global market position. We have made some acquisitions in design management here. We acquired, in the quarter, Space Intel. It's an AI-enabled software platform for facility management. And we also increased our investments in beamifying in use. And in the beginning of the year, some of you might remember that we acquired a company called ATEF+. Together, these investments provide us with innovative solutions for the digitalization of building, smart property management, and connected industrial environments. By combining these companies' technologies with the design management divisions, strong market position, extensive customer base, and global sales organization, we have a good foundation to accelerate market penetration and boost our recurring revenues. And a concrete example on how we already can see the value of these investments is our solution for Technology University of Dublin. And that is my segue to our customer success stories for this quarter. The first example to the left in the slide is the one that I just mentioned. It shows how SWG in design management is supporting the Technology University of Dublin. The university wants to support and create a scalable digital foundation for its campus operations and to support its 2030 sustainability targets. We did that by bringing it all together in SWG's Geminus platform, integrating facilities management systems, BIM digital twins, IoT, and other data sources into an AI-powered environment that automates, monitoring, reporting, and building performance optimization. This has enabled the University of Dublin to optimize campus performance, support sustainability, and track decarbonization progress. It is a good example of how our industry knowledge and domain expertise combined with AI and integrated data sources can create new opportunities to improve efficiency and further develop customer operations. The second example that you can see in the middle of this slide comes from Tekna in division product lifecycle management. As Electron Aerospace prepared for certified production of its electric aircraft, it needed a scalable cloud-based PLM environment to manage growing engineering and certification complexity. We supported Electron by deploying the 3D experience platform in the public cloud unifying design, simulation, product data, and technical documentation into a single source of proof. This gives Electron a digital foundation to improve collaboration, reduce rework, and accelerate certification and aircraft development. The last example comes from Disarna Indivision Process Management. They've been working with Task Experience for a long time, helping them and supporting them. It's a long customer relation. But they wanted to evolve with intranet into a central knowledge hub and to improve access to information on sales, administration, and legal processes for the employees. We did that, but within Sweden called Bira assistenten, an app assistant for help. It's an AI-powered intranet assistant that delivers relevant answers and source back information through intelligent search and generative AI. This enables FastExperience employees faster access to trusted knowledge while providing FastExperience with a scalable AI platform for future growth. These three examples reflect a broader trend across our business. Customers continue to invest in solutions that improve efficiency, increase transparency, and support long-term growth. Add those strong customer relationships Deep domain expertise and the data embedded in our solutions position us to develop and deliver new AI-enabled solutions for our customers. So I would like to hand over to our CFO that will bring further clarity on the Q3 results.

Thank you, Johan. And I'm now going to take you through the development of Netspace from Q3 2025. to Q3 2026. And you can see here on the graph that the Q3 2026 net space amounted to just over 1.4 billion set compared to just over 1.3 billion set last year. That's a total increase of approximately 10%. And this growth is coming from organically, the currency-adjusted organic growth, was 42 million SEK, which was an increase of 3%. And the increase is mainly derived from division design management. And as Johan already pointed out, net sales in the comparable period was impacted by early renewals. Acquisitions contributed by 68 million SEK, which is a growth of approximately 5%. And we have positive currency effects in the quarter of about 17 million SEK. And that is mainly relating to both Norwegian kronos and the U.S. dollar. And we also have another way of presenting the next phase growth from the divisions, which is the next slide. And this slide illustrates the division's contribution behind the net sales growth during the quarter. And looking at the design management, contributed by 105 million CX, which is up 21% in total compared to last year. And it's worth noting also that the prior year comparisons were affected by the early contract renewals that we talked about. PLM contributed by 1 million, which is in line with last year's net sales. And here we have a positive currency effect of 2 million SEK. So the organic growth was minus 3%. Process management contributed 22 million, which is a growth of 6% compared to last year. And here we have a positive effect of 7 million SEK. and therefore the currency adjusted organic growth was 4%. Now I'm going to talk about a little bit about the net sales by category. And in this graph you're presenting the net sales by category, and we emphasize that the offering consists of the mission critical digital solutions, our deep domain expertise with a strong and recurring customer base. which reflects the high customer retention. And the majority of our net sales, which you can see in the graph, representing just over 60% of own software and services, representing the value we bring to our customers. And our strategy remains focused, profitable organic growth, supported by innovation, customer value, and a strong recurring base. And over the last 12 months, recurring revenue represents 62% of our net sales. And I'm going to go to the next presentation about the EBITDA development from last year to this year. And this bridge illustrates how we have delivered profitable growth in the quarter. We continue to drive growth through innovation customer value and growing share of recovery revenue, while at the same time improving operational efficiency across the Group. EBITDA amounted to 250 million SEK this quarter, compared to 149 million SEK last quarter. The increase is about 68%. And as a reminder also, the comparison quarter was impacted by contract renewals that we talked about. Even taking this into account, the quarter reflects improved underlying profitability, supported by operational efficiency, restructuring initiatives, and disciplined execution across the businesses. And let's take me, let me take you through the EBT development in the quarter. The sign division was the main contributor. about 79 million sheikhs of Ibidai was up 184% compared to last year's Q3. And the restructuring program that was initiated in Q2 had now been implemented, and we're starting to see the benefits of this coming through. And PLM contributed by five million sheikhs in Ibidai. And as you remember from last slide, the net sales were flat year-on-year almost, but EBITDA increased by 10%, which was supported by the restructuring actions in which we implemented last year, primarily in Germany. And looking at process management, contributed by 40 million SEK of EBITDA. That's an increase of 60% compared to last year. So overall, the EBITDA improvement reflects our focus on profitable growth. While growth level varies across the divisions, we continue to strengthen profitability through operational improvements, recurring revenue, and a disciplined execution of our efficiency programs. And looking at the strong operational performance We grew EBITDA margin from 11.4% to 17.4% in the quarter. Now let's have a look at the cash flow. And starting with the cash flow from operating activities in the quarter improved by 73 million, which is mainly driven by higher operating profits. If you look at the year-to-year cash flow from operating activities, the increase was significantly based on improving working capital. Investments during the quarter mainly related to software development and also M&A-related payments. And investments last year in Q3 included acquisitions of the Norwegian company and the Brazilian company. Financing activities in Q3 included new loans for financing settlements of earners that are falling due in Q4. And now I would like to hand over back to Johan for the outlook and focus.

Thank you, Christina. As you know, our financial target is to improve our EBITDA by 15% year-over-year over time. If you look at the graph here, you can see from 2016 to 2026, rolling 12 months, the compounded annual growth rate is 20%. Our business model is based on a strong combination of organic growth, value-accurative acquisitions, recurring revenue, and constant improvement. We work constantly to boost efficiency and the profitability of our companies. Our focus is on increasing customer value through AI, drive organic growth, increase recurring revenue, and at the same time, enhance our operational efficiency and do value-accurative acquisitions. As you know, our comparability between peers is affected by the renewal cycle of three-year Autodesk contracts. 2026, the cycle has been negative for reported net sales. For 2027, we would like to highlight the three-year cycle, meaning that we see that more three-year contracts are expected to be renewed compared to 2026. This will support continued organic growth. We have proved that we can double our EBITDA every five years, and we are going to continue that journey. ADO Group is well positioned for continued growth, supporting our 40,000 customers. With that, I would like to open up for Q&A.