BTS Group AB (publ)

Hi everyone and welcome to today's conference call together with BTS Group. My name is Ida Tillas, I work here at DMV Carnegie and today we are pleased to welcome Jessica Skun to the studio. As always, if you have any questions, please feel free to ask them in the live chat on the right hand of your screen. So without further ado, Jessica, please.

Thank you very much. Good morning, dear investors. I am very happy to be with you today for a Q1 report, and I am super pleased to announce that BTS is back to profitable growth, and we expect that to continue. Our revenue at the group level grew 5% in the first quarter, while EBITDA grew 19%. We're very pleased that our North America turnaround is complete. BTS Europe continues to do fantastically from a growth perspective and a profit growth perspective. And BTS other markets had a rough start to the year and expect them to recover during the second half. So if we double-click into the two or the three different markets, and the other thing that I'll go deep on is that AI continues to be a very strong force for good for the firm, both in terms of our competitiveness and driving growth and in terms of our internal abilities to reinvent ourselves and drive productivity. So if we look at BTS North America, back to profitable growth, just to remind you, it was a year ago that we declared we wanted to do a turnaround in North America. We shifted out the leadership, and many different leaders took new roles. We had three core strategies at that time, which was to make sure that in every proposal, we were using our most advanced AI technology products and services, and we were helping our clients with their AI ambitions. We decided to focus more on the core of BTS, which is training, leadership development, sales and activating strategy and change. And, of course, focus all of our time and attention with our clients, helping them to reinvent themselves and stronger commercial activity. And these worked. In the first quarter, we are back to growth with 8% growth in revenue and a 50% improvement in our profitability performance. BTS Europe continues to have very strong growth. That's due to the high win rates over the last year. Those projects continuing to move and a bunch of small projects that we won in the fourth quarter. They had 17% revenue growth, all of which was organic. And we're seeing significant growth in two of our large markets with a lot of growth potential, which is France and Germany. BTS Other Markets, we expect them to have a recovery later this year. And their profit dropped in the first quarter, which was primarily due to Southeast Asian operations, in particular our team in Thailand, Japan, and Korea. We have, of course, many actions underway that we've been addressing for the last few months. We have, given that this market went down in revenues, we are moving resources around most of the world market. And so the countries that are having strong growth can continue to drive growth and use those resources. We have a much stronger revenue growth plan. We have strength in leadership. We've moved a very strong partner for one market over to Southeast Asia. They're more dividing and conquering. We have a more industry-focused kind of client-back approach in terms of our go-to-market activities and so forth. One bright spot in other markets, despite the war, our Middle East team is having very healthy double-digit growth in the first quarter, and we expect that to continue in the second quarter. And our summary on AI for the moment is actually we are in the sweet spot right now, both for helping our clients in terms of evolving their companies to take advantage of the AI movement, AI era, but also in terms of our ability to invent internally at BTS, making our products more competitive and driving innovation. absolute breakthrough efficiencies and productivity gains for the firm. If we look at the statistics behind this, our core AI booking revenue, meaning helping our clients with their AI evolution, grew 35% in the first quarter. The AI product bookings went up 3x from a year ago. I believe, because we've been studying this and we help our clients do this, that BTS is in the top 5% of global companies right now because Not only have we achieved clear ROI from AI, but we've done it three times, and we can see more coming in the future. And we can take all of those applied AI learnings around how we've disrupted our own products and services, our own workflows, and help our clients able to do the same thing. More and more week by week, day by day, through our own experiences, this could not be more different from digital transformation of the past. This is a people, a leadership, and a culture issue. This is not a technology issue. Internally, we've talked about this all of last year. The productivity gains from our own AI workflow reinvention in last year, 2025, is equaling 74 million sec in annual savings this year in 2026. And all of this is great and it's very exciting and maybe equally important and exciting to stress is that the core of BTS demand remains very strong. BTS has never been a traditional consulting firm, right? And our core is about building breakthrough experiences and simulations In off-site, so top 500 meetings, top 50 meetings, CEO C-suite meetings, we pull people out and they simulate the thing they're trying to get done or the future of their firm. And clients are choosing to spend a lot more money and time bringing their people together, which I think is the counterbalance to the AI and the technology. And then we're also good at scaling adoption and change. And right now we have clients saying 25,000 people just got clawed. Can you help us with the activation, the adoption, and then the shifts that are going to come from that? So that's working at scale to support adoption and change. And as I mentioned last time, the team is doing a really nice job of attracting some of the best AI companies as our clients. I'm very, very proud of that. So that's the quarter. If we take a step back and just remind ourselves, like, why is BTS a great investment? We are back to sustained profitable growth. AI is creating more opportunities for growth for the firm and improved productivity internally, while our core remains in strong demand. And our growth has been and will continue to be capital light. If we just click on all three of these for a minute, the first one, back to sustained profitable growth, we have an amazing global client list. We operate in 24 countries. We have been very innovative in how companies learn, change, and perform for 40 years, and it is particularly important right now with a very unique value proposition. We still only have one, maybe max 2% of the global market share in our space, and we are way ahead of the competition in terms of our simulation capabilities and how we're using AI. And I would say sustained growth is in our DNA. It's what the company knows. It's what we're proud of. It's how we know to operate and grow talent. We've had 13% revenue, Kegar, from the time we went public to 2022. The years from 2022 to 2025 was held back simply for one reason. It was one unit out of three. And the mistakes that we made in that unit, that was dragging us down. 2026 forward, our biggest unit, North America, is back to growth at 8% revenue and 50% profit improvement. And we expect that growth to continue this year and into 2027. The second one, I've already made these comments, so I can skip over it. And the third one, our growth is capital light. So if you think about the history of the firm, we've grown 12x since our IPO. Roughly two-thirds of that has been organic. We've paid for a great number of acquisitions during this process. Despite that, we also give about 50% on average of our profit through dividends. We've asked for no capital, no new capital from our shareholders. We have a very strong net cash position, and our cash conversion is 97% over the last 12 months. So the outlook for the year remains unchanged. And I will remind you that we never change our outlook after the first quarter. So thank you very much and happy to answer your questions.

Perfect. Thank you, Jessica. So starting off with a question from Johan Sundén here at DNB Carnegie. When do you expect licensing revenue in North America to show year-over-year growth again? You delivered quarter-over-quarter growth in Q1. Great question.