CAG Group AB (publ)

Hi, and welcome to today's webcast with CIG Group, where the CEO Åsa Landén Eriksson will present the report for Q3 2024. After the presentation, there will be a Q&A, so if you have any questions for Åsa, you can send them in the form to the right. And with that said, I leave the floor to you, Åsa.

Tack så mycket. Kul att ni har valt att vara med C&G här på onsdags eftermiddagen. Titeln på vår Q3-rapport som jag ska presentera på svenska är vinsttillväxt i en marknad under återhämtning och det känns ju bra. Så jag går rakt på sak. Jättekort bara för er som inte känner till oss så är vi We are also an IT consulting company with management and management. An important thing is that we have ten independent subsidiaries in different niches, which is a great structure. On the map you can see where we are and you can see that we have the pleasure of being one of Sweden's best jobs. We have won third place in Great Place to Work two years in a row. If you look at what we do, we do IT things, system development, project management, test automation, BI, analytics, which in extension is AI. The banking sector, anti-penning, payment solutions, anti-financial crime, fraud. And in operation and administration, it is the goal and land storage and storage, many, many goal migrations, as it is so nicely called nowadays. But also financial expert systems such as the portfolio management system, Simcorp Dimension and the like, we work with. So we are very niche there. And the Tilda business also has a SOC, a security surveillance service. which is also backed up by our specialist box within cybersecurity, which can do everything from pen tests to information security, such as ISO 27001 and DORA, for example, within the financial sector, with various regulations. Within defense, we work a lot with systems engineering and lifecycle management, which focuses a lot on handling and handling of various large systems. And within e-commerce, we have common e-commerce solutions and also product information systems. And I don't have a special slide about AI this time, but this goes into all of our areas. If AI is business value, it is very important that you know your businesses out there. So we focus a lot on business value for our customers within AI. We have had a very good development over the past few years and we intend to continue with that. We also have 20% recurring revenues in addition to our consulting services. Then I go straight into Q3. How did it go? Pretty good, we think. We have a profit growth that delivers the highest margin ever in the history of CHG. 7.1% is due to the fact that it is still Q3 that is the semester period in our industry. Otherwise, the margin should be up to 8, 9, 10, maybe even 11%. But for Q3 it is really good and our EBITDA grew by 16% as well. The turnover has been good in a fairly divided market, a little more challenging than last year. So that's what we're happy about. And we also have an increase in profit per share. So far, so good, we think. Good Q3, if we can say it ourselves. And looking at the whole year, we also live up to our reputation as the most stable IT consultant. Vi har en vidmakthållen omsättning med en tillväxt på egen affär, om vi räknar bort underkonsultaffären, som är av olika slag, och en marginal som är hyggligt i närheten av föregående år. So that's where we are. And if you look at our segment distribution, we see that it continues to grow in the defense segment. It is now one third of our revenue. And I'll come back to that a little later. But you also see that banking and finance, for example, is about a fourth, and that we have many other customers also in the public sector and a little else. A good, stable customer base. If you take a quick look at our customer base, you can see a lot of nice names here as well. We have fantastic, nice customers, which we are very proud of. And not only that, we also take new customers all the time. Even when it can be a little tougher out there on the market, we have brought with us Vitamin Well, so we have a lot of vitamins at the office now. We have VetFamily, which is part of Vimian, a large global animal health company. Syre, which is a startup more or less, but which is backed up by, among other things, H&M and Volvo, and works with the recovery of polyester fiber. A really cool company that we are proud to be able to help. Hansen Advokatbyrå, McGregor, which is part of Cargotech, where we help them with product development processes. And then we have many new customers within Pentest and Dora's cybersecurity regulation for the financial sector. But we don't usually talk about who the customers are. But it's nice to see that there is a flow, we think. This is also true for our current customers. We got a new Fintech customer in Q2 that we have started working with here in August and that has already expanded. We think it's a great confidence to get an increase like this pretty soon at the start. We also have several projects within Microsoft's 365 Co-pilot, which is Microsoft's AI solution, where we roll out and help customers get the business value of it. And as you can see, many other customers as well. Finally, as a transition to a little extra section on the defense sector, we also have new projects at FNV within management systems and military health care and also at BAE and SAG. So I just wanted to take this time to talk a little more about defense, as I said, and this is an example of things that we do to the defense authorities above all. And what I want to say with this picture is actually that we work with the business itself. We are deeply involved in the project to build up our capabilities within the defense sector. So it's not like we're sitting with HR systems or administrative systems to some... till en märkbar del alldeles, utan det är liksom Gripenprojektet, det bygger upp flygbördskapacitet, vi jobbar med ytfartyg, amfibiefartyg, ubåtar, stridsfordon, other weapon systems, a lot of leadership systems, both on the ground and on the marine side. And also, as I said, with military healthcare, which we think is really fun, but also cybersecurity and communication systems. We are also working on NATO-compatibility, to help Sweden with further development. We have already had a lot of compatibility, it's a difficult word, but it will be exposed now that we are with NATO. And if you look at the customer side, there are the defense agencies, not only, so to speak, FNV, the defense market. FNV is our biggest customer and as you saw, a lot of interesting projects. But also in Norway, we have the material administration of the defense and the logistics organization of the defense, which we are very happy to work with. Finnish Defence Forces and also Denmark. NATO is an area where we don't have as many concrete deals as we do now, but we have approved suppliers to NATO's procurement agencies, which we hope to be able to expand here in the future. And then we work with other authorities within the sector. And we have many framework agreements with these customers, both in Sweden and Norway. So it's a very good base to stand on and very interesting tasks. And if you look at the industry, we also work broadly with Saab's various businesses, with BAE as I said, with Scania, which also has a military part with trucks. In Norway, Rheinmetall, Kongsberg, Danmark, Weibel and also a lot of other equipment manufacturers in the Nordic countries. Of course, we have a framework agreement with Saab and a strategic partnership agreement with BAE, which we are very happy about. So it's a very broad base of customers. And this is a sector where we see a good future demand, I should say, in the long term. Increased budgets, full order books. So we feel a strength for us, and it feels good to contribute, if one should be a little generous, to maintain our democracy. It is extremely important, I think myself. I think you agree. I will end the presentation with a picture that is quite similar to the one I took in the last two quarters. Good demand in the defence sector continues. We see a recovery on the general market. I mean specifically the public sector and system development, Inflation pressure and sluggish budgets have made it slow if you look back a year and so on. Now we see that it will come to life and there are enormous needs. And then a little lower price and wage inflation and still regulatory requirements, many of those. And we see that the M&A market can also get a little more speed next year. So that was really what I was going to say here before we open for questions.

Thank you very much for your presentation Åsa. And I think we'll go straight into the questions here. How has the expropriation law affected you now after the introduction? What are the effects of it in your industry?