Clavister Holding AB (publ.)

Hi, and welcome to our Q3 Interim Report presentation. My name is Jenny Ramkans, and I will host this session. With me, we have our CEO, John Westberg, and our CFO, David Nordström. We will start the session with John and David giving the presentation, and then end the session with a question and answer session. If you have any questions, type it in the Q&A tool. That's the box with the question mark. But now let's start and over to you, John.

Thank you, Jenny. And again, warm welcome to our interim report. Starting as usual with a summary of the quarter after I will leave to David to walk you through some of the key metrics. And then we will look at some specifics in our individual business areas as a. Overall summer of the quarter, I think we can conclude that Clevester has had a very eventful and a very positive quarter, actually in all aspects from all metrics point of view. One important milestone, of course, is reaching positive operating profit or EBIT. That's a milestone that we have been working hard to reach for a time. And finally, this quarter, we came to that point. If we look at our sales, the sales growth continues, and I think continues steadily is the keyword here. We have now 12 consecutive quarters of year-on-year growth. So I think that's something to be quite proud of, to be honest. If we look at the metrics in terms of non-FX adjusted net sales growth, we reach 16%. Adjusting for FX, we're looking at 21%. So we're hovering around the 20% growth numbers that we're targeting. We would like to increase that somewhat more. We see that the trend is pointing upwards. Looking at annual recurring revenues or ARR, a growth of 10%. As usual, our ARR growth is trailing somewhat from net sales growth, given the time lag from shipments of solutions or products to the actual contracts are starting. Looking at our consequential, then our EBITDA margin raised even further to 25% adjusted. If we look at the growth drivers, I think one key takeaway from this quarter is that there are no major significant individual deals. That is the pure explanation for the growth. It's on the contrary, an overall improvement of our base business topped with deliveries from our existing defense contracts. So the key base business in the companies is overall improving in a very steady fashion. Looking at errors and order intake, you might have seen a strong flow of press releases during the quarter. And it is actually new business contracts flowing in over all our business area. And that's especially nice to see that we're gaining traction also in business areas that have been a bit flattish before. And we'll come back to that. So all in all, the order intake for the quarter grew by 31 percent, which means that we have now an accumulated order backlog for the end of quarter at two hundred and thirty four million six. Obviously, that serves as a very good base for for further further net sales development over the coming periods. You have probably also noticed that by the end of the quarter, we concluded the T08 warrant package and we had a very nice pickup rate on that one, 98% participation. And as a consequence of that, it meant that Clavister was brought 50 million SEK approximately before transaction costs. And as we previously communicated, the entire proceed is used to pay down our EIB debt. With that, leaving to you, David, to talk us through the metrics.

Thank you, Jan. So looking at then starting with, as usual, stability in the trend, if we look at the Trend line in the upper part of the graph, you see that we continue to be on a good order growth trend. Also comparing Q3 last year to this Q3, we see a healthy 31% growth. been following Clavister during the quarter, you see that there's been quite many orders press release, a good inflow of, I would say, mid-sized orders in this quarter, helping us growing. In the same time, we've seen a good stability and good growth of many smaller orders, especially in the civilian firewall business. So all in all, that leads to a good order intake growth in this period. And if we move over then to I would say same thing there. We see that the trend line of growth, it is there, growing with 16% in reported numbers and 21% in FX adjusted growth. We can also see that we have an ambition to be above 20% growth on net sales numbers in reported net sales. Q1, Q4 last year as well. Didn't fully reach that in Q2, not in Q3 either. But I think then that we see we are solidifying kind of our base of growth that is quite resilient being on the above 15% growth levels. And I think we are clearly saying that we are aspiring to come back to and be above 20% net sales growth in the near term also. But the stability in the performance, I would say. Then ARR wise, double digit growth with 10% growth of ARR. Q3 is a kind of a challenging quarter for the perspective that it is a vacation period, a bit of a slowness in July and August, meaning that a lot of the sales happens in the later part of the quarter. Meaning also that for us to record ARR, that means that we have to have sold the contract and the customer needs to have started that contract. So in a period, a quarter like Q3, when you tend to have because of you know vacation reasons more activity by customers in the later part more sales there meaning then activations of licenses tend to to a higher degree than in a normal quarter be in the quarter after so i think there is uh quite a lot indicating that we would see a little a bit of a better uh growth for arys in in cube uh q4 but absolutely good numbers with double digit growth gross profit See here, a 17% growth compared to then a 16% net sales growth. That clearly indicates better gross margins in this quarter compared to Q3 last year. That, I think, is something that we're quite pleased with, given the fact that we have had a quite strong increase of hardware sales. I mean, number of shipped appliances are up 25% compared to last year. That creates pressure on the gross margin. So being able to grow it from 79.3 last quarter to 80.4 in this quarter, well, that means that we also have a good mix of profitable software contracts here in the sales mix, leading to a better gross margin and then also growing gross profit which is if we then also look at the cost side of things and we look at OPEX, well, this delta that we have now been demonstrating quite many consecutive quarters over and over, stability in the growth numbers, OPEX being under control means that, you know, for the first time in the history of Clavister, our OPEX is in this quarter below 80% of sales. It's at 77%, meaning we are growing with profitability. So this delta of higher growth and lower growth and a significantly lower growth rate in our costs creates a better and better operating leverage for us. So looking at EBITDA, well, in this quarter, we land with a 25% adjusted EBITDA margin, which is our highest EBITDA margin so far. Growing that with 47% compared to last year. And those who participated in the Q2 presentation, you might remember that we were a bit displeased with the EBITDA margin in Q2. So glad to see that the trend line is back with strength there. Coming in with, as I said, our best EBITDA margin so far. The ambition is to go higher than that. But glad to see that the trend line is in direct direction. So I think I will stop there and pass the ball back to you, John.