Exsitec Holding AB (publ)

Welcome to this quarterly presentation for Excitec. Presenting today will be Niklas Ek, CEO, Carl Arneson, CFO, and me, Hampus Strangqvist, Head of M&A and Investor Relations. If you have any questions, please use the raise hand function in Zoom. And with that, I'll leave the word to Niklas.

Thank you, Hampus. Hello, everyone. This is Niklas Ek speaking. I am the new CEO since the beginning of March. I will start off by making a short recap about our business as a reminder of what we do. After that, we will cover Q1 financials and a short market update and also a recap of our priorities going forward. So Excitec, we exist to deliver digital solutions that improve our customers' businesses and we aim to be a one-stop shop to the customer. We do this by selecting different softwares and develop in-house integrations that can be reused. By implementing different software and provide long-term support, we aim to be a single point of contact for our customers. The digital tools that we use can address areas like reducing financial administration through automation or use data for better decision making. Our customer base today is around 5,500 organizations and our target market is medium to large sized companies in the Nordics. No one customer typically is more than around 1% of our revenue, so very low risk in the individual accounts. We combine the software packages we work with to fit different industries and we have customers in many different industry sectors as you see in the slide. These are the primary software providers and partners that we work with at this time. We are resellers of softwares and the selection has grown to just over 20 software components. We combine these softwares with integrations that we develop in-house. We have a revenue share partnerships with these software providers where we market and sell their software to new accounts and make customers successful in using the software over time. The business model is built on three revenue streams. The sales and marketing is focused on selling software together with integrations. This is sold on a subscription model where you pay as you use. This revenue stream has grown to 23% of our net revenue. Just under two thirds of our revenue is from professional service where we implement the software and make the customer successful using the software over time. We also do custom development and custom integrations when needed. The third revenue stream in our business model is that we offer our customers a single point of contact support on a recurring fixed price model. In this engagement, we can also take care of infrastructure, internet access and IT security and such things. Excitec is a Nordic company that started out from Linköping, Sweden. Today we are over 600 employees with Sweden being the biggest segment. We have been successful in the last 10 years with growth, both organic and from M&A. Our EBITDA has followed our growth nicely with an exception in 2024. Excitec runs one of the largest trainee programs in the Nordics and has been doing that with scale since 2015. We are very proud of this and almost 40% of the employees working at Excitec started as trainees. After a record large trainee program in 2024, we are planning for a large program this August as well, but it will not be as extensive as last year. And normally our trainee classes are profitable sometime in Q2 and we see the same trend with a class from 2024. So let's dive into the specifics for Q1. I will start off with the highlights and then leave the word to Karl Arneson, our CFO, for the financial details. This is the short summary for Q1. We feel very good about performing 46 million SEC in adjusted EBITDA, which is the best result in a single quarter for Excitec. But we also need to remind us that in 2024, parts of EASER was in Q1. And after two quarters with the negative organic growth, we are now back at organic growth with 2%, where our overall growth was 13%. And it is really good to see our improvement in especially other Nordics with Denmark performing really well in the first quarter. Also Norway improving its margins from 10% in Q1 last year to 14% this quarter. When it comes to Norway, it is almost entirely better efficiency in our professional service, which is a good step forward for us. And the last one is about order intake where we had 15% growth in Q1 and overall a good product mix. Carl.

Thank you, Niklas. Starting off with our net sales, we reported a 30% growth in Q1 versus Q1 last year, where the organic growth summarized to 2%. And following the slightly stronger Swedish krona, we actually delivered a bit stronger numbers, although the effect was not that material. During the quarter, we saw strong net sales performances in especially other Nordics and in Sweden through our acquired businesses. And I will come back to the development per segment shortly. Our growth comes from almost all our revenue streams, where professional services and software are the main ones. And the overall feeling is, as mentioned previously, that... Still, our customers tend to push decisions for minor system updates and adjustments into the future, while bigger projects such as new investments and system migrations are developing more positively. Also, looking at our trend the last 12 months, we see a 3% growth year on year. Moving over to our adjusted EBITDA, we report a 13% growth versus Q1 2024, where stronger net sales and gross profit, of course, were the main drivers behind the uplift year on year. However, we still feel that we can deliver even stronger performances almost across all our segments. The efficiency in especially Sweden and Norway can be improved further. And this is something that we continuously are working on. You should also bear in mind that we launched a bigger trainee program than ever in Q3 last year, something that increased our cost base year on year in this quarter. For the entire year and a few years back, the net recurring revenue from software has been a highlight for us. And for the last 12 months, we see a growth of 32% in this revenue stream that made up of 23% of our revenue last year, as Niklas mentioned earlier. This growth is driven by both M&A and through new and cross sales, and to a certain degree also by price increases, of course. Overall, the organic growth in the net revenue from software summarizes to approximately two-thirds of the growth for the last 12 months, while the rest comes from M&A. This is, of course, a very important contributor to our earnings, but it also is a good measurement to see that we have a strong offering and that customers continuously working to use and deploy software that we deliver to them regularly. Regarding our different segments, looking into Sweden, Sweden delivers 11% growth year on year in Q1, where the organic growth was 1%. The adjusted EBITDA margin did not develop in the same manner and ended up at 18% versus 23% last year, although it's an improvement versus Q4 last year. Okay. The lower margin year-on-year can mainly be explained by a lower efficiency and higher cost for the trainee program, since the majority of our trainees are hired in Sweden. Regarding the efficiency, we however saw a gradually improving development at the end of the quarter. Norway reported a slight decline in net sales year-on-year, however, affected by a weaker Norwegian corona. In local currency, we instead had a slightly positive growth year-on-year. Something more satisfying is that we managed to increase our adjusted EBITDA margin from 10% to 14% year-on-year, where an improvement in efficiency was the main driver behind this uplift. Even though we are happy with the improvement in Q1, we still feel that we can have even more opportunities ahead of us. An improved margin in Norway is one of our key focuses going forward as a stable and strong margin over time is important for us to build a stronger business ready for further growth. Finally, our third segment, Other Nordics, that covers our offerings in Denmark and Finland, reported a very strong growth of 88% year-on-year, where 33% was organic. The growth year-on-year is, of course, boosted by the acquisitions we made last year of the customer base from ECIT in Denmark, but also due to good numbers from Mflow in Finland. Especially the professional services business in Denmark developed extremely strong during the quarter and the acquired customer base was to some extent previously given insufficient attention. So we have been able to serve these customers well during Q1 and we also see further potential in the coming quarters. This has of course been an extremely strong quarter, but we expect the development to normalize a bit over time. And as a result from these strong sales numbers, the EBITDA margin in this segment also developed accordingly. And by that, I hand over to you again, Niklas.