Guideline Geo AB (publ)

Hello everyone. My name is Malin Syberg. I'm the CEO of Geiland Geo. Welcome to our Q1 report. I will start as usual, a brief intro to the company and then focus mainly on the Q1 achievements, and highlights, and numbers, and then we will end with a Q&A session. So please type in any question you may have in the chat room and we will respond to them in the end. This doesn't work. So, we are your guide to the subsurface. We use non-destructive geophysical methods to see what's below the surface, just below the surface or down to even 1000 meters below the surface. We have three main applications. We help our customers find and monitor groundwater for the infrastructure and building construction market. We do ground investigations with our instruments. And for just below the surface, within a couple of meters, we find pipes and cables utility locating. Our customers are in the private sector, contractors, consultants, and in the public domain, both authorities such as water ministries worldwide and universities. This is who we are. We are a stock listed company. We're listed on first growth market. We have a long history. We have been in this space since 2023. We are on a profitable growth path. Last year, we had a small dip in our annual sales, but we ended up at 185 million Swedish kronor and a positive EBITDA of 21 million. We are made in Sweden. We have our headquarters in Stockholm and we have our manufacturing in Västerbotten in Malå and our R&D in the university city of Umeå. Innovation is in our DNA and we pride ourselves to have market leading innovative solutions for the geophysics world. We go to market under two industry leading brands, ABEM and Malå, the name of our town where we're from. Given our size, we have a really global reach and the orange dots in the map is where we have our direct sales and our own offices and subsidiaries. I'll talk a little bit more about that in a coming slide. The light green dots is our partner network, our distributors worldwide. As you can see, we cover the world pretty well and are present through our indirect channel in many countries worldwide. But let's move our eyes to Q1. We had a very strong start of this year. Our net sales was up 46%. We ended at almost 50 million Swedish kronor for the quarter, which we consider is a good sales for Q1. We had a strong order intake, plus 27 from last year. Our cash flow, our operating cash flow is strong and we have a solid net cash of 23.9. The operating cash flow was plus 10.5 million for the quarter, which we consider as good. If we look at EBIT profitability, EBITDA and EBIT, EBITDA was positive 1.8 and EBIT was negative minus 3.3 million for the quarter. I'll elaborate a little bit more on that, but one important factor for the profitability was that we were heavily impacted by the strengthened Swedish kronor. We're an export company. We are affected by currency fluctuations, and it was very strong this quarter. We are a true export company, and we think that our global sales makes us strong and also somewhat resilient to the US import taxes that's on everybody's minds at the moment. And I'll elaborate a bit more on that in the coming slide as well. If we break down net sales and order intake, as you can see quarter by quarter and through regions, you can look at these charts. Net sales on the left column and order intake on the right column. If we look at the market that drives the Q1 numbers, we can see that I'm happy to see that we have pretty strong sales to the infrastructure and building construction sector. Last year, this period of time, we had very weak infrastructure sales, and we could see end of last year that we started to see more and more sales into this customer segment and through our Marlowe product line, and that trend continues also in Q1, so good sales to the infrastructure segment. In Q1, we also saw strong sales into archaeology with our latest GPR solution, Marlowe solutions. We've taken the archaeology with a sector compared to our competition. They turn to us for our 3D solutions, so strong archaeology sales in Q1. The groundwater sector is strong for us, and it continues to be strong also in this quarter. I put mining up here. Mining is not a focus area for us, but in the quarter we saw a couple of mining customers choosing our solutions for their applications. One specific one I want to highlight is an Indian university that builds a center of excellence for geophysics, for mining, and they chose us and our solutions, different methods for their university. So we have customers also in mining. If you look at regions, I'm glad to see that we saw net sales growth in all three regions, in APEC, EMEA, and Americas. And if you look at the blue line, the blue bars, we can see that in this quarter we had an evenly sales in all three regions. And that's pretty, I like to see that because it shows that we're not dependent on one specific country or region, and this quarter, of course, it's good to not be over-dependent on the Americas. Last year I've talked to you about that we've had weaker sales in our major countries such as US, China, UK. We saw some trends in Q4 that they started to take off and that has also continued in Q1, so good sales in these large countries for us in Q1. If we look at net sales split between our product lines, there are a few things I want to highlight. We continue to rely on our two product lines, ABAM and MALO. They're equally important to us. We invest heavily in both. If you look at the orange bar, the MALO bar, it had a weak first half last year driven by the weak infrastructure market. We are now seeing that the trend that is coming back also holds for Q1. It's good to see. We also saw that if I look at specific products that are modern solution, our 3D solutions that we call array solutions, the Mira Compact I've talked about with you before, and the Mira HDR, they're selling well also in Q1. So our array, our modern solutions, they sell well, which is good to see. ABAM had a solid quarter, the blue bar, and it's as always I'd say driven by the water sector continues to be strong for us. If you look at specific products, the TEM solution, we saw a positive trend here, TEM solution specifically for the water sector. If we look at profitability EBITDA and EBIT, the top chart showing EBITDA and a positive number, and EBIT a negative number for the quarter. And as you can see the quarter by quarter, we do have a seasonal effect in our industry that we always tend to see a lower sales in H1, and that gives us a lower profitability because our fixed costs are more or less the same over the year. We did see a good portfolio mix. We continue to see and have a strong product margin, we are at a product margin where we want to be, which is really pleasing to see. But the currency effect really hit our profitability this quarter, and I have to have a slide to show you a bit more about that. The graph shows the Euro in the red line, US dollar in the black line, and Australian dollars in the light blue line. And these are the currencies that we sell in our net sales, comes from any of these three. Our supply chain is mainly Swedish Krona, a few others as well, but we have our supply chain close to Mono, so we buy a lot in Swedish Krona. And as you can see in the chart, the last column, the strength in Krona really shows that it's a big drop in all our three sales currencies, so that of course affects us. So if we look at our EBIT in the quarter, it was affected negatively with minus 3.6 million Swedish Krona for this quarter, so this is a big impact of this strength in Krona for us. If we look at cash flow and the net cash, we're happy with the cash flow, plus 10.5 million Swedish Krona in the quarter, and the net cash is 23.95, if I remember correctly. These numbers are mainly driven by that we continue to push down our stock levels. I've talked to you before that last year, this time we started to build our stock levels that was not healthy, and we've since then pushed them down, and it continues down in a very good way, and that helps our cash flow. Another thing that obviously helps our cash flow is that in Q4 we had strong sales by the end of the year, and that turns into cash when customers pay as expected. Given this last quarter's healthy cash flow and healthy net cash, in the quarter we lowered our check credit because we don't see as big a need as we had during the summer period last year. So our check credit is now at 5.5 million. US import taxes, I think it's on everybody's minds, and we follow the news hour by hour, and we're an export company. US market is pretty big for us, of course we are affected by this as well. So the current import tax on our instruments is 10%. When I went into this room, let's see what happens next. But if I use those 10% and apply them to our sales last year, those 10% would have meant that we would have increased our cost with 2 million Swedish kronor, just to give you an estimate of the impact of a 10% import tax to us. So of course we, as everybody else, we take measures, we take actions to mitigate this, and what we did during Q1 is that we did some stock build-up in the US prior to the import tax implementation, more or less to give us some time to act, to see where we end up. And we are prepared to revise our US price list if we see more import tax or big changes coming quickly. So we can be pretty fast in acting if this situation changes. But right now we're not overly concerned about this. In the quarter we registered and opened up our own subsidiary in Malaysia. That's part of our sales strategy. We want to be closer to our customers in our main regions. And the reason behind opening this up is that we want to create a hub in Asia to support continued growth throughout Asia. And in the table on top you can see that we've had a continued and strong and steady growth year over year in APAC, and we continue to believe that there is high potential in Asia for our instruments, for our solutions. And that's the reason for us to open up our own office. We want to be present to show customers that we're there, to also better capture needs and requirements and requests from the Asian market. At the moment we have six employees connected to this new subsidiary, and we have 17 distributors throughout Asia. And you can see them in the picture below. During the quarter we've held three partner conferences where we gather our distributors regionally. You can see pictures of them. On the bottom right picture you can see where we gather our distributors throughout Asia in a partner conference in our newly opened office in Malaysia, in Kuala Lumpur. On the top left picture you can see a partner conference in EMEA, Middle East and African distributors, and we gather this time in Ethiopia. And in the middle picture we can see our Latin American partners that we gathered for a conference end of March in Mexico. We believe these regional conference are really important to us and to our partners. And we have the same thing on the agenda every time. We capture and we ask for feedback input from the regions to better understand local requirements. We do sales trainings, we do product launches or updates, and we do demo training, how to sell, how to demonstrate, product trainings. And we gather the distributors in the region to share customer cases from the region, from different applications, and we want them to share best practices as a way to improve their way of representing us and representing our instruments. And last but not least, it's a way of building a strong network, building relations and building motivation, because we want them to focus and prioritize in selling our instruments and not somebody else's. So these events are important and they give results. We also continue with our innovation strategy, and this quarter we released an important product on the ABEM product line, ABEM Ground Temp Rally. And it's our first mobile solution for groundwater exploration where you can tow a Temp solution after a vehicle. It's within the Temp family, Transient Electromagnetic family, and it's to find search for groundwater. You want to have it mobile because it helps you cover larger areas faster, so that this is important in many parts of the world. And this release is a result of our collaboration, our partnership with a Danish Temp company that we signed about a year ago. If we look at the sustainability perspective, I want to share with you one highlight from Q1. Earlier this year, UNESCO declared 2025 as the International Year of Glaciers Preservation, and we teamed up with a team called Project Pressure, and they have conducted a glacier research expedition to Uganda using our physical instruments. You can see Heidi holding one of our GPR antennas to study melting equatorial glaciers and the impact of the groundwater availability in the region. Really important research work in the groundwater sector that really is so important for us. And that was the end of my run through of Q1, but here are the three key takeaways from me from this quarter. We had a strong Q1, a strong start of this year financially. We have during the quarter invested heavily in our -to-market channel by opening our new office in Malaysia to support growth throughout Asia. We have also invested heavily in our partner network. We've exchanged a couple of distributors, signed new ones, and we've held three partner conferences as a way to make sure that our partner network is the strongest and market leading in our industry. And the last takeaway is around the macric, the turbulent macroeconomics that we're in. We are a true export company. -99% is in export. So of course we are exposed to currency effects, and of course we are also affected by import taxes. But we think and we strongly believe that our global sales makes us strong, and it also makes us resilient to these turbulent times that we're in. But of course we are affected by it. And with that I close this session and hand over to any questions that you might have. Amir, do we have any questions from the chat?

Yes. You mentioned Americas. Do you have any competitors that might benefit from the fact of new import taxes?

Yes, good question. It's a bit different if I look at our two different product lines. If I look at Malo, our GPR solution, there are many competitors, and one of them is a US-based competitor. So of course they benefit from this, but apart from them, we have four European players that are equally strong, one in Sweden and two in Europe, and we're in the same situation with import taxes to the US. Some of us have legal entities that we import to and sell directly, and some of them don't, so they import directly from Europe. But on Malo there is one US player that of course will have a benefit from the import taxes. On ABAM, we don't face as fierce competition. There is another strong European player, and we have a similar situation from an import tax perspective.

You also mentioned that if the import taxes would have been active in 2024, it would have affected with about two million Swedish crowns. Can you elaborate on this?

Yes. If you look at our sales to Americas last year, I've showed that to you in earlier calls, it's been roughly 30% of our sales. But in the Americas sales, it includes both North America, which is both US and Canada, and it also includes Latin America, which is a pretty big part of our sales. The numbers that you see in Americas is not only the US, it's also Latin American numbers. And then we have a pretty large service business in the US, a recurring service business that is pretty high and that is not affected by import taxes at all. And thirdly, we have also, as we have legal entities, we have sales service support offices in the US. We have a transfer pricing, so our American legal entity, they buy from GANLA-U at transfer prices. So our sales prices, it's our transfer prices that has the import tax, not the end user prices. So these three things impact the total cost, impact of the import taxes to the US.

EMEA had a strong Q1 net sales and order intake compared to last year. Can you elaborate about how EMEA is developing and what is working well there? Which segment is growing?

Yes, EMEA has been working well for us in the quarter. Also, we have to admit that last year's Q1 was pretty weak for EMEA. The segments that work well is utility, is for the Marlowe specifically, strong in archaeology, also strong in the infrastructure market is starting to get back in a good way. EMEA, as always, it's ABM, it's the resistivity and products that go well in Middle Eastern Africa. So it's good to see the bounce back for EMEA in the quarter.

You mentioned that you're opening an office or opened an office in Kuala Lumpur. Do you have any plans to open more offices around the world?

That's a good question. It's an ongoing, never-ending discussion and that we review how to go to market, our -to-market channel. And we do rely heavily on our partner network. During this quarter, we've signed three new distributors worldwide. So we continuously add or review our partner network to make sure that it stays market-leading. But we also see that in some areas we want to go direct. We have sales offices in the US that we consider a really important market. You know that we acquired our distributor in Australia because we saw an opportunity and we wanted to get closer to our customers and have more direct sales in Australia. And now we've seen such a strong sales growth in Asia that we decided to open up an own office to even better serve and support and understand the Asian market. So it has to make business sense when to start an office and when to instead sign on a new distributor. We have that discussion every week. So we let you know when we do that. But the -to-market and the sales channel and where we want to have subsidiaries is really on top of our minds, on my mind. So no clear answer, but we are always considering it.

And I believe that was the final question. I don't see anything incoming. So thank you.

Thank you. See you again in a quarter's time.