Invisio AB (publ)

Thank you very much and welcome all to the presentation of our fourth quarter and full year report, which we characterize as record breaking. And indeed it is. In addition to the numbers, we also report on our acquisition of the product line called Ultralinks. That is a new growth opportunity for us going forward. So in the final quarter of 24, we saw a continuation of the positive trend we have seen throughout the year. And this led to a record quarter for us with revenues close to 600 million and order intake around 550 million. So we leave 24 with a very strong order book. And 24 also shows the last quarter that we have a a very agile business model where we are able to react quickly on customer requirements for deliveries. And that includes the fact that we have significant inventory for immediate delivery. And this has a direct impact on our operating margin, which in Q4 was record high at almost 33%. Two important customer activities that we will return to with the US Defense Innovation Unit and a large order that we received. And then we will also get back to the Ultralix acquisition and a little explanation to exactly what that is. So turning to order intake. Again, a very strong quarter and the demand continues to be strong. across all our portfolio and also in our main geographical market areas, North America and Europe. So we are almost 80% up compared to last year on the order intake. And for the full year, we went from 1.3 to almost 2 billion Swedish kronor in order intake. And if we exclude the radio in The first quarter of 24 we ended at 1.7 billion Swedish kronor. So a strong increase in our order intake both with and without the third party radios. Now that means that we go into 25 with a well-filled order book of around 830 million. This gives us a strong start because A big part of that will be delivered during the first half of the year. Again, we have a good inventory situation and we always try to deliver according to customers wishes. So we should be seeing good deliveries in the first half of 2025. The revenues for Q4 was record high, as I said, almost 600 million compared to 350 last year. And for the full year, we ended at 1.8 billion, also highest in the company history. So our growth in 24 was 46% in revenues or 32% if we exclude the radio deliveries earlier in the year. So this is a very strong performance and it shows the advantage of our business model with external manufacturing where we are able to scale up within a reasonably short amount of time and we see this as a strong competitive advantage in the marketplace where we are able to respond to customers needs within a very short period of time. Our gross margin also remained stable in the quarter a little above 60 percent improvement from last year and for the full year we were also above 60 percent 60.9 if we exclude the third party radio deliveries which impacted us with around five percent so and the majority of the deliveries of the radius took place in the third second quarter and were completed in the third quarter. So all in all stability across the line here and that also goes for our underlying trend for our operating expenses. We have a plan for how we continue to invest in R&D and in our sales team and so we added net about 25 people to the company in 2024. And then additionally, we have added six people through the acquisition of the Lynx product line in early 2025. So this is a sort of stable development we have seen, and that is in line with our expectations for market growth and development over time. We, as most know, expend about 15% of our revenues in R&D. We have many new products under development and in 2025 we will see several of our larger projects go into the final development stage, which is where we also do external testing and verification and Therefore, we are expected to see a little higher amount for depreciation than in previous year due to large projects being terminated and ready for sales. So, EBIT margin, as I said, the revenue is a direct impact on EBIT with the light business model that we have with external manufacturing and it was record high in the quarter and for the full year it was also satisfactory at 22.3% well above our financial target of 15%. But as we all know from history, it fluctuates between quarters and Therefore, as usual, the development and performance of Invisio should be evaluated on a longer term perspective and not on a single quarter alone. But we are, of course, very pleased with the performance that we saw in both Q4 and for the full year of 2024. Cash flow, not so much to say. We invoiced quite a lot of our revenues in the last part of the quarter. and therefore payments will be received in Q1 and that has an impact on the cash flow. But this is our usual way of operating and we will receive payment for the many shipments in the first half of Q1. A couple of highlights from the business side. Another order for our intercom system with hearing protection solutions so it is a combo system for a customer in Europe that wants intercom systems for vehicles together with hearing protection systems for the people inside the vehicles and this is what we have seen growing demand for in 2024 and we keep inventory of these solutions to be able to deliver relatively swiftly which also was the case here where we delivered the majority of the order already in the same quarter, Q4, where we received the order. Another significant customer activity was the co-development with an organization called DIU, US Defense Innovation Unit, that has resulted in product solution called Invisio Link that we have announced during 2024, which is a wireless addition to our Intercom system. And the advantage of cooperation with the USDIU is of course that we've had access to special users that have been able to give us necessary feedback and testing verification on the product solutions back and forth throughout the development phase. So we've been very pleased with the collaboration and this gives us further opportunities for developing products, but also for sales throughout this collaboration. We received the first test order worth around 3.5 million US dollar for the InvisioLink solution and we definitely expect this to be increasing over time and already in 2025. Then the acquisition of the product line LINX that we have announced a little earlier this year, which is a new addition to our product portfolio. And the explanation, so to speak, behind this is that it relates to the modern soldier system that we have tried to illustrate a little bit on the picture. That a modern soldier has a complex network of items on the body, radios, weapon sites, navigation tools, sensors, etc. And all these devices have different standards. they must also often share data audio and power to be efficient the integration of all these different devices is often difficult because they come from different manufacturers they use different protocols they have different power demands and and different needs for real-time communication now the product line from alter links will streamline this by making sure that things work together, talk together, harmonizing protocols and manage power and ensuring interoperability between the different devices. And as we can see, modern soldier systems are transitioning from analog to digital. And this means that more soldiers will be equipped with this type of advanced technology that not only enhances their safety, but also their coordination and mission success. So we think that greater connectivity, navigation and faster information sharing will improve their decision making and effectiveness. So the system is a plug and play. It has plug and play functionality and it will reduce both the cognitive and the physical burden on the user. So it's very much a product of the future. So what we have acquired is a product line, physical products with software from a UK company called Ultra PCS. And the product line will be renamed, rebranded to Invisio. It consists of intelligent data hubs, software inside, small computers inside, and a range, a variety of cables to connect with. The know-how is secured. It's not only the physical products, it's also the know-how by the fact that all employees that have been directly involved with the product line have now joined Invisio and are based in the UK. We have products that are already at display at trade shows. and are being promoted to customers, but we don't expect to see significant revenues from this until 2026 and onwards. The functionality, as I said, here you can see SOTA with a data hub on his back. The functionality enables integration of devices from different suppliers. including those that have not been designed to work together. So you get an ecosystem which will provide audio data connectivity and power and help the soldier maneuver and be more efficient. And it will allow a point of issue to provide a seamless and really robust plug and play communication system that meets the evolving needs of modern soldiers and defense operations. On the next slide, we just try to illustrate one example of what it could look like. It could be used as a standalone system, but here in this case, it is a user who has a V60 ADP control unit on his body with a headset. The user has two tactical radios and a laser range finder. that are connected to his V60, but then he needs more devices on his body and therefore the Ultralinks hub is really perfect because here you can connect an end-user device, a small PDA, you can connect a battery to power the entire system and you can connect an extra tactical radio and other types of equipment that you might want to have and the hub will make sure that all of these devices talk together, they share power, you can transfer audio and data in an efficient manner. So it allows for modular setup to enhance flexibility and Invisio will still remain central to the user through our control units and communication headsets. So this acquisition will align with our vision to expand and enhance our product offerings. We have now added a product line that we think will be very successful over time. It will be a catalyst also for development of future innovative products that will combine our knowledge and history within audio and communications with the knowledge and technologies that is contained in the hubs so by that we will be bringing future innovative and cutting-edge products to the market and as a total it strengthens our position in the market for the modern soldier systems with many digital components What we have also released today is an update to our addressable markets, and our first attempt to do that was back in 2017, so it was time to update the numbers. It is important to say that the numbers are our own internal estimates. They are based on certain available data and knowledge and data, but they are estimates and we are talking about addressable markets for our different product areas. And what has happened since 2017 is of course a couple of things. First of all it is a more mature market today, which means there are more potential users. Modernization programs have been ongoing in many countries, which has brought more radios and the need for our products up. There is an increased trend for digitalization and also a need for Communication systems with hearing protection are receiving higher priority. And as we all know, for the last two or three years, the geopolitical uncertainty has further contributed to market growth. In parallel with that, Invisio has also been driving the market. We have done that by extensive product development, and this gives us a higher average price per user and system, simply because a user will buy more of our things in a system. And the last example of that now is the UltraLynx hubs that will be part of the Invisio ecosystem, so to speak, or the solar system. So our continuous investments in R&D has also brought us to a position now where the market is more attractive. But of course also the general increase in prices and inflation since 2017 has contributed to a higher market value. The countries that we have included are the countries that are within NATO or NATO friendly and are basically the same that we have used in the previous estimates. And calculations are based on number of potential users, average prices and the purchasing intervals that we see within each sub market. So the conclusion to this is that we believe our current addressable market to be around 25 billion per year which is an increase with almost 80% from the previous estimate of 14 billion. And more details can be found in the press release that we sent out today in connection with the annual report. And again, it's important to say this is our internal estimate for addressable markets. There are no exact data available, so these are in vitio estimates. The board of directors are proposing a dividend of 2 kronor and 30 euro, Swedish kronor, per share. up by 1.30 from last year. Company policy and objective is that over time the dividend should be between 25 and 50% of our profits after tax and over the last five years we can now calculate and see that the average dividend has totaled 48% of the total profit after tax. And if we include the proposed dividend for 2024, the number will be at 42%. So we are within our policy. So a proposed dividend of 2.30. So going forward into 2025, we still expect strong demand. are committed to play a very central role in the advancement of modern solar systems with our personal hearing protection systems, our vehicle systems, our intercom, and now also reinforced by the acquisition of the data hubs from AltaLynx. And we have a head start with a good, strong order book. and very high market activities and that supports our sentiment that we are looking into another strong year in 2025. So before we go to questions I would just like to mention that we have many different types of customers around the globe and today there is a short video after this call if you like to see that, otherwise it's also available from our web page. It is a short customer case where our US team has put together a so-called command station that helps different types of law enforcement to communicate together which is often a challenge when they go to very large activities like for instance the pre-presidential rallies that we saw we see in the u.s as a problem for local states and federal police to talk together and there we have communication solutions that have been demonstrated and that is something we expect to be a sellable solution going forward. So if you have time, watch the movie. That was the presentation for Q4 and full year. So operator, we are ready for questions, please.

If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad The next question comes from Jacob Marken from Danske Bank. Please go ahead.

Hello, Lars. And first of all, congratulations on a fantastic quarter, of course. So just a couple of questions from my side. I'm just wondering, you know, on the new market size, of course, a big adjustment upwards. How much of that is related to the UltraLynx acquisitions?