Invisio AB (publ)

Thank you very much and welcome to our Q1 presentation that we have chosen to title position for an eventful 2025 and indeed we do expect a very interesting and busy 2025. As you might recall, we come from a very strong fourth quarter in 24 and indeed a full year 24, where we grew our revenues with 46%. And in the late part of quarter four, we had a delivery and order intake of a large order of 150 million Swedish kronor that we managed to deliver before the end of the year. Normally that would have been played into Q1 and be part of the revenues in Q1. But as we always deliver according to customer wishes, we managed to do that in Q4. And this is reflecting the normal order and revenue volatility that we see in defence markets. We will go into the different details of the numbers slide by slide. And of course, when we have a quarter like this, which is a little more soft, we still have to remember that the revenues are actually almost 10% better than the same quarter last year. And it is actually the highest revenue number ever for a Q1. Order intake a little down. We have hard comparison numbers because we did receive a very large order last year with the radio deliveries that you might recall. But we still leave the quarter with a quite strong order book i will dive deeper into that in terms of operational highlights there's a couple of things important to mention the acquisition of the product line ultra links in the uk the fact that we have updated our market estimates and also a few comments around the tariff discussions that are ongoing So when it comes to order intake, we were quite a lot lower than last year. And as I said, that was partly due to the very large order in Q1 last year that included radios from a third party. And I would say there's nothing unusual in this quarter. It's a little lower maybe than previous quarters, but it is part of the normal fluctuations and seasonality that we see. We still expect a very strong 2025. We can see the activity level being very high all around the globe. We can also see that many of the funds and budget increases that have been distributed in many countries have not yet reached our part of the product portfolio. So we expect this to happen from the second half of 2025 and onwards. Our revenues, as I said, best first quarter ever, approximately 10% higher than last year. So yeah, not so much to comment there. We will move on to the order book. where we at the end of the quarter were at almost 750 million. And the majority of this order book is expected to be delivered during the next two quarters. We are well prepared to be able to deliver relatively fast, as you will see also from the inventory levels a little bit further on. Our gross margins are stable over time. It was a little lower in this quarter, primarily due to a couple of deliveries made through third party system integrators where we have a little bit lower margin. But over time, our gross margin is averaging over 60%. And as we continue to increase the number of newly developed products, that will continue to support a strong gross margin, but there will be a few fluctuations between quarters pending some of these deliveries where we work with large system integrators or vehicle manufacturers or others where we have a little bit lower margin. But all in all, we are happy with that when we know the reasons why. So for OPEX, we are also in line with our own expectations. We continue to invest in product development and in the sales organization where we see fit. As you know, we have also acquired Ultralinks during the quarter, which added seven or eight head counts to our cost base. And we have consistently and very focused been investing in a new product portfolio and you can see some of the products that have been announced within the last four quarters. The new V60 generation 2 ADP control unit, our new world-leading X7 in-ear headset, the Invisio Link intercom system that will be shipping from the second quarter, the Invisio Control app for the intercom, the acquisition of Ultralinks and a number of other product upgrades. Just yesterday at a large trade show in Tampa, Florida called Soft Week, we announced two further accessory products to our Intercom, a switch and a loudspeaker to further expand the capabilities of our Intercom system. So our investments in operating expenses is definitely leading to a lot of new products. We have a world leading product portfolio at this point in time, and there is more to come before the year is over. operating margin of course lower than last year because of the lower gross margin and as well as the higher operating expenses that we have just seen. We still maintain our financial target that the operating margin over time should exceed our target of 15% and for the four last quarters we've been around 21% in average. So as always and said many times our company development should be evaluated from a long-term perspective and not from a single quarter. Inventories continue to increase a little bit and we are now at almost 300 million and that is a management decision to do so because it does enable us to deliver large volumes at speedy rates as we saw in Q4 where we delivered the 115 million order very swiftly. And that is definitely a competitive advantage in the current market conditions where a lot of customers and governments are willing to spend money and need to spend money there. It will be a significant advantage if you are able to deliver within a reasonable amount of time. And I would also say again that the inventory is predominantly components and standard products, so we normally do not see any risks from obsolescence or scrapping from the inventory. It is all products that are sellable. Cashflow was positively impacted due to payments of trade receivables that happened arising from sales in our very strong Q4 2024. So nothing out of the ordinary there. Explanation is strong sales in Q4. And from an operational point of view, well, you have probably Heard by now that we acquired Ultralinks in the UK during the quarter. And this is part of our ongoing transformation towards a company where we do not only sell and offer hearing protection communication solutions, but we look a bit broader on platforms for the modern soldier system and vehicle systems. And a modern soldier system today is a very complex network of many different products. radios, weapon sites, navigation tools, sensors and all kinds of different unique standards. And all of these devices must be able to share data, audio and power in an efficient way on the body of the soldier. So with our acquisition of Ultralinks, we believe that we have expanded our value proposition considerably. and over time it will also help us in developing new product solutions. So it allows us to work on the body of the user to combine a number of different products that were not always developed to be able to communicate with each other and to share data and power. In itself, this product line from Ultralinks will soon start to create revenues for us of a considerable size, but it will also help sell products of our entire portfolio in a larger system. And we again believe that this is strengthening our position in the modern soldier system segment, and we will continue to do that over time. During the quarter, as we touched upon also in the update from the fourth quarter, we have updated our total addressable markets from an estimated 14 to 25 billion Swedish kronor per year. And I'm not going to go into details with it here. It's also available on our website in details. But I think the headlines here are that this is an update based on where we are now. It's an update towards our first estimate almost 10 years ago and the estimate is more related to price increases and system selling than of the increased fundings that we are going to see over the coming years. So we still expect that the funding increases, budget increases over the next 10 to 15 years will result in even further market sizes, and we will have to update the numbers some years down the road. But this is where we believe we are right now from a market size perspective, 25 billion. Tariffs, there has been a lot of talk about that and uncertainty. And historically, defense equipment has either been exempt from tariffs or subject to very low rates. How that will play out in the future is of course a little bit uncertain at this point in time. But from a company point of view, Invisio has for quite a while been putting a couple of strategies in place, operational plans to compensate and handle potential terrorist situations. And that also include preparations for manufacturing in the US related to certain activities. We have since a long time back a well functioning manufacturing model that makes use of partners within NATO and almost entirely in Europe. We have today warehouse facilities, distribution facilities in the US and have also prepared for manufacturing in the US. So I think all in all, we will have to follow the situation closely, but we are well prepared for what might come not only short term, but also long term effects of these discussions. So in summary, we are moving forward according to our long-term strategy. Invisio is committed to playing a central role in the development of modern solar systems, and we have further reinforced that now by the acquisition of Ultralinks. We have a strong order book, we have good market conditions, and we look forward to a year of continued high activity, good growth, profitable sales, It is still very difficult to estimate regarding national defense budgets, but our best assessment is that they will start to have significant impact on our revenues or order intake from the second half of 2025. We have consistently made very good investments in new products in our organization and we believe that this has given us an excellent position to take advantages of the opportunities that we will see in the defense markets and public safety markets today and for the next 10 to 15 years. So we look forward to an eventful 25 where we will continue our long-term work to strengthen Invisio as a company and add value for our customers, our shareholders and for our employees. So with that I end my short presentation of the Q1 and operator we are now open for questions please.

If you wish to ask a question please dial star 5 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 Daniel Thorson from ABG Sundial Collier. Please go ahead.

Yes, thank you very much, Lars and Thomas. A question here on Q1 started off with a decline year-over-year in European sales but growth in North America. How do you expect these two regions to develop in terms of growth pace during 2025? Is it anything that differs these two given the recent US-European political discussions?