Invisio AB (publ)

Welcome to the conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers. Please go ahead.

Thank you and welcome to our presentation of the First quarter of 2026, which we characterize as our best first quarter so far. As some of you will know, our first quarter is sometimes a little bit soft beginning of the year. And so has been the case also this year. But I still think we have done pretty well with good growth in both revenue and order intake, despite inflation. the prolonged U.S. government shutdown that we have seen during this quarter. We've seen good order intake across most of our key markets. And we will get back to, of course, some of the details here. Our gross margin was a little affected in the quarter related to some donation-tied sales issues. at a lower margin, and that also directly impacts our EBIT margin. But when we leave the quarter, we are sitting with a strong order book that underpins our revenue for coming quarters. Now, again, the first quarter was our strongest first quarter ever. Revenue totaled 430 million Swedish kronor and somewhat higher in comparable currencies. So this gives us a growth around 30%. This comes, of course, on the backbone of our very strong order intake in the last quarter of 2025. we see a very high interest in our new products that is also reflected in our order intake, an increase of 27% compared to last year. And we've seen a very good continued inflow of small and medium-sized orders. And again, as we've said several times, we see a trend towards higher number of product items per order as we are to a higher degree selling complete systems rather than just individual products. So all in all, good start to the year. Our order book stands at around 750 million Swedish kronor at the end of the quarter, which we, as usual, believe we will be able to deliver within the coming quarters, normally within six to eight months, so the majority to be delivered in second quarter and third quarter of this year. Now, our gross margin was a little bit lower. And this level is primarily because of sales to a customer for onward donation to a third party. And there we accepted a lower price. And I would say without this, we would have reached a gross margin close to 60%. And as we've said also several times, the growing share of new products also as we advance further into 2026 will contribute positively to maintaining healthy gross profits over time. We have a variety of new products coming during the year that I will get back to. OPEX investments follow our plans as they have done for many quarters. We increased OPEX with 15% in Q1 versus the same period last year. And operating expenses is primarily personnel costs in R&D, in sales, in operations and in other parts of the company and is related to the market activity levels that we see. Some of the R&D work, of course, related to future opportunities that we see with certain customers or markets and sales also related to building on the current sales team so that we can take advantage of the opportunities that we see in many markets. So at the end of the quarter, we are around 330 employees in the group. Our margins are due to our business model with outsource manufacturing margins fluctuate significantly. with our gross margin and our OPEX margin was 9.2. And this is in line with what we have seen previously in the first quarters of years. And this time it is related to the slightly lower gross margin. As you will recall, our target is that operating margin EBIT should exceed 20% over time. And as usual, we recommend that you look at Invisio not one quarter, but at least four quarters and at best 18 months rolling so you get a better picture of the business development as each quarter can be very volatile. On a rolling 12-month basis today, we are at 17.5% EBIT margin. Now, inventory has for a long time been a competitive advantage for Invisio and will continue to be so. We also expect inventory levels to increase somewhat over time, partly because of the many new products we are launching, but also to make sure that any geopolitical changes Dispute or activity will not have a short-term impact on our ability to deliver. So our inventory consists of standard products, but it also consists of key components that we deem necessary for the business for a certain period of time. So and we have seen on several occasions also related to near term activities that fast deliveries is a significant competitive advantage for us in the current market conditions. So we will continue to stay at this level and even somewhat higher. Yeah, normally not much to say about cash flow operating activities. 48 million lower than last year, but this is almost always related to when we invoice and when we receive payment. We have a very smooth system where we sell with 30 days payment terms and we also have the same terms with our suppliers. So it is all about timing for when we invoice and when we receive payments. Our board of directors have proposed a dividend of three Swedish kronor per share. We have our annual general meeting later today where the meeting will decide on this proposal. Our objective is to pay out 25 to 50 percent of post-tax profit in dividends over time. And with this proposed dividend, we are at 48 percent for the last five years. Period. So within our objectives. So from an operational point of view, from a business point of view, what we have seen during the quarter is very happy to report the first deliveries of some of our really key products. The new Invisio T30 headset, which we know will address very large user groups. The Invisio Link headset. wireless intercom that strengthens our total product portfolio. And this is the solution we have sold to the US Coast Guard. And then our H-series, the data hubs that enables integration of multiple products and functions on body worn soldier systems. And this broader offering It really strengthens our ability to meet the customer's growing demand for complete and integrated system solutions. This takes us to the next level. Now, manufacturing and deliveries is slowly ramping up, especially on the T30. It takes a little bit of time in the beginning to get up, but we are very focused on making sure that we can meet the anticipated demands for these new products and especially the T30. where we have delivered the first solutions this quarter. As we said, there has been a prolonged U.S. government shutdown, especially in the homeland security area. It is over now, but it did impact our order intake in the first quarter. We expect these delays to be recouped during the year, so hopefully we should be seeing solid order intake also from the U.S. side before the end of the year. Now, as you might recall, in the fourth quarter of 2025, we entered into a very important agreement, strategically important, with the U.S. Coast Guard. It is our first major contract in the maritime segment and Apart from the contract itself, it also opens door to other U.S. Coast Guard units, but also Coast Guards globally and other maritime organizations globally. We have already seen great interest from other organizations to test and try out the solution here, and we expect this to be a very significant project. order contributor to our business for a long time to come. It is really a unique solution that we are proposing here. So not much has changed we are still in a very uncertain political landscape that continues to keep defense and security high on the agenda. And adding to that, there is a fundamental need for modern communications equipment in many countries that needs to be added or updated. And these factors lead us to expect continued high demand in 26 and for many years to come. So a little bit business as usual. And with that, I conclude the presentation for today and we open up for questions, please.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Adrian Almland from Nordea. Please go ahead.