iZafe Group AB (publ)

Hello and welcome to ICF Group's quarterly report interview with Anders Segerström for Q4. Hi Anders! Hello there, Marius. It's been a very exciting year, and I think we're immediately entering all the numbers and what we have ahead of us. The most important thing that has happened during the year is that we have reached the ARR goal that we set up at the beginning of the year. Could you go into that a little bit? What does it mean for the company and how does it position itself in our business model?

Yes, it's really fun. Last year was the first time we went out with a forecast. It's been a long journey to develop the product, get the concept out there and really show it. It was the first time we started last year that we felt that we now have a track record that makes us know that we We know roughly how we're going to grow, and we made a prognosis. Last year, we started with an ARR of approximately 1.7 million. We were going to close at around 10 million, and now we've started the year with 10 million ARR when we go into 2026. So that's of course a huge milestone for us as a company. This year, we've gotten over 1,000 units that are active. And we see many municipalities and even customers who are very happy and want to start more. So it's a completely new phase and it's very fun.

You talked a little bit about hardware sales and license revenue. How does that fit into the numbers and how can the shareholders understand a little bit about it?

We sell a hardware, it's mostly for our suppliers, and we sell it to our partners. And there we have a revenue that is relatively good, but not so much profit on it. Sometimes even maybe a loss, because that's what makes us lower our license income. And with our license income, we instead have a good margin, where we have around 90-95 cents margin against our partners. Then we have Kent a bit during the year 2025, where we have bought our distributor towards the end of the year, which means that there we instead have hardware for ourselves here now forward, which means that we will not sell it to ourselves, as well as that we in Sweden start selling a whole lot ourselves here forward, especially with Adda, which we will go into a little more about later. It means that we do not sell hardware to ourselves, but we will do so on the other markets. But the positive thing is that our return on license is increasing in the markets where we sell ourselves.

In Sweden and the Netherlands, we mentioned that we have about 30 active communities in Sweden and about 29 customers in the Netherlands. How do these customers work and what standards do they have in the future?

If we take the municipalities, for example, like in Sweden. Last year, we called all these 290. We have talked to 200 of them. We have shown the products to 100 of them. And of these 100, we have resulted in that there are 30 that have already started last year. And there are 10 that are interested in starting. And there are 10 more that have flagged that they are interested in starting with Avda. And then there are the other 50... are interested, but it's all about timing, because- medical machines are still something that may not be present in some municipalities. They have it a long time ahead, which means that it will follow up during the year 2026. Then when they take this in, it's a work of change, they will- It's a process to get the municipality started properly, but we see that Those who have started now are happy, satisfied with the product and are starting to bring in more. So what we see here in 2026 is that we will grow both the number of units of municipalities, or the number of municipalities, quite simply. But in each municipality, we will also grow the number of units, which means that the effect will be very good here during the year. And this applies to both municipalities in Sweden and also customers in the Netherlands, like myself. But it also applies to our partners.

You mentioned a little bit about all of them. It's a very exciting part that I think most shareholders are very interested in hearing about. What impact would you be able to get on iSafe if it falls well? And what does it really mean for us?

If we look at it, what's most fun is that it shows that the cash machine is something that is really being sought after by all municipalities. Because they have done this as a national agreement for the demand to exist in the municipalities. Then it can still generate that some municipalities choose to go out on their own. But it makes it possible that those municipalities who want can call off this ADDA agreement. So that would give a norm. Simplification in the work if we have municipalities that are interested in us. We are on the ADDA agreement, they can call off directly from the ADDA agreement. It will be a process that is much simpler than if we have a municipality that is interested in us and then we have to go out on an agreement. Så det kommer göra stor skillnad snabbare och viktigt att veta är att de prognoser vi har satt är inte kopplat till om vi vinner ABBA eller inte vinner ABBA utan det är kopplat till hur vi ser den takt vi idag ökar med både enheter och kommuner.

So there is of course a very big potential in Sweden and in the Netherlands, as mentioned, together with our other partners. But if you would like to look forward to 2026 and where the company is right now with the momentum that we have heard of in most municipalities and everything is starting to come. What do you say, because there are conditions to scale the business even more forward?

Yes, it's a very interesting market. We did the acquisition, we need to grow there organisatorily to make sure that customers get the service they actually need and that we make sure that we get more units. So the first step is that we are going to hire a country manager. We have started interviews, we have two very good candidates that we are going to go into the final stages with here, who will then help us the market in a well-structured way and can take parts of it. In Sweden, when we start selling ourselves, we also need to get more staff in. We get higher revenue from selling ourselves, but we also need to get more staff. And it's mainly about having people outside the municipalities to implement, help project leaders, actually get upcoming meetings weekly. How many units do you have going? How many customers are out there? What is the goal for next week? And follow up so that we make sure that they get as good an implementation as possible. So that's the most important thing in our home markets. Then it's to help our other partners. We have Iceland this year. We have Norway, which we have six municipalities come to. We have Finland with an exciting project. We have Spain with our partner there, who is also one of our top ten largest shareholders, who has great potential. The Spanish market is still a bit immature, but we see that in the north, there is great potential with our partners. Here under 2026 in several units.

I agree, and it really feels like we're in a position now that we've reached the forecast we've set for 2025, and that we continue to follow that momentum together with ALDA and the other markets we have. And it's very exciting to see, so thank you very much, Anders. Thanks, it's fun. It's going to be a fun year. It's really going to be. Thank you very much.