Karnov Group AB

Welcome everyone to Carnum Group's earnings conference, where we will present the outcome of the first quarter of 2020. Magnus and I will present the outcome of the quarter using a few slides and then we'll open up for questions. With that said, let's get started with the presentation. Please go to slide three. Digging into the numbers, the adjusted EBITDA margin was 29%, compared to 26% in Q1 last year. We convert that margin improvement to a strong free cash flow. The organic growth was 3%, driven by organic online sales growth in all markets. The legal businesses in Region North had 11% organic online sales growth, a small improvement compared to the previous quarter. The corresponding number in Region South was 3%, hopefully the start of a continued online sales growth. Leverage was 1.8 times, well below our financial target. Please go to slide 4. We have now completed the large renewal season in both Region North and Region South. Customer satisfaction is on a high level and the retention rates are on the same high level as previous years. Customers are upgrading to our AI supported solutions and the number of users in all customer segments is growing and also the monthly usage. Two good signs of appreciated products. In Q1, the organic online growth was 5%, driven by our legal businesses in Region North, which had 11% organic online sales growth, and Region South, which had 3% organic online sales growth. Our market-leading Spanish business is accelerating growth thanks to a stronger product portfolio and deep expert authored local content. The French business had weak legal training sales. We are currently taking action in France. At the end of March, we launch new AI products in France and Spain. The new products are based on the group's AI platform and generate new customer value. While the launch was in late March, the initial customer feedback and sales results are promising. The adjusted free cash flow improved by 19 million SEK to 264 million SEK. During the quarter, we have repurchased close to 10% of the shares. The Board has requested a mandate to continue repurchasing shares also after the 2026 Annual General Meeting. Next slide, please. Kano's market-leading position in European civil law market sits in our proprietary legal content, authored by Kano's 7,000 recognized legal experts. Without access to this interpretive layer, courts, law firms and corporate legal teams cannot trust the basis for decisions. This creates a system-wide reliance on Kano. Canov has on a recurring basis throughout its history acquired and integrated content-based assets across Europe, creating stronger customer offerings, accelerating growth and improving margins. In Region North, we acquired and merged two Swedish competitors and created a market leader in 2019. We later merged the Swedish market leader with our Danish business and created a Scandinavian business selling AI-based solutions. We have, thanks to this, accelerated growth to double the numbers and raised the profitability from 40% to 50%. In Spain, we acquired and merged two Spanish competitors and created a market leader in 2023. After completing the integration, we now see accelerating growth and meaningful margin improvement. This is already before the launch of the new AI products in March 2026. Next slide, please. In the civil law markets where Kanoff operates, legal precedents are based on four different types of legal sources. Legislation, preparatory works, case law, and legal doctrine. Kanoff's proprietary legal content is the doctrine shaping the legal interpretation. For example, in 2025, close to 50% of the decisions made by the Supreme Court in Sweden referred to Kanop's content. This is different from common law markets such as UK and the US, where case law is more important. So in the markets where Kanop operates, our content is considered mission critical doctrine. Next slide, please. Tying this with our value proposition, Kanav, as a market leading provider of legal doctrine, has a mission critical role. To the left is our legal knowledge sources, both public sources and proprietary sources. Our authored content is written by our 7,000 local legal experts. The proprietary authored content is what makes Kanav a unique supplier of legal information solutions, helping our customers to make better decisions faster. This content is crucial also to develop and offer AI solutions. To the right is our customers. The largest customer segment is the public sector. Courts, universities, authorities and local municipalities, among others. The second largest customer segment is practitioners, mainly law firms. The third largest customer segment is corporates. mainly legal counsels. Next slide, please. These are some of our 7,000 legal experts across Europe. They are Supreme Court judges, advisors to the parliament, legal professors, partners at well-renowned law firms, and former counselors of justice across our local markets. Next slide, please. Our core value proposition is local legal knowledge authored by our experts, trusted by more than 400,000 legal professionals across Europe. Our competitive mode is the proprietary authored content itself, solely available via our solutions. AI serves as an interaction platform that delivers our content in increasingly valuable ways. By adding an AI workflow layer on top of that authoritative content, Kanoff turns the value proposition from a trusted legal knowledge source into an embedded infrastructure layer seamlessly across the entire circle of legal work. As legal workflow and legal research converge, customers will put a premium in products anchored in authoritative sources. Canav is uniquely positioned to capture this inflection because we can embed our legal content directly into AI enabled workflow services at scale. This summer, we will launch our content driven workflow solutions and leverage our proprietary content in new valuable ways to create even greater customer offerings. Next slide, please. With that said, we have reached the point where I hand over the floor to our CFO, Magnus Hansson. He will tell us more about the financial results. So, Magnus, the floor is yours.

Thank you, Pontus. So let's start with an overview. Next slide, please. In Q1, the organic growth was 3.2% and net sales were 628 million SEK. Currency effects were minus 3.6% and the acquired growth was minus 6.2% due to the divestments of EHS and the Spanish training business. We have separated EHS from all numbers and the slide present the financial result for the current Carnov Group. The organic growth in Q1 is driven by increased online sales, including selling more licenses to existing customers, higher tier packages, AI uplifts and attracting new customers. the online sales growth was 5% in constant currency. Next slide, please. Breaking down net sales on segment level, we see continued strong organic growth in Region North and modest growth in Region South in the quarter. Region North had organic growth of 6% thanks to strong online sales performance, while Region South grew by 0.3% thanks to organic online sales growth in both Spain and France. The legal businesses in Region North, excluding the acquired carved-out Schultz business, had an organic online sales growth of 11%, and the Region South legal businesses had an organic online growth of 3%. Next slide, please. The adjusted EBITDA amounted to 180 million SEK in the first quarter. This corresponds to an adjusted EBITDA margin of 29%. which is an improvement of three percentage points. The margin improvement is driven by operational leverage, product mix and lower cost base. Synergies are coming through as expected, meaning personnel expenses are decreasing. Next slide, please. At the end of Q1, we have achieved synergies within the group of 20 million euros on an annual run rate basis. The effect in the quarter compared to the baseline amounted to 4.9 million euros. We are ahead of plan. The cost to achieve and the two initiatives are estimated to 38 million euros. At the end of Q1, we have spent 33 million euros in cost to achieve. The initiatives are planned to end in 2026. Next slide, please. In Q1, net sales amounted to 325 million SEK in region north. Organic growth was 6%. The growth is driven by online sales. We continue to strengthen our market position and attract new customers, especially in the public sector in Sweden and Denmark. The online LIS business grew by 11% organically. Adjusted beta was 165 million SEC. This is an increase of 18 million SEC compared to last year. The adjusted beta margin amounted to 51%. The improvement is due to operational leverage from higher net sales and lowered cost base. We completed the Schultz integration at the end of 2025. This lowers the cost base in Region North going forward. Next slide, please. In Region North, the online sales accounted for 89% of the net sales in the quarter. Please note the divestment of EHS and fairly large FX effects. Subscription-based sales increased during Q1 and represent 90% of sales in the quarter. Next slide, please. Carnav's LIS business continued to grow as customers buy our AI package. In Q1, the organic online sales growth was 11%. Our tax and accounting business, Deep Kunskop, had a stable performance in the quarter. The carved-out Schultz business case still holds true. As mentioned in Q4, a few carved out customers outside Carnox core area have chosen other suppliers. Next slide, please. Which is the Region South segment? Net sales in Region South were 303 million SEK in the quarter. Organic growth was 0.3%, driven by the Spanish business, which had an organic growth of 5.3% in the quarter. The French business had solid growth in subscription-based online sales while legal training sales were weak, leading to a negative organic growth of 4.8%. The LIS organic online growth was 3% in Region South. The adjusted EBITDA margin was 13% in the first quarter. The Spanish business has meaningful margin improvement thanks to growth and synergies while the French business had margins decline due to the weak legal training sales. We are confident in our medium financial targets for Region South. At the end of March, we launched new AI products in France and Spain. This generates additional customer value. The initial customer feedback and sales results are promising. Next slide, please. Due to currency effects, the reported online sales in Region South declined by 3% compared to Q1 of last year and accounted for approximately 84% of net sales in the quarter. Organic online sales and subscription-based sales grew by 3% in Region South constant currency. Next slide, please. Which present the segment group functions? Expenses in Q1 were 24 million SEK. Next slide, please. Q1 is typically a cash-generative quote of a carnival, reflecting the timing of the group's online contract renewals and invoicing cycle. The renewal season has been in line with our expectations and the adjusted free cash flow was 264 million SEK. The leverage was 1.8 times EVTA last 12 months, well below our financial target. During the quarter, we have allocated 665 million SEK to repurchase close to 10% of the shares. Carno Group is limited by Swedish law to hold a maximum of 10% of its own shares. The board has proposed to the 2026 AGM on May 7 to cancel 8.4 million shares and that the AGM further resolves on mandating the board to repurchase up to 10% of the outstanding shares after cancellation. Provided that the shareholders vote yes on these proposals at the AGM, the board intends to initiate a new buyback program as soon as the shares are cancelled. I'm now handing over to Pontus again, who will present our last slides.

Thank you, Magnus. Please switch to slide 22. The market for legal solutions is growing. Our market leading positions in local European civil law markets stem from our proprietary legal content authored by 7,000 legal experts and trusted by more than 400,000 legal professionals. Seamlessly embedding our content into legal work will generate great new customer value. This summer, we will launch our content-driven workflow tools, which have been co-developed with customers. These new workflow solutions, along with our recently launched AI products in France and Spain, form an exciting future for Counter Group. Next slide, please. And by this, I'll end our presentation, and we are now ready to take questions. So I'll hand over the conference again to our host.