Karnov Group AB

Welcome to the Karnov Group Q2 2026 report presentation. For the first part of the presentation, 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. If you are listening to the presentation via webcast, you can ask written questions using the form below. Now, I will hand the conference over to CEO Pontus Bodelsson and CFO Magnus Hansen. Please go ahead.

Welcome everyone to Kano Group's earnings conference, where we will present the outcome of the second quarter of 2026. Please go to slide two. I am Pontus Boleson, president and CEO of the company. With me, I have our CFO, Magnus Hansson, and our head of investor relations, Erik Berger. 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. In the second quarter, the core online legal growth was 7% and the adjusted EBITDA margin improved to 25%. Growth is driven mainly by AI uplifts across all geographies. The financial performance is strong in Denmark, Sweden and Spain, where Canov is the market leading provider of legal content. The financial performance in France, where Canov is number three, is below expectations due to weak non-core offline sales. The organic growth was 2% driven by online legal. Online legal grew 11% in Region North, consistent with previous quarters. The corresponding number in Region South was 2%, continuing the positive trend from Q1. Leverage was 2.0 times well below our financial target. The increased leverage compared to Q1 is due to our buyback program. During Q2, we have repurchased shares for 159 million SEK. Please go to slide four. During Q2, we have continued the accelerated growth trajectory in online legal. Customer satisfaction is on a high level. and the retention rates on the same high level as previous years. We continuously upgrade customers to our AI supported solutions and the number of users in all customer segments and the monthly usage is increasing quarter by quarter. In Q2, online legal grew 7% driven by our legal businesses in Region North which grew 11% and Region South which grew 2%. Our market leading Spanish business is accelerating growth thanks to a stronger product portfolio and deep expert authored local content. Our new AI products launched in March have become the most important sales contributors in Spain Q2. At the end of June, we launched our new AI driven workflow solution on all our markets. A very important milestone for Canov. which expands the company's position in the legal landscape. Our number one market position in three European countries stem from our proprietary legal content authored by 7,000 local legal experts. For more than 150 years, we have been the partner legal professionals rely on for legal knowledge and doctrine and we have sold AI-supported legal research for the past two years with great success. Now our trusted content will be seamlessly at hand through every step of their work. By adding an AI workflow layer on top of our trusted authoritative content, we become an even greater partner to our customers. Quite a few customers on all markets have already upgraded to the solution, and customer satisfaction is on a high level. Next slide, please. Over the past seven years, Carnov has evolved from a leading Scandinavian knowledge provider into a leading European provider of mission, critical knowledge and workflow solutions. We have expanded our user base from 60,000 to more than 400,000 users. Sorry, from 60,000 to more than 400,000 users. The number of legal experts has increased from 1,500 to more than 7,000 and net sales has increased by more than three times. We have created shareholder value through value accretive acquisitions and divestments and generated accelerated growth through development of AI solutions with strong customer testimonials. Today, more than 75% of our net sales come from market leading positions. Thanks to our ever evolving proprietary content base, we stand strong in a legal market landscape in transformation. Next slide, please. So, a quick reminder of our value proposition. 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 Canva a unique supplier of legal information solutions, helping our customers to make better decisions faster. This content is crucial also for our trustworthy 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. And the third largest customer segment is corporates, mainly legal counsels. Next slide, please. In the civil law markets where Carnov operates, legal precedents are based on four different types of legal sources. Legislation, preparatory works, case law and legal doctrine. Carnov'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 Carnov's content. This is different from common law markets such as UK and the US, where case law is more important. 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 the interaction platform that delivers our content in increasingly valuable ways. We cross-sell our AI solutions into this 400,000 user base with great success. Late June, we launched our new content-driven workflow solution, which is powered by AI. By adding an AI workflow layer on top of our authoritative content, Kano turns the value proposition from a legal knowledge source into an execution layer seamlessly connected to our knowledge content across the entire cycle of legal work. As legal workflow and legal research converge, customers will put a premium on output anchored in authoritative sources. Canov is uniquely positioned to capture this because we embed our authoritative legal content directly into AI-enabled workflow services. Since the launch, several customers across our geographies have purchased the workflow solution. The customer satisfaction is at a high level and it looks promising for the coming sales cycle. During the autumn, we will enhance the solution with more features, creating even more value for legal professions. Next slide, please. Kano's rights to win in legal AI stems from our trusted proprietary content for more than 150 years. We've been the partner legal professions rely on for legal knowledge and doctrine. And we have sold AI supported legal research for the past two years with great success. Now our trusted content is seamlessly at hand through every step of their work. Customers are now assisted by Karnov from assignment to finished document. The legal validation follows every step of the workflow and switching between tools is not needed anymore as our trusted content is seamlessly integrated. Legal knowledge exists where the work happens. Next slide, please. Up until September 2024, Karloff only had one online legal product layer divided into different packages, the core legal databases. In September 2024, we launched the AI layer interacting with our content as a second product layer. Customers upgrading to the AI layer generate a net uplift of at least 30% for Karloff. Now, with our workflow solution launched, we have added the third product layer. Every customer uplifted to the workflow layer generates a net uplift of at least 50% compared to the AI layer and doubles the annual subscription value compared to the core legal database list price. Growth potential is driven by the pace of upselling to existing customers and pace of acquiring new customers. AI and AI-driven legal workflows are great growth enables for a company like Kaunov with unique proprietary content. Next slide, please. Over the past few years, Kaunov has transformed and grown into a trusted and leading European legal solutions provider through value accretive acquisitions and divestments. The company has introduced AI-enabled legal research and workflow tools that deliver clear customer value and at the same time achieved solid organic growth with a substantial margin improvement. Built on strong foundation of legal expertise, Kanovs deep proprietary content provides a distinct competitive advantage in legal AI. As the market leader in three countries, the company is uniquely positioned to leverage the seamless integration of differentiated content and workflow tools. Customer adoption of the new AI solutions is strong, and continues to accelerate the company's growth trajectory. Canov is aware of recent take private speculation concerning the company in financial media and has received related questions from shareholders and research analysts. The board of directors has and will continue to evaluate all options available to maximize shareholder value. Such options may include but are not limited to a sale of the company, divestitures, strategic partnerships or business combinations or other transactions, as well as continued execution and enhancement of the operating plan and capital allocation. The board of directors has appointed Goldman Sachs as financial advisor to the company. And we will not make any further comments to this evaluation at this stage. Next slide, please. And by this, I'll now hand over the floor to our CFO, Magnus Hansson. He will tell us more about the financial performance and the second quarter. Magnus, the floor is yours.

Thank you, Pontus. So please go to the next slide. In this quarter, we introduce a new term, online legal. In this term, we include our LIS, our legal information solution, our AI layer, and our newly launched workflow tools. In the second quarter, net sales amounted to 619 million SEK, a slight increase adjusted for the divestment completed in 2025. Online legal grew by 7% driven by continued AI uplifts, increased number of users and annual price increases. The organic growth was 2.4%, a slight decline compared to previous quarters. This is explained by weak non-core offline sales, mainly books and legal training in France. Next slide, please. Breaking down net sales on segment level, we see continued strong growth in Region North and modest growth in Region South in the quarter. Region North had organic growth of 5% thanks to strong growth in online legal, while Region South grew 0.2% thanks to online legal growth in both Spain and France. In Region North, excluding the acquired carved out Schultz business, online legal grew 11%. And in Region South, online legal grew by 2%. Next slide, please. The adjusted EBITDA amounted to 153 million SEK in the second quarter. This corresponds to an adjusted EBITDA margin of 25%, which is an improvement of 2 percentage points. The improvement is driven by operational leverage, product mix and lower cost base. During the quarter, we have launched our workflow solution and the cost base includes extra expenses relating to that launch. Synergies from our cost saving programs are coming through as expected, meaning personal expenses are decreasing. Items affecting comparability related mainly to restructuring and integration amounted to 31 million SEK during the second quarter. We are ahead of the plan in cost saving programs and in line with the expected cost to achieve. The programs will be completed by the end of 2026. Next slide, please. In Q2, net sales amounted to 310 million SEK in Region North. Online legal grew by 11% and the organic growth was 5%. The online legal growth is due to strengthened market position as we upsell and attract new customers, especially in the public sector in Sweden. During the quarter, we have upgraded several customers in Region North to our AI solutions. In Q2, we have a slightly larger decline in offline sales than usual. as we had one of sales of school curriculums in Sweden in Q2 of 2025. The effect on the organic growth is approximately one percentage point in Q2. We are expecting this trend to continue into Q3. The adjusted EBITDA was 155 million SEK. This is an increase of 25 million SEK compared to last year. The adjusted EBITDA margin amounted to 50%. 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, and this lowers the cost base in Region North going forward. Next slide, please. In Region North, online sales accounted for 97% of net sales in the quarter. Please note the divestment of EHS. Subscription-based sales represent 98% of sales in the quarter. Next slide, please. In Q2, online legal grew by 11%. The growth is driven by AI sales, pricing, and additional seats. Our tax and accounting business, Dibkunskop, has improved its financial performance and grew by more than 6% in the quarter. The carved out Schultz business performs in line with the business case. Next slide, please. Which is the Region South segment? Net sales in Region South was 309 million SEK in the quarter. Online legal grew by 2% and the organic growth was 0.2%. Our Spanish business continues its positive momentum. In Q2, the organic growth was 5%. The French business had solid performance in subscription-based online sales, while legal training sales continued to be weak, leading to a negative organic growth of 4.5%. In Breeding South, the group's common AI platform was rolled out in Q1 of 2026. This means that we have a growth opportunity through upselling AI and now AI workflows into the legal customer base. The adjusted EBITDA margin was 11% in the second quarter. The Spanish business had meaningful margins improvement thanks to growth and synergies, while the French business had margins decline due to the weak legal training sales. Depreciations have increased by 5 million SEC, mainly due to completed development projects and catching up on lease agreements in office relocation in Spain. The latter is a one-time effect. Next slide, please. In Region South, the online sales increased by 2% compared to Q2 of last year and accounted for approximately 83% of net sales in the quarter. Online legal grew by 2% in Region South. Next slide, please. Breaking down the adjusted EBITDA margin in Region South on country level, we see strong margins improvement in Spain and a decline in France. The Spanish business had an adjusted EBITDA margin of 18%, well above our medium term target of 16%. while the French business declined to 2% in Q2 due to the negative organic growth. We expect this trend to continue in third quarter as the market demand for legal training courses has a temporary dip. Next slide, please. Which presents the segment group functions. Expenses in Q2 were 35 million SEK. As mentioned before, Q2 includes expenses primarily for consultancy in relation to the launch of AI workflow solutions. Next slide, please. In Q2, the adjusted free cash flow was minus 14 million SEK. The cash flow from operating activities increased by 11 million SEK, driven by higher operating profit, while capex increased compared to Q2 of last year. During the quarter, we have allocated 159 million SEK to repurchase of chairs. I'm now handing over to Pontus again, who will present