MilDef Group AB (publ)

Well, good morning, ladies and gentlemen, and welcome to this investor call with Mildef, with a special focus on Mildef's reporting on the fourth quarter and year-end 2025. This quarterly call and year-end call will be presented by Daniel Ljunggren, president and CEO, and Vivica Jonsson, CFO, Mildef Group. We expect approximately 30 minutes to be sufficient for the presentation and Q&A. At this time, all guest microphones are muted, but I will open up and allow individual mics for the Q&A. And if you wish to state the verbal question, raise your hand or write in the chat and I will moderate the questions in the Q&A. Also for information, we record this meeting. So now, with no further ado, please take it away, Daniel Ljunggren and Vivica Jonsson. And remember to help our audience where we are in the presentation by stating the number on the slide. Take it away, Daniel.

Thank you very much, Olof, and a warm welcome to all of you that has joined this conference call here today. And if we move on to the slide number two, this is again the slide showing what we will cover here today at this conference call. We will start by having some highlights for the fourth quarter and also some individual key numbers for the fourth quarter. And then we will move on. Guided by Vivica here, we will move over to the financial side. covering more of the long-term financial trends within the company. And then after that, we will touch base on the RODA progress. You all know that the RODA acquisition was a transformative acquisition closed in March in 2025. So I would like to give you an update on the progress and integration of RODA. And then in the end here, we will have a short future outlook, and then we will open up for the Q&A session. If we then move on to slide number three, which contains the highlights of the fourth quarter, it's very happy to see that the fourth quarter was the strongest quarter to date in the middle of history, both in terms of order intake, net sales and earnings. Strongly and significantly supported by the acquisition by Rhoda, that was a strong contributor, especially to the order intake here in Q4. We also saw a margin that was improved here in the fourth quarter. EBITDA reached 151 million set that corresponding to a EBITDA margin of 19.3, which is a clear improvement from Q4 2024. I think that in some kind of way shows the operating leverage and the scalability we have within the business when we are increasing the top lines. Further on, I will also highlight the continued strong underlying gross margin, excluding the M&A from RODA. This was now the fourth quarter in a row where we ended up with a gross margin above 50%. And in this fourth quarter, the exact number was 52.8. And that's showing that I think we have an attractive offering with a good pricing power. Also worth mentioning, I'm very pleased to see that we now return to a positive cash flow in the fourth quarter, improved by 25% if we compare to Q4 in 2024. And in total number, the free cash flow ended up with 60 million sec here in the fourth quarter. Further, as expected, we saw a drop in the KPI net debt through EBITDA. This is something that we have expected due to the dynamic of the acquisition of Rhoda. We now saw in the fourth quarter that it dropped from 2.6 to 2.0, which is quite far below our long-term target of not exceeding 2.5. Another expected movement was the drop of the net working capital compared to the last 12 months net sale that dropped from 39 to 34%. That was also an expected move driven by the increased top line and the net sales. I also will say that we are moving into 2026 with a solid order backlog. The order backlog when we closed 2025 was 2.1 billion SEC. That is more than 80% better than we had at the same time the last year. So that is building some confidence as well going into this year. And in order to meet this increased demand, we are ramping up more than we have had and never had in this history of this company. So we are at a very high level when it comes to investments, and the investments is into increased capacity. It's about getting more staffing in their production sites and things like that, making sure that we are reaching a new level of capacity. And about capacity, it also worth mentioning is that these investments that we have made during the autumn here in 25 is now starting to pay off. The delivery situation is improved in the beginning of 2026. But I also want to say that things can quickly change. So that is the view we're seeing right now. But we also want to be humble and say that things can change quickly. And I know that you all probably already know about, for example, the global situation when it comes to the memories, which now have a very high volatility, both in price and lead time. And that is something that could have potential negative consequences in the future. But here and now, I would say starting on this year, we are in a healthy position when it comes to the delivery situation. And finally, the board of directors has proposed the dividends of 0.75 sec that last year was 70 0.50 per share and now we'll move on to slide number four and also speaking about investments i just wanted to show you on the slide here you can see a photo of our latest addition to our capabilities our new production site in area of stockholm is now open for business and it's very important milestones and sets the tone for future growth in our future the defense capabilities and delivery capacity so that it was an important milestone here in the fourth quarter Now I will jump over to some key figures here in the fourth quarter. Net sales, 87% growth year over year. As I said, an all-time high number in a single quarter. Organic growth amounted to 13%, and M&A contributed with 75%. Order intake, one new milestone for the company in the first quarter, where we reached an order intake that exceeds 1 billion sec, and that was growing 30% year over year. And the book-to-bill rate in Q4 was 1.28, and if we look at the last 12 months, it's 1.57%. And also what I think is a really strong number here in the fourth quarter, the operating adjusted EBITDA profit 19.3% coming from an increased top line with a good underlying gross margin, but also good cost control where OPEX development is according to plan. We will of course need to add OPEX this growth journey we are on and we need to invest to be able to increase our delivery capacity even more so this is something that we will see going on in the future where we will see some increased opex but i think it will be less than what we can add on top line and as i said yesterday a bit that was growing by more than 100 year over year And I touched base on this earlier as well, very positive to see that we have returned now to a positive free cash flow in Q4, growing that by 25% year over year. And also worth highlighting is that we ended 2025 with a very high number of account receivables. It was more than 500 million SEC that is in the account receivables due to the strong deliveries here in Q4. I also want to move on to the next slide, page number six, where we can see the business news. And this is announced press release already. So this is some kind of recap. What I would like to go through it is to give you an update on what has been going on in the Q4 from ILLF. If we take it from the left, we can see that we won. a contract with Altra Harris. Altra Harris is one of the big primes on US market. And I think that the significant importance on this contract was that the content in this order was mill of own IP products, the 19-inch 2 product segments that we now won our biggest first order in US, which to me indicates that there is a strong attractive offering on the US market as well, which is still the largest one when it comes to defense spending. The next one was an undisclosed NATO country. It was a large order for Mille for reaching 326 million. And then we talked about the new production facility that has now been opened in Stockholm. And the final piece here was that Rhoda awarded their biggest contract in that company's history by adding a contract on 320 million SEK. And since this is also a year-end report, I think it's a good time to make a summary and also make a follow-up towards our long-term financial targets and how we perform against those. If we take it from the left, we start with the growth, where we have a target of growing the company at least 25% per year. And the performance in 2025 was strong when it comes to the growth. Of course, very significant supported by the road acquisition, but it ended up with 70% growth of net sales. And if we then go further on and look into the profitability where the target is at least 15%, we have moved the needle a little bit. We are doing one percentage point better than we did in 2024. We are not reaching the target here that we have, so we have a little bit more to do when it comes to the profitability. I think we had a quite slow start in the beginning of 2025 but if we look at the second half of 2025 the EBITDA is reaching more than 17% so I think we are showing that we are on the right path when it comes to the profitability as well. And the capital structure also where the net debt should not exceed 2.5 ABTA is the target. And we have now been able to come down, as I said before, this was expected due to when we're now adding on more on the RODA figures into the consolidated numbers. We were expecting this to drop and we can now see that that has happened as well. And we're closing 25 in a position of 2.0. And then we have the dividends policy in the end where we, the target is to distribute 20 to 40% of the net profit. And as I said, the board of directors has proposed a dividend that corresponds to 24% of the net profit for payout in 2026. And by that, I would like to leave the word over to Viveka, who will guide you through the financial highlights and the numbers.

I will for sure do my best to do that. So turning to slide number nine with those financial targets fresh in mind, we'll look at the full year accomplishments just north of three billion in order intake, which is a 76 percent growth. We have a book-to-bill ratio of 1.56, which is, of course, meaning that we're building for the future with the higher order intake growth of, as I said, 76%, and a net sales growth of 70%, which is adding to our backlog. We're also welcoming a number of new employees in order to ensure our growth journey. Graphically, we will see the order intake haggard, of 53% since the IPO. And we have continuously built for the future by also increasing our order backlog in a similar pace around 50%. Let's deep dive a little bit into the full year figures on slide 10. 2 billion in net sales, which is a 70% increase. 64 of that is coming from our acquisition of Rhoda Computers. the organic growth was 6%. However, I want to highlight that we have divested handheld industrial segments, and the RODA sales previously made from Mieleft to RODA before the acquisition is now, of course, only considered once in the RODA part. So the underlying business of Mieleft before RODA is around 20%. The same logic applied then to the order intake, 76% growth with organic growth being a mere 1%, but the underlying business cleared for those structural initiatives is 14%. Profitability, which is maybe the largest progress in the group, and we're all expecting us to grow, but also profitability is growing. It's showing our scalable business model throughout the group, and I want to highlight that it is throughout the group, which includes Rhoda. This is also a scalable business model. We have a 15% long-term target, 13.5 in 2025, which is a full percentage point up from 2024. Daniel talked about the positive free cash flow in Q4, which is a strong sign. We are not catching up from the slower start of the year, and we're ending the year in a negative free cash flow position. We are gearing for growth and preparing the group to take further orders and ensuring customer deliveries with higher volumes. And with a strong growth, it will be sometimes troublesome to keep a strong free cash flow. but we're confident to build that over time as well. An illustration of what I just said with the strong order intake growth and the book to bill ratio, which is pegging me up for the order duration on slide 12, which is on the left-hand side, you have the order duration split per year, and you have north of 2 billion for the 2026, which is the current year then, on the graph to the right. And then you have 2027, 2028 and beyond. And if we are looking at the development of the duration, we have more than 80% growth of the current year versus the position that we held at the end of 2024. And we see a good development also of the year two, which is, of course, those two years that we are primarily focusing on of how much we have loaded the backlog with. So strong position in the backlog. We talked about the growth development. Let's take a little deeper look on gross margin development. The green line on the right hand side on slide 13 is showing the total group margin with the mix of RODA being further blended in the more the year. goes on since it's a rolling 12 graph and the gray one as of Q1 2025 is showing the mid-left group excluding RODA. And as Daniel mentioned, the margin development for the mid-left group excluding RODA is A positive trend, which is following the previous communication, that we are north of 50% when we're doing it properly. And as you see, that is exactly what's happening. We also see that the Rhoda Group has developed well since the acquisition and added on further gross margin in their business. So the downward trend here is merely a mix of the two business models. So each business is doing well. And the mix is simply a mathematic outcome. EBITDA development. It speaks for itself, doesn't it? The scalable business model. When we get the good volumes, we're keeping our strong margins. This is what we end up with operationally from a profit point of view. Talking about working capital is where we have the adverse effect of the growing, then, if you will, which is impacting our free cash flow. We saw strong deliveries in Q4, adding on our accounts receivable. So we see a shift from inventory to accounts receivable. We're happy to see that we're showing a number here of 33.6% working capital in relation to net sales. We have previously talked about different volumes, but since the road acquisition, It is a slightly different structure of the business models working capital consumption. And with that blend, we need to recalibrate what we think is a good level, so to say. We're striving more towards the somewhere around 30%. This is a good outcome. And as you can see, when we get the good volumes, we are coming closer to that. So that is a good development in Q4. We still have further activities ahead. to get closer to the 30% where we're seeing a more long-term trend or stability, if you so will. Net depth in relation to EBITDA. Well, we have said since the acquisition, it will take around a year to come below our long-term target after the close of RODA. And after three quarters, we see that we are coming down to And now after four quarters, 2.0. So well in line with our previous communications and our internal expectations. On slide 16, I'm leaving you the sales footprint geographically. where we, since the RODA acquisition, saw a strengthening of the European business and a good size of that now on 43%, almost on par with Nordics, 46%. North America is represented by 7%. And with that, I will leave the word back to Daniel.