MilDef Group AB (publ)

Well, good morning, ladies and gentlemen, and welcome to this investor call with Mildev with a special focus on Mildev's reporting on the first quarter of 2026. This quarterly call will be presented by CEO Daniel Ljunggren and CFO Vivica Jonsson. We expect approximately 30 minutes to be sufficient. for this call and the Q&A. At this time, all guest microphones are muted, but I will open up and allow individual mics for the Q&A. So if you wish to state the verbal question, raise your hand or write in the chat. I will then open up your mic and you will also have to open up your individual mic to let your lovely voice come through. Also for information, we record this meeting So now, with no further ado, please take it away, Daniel Ljunggren and Vivica Jonsson, and please remember to help the audience understand where we are in the presentation by stating the number on the slide.

Thank you very much, and a warm welcome to all of you that are joining this Q1 update here from the middle of today. And we will try to remember to state the numbers on each slide. This is what we will try to cover today. We will go through some highlights for the first quarter. And after that, we will deep a little bit diver into the financial numbers. And then we will also further give you a update around the rhoda progress and then we will have a short summary and then we will open up the floor for q a session in the end but let us then start with a highlight for the first quarter here q1 was a record quarter in terms of order intake indicating the strong customer demand for our products and solution and the demand is still very solid This is now the second quarter in a row where we exceed the milestone of one billion SEC in order intake for an individual quarter. And I think to bear in mind is especially strong that it's in a Q1 that is normally a little bit weaker quarter during the year. It is, however, worth repeating that Middle Up operates in an industry where order intake net sales have are typically volatile over individual quarters so for this reason as stated before it's very important to assess middle financial development in a more long-term perspective the second one is a very strong delivery execution um in Q1 here. Our investments that we've done in the past here and already started doing in the second half of 2021 has now really started to paying off in an increased delivery capacity. We already in Q1 stated that the delivery situation in the beginning of this year was clearly improved. And that is something that we now see in the net sales numbers as well, that we have had a strong delivery execution in the first quarter. We also saw clear improvements of the margins here in Q1, as we have stated before. When we see a strong top line net sales development, the margins also increase and falling in the right direction. And here in Q1, there was a good proof in the putting for that statement with a high margin. This also, of course, relates to our scalable business model with a high share of fixed OPEX. If we continue, we also see another positive trend in Q1 was that we saw a significant improvement of the free cash flow, the cash generation. Here in Q1, it amounted to 159 million SEK compared to the same quarter last year where we had minus 75, so a huge difference between the different quarters. And this has, of course, improved due to that we have a better margin, We have a strong growth and we have done this without adding more working capital in the same extent. Also worth mentioning as a highlight here in Q1 is that we have secured some strategic contracts within our new established solutions offering. So this is an offering where we mainly support our customers around system design, system engineering of tactical IT system for military purpose. This is a support that we provide guarantees high availability and quality for our customers throughout the full lifecycle of the systems. So this contracts, I would say it's also evidence of our capability delivering turnkey ready it solutions to our customers and then our portfolio is not just isolated to the hardware it's now a wider offering. From a pure financial perspective, these contracts are mainly improving our margins, but also that the nature of this business have a less volatility over each quarter and also provides a more stable cash flow. And finally, as a highlight here in the Q1 is around our investments into additional capacity expansion, and they are still at the high level. At the same time that we are delivering this high growth rate and also improving our margins, we continue to invest to be able to meet future customer needs. So the investments that we are doing are mainly consist of onboarding more co-workers, but we are also increasing our production areas. The latest major investments that we have announced is the extension in Helsingborg, where our current operation premises in Helsingborg will be doubled in square meters. And that is something that we think and expect to be ready somewhere around summer next year. And by that said, I will move over to slide number four and give you some of the key figures for Q1. If we start with the net sales, we're in Q1, 708 million SEK. And that is a strong growth, 108% if we compare year over year. And as I said, this all-time high net sales in the first quarter is due to our strong delivery execution. Organic-wise, the growth amounted to 41%. And M&A-wise, the contribution from the road acquisition was 6-7%. Let us then move over to the adjusted EBITDA, 121.6 million SEC. That is also very strong growth compared to last year in the same quarter. If we look at the EBITDA margin here in Q1, as I said, really improved to 7.2 compared to 4.6 in Q1 2025. Gross margin in total ended up at 44.3%. If we are including the M&A from the road acquisition, but also very pleased to see that the underlying gross margin excluding the M&A was at the high level this quarter at 53.9%. If we then go further down in the P&L and also look at the OPEX development, I would say it's according to plan. If we are excluding the OPEX that is coming from the M&A, the increase was around 6% year over year. which I think indicates a good cost control within the company. So even if we are growing net sales and order intake really strong, we still continue to have a development according to plan when it comes to the OPEX. And that takes us to the order intake, which I think is the really strong number here in the Q1. 169% growth if you compare year over year. So this is also an all-time high for an individual quarter. And I would say that underscores the robust demand we see for our offering on the market. And also indicate even if we have a strong growth in terms of net sales, our book-to-bill rate is still strong, 1.5%. And if we look at the last 12 months, it's 1.6. So that indicates continued growth when it comes to the net sales and supply. Finally, on the key figure slide, the free cash flow. Huge delta between Q1 2025. We are improving that with 234 million set. It's an all-time high number for the free cash flow in an individual quarter. And it's due to, as I said before, our growth in combination with improved margins without being able to add networking capital in the same extent. That was the key figures for Q1. Now I will move over to slide number five, which contains the operational highlights, just to give you a quick overlook of some other highlights that is not on the financial side. Right here and now the construction of our new assembly space in Helsingborg is ongoing where we're adding up to 50% more assembly area and this is something that we expect to be ready quite in near term here and before we move on to summer vacation in 2026. So ongoing And as I also mentioned, the more wider decision and make a bigger expansion in Helsingborg to meet the long-term demand is now taken. And this is something that we expect to be up and running, not later than fall in 2027. I mentioned this before in the highlight as well, and it's really important to do it once again, the several large system engineering contracts that we have. Secured here in Q1 is towards both the government side, but it's also towards the business-to-business customer. Really puts Millef in a good position on this market, making sure that we are making the movement upwards in the supply or in the value chain, etc. So it's really strategic, important contracts that we have secured here in Q1. And finally, and I will come back to this a little bit later on our RODA progress, but it's now a milestone where we have reached the one-year milestone together with RODA in the middle of group. But I will give you a little bit more flavor on the progress around RODA later on. With that said, I will wrap up the first session here, the highlight session, and I will leave the word over to Vivike Jonsson, our CFO, who will give you some more details around the financials.

Thank you, Daniel. We will be starting on slide seven, which is quite a busy slide, but the message is quite concentrated. It's a fast-growing defense tech company. We have an annual growth rate all the time here on 40 plus percent, which is, of course, exceeding our long-term target of 25%. We're doing that with a book-to-bill of 1.6%. which is of course indicating a strong future as well with the backlog of just north of 4 billion Swedish and 514 employees enabling this growth and this continued journey is the main message from this slide, which will be taking us to slide eight. where we are having a bit more of a deep dive into order intake and book-to-bill, where you can see that we are on a rolling 12 basis on an order intake of roughly 3.9 billion. So also here catching up on the four. And you see the book-to-bill ratio remains rather stable the last three years. comparative periods here full year 24 full year 25 and the rolling 12. and so we are continuing to adding more orders to our backlog than we are delivering out although we did see a very strong and delivery during q1 following that on slide nine we are looking into our backlog duration where you can see the deliveries for the current year here 2026 as well as the coming years, 27, 28, and then what we have beyond that. We do see that we have, for the first year here, roughly a 20% growth in what we have already now after Q1 in the backlog for delivery in the current year. So just shy of 1.9 billion for 2026, which we are counting as a strong sign and a good basis for 2026 but we also see good growth in the in the other period and the small dip in the last period here is related to our previously announced contract that was going on deliveries for 10 years which we have now started to deliver on so that naturally goes down it's important for us to strengthen our backlog in closer deliveries further this we're going on slide number 10 so after orders backlog comes sales which it also does here on slide 10 and 84 growth on a rolling 12 basis again well exceeding the long-term target in growth and this picture is also showing our gross margin development where we have on the Gray line indicated the group's total gross profit margin development. And you have on the above brownish color, the MILDEF without the RODA acquisition. And then you have the isolated RODA underneath in a more beige color. So what we are seeing in MILDEF excluding RODA is a further strengthening of the gross margin, which is completely in line with the communication that we have given beforehand, that we see that this is roughly a level where we can be at, where all the stars are aligned, so to say. We're also seeing the road acquisition delivering on and about the level that we were expecting at the time of acquisition with some 30, 30 plus percentages. And that is, of course, a different business model where you have a lower gross margin, but also a lower OPEX than the other part of Miele where you have a higher gross margin, but then also a higher OPEX. It roughly evens out on EBIT, EBIT A level, but on the gross margin, it differs a lot. So what could look like an indication of a declining margin is in fact not. It's simply a combination issue of the two business models here. That will be taking us to slide 11 and EBIT A, with the exceptional growth of 133% on a rolling 12 basis. And as Daniel mentioned beforehand, this is yet another proof of our scalable business model where we have a strong top line. We will be having a nice contribution on that on EBIT A. And with that said, we will be focusing a little bit on our working capital and net debt position. We had a free cash flow of 159 million, which is historically a very large cash flow. We have a couple of positions in our balance sheet, which individually are not very significant, but we have a quarter here where a lot of things are aligning. on a very good side, so I think this should not be seen as the new normal, some 25%, but it will be higher than that. So we have spoken previously around some 30, possibly a little bit lower, but this is more where we think we are going to be long-term, and this is also building on what Daniel said previously, where you have a growth journey, there will be some capital tied up in in inventory, in accounts receivable, just due to the heavy and quick growth. We are doing our best to balance that, but I think 25.8% is all the stars are correct this quarter, and we're quite happy about that. But I would like to remind you of the volatile quarters that we do have, that you have seen historically. Net depth, also a very good development in Q1 2026, primarily driven by the strong cash flow. our payment terms and the amortization of our debt and so on, are exactly according to plan. So the further decrease in net debt is driven by a strong cash and a strong profitability over the last 12 months, and then maybe particularly here in Q1. Yes, we will be rounding off the financial session with the geographic spread. And here we see one year after the RODA acquisition, one year of integration, that our geographic map is looking more or less exactly as per prediction that we have a Nordic and the rest of Europe that is on the same scale. We have a North America with primarily USA of the same size, and we have a Europe and a Nordic that is in parity with each other. which is giving us a better foothold in the European markets, especially in the Germany region, Central Europe region. And this is, of course, giving us a better focus area in those interesting markets, but also balancing out our geographic footprint. I will be handing back to Daniel now on slide 14.