MilDef Group AB (publ)

Please Daniel. Thank you Olof for that introduction and warm welcome to all of you that are here in the high peak summer period in Sweden joining this YouTube conf call for Milllöv. This is the areas we will try to cover today. We will have some highlights for the second quarter and post that we will have some more clarifications on the financial side and then we will have a summary and of course in the end a Q&A session. But let's start with slide number three then and look at the highlights for the second quarter. Q2 was a strong quarter when it comes to the delivery execution and with a high operating leverage indicating that our investments and efforts into increased delivery capacity has not really started to pay off. Net sales grew by 64% purely organic and operating profit EBITDA grew with almost 300%, which is, to me, a clear evidence of the operating leverage and the scalability in the business model that we have stated before. If we continue, we saw a good market momentum. We continue high demand across the entire middle of portfolio. The demand for advanced military IT solution is increasing. We have an offering that clearly meets the requirements set by the customers. The slightly lower order intake in the second quarter compared to the same quarter last year should be seen more as a reflection of the volatility between individual quarters. The gross margin was clearly improved here also in the second quarter. Total gross margin ended up on 51.9% and we can compare that to 46% in the same period last year. This was an increase that was driven by a profitable sales mix in the second quarter, more specifically driven by a higher share of sales that is related to software and solution in the second quarter. And those items is bearing in higher gross margin than our traditional hardware business. The gross margin level here we saw in Q2 cannot be taken for granted as a new normal. The gross margin will continue to vary across quarters depending on our products and customer sales mix. We also had, when we closed the Q2, we had a record high order backlog indicating good chances to continue our long-term net sales growth. The backlog by the end of Q2 was just above 4.2 billion second. By that is, we have grown the order backlog with 32%, the last 12 months. And this is despite that we have performed a top-line growth, net sales growth of 91% in the same 12 months. Also, of course, worth highlighting is the strategic framework. A very important milestone was that we secured this new seven-year strategic framework agreement with Swedish Defense Material Administration, also known as FMV. This agreement has a potential value of up to 1.5 billion SEK. And also when we signed the contract, there was a first call-up order was placed in connection with the signing. I think that this agreement will accelerate the implementation of Mildef Software, the so-called ONCIS, into the Swedish Armed Forces. ONCIS is today already used operational-wise in several other countries and also within the Swedish Navy. Our investments also into additional delivery capacity are still at a high level. At the same time that we are delivering growth and improved margins, we also invest to be able to meet the future long-term customer demands. The investments we have made so far mainly consist of onboarding more co-workers and increasing our production areas. The already announced expansion of our current site here in Helsingborg, the fortress, is progressing very well. We expect that new site to be operational not later than the autumn of 2027. and by that we will double our production capacity in Helsingborg. Also worth mentioning is that there are still some challenges in the supply chain for electronic components, both in terms of lead times and price levels. We of course continue to take proactive actions to secure access to the critical components. Mainly, this is done through a range of activities such as the inventory build-up of critical components, close collaboration with suppliers to ensure deliveries, and also frequent dialogue with our customers regarding the price absorption of the increased prices. And finally, of course, also worth mentioning, going back to the volatility in the order intake, post Q2 here, we received our largest order to date, an order value of plus 550 million SEK, an order that consists of hardware and that we estimate delivers during next year in 2027. And by that said, we will move over to slide number four, which contains the key figures for Q2. And if we take it from your left hand to start with, the net sales ended up on 630 million SEK. And that is a growth compared to Q2 2025 with 64%. And that growth is pure organic, and it's also an all time high number for individual Q2 And also next one lower down in the P&L the adjusted EBITDA of course 99.7 showing a growth of almost 300%. The adjusted EBITDA margin is 15.8 and we compare that to 16.5 and of course driven by higher sales but also by a strong gross margin. And I said gross margin was strong here 51.9 in total and on the OPEC side we think that is developed according to plan. increased OPEX with 27% excluding some non-recurring items and some unrealized FX losses in the second quarter. Order intake is dropping down a little bit. It's dropping by 17% if we compare to Q2 2025. This is decline, should not be seen as an underlying trend. It should more be seen as a reflection of the volatility we see in a defense sector between quarters. We also now, as you already know, announced this large order this week. So it could be a little bit variance from quarter to quarter. Book-to-bill ratio here in Q2 reached 1.2. And on a rolling 12-month basis, we have 1.4. And also finally the free cash flow 7.4 compared to 32.7 in Q2 2025. But I would like to zoom out here and look at the first six months because the cash flow on an individual quarterly basis could be a little bit up and down. But I think we have really improved the free cash flow the first six months improved by 208 million sex in absolute numbers. But of course, the free cash flow is impacted by the increased inventory level securing critical components for delivery in the upcoming quarters here. And by that said, I would like to leave the word over to Vivica Jonsson who will give you some more clarifications on the numbers in Q2 and long term.

Thank you, Daniel. Let's take this to a more rolling 12 and long-term view and starting on slide six, we're going to do that from the top left on order intake, which is now on 3.7 billion Swedish, getting closer to four. And at this point we're on the 50% growth, which is of course happy to see that, but it's also great to see that our backlog continues to grow and the book to bill ratio is on 1.4. We'll get a bit deeper into that on the next slides here. Net sales is continuing to develop strongly. And as Daniel mentioned, it's been strong during the second quarter and rolling 12, we are looking at north of 90%. And to deliver that 90% sales growth, we have added around 18% of employees. So we were at the end of June on 550,000 three souls in the middle of the universe, delivering these strong growth numbers and also increased profitability, which I will get back to in a couple of slides. If you allow me to zoom out even further on a five-year basis here, we have since 22, a CAGR of 41% on order intake, 38% on order backlog, which is, of course, strengthening the thesis that there is a good growth momentum in this company. even if the second quarter was slightly softer due to quarterly volatility. We'll continue on slide seven, the order intake growth journey, rolling 12, as I said, 3.7. The growth accelerated with the acquisition in 2025 by Roda Computers and has now also continued. As Daniel said, in the second quarter, we had 64% growth and that is all organic. The book-to-bill ratio is coming down slightly compared to the full year 2024-2025, which is primarily driven by the fact that our delivery pace is increasing. We have built out capacity, as we have spoken about previously, and that is now showing in the net sales figures of the second quarter. We'll move on to the backlog and talk a bit more about what there still is to deliver here on slide eight. So for 2026, this current year, there is another 1.6 billion Swedish in the backlog. This is then before the order that was announced earlier this week, so that is coming in Q3. You will have to wait patiently for that report. Moving on to 27, there is another 1.6, and if I'm looking at the graph on your right-hand side, that is a substantial improvement to this position compared to the year before, so where we were in 2025 at the same time. So strong development here in the existing year and especially in the coming two years after this one, compared then again to where we were last year. There is a slight decline in the beyond 2028, the year three numbers, and that is primarily due to that we had last year more of these 10-year delivery contract that is now getting closer to delivery. So that doesn't concern us in a significant way. We focus here on year one, year two, year three, where we're also seeing that this, where the customer would like their deliveries. We will turn to slide nine to dive into the net sales and gross margin development a little bit more. We have the 91% growth on a rolling 12 basis. This we discussed already. So let's focus on the gross margin where we are on 45.9% rolling 12 at the end of Q2 2026. This is a growth again after the acquisition of Rhoda Computers. We saw that the gross margin declined given that their business model was a bit different from the other parts of the group. We are now seeing that all parts of the Mielev Group are strengthening their position But what is especially boosting this here in Q2 is the sales mix, where we see more software and more solution and integration sales in the isolated quarter, but also in the first six months they were growing well, but especially true for the second quarter of 2026.

On slide 10, you will follow our EBIT-A.