MilDef Group AB (publ)

So, warm welcome to this investor call with Mildef, with a special focus, naturally, on Mildef reporting on the third quarter of 2026. This quarterly call will, as always, be presented by Daniel Lundgren, President and CEO, and Vivica Jonsson, CFO at Mildef Group. We expect approximately 30 minutes to be sufficient for the presentation and Q&A. At this time, all the guest microphones are muted, but I will open up and allow individual microphones for the Q&A. So if you wish to state a verbal question, raise your hand or write in the chat. Naturally, you can write your question in the chat and I will moderate it for you. Also, for information, we record this meeting. So now, with no further ado, please take it away, Daniel Ljunggren and Vivica Jonsson.

Thank you very much for that and welcome to all of you joining this call today in the middle of achievements in the third quarter here in 2026. For those of you that are not so familiar to me left and maybe new to the middle of case, we're trying to give you some Short flavor and introduction to the company. We are a rugged IT solution company delivering tactical IT into defense and security. Founded in 1997, so we are almost 30 years in the business. We are today a capability company that can deliver tactical IT solutions for the forces. Our core markets is Nordics, Duff, UK, US and selected NATO countries. Employee-wise, we are today roughly around 580 people. And we were listed on Nasdaq Stockholm in 2021. And on the numbers side, we can see now that the last 12 months, net sales is almost reaching 2 billion SEK. where we also have an adjusted EBITDA last 12 months of plus 500 million SEK and order backlog that is record high in 5.6 billion SEK and the adjusted EBITDA margin here and rolling 1218.7. So that is just to give you a flavor into the middle of world and set the scene for the rest of the presentation here. This is the agenda that we would like to share with you today. We will start with some of the highlights for the third quarter, and after that, I believe, the word of the CFO, Vivica Jonsson, who will dive a little bit more into the financial and the numbers. And then, of course, we will have a summary before we move over to Nei in the last phase of this presentation. So let's start with the highlights for the third quarter. When we now summarize the third quarter, we can state that this was a very strong quarter for Midloth. Order intake, net sales and margins all reached record levels for a single quarter. And they all did it in the same quarter here. Order intake was of course supported by strong business momentum with some major contracts awarded in Q3. One of these important contracts in the third quarter was an extension of New seven-year strategic framework agreement with the German Defense Material Administration, which goes under the name Bundeswehr in our book at the moment. The agreement has a potential value of up to 527 million euro. And the first call of order that was worth 95 million euro was also placed here in connection with the signing of extension. So that also really boosted order backlog and order intake. And further, here in Q3, we saw a clear margin expansion as well, driven by a high operating leverage. Net sales grow by 54%, purely organic, and operating profit grow with 131%, which is a clear evidence of the operating leverage and the scalability in the business model that we have stated before. The EBITDA margin in this isolated quarter was high at 21.8, and that is compared to 15.7 in the comparable quarter previous year. Our investments also in additional delivery capacity are still at a high level. At the same time as we are delivering growth and improved margins, we also invest to be able to meet the future long-term customer need. In the third quarter, we announced an additional expansion in Reels' pack. which entails doubling of the production area and also strengthening of course our capacity to handle this increased volumes which is very important not least in the light of the recently signed framework agreement with Defense Material Administration FMB and at the same time we continue to strengthen our organization also in order to support continued growth and meet the long-term demand Another bullet worth mentioning here as a highlight is our integration of the Rhoda Computer GmbH, that company that we acquired 18 months ago. It's now formally adopted and rebranded to Millef. The name is Millef GmbH instead of Rhoda Computer GmbH. The name change reflects our long-term strategy of fully integrate into the Millef Group. And by bringing our businesses together under one brand, we create a stronger and more unified platform for serving our customers while we maintain the expertise, the products and the relationships and the good people we have in Rhoda. We keep that as a trusted partner for many years on the general market. Also, it comes to the record high order backlog. By the end of Q3, we had a record high order backlog indicating a good chance to continue our long-term sales growth. The backlog by the end of Q3 was more than 5.6 billion SEK. And by that, we have grown that at 61% the last 12 months. And that is despite that we have performed a really strong top line growth as well with 76% the same 12 months. We continue to see a long-term demand across our entire portfolio. The demand for advanced military IT solution is increasing, and we have an offering that clearly meets the requirements set by the customer. The new political drivers behind this increased defense investments are long-term, I think, and the demand we're delivering, which is the robust digital infrastructure, continues to grow. And also worth mentioning, On the challenge side, we still see challenges in the supply chain for electronic components, both in terms of lead times and also price levels. We try and we continue to take proactive actions to secure access to these critical components. Mainly this is done through a range of activities such as we're building inventory, we have a close collaboration with suppliers to ensure deliveries and we also have a frequent dialogue with our customer regarding the price absorbing and so far I think we have been able to meet these challenges in a good way but we also know in the long term this could be an issue that will continue. Now I'll move on to some of page number five, which includes some of the key figures for Q3. If we start with the net sales, it's ended up on 829 million SEK, which as I said before, is an organic growth of 54% year over year. And it's also on a record high number. And it was mainly driven by the Nordic and the German markets, if we break it down to your graphic areas. And this also, due to the scalability and operating leverage in the business, also created a strong adjusted EBITDA in absolute numbers, 180.5 million SEC, and that is a growth of 113% year-over-year. And when we come down to the gross margin level, we saw a solid level, 45.4 compared to 45%, so it's very similar to the comparable quarter. OPEX side, I think the development was according to plan, we increased by 21% year-over-year, excluding non-recurring items and FX. And OPEX to sales ratio improved from 33% to 26%, also indicating the operational leverage in the business. But probably the biggest number and the strongest number in this third quarter was the order intake, increased by 130%, and this of course reflects the continued high investments activity among our customers and their growing need for robust digital defense infrastructure and even if we had a strong net sales growth we see that we have some strong growth to build way to 2.5 here in the isolated Q3 quarter. Finally the cash flow side and negative 112 million SEK and mostly impacted by the inventory build up here from making deliveries in the third quarter or in the fourth quarter sorry but also impacted by strong net sales in Q3 which is building up your accounts receivable and this is something that we look forward to improving the upcoming quarters. Also mentioned some of the strategic events in Q3 in Q3. I have pinpointed three of those. One is the, if you start from left, one of the major contracts that we have. and that I was mentioning before was a hardware contract with a European NATO country worth 553 million SEK. This order is about digitalization of the armed forces in the country and it's one of the single largest hardware orders Miloš has ever received and this order is expected to be delivered in 2027. Another major contract awarded and I mentioned this before as well and really sets the scene for the future and build some comfort in our order backlog and comfort in our continuing expansion is the extension of the seven-year framework agreement with Bundeswehr. This agreement in both size and duration is a strong testament that Miller is going to be a significant supplier in the ramp-up of the German defense capabilities. And the final here on the strategic events is the expansion in Liossos Bay. We will increase the production and office facility. And hopefully this will be done by the early 2028. And we expand that by 7600 square meters. So it's quite about large investments into our increased capacity ramp up. And by that, I will leave the world over to Vicky Jonsson, our CFO, who will deep dive a little bit more into some of the numbers.

Thank you, Daniel. Let's begin then on page eight, which is a collection of key numbers for a fast-growing defense tech company. So the order intake just shy of five billion. We have a book-to-bill ratio of almost 1.7 on a rolling 12 basis, despite the strong delivery execution during the quarter. We continue with 60-70% growth on order intake and net sales, which is also demonstrated in the increased backlog. And of course, we mustn't forget the people that we have brought on board the last 12 months to be able to execute on the strong order backlog and turning that into deliveries for our customers and their capabilities. An additional 25% in the number of full-time employees in relation to this 76% growth on last 12 months basis for net sales. The charts at the bottom of the page is further strengthened from last quarter. We are now showing a CAGR of roughly 50% growth on an average and over five years. We are, of course, proud of this. We continue on page 9 with a deep dive into the order intake and book-to-bill ratio development. The third quarter here was, as Daniel said, a strong quarter, particularly lifted by the two press released orders during the summertime. But also the net sales was strong in the quarter, especially the latter part of the a strong execution of deliveries, which all bundles up to a book-to-bill ratio of 1.66 to be very precise, but let's call it 1.7. If we go further on to slide 10, look at the backlog duration, which I know is, especially after doing the revised profit last week, you were waiting for this number, the 2027-2028 numbers. As you see on the right hand side, it's a strengthening of both those year, particularly the 2027 numbers in relation to where we were last year. We have now just shy of 3.3 billion Swedish already now for deliveries in 2027. So we're going to need those additional people that we have brought on board to continue the strong delivery execution and the continued expansion of the Mail Def Group. Friskly swept over to slide 11. We are talking a bit more about the net sales and the gross margin development. Rolling 12 is a similar composition as the quarter and year-to-date numbers where we see a strong growth geographically in Germany and the Nordics, especially Sweden is strong in the Rolling 12, but also the other Nordic countries are performing well. Germany and the mobile part of our portfolio is also