Sectra AB (publ)

presentation with CEO Torbjörn Cronander and CFO Jessica Holmqvist. Today's presentation are pre-recorded. Torbjörn Cronander is at the European Congress of Radiology today in Vienna and he will join the Q&A session from there. My name is Helena Pettersson, Investor Relations Officer and I will moderate the Q&A session after management presentations. And with that, I hand over to you, Torbjörg.

Welcome to the nine-month report presentation, 6th of March, 2026. And the content of this will be intro and highlights by me, financial developments done by Jessica Holt, Chris, our CFO, a little about our way forward, and then we have a Q&A session. This is, as Elena already said, a recorded session. presentation. The Q&A session will be live, but I will be present from Vienna, where I'm at the Regiole Conference at that time. Our business operation and etc. is imaging IT, our by far largest area, handling and managing images and presenting images in hospitals. Images is a very strong part of the diagnostic process, but they are not normal thing that you just put into database. They are larger data volumes and they take a special systems to treat them. We have secure communications, which is our communications of secret information we do encryption for secret information and we do a whole system especially eavesdrop secure telephones in in in on the national security level which is the highest possible security levels and then we have business innovation which is our greenhouse and our future uh development program these are should not be there forever they should either be made in their own business area like imaging IT, secure communications. It can be incorporated into one of the existing business areas. It could be sold, we have sold, or it's being shut down if it doesn't grow big enough to keep it. Some examples in the business innovations, medical education. In medicine now, development goes very, very fast. Training the assisting staff of healthcare, doctors, nurses, etc., become a very important part. Before, we have done a lot of basic training, university training, when you are a student. Now we see an increasing need to have continued education for medical professionals all over the world and that is a very much growing area. Orthopaedics IT, orthopaedics works with images in a completely different way from radiologists for instance. They plan operations and they follow up surgery. They do not only do a diagnostic and they require special tools and we do that in orthopaedics department. We have a new department since a few years called Genomics IT. Genomics information is similar to images. It's not images, but it's closely related to diagnostics, and it's very much made in conjunction with digital pathology that we do. It's about, in order to do precision medicine, you need to know the genomics of both, for instance, the cancer, if it's oncology, but you also need to know your own DNA, the patient's DNA. That means you can treat different patients with different treatment, which increases survival a lot. Then we have a few growth areas inside the big ones. In sector communications, we have critical infrastructure. with Ukraine that has been made clear that this is a very critical area to protect for society. We have a special division for that. In imaging IT, we have an area that was moved from business innovation a few years back, which is still pathology, handling microscopy images. This is quite different from radiology, because these images are very, very large. And then a new area in imaging IT, which is output. The diagnosis needs to be reported, and that report, in order to be productive, needs to be very comprehensive and very good for the treating physicians to use. And we have a special product in that, especially adapted for the US market. But it will be generally applicable all over the world. Highlights from the quarter. And we have had the customers as we have had since SECRA started. This has resulted that the order bookings have gone up despite the difficult comparison quarter nine months ago. We still increased by 4%. Net sales grew by 8%. And profit per share increased by 18%, two and a half Swedish krona per share. we are transforming to as a service model and that you see that and that we get more and more sales coming from recurring revenue and especially cloud recurring revenue when we sell services software from the cloud mainly in the US and UK so far but increasingly in Europe as well and that grow a healthy 58% and now when we have quite a large number to start with, percent relative growth in cloud recurring revenue makes a direct impact on the bottom line of SQL. Recurring revenue includes the cloud recurring revenue. That grew less because we have less and less on-premise installations, but it still grew, mainly driven by the cloud or driven by the cloud recurring revenue growth. And then we have, if you are based on recurring revenue and selling services, you don't want to lose customers in a few years into that path. So it's very, very important to keep the customers so they keep on paying for service and procedures. And thus churn is very important. And that's how large proportion you lose from these customers. And we lost very little, only 0.5% this rolling 12. The financial targets for the group are fulfilled. We have three overall financial targets. One is stability. Equity to assets rate should be about 30%. We are at 48%. That's a hygiene measure. We don't want this to be 100% or 75%. It should be above 30% to show that we are a healthy operation that will not disappear because of financial issues soon. And we sell a very sensitive product for our customers. They want us to be stable. So that's a hygiene measure. Profitability operating margin is 21%. You see two curves there. One was a patent settlement we did last comparable quarter, but that is now gone. And we have a solid line is for the development without that patent. And it shows a healthy increase of the years. But again, the target is 15%. We do not have target that is higher than that. We have a huge opportunity for growth, and we will reinvest the profits about 15% in growth when we see it. And then the main target, which is not a hygiene target, but unlimited upwards, is growth of profits. We count that a profit per share, because that is the best for existing shareholders. And that should grow more than 50%, which is an average growth of about 8-9%. Over five years, it should grow 50% and we'll waste about that. We're 126% growth over the five last years. In imaging IT solutions, we are seeing beginning now that we are rolling out in this large contracts that we sold over the last two or three years are now beginning to roll out. Revenue is increasing despite that we do not sell much on-prem licenses anymore. And we see that these large contracts now, the first hustles are live and we are beginning to see increased profits. It will not grossly affect this year, but we see an increase coming over the next year. We also are the most chosen vendor in the U.S. market, so we are growing faster than anyone else in the U.S., which is, of course, it's a very large market, despite the dollar now is a little lower in value than it was. It's a very important part for us. It's our largest market by margin. In sector communications, we have been selling mainly classified products. This is governmental approval, approved encryption systems. They are difficult to administer for customers. There's a lot of regulations, how you manage keys, how you have to lock in the phones in the evening in a safe, et cetera. Now, the larger market of information, and your secret has to, be kept secret for about 50 years. That's a very long time. You have to be there because that's called secret level, a top secret level. Then you have a restricted level. Restricted level is still government controlled, and you need to lock in the phones in the evening, but the secrecy should only be for one or two weeks against a state hacker. Companies cannot have that administration bureaucracy around the products. but they still want secure products. We have launched a new family product called Tiger E. That's an e-stop secure phone, and the E stands for essential. So we have Tiger S for secret, Tiger R for restricted, and now we added Tiger E, which is mainly for a private market. You want that security, but you cannot have a department that takes care of all the administration about it. So it's called Tiger Essentials, all the essential things for high-level encryption is there, but you don't have all that administration you need for a restricted product. It's the same product philosophy, but much simpler administration. Not formally classified as said before, but that also means you can have that simple administration without losing that classification. We see in secure communications a postponed serial deliveries and that impacts financial outcome. The reason postponed is partly change required from the customer. Cyber security is a fast moving market and things happen. And then you have to change the products. And of course, your deliveries are then delayed. You might have to rebuild something in a very late stage. And this is what happened here. We had to redevelop things. And that means a delay. This is lost orders. We have very good order intake, but it's delay. And that affects this current fiscal year quite a lot. But we have still won new contracts and new partnerships, and we have expanded with several new customers. And these products, we do not sell all over the world. We sell them in EU and NATO exclusively. After the quarter, we have been ranked again number one in customer satisfaction worldwide. We are the 13th year in a row, the highest customer satisfaction in large hostels in the United States. Seventh year in a row in Canada. And we also have the happiest customers in Northern Europe, Southern Europe, DACH, which is Germany, Austria, and Switzerland, Middle East, Africa, and Oceania. And of course, this is what drives us our growth. We have also announced recently that we have entered an agreement to acquire an AI company, Oxipit, in Lithuania. We have avoided doing pixel-based AI ourselves in the company so far because we think the customers must have a very clear business case, otherwise it's too expensive for them. We have resold, we have had an app store, we call that Amplifier for AI, so we resell a lot of products integrated into our system. But this time we saw that this company, Oxidbit, they have something very special. They have autonomous AI solutions for diagnostic imaging, especially plain chest. And that means you can set up sensitivity thresholds so high that you will not, with very small probability, will miss anything that is a real critical finding. But you will perhaps take 20-30% out that the doctor doesn't have to look at at all. Now that really saves radiologists time. It takes 20-30% of the images that is not needed to be looked upon by a radiologist. This is significant savings. for screening with lungs, which is one of the biggest exams you do in the radiology department. Plain chest x-rays is a big thing. If we can take out 20-30% of those, not require radiologists at all to look at them, that's a very important thing. And the radiologists can concentrate and only do the 70% remaining. You find a lot of false positives, but you have almost no or very, very few false negatives. This will contribute significantly to the reduced cost of healthcare. It is an approved product in the European Union, and everyone who acknowledges MDR, which is the European regulations, as a good or reasonable thing to require in order to use it, So all the areas, all of European Union EAS, we can sell it. It's in trials in several hospitals already. And it's an interesting app because this is a real solid business case for us. We have FDA and other approvals in the pipeline. It is subject to customer closing conditions. We have signed the contract. Hopefully this will be completed in March. It requires some authorization from Lithuanian authorities and other things. It is a small company, it's a small business. But it means we're going into AI for real and we're going into the area of AI we believe most in ourselves to take actually workload away from the regular list. It will have no material financial impact on the group this year and only little next year. But it's an interesting area and we hope that this would be significant in the future. Then I will leave the word to Jessica to tell a little about the financial development.

Thank you. Welcome again to our interim report presentation. I will take you through the financial development, focusing on the key financial metrics. Demand for Secra's products and services remains high, with the contracted order bookings exceeding six billion in the nine month period. of which 4.5 billion was guaranteed order intake. In the nine-month period, we have seen strong inflow of large and medium-sized orders in the US, Sweden, and the UK. And during the third quarter, several of our UK customers already using our imaging systems have signed Sector 1 cloud contracts. taking a step towards cloud services. Our rolling 12 book to bill ratio is 2.6. And we highlight the fact that the size of individual orders can cause large quarterly fluctuations in our reported order intake numbers. We see solid recurring revenue growth Our net sales increased by 8% to 2.5 billion in the nine-month period. And high customer satisfaction, new deployments and increased production volumes all drive growth, whereas currency exchange rate movements and the delayed deliveries in secure communications have negative impact on our sales trend. And just to repeat what Torbjörn said, our recurring revenue from our cloud services grows fast, up 58% year on year. And we continue to report low recurring revenue churn, 0.5% rolling 12. We had substantial currency impact in the period. Adjusting for currency, sales would have grown by 16% instead of the reported 8%. And the third quarter sales increased by 5% to 892 million. And adjusting the quarterly numbers for currency, sales would have grown by 16% also in the quarter. Our operating areas, imaging IT solutions and business innovation, increased sales year on year and our medical imaging business growth with deployment of new customers, add-on sales and healthcare providers choosing to move from on-prem to cloud services. Imaging IT increased sales by 10% to almost 2.2 billion in the nine month period. In secure communications, we remain impacted by a delay in a major customer project, and we report a sales decline of 3% year on year. Business innovation increased sales by 25%, and this is driven by the development in our medical operations. In geographic terms, our U.S. operations reported by far largest sales growth year on year, but all geographic markets show growth in local currencies. We note that more than 70% of Cetra's sales are generated in foreign currencies, primarily Euro, British pounds and U.S. dollars, causing high sensitivity to currency fluctuations. First, I would like to highlight that all year-on-year profit comparisons during the presentation are made excluding the patent settlement that occurred in the third quarter last fiscal year, as this is a non-recurring business transaction. The EBIT impact of the patent settlement was €110 billion. And having said that, our operating profit increased by 21% to 502 million and the margin was improved to 20%. And the growth in our operations and also more capitalized work for own use are drivers of the profit development. The third quarter operating profit of 194 million is lower than in the comparable quarter where we had a larger impact of traditional license revenue recognized. Imaging IT shows profit growth of 27%. and an operating profit margin close to 22% in the nine month period. And I repeat increased sales and more production volume as our customers take our services into operation and more capitalized development costs and as well as lower consultant costs have impacted the profit generation in the period. Secure communications operating profit declined by 25% to 45 million, and the operating profit margin is at 15% nine months into the year. And here we see the clear impact of delayed product deliveries this year. Year to date, the cash flow from operations amount to 578 million. Cash flow generation in the third quarter was strong, 418 million. And underlying profit growth is the main driver of strong cash flow. Comparing to the nine-month period last year, we have increased our capital tied up in current receivables, mainly as a result of higher accounts receivable outstanding on the balance sheet. That was all from me.