Sensys Gatso Group AB (publ)

Good morning and welcome to the presentation of Census GATSO Group's Q1 2026 Interim Report. My name is Lewis Miller, Group Chief Executive Officer. Joining me this morning is Simon Mulder, our Group CFO. To start our presentation, I'll provide an overview of our Q1 results as well as changes to our segment reporting and the restructuring of our North American organization to commence the year. I'll then turn the presentation over to Simon to review the group's results and new segment reporting in greater detail before addressing our financial outlook for 2026. Q1 marked our fourth consecutive quarter of strong performance with year-over-year improvements in revenue, EBITDA, and EBIT. Revenue increased 5% to 160 million Swedish kronor, driven by strong performance in our international segment that more than offset significant negative currency impacts and lower event volumes in the United States. EBITDA landed at 22.2 million for the quarter, up from 11.1 million last year, with margin increasing from 7.3% to 13.9%. This was due to economies of scale in project delivery and effective expense management across our organization. The strong revenue and EBITDA results flowed to a positive EBIT of 8.2 million, a significant turnaround from negative 1.1 million in Q1 25. Taken together, our Q1 financial results confirm our strategic direction announced last year, focused on our core markets, disciplined execution, and profitable growth. Turning next to our Q1 report, we are introducing a significant change in our reporting structure, moving from segments based on type of sale to a geographic basis. The new North American and international segments reflect our strategic priorities and the different business models that apply globally, while highlighting the difference between one-time product sales and recurring service revenue. Specific to North America, we are also introducing three new key performance indicators, revenue retention rate, new business intake, and backlog in order to provide additional insights into our existing customer base, incremental order intake, and our growth trajectory. Collectively, these changes are driven by our commitment to transparency, and our desire to provide investors with a clearer view of our business drivers and performance. Lastly, after a comprehensive review of the business, in Q1, we commenced a reorganization and restructuring in North America designed to increase our market engagement and commercial focus. This includes welcoming a new North American Managing Director, Brett Kesey, as well as new sales leadership and enhanced customer success and bid management resources. With that said, I'd now like to turn the presentation back over to Simon for a closer look at our group results and our new North American and international segments.

Okay, thank you, Louis. As always, I will go through the Q1 results, of course, the segment performance and our cash flow and our financing position. First, looking at our group results, our Q1 performance has seen year over year improvement on revenue, EBITDA and profit. Our revenue performance of 160 million in the quarter was driven by a strong performance in our international business segment. Overall revenue growth was approximately 5%, but adjusted for currency impacts, the real underlying growth was approximately 13%. Our gross profit rose to 62 million due to improved gross margins of 39%, which was driven by disciplined project management. The EBDA increased to 22 million with an EBDA margin of approximately 14%. This has resulted in a profit for the period of 7 million compared to a loss of 15 million last year. Moving to our segment North America. Our North America segment currently reflects our US business operation. The revenue in this segment has been impacted by currency and event volume. Our new business intake reflected in annual recurring revenue amounted to 0.7 million from a new customer signing in Colorado. After the quarter, we've announced the expansion of our footprint in New York State with the signing of a new customer, adding 5.8 million in annual recurring revenue. Our total backlog, which reflects signed contracts pending implementation, amounted to 23.3 million. This is after the conversion of 4.3 million of new installations. Overall, this backlog is a solid foundation for future growth. Revenue amounted to 37 million, significantly impacted by currency to the amount of 7 million in the quarter. Our revenue retention rate, which reflects the performance of our existing customer base, was approximately 85% due to lower event volumes. The lower event volumes were driven by extreme weather conditions in the northeast of the United States and increased compliance of drivers with traffic regulations. The EBITDA for the quarter came in at 4 million with a margin of 10%, impacted by lower revenue. Our international business segment consists of our European, Australian and Middle East businesses. We have experienced a good Q1 performance in both product and service sales. The order intake of 35 million is mainly driven from an expansion of Dutch maintenance contracts and smaller repeat orders. Revenue increased to 124 million, driven by strong product sales from the ongoing Swedish and Dutch projects and strong service revenue from Sweden, the Netherlands, and our services contract with Saudi Arabia. Our EBITDA rose to 20 million, or 16% EBITDA margin, driven by economies of scale and effective project and expense management. Now going to our cash flow. Our cash flow from operations amounted to negative 6 million in the first quarter, with positive movements on non-cash items related to favorable translation impact. We have built up working capital during the quarter for our ongoing projects, mainly relating to increased milestones to be invoiced to the customer. During the quarter, we have invested 10 million in hardware and software development and 7 million in fixed assets and operations. The fixed assets and operations relate to our Australian project, which are financed through our asset finance agreement. Available cash rose to 196 million, up from 149 million in Q1 of 2025. Our financing position, expressed as our net interest bearing debt, has increased to 236 million. Main drivers are translation impacts on our Euro-denominated bond of 4 million and an increase in our asset finance of 7 million. Our cash at bank ended at 141 million with our credit facility mainly unused. We continue to have a healthy leverage ratio of 1.96 at the end of the quarter. And with that, I'd like to hand it back over to Louis.

Thank you, Simon. To conclude our presentation, I'd like to address our financial outlook for 2026. Although the conflict in the Middle East has introduced market volatility, we are reaffirming our guidance for the year with revenue expected in the range of 750 to 800 million and an EBITDA margin of 14 to 16%. Our operational momentum remains strong, and we are confident that our strategic focus and financial discipline position us well to navigate the remainder of the year. To summarize our interim report today, Q1 was a productive start to 2026 for Census GATSO. We saw year-over-year improvements in revenue, EBITDA and EBIT, And we are introducing changes to our financial reporting structure at North American Organization to provide a clearer view on our financial performance and to drive profitable growth. With that, I'd like to open things up to questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad.

next question comes from origin rhodian from dnb carnegie please go ahead yes good morning everyone and congratulations to a very solid performance i think that that was impressive given all the circumstances we have around us A few questions from my side. You're citing several factors in the North American business that was impacting the first quarter. How much of that would you call structural and how much is that more temporary, that is weather, basically?

I can take that, and thanks for joining, Orian. There were three, as indicated, there were three major factors affecting our North American performance in Q1. First and the most significant factor was currency in the range of 7 million. I think whether that's temporary or permanent will depend on how the currency moves, and we'll just have to deal with that. The other two factors related to event volume and lower event volumes, given the variable fees in many of our North American contracts, Part of that is temporary in terms of, yes, we do get winter weather in the US, but in particular, there were some severe storms that primarily impacted our school zone speed programs through school closures as a result of those storms. I would describe that as temporary, The second piece of that was additional compliance or lower volumes that resulted from compliance with traffic regulations, primarily in our Albany, New York contract. We expect that to continue.

Okay, thank you. And second question is also related to the U.S. EBITDA margin. It's maybe not where you expect it to be. Can you say anything about timeframe of when do you see a margin improvement towards the longer-term ambition that you have?

And that's specific to the North American market?

North America, yes.

We think we'll get some natural improvement in the EBITDA margin as the top line revenue increases due to some of those temporary factors. We continue to look at operational efficiencies in North America as well, which we believe can have a positive impact on the EBITDA margin. So, you know, in terms of timeline, we'll see as we move along here, but we think those steps we're taking should result in improvement.

Okay, thank you. Looking at a few questions on the cash flow, and I guess that's questions for Simon. The software CapEx, do you expect, is this a normal level, or do you expect it to increase or decrease going forward?

We've completed the development of our Flux system in 2025. 2026 is a year where we will invest in more generic customer features. So I expect that to continue. The other investments are related to our software platforms, Zillium and Pulse, which are the mid office and the back office. And we're making some improvements there also to support efficiency efforts in the US. So I expect that to continue at least in 2026 at a similar level.

Okay, thank you. And one other question on the cash flow, there were these non-cash items was relatively significant in the quarter, well above the appreciation. Can you just give us some insight into what was driving that particular line in the cash flow statement?

Yeah, so those are translations on non-monetary assets and liabilities mainly. And from the group perspective or the parent perspective, we have loans to group companies in their local currency. So in US dollars, Australian dollars, and those translate. but the impact of those translations have been significantly less and actually flipped to the positive side in Q1 compared to Q4. So that's what happened in the non-cash items. And the other parts in there relate to depreciation and such.

Okay. Thank you very much. That's all for my part. All right.

Thank you, Arjan.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions or closing comments.

Yeah, we have a couple of questions online. Let's see if we can take them all, but let's start with the first one. There's a question around how much of our fixed assets and operations are related to the US operation? Yeah, so fixed assets and operations, if we go back four years in time, would have all related to the US operation. Now, of course, in recent years, we've added Australian managed services operations as well. I would say that approximately still 80, 85% of that amount is related to the US business operations. And then there's a question around restructuring costs for North America. Do you want to speak to that, Lou?

We haven't taken any specific restructuring costs for U.S., so that's reflected directly in our expense line items.

Yeah, so we don't have any expenses to adjust to an adjusted EBITDA level. It's all ongoing costs. And that concludes the online questions for today.