Sensys Gatso Group AB (publ)

Welcome to the Census Q2 2026 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. If you are listening to the presentation via webcast, you can ask written questions using the form below. Now, I will hand the conference over to speakers CEO Lewis Miller and CFO Simon Mulder. Please go ahead.

Good morning and welcome to the presentation of Census Gatso Group's Q2 2026 Interim Report. My name is Lewis Miller, Group Chief Executive Officer, and joining me this morning is our Group CFO, Simon Mulder. To start our presentation, I'll provide an overview of our Q2 and first half results, which include an increase in our full year EBITDA guidance, developments with our North American restructure and the appointment of our new chief technology officer. I'll then turn the presentation over to Simon to review the group's results, segment reporting, and cash position in greater detail before addressing our financial outlook for the remainder of 2026. Q2 saw us build on our momentum of the past four quarters with disciplined execution driving a material increase in profitability and improved sales performance. As we reach mid-year, revenue is up 2% over 2025 with EBITDA margin expanding from 11.9% to 17%, a 5.1 percentage point increase. Based on this strong first half margin performance, we are increasing full year EBITDA guidance to 15 to 17%. We're also beginning to see tangible results from the strategic restructuring of our North American business that commenced in Q1 with multiple new customer signings leading to a significant increase in backlog. Additionally, to accelerate our next phase of innovation and growth, Q2 saw us appoint a new Chief Technology Officer, Johan Norman. Johan brings over 20 years of leadership experience in global technology organizations and his proven track record of integrating hardware and software platforms, deploying advanced AI-driven video solutions, and leading significant technology transformations will be instrumental in ensuring that our roadmap directly supports our commercial strategy and market competitiveness. Overall, at mid-year, we are pleased with our progress and will continue to focus on the disciplined execution of our strategy to drive performance. Turning now to our specific Q2 results, Revenue was in line with Q2 2025 at 204 million Swedish krona with improved quarter-over-quarter performance in North America and services revenue from our global maintenance contracts contributing to the results. While North American revenue continues to be impacted by lower year-over-year violation volumes in our Albany, New York program, We are pleased with the program's effectiveness in reducing speeding and will maintain focus on improved sales performance to increase backlog and support future growth. In our international segment, our core Dutch and Swedish projects continue to provide a solid revenue foundation. Changes in customer order and delivery schedules impacted the timing of some planned Q2 revenue, However, based on current project plans and customer communications, we anticipate achieving the majority of delayed Q2 revenue in the second half of the year, while continuing to closely monitor developments. Turning to margin, EBITDA for the quarter landed at 39.8 million, up from 31.4 million last year, with margin increasing from 15.4% to 19.5%. Economies of scale in project delivery and effective expense management across the organization contributed to this result. The strong EBITDA performance flowed down to EBIT, which increased from 18 million in Q2 25 to 25.1 million this quarter. Turning next to our North American restructure, Q2 saw significant increases in new business intake and backlog. Specifically, new business intake for the quarter reached $16.5 million in annually recurring revenue, driven by new customer signings in Colorado, New York, and Pennsylvania, with backlog increasing to $35.3 million in annually recurring revenue. This momentum continued after the quarter with entry into Minnesota, a new state for Census Gatso, to support the state's innovative work zone safety pilot. Q2 also saw the go live of our new Zillium traffic event service, the realization of this investment in our software platform, which includes additional automation, is expected to increase violation processing efficiency while also enhancing the user experience. These encouraging developments in North America position us well for top-line growth and improved margins moving forward. With that said, I'd now like to turn the presentation back over to Simon.

Thank you, Lewis. Going to our group results first, our Q2 performance has seen a year-over-year improvement on EBITDA and profit. Our revenue for the quarter came in at 204 million, in line with Q2 of last year. The services revenue in our international segment was the big driver, with increased revenue from the Netherlands and Australia while navigating international product sales timing. Quarter over quarter, the revenue performance in our North America business has improved, overcoming the one-off weather impact of Q1. Our gross profit arrived at 77 million with a gross margin of approximately 38% impacted by the compliance effect in the North American business. Effective expense management in both business segments and increased global maintenance revenue have contributed to an improved EBITDA margin of 19.5% reaching 39.2 million for the second quarter. The strong EVDA performance in combination with lower currency impact in the financial items resulted in a profit for the period of 14.5 million compared to a loss of 8.9 million in Q2 of 2025. Our segment North America has seen improved sales performance with quarter-over-quarter revenue During the quarter, we've signed several new customers in Colorado, New York, and Pennsylvania, adding 60.5 million of annual recurring revenue to the order backlog. Our order backlog, which reflects signed contracts pending implementation, closed at 35.3 million annual recurring revenue net of backlog movements. This backlog will support the future growth in the North American market. The revenue for the quarter amounted 43 compared to 46 million in Q2 of 2025 due to lower violation volumes as mentioned before. However, revenue is up by 15.5% compared to Q1 of 2026. The EBITDA for the quarter came in at 5 million impacted by the lower violation volumes. The Q2 2025 results were positively impacted by a one-off insurance recovery of 8 million. After adjusting for this one-time item, the underlying operational profit improved by 1 million. Our international business segment has experienced an increased order intake during the quarter and improved profitability. The order intake of approximately 63 million is mainly from repeat orders from existing customers and the renewal of our Saudi maintenance contract. After the quarter, we have signed the contract to expand worth 38 million. Revenue has remained stable at 164 million with continued deliveries on our core Dutch and Swedish projects. The segment has seen strong service performance driven by maintenance projects in the Netherlands, Australia and the Middle East. The outperformance of these services revenues in the quarter offset delayed product revenue. Our EBITDA rose to approximately 34 million or 21% EBITDA margin, driven by effective project and expense management. Now moving to our cash flow and financial position, our cash flow from operations amounted to 25 million in the second quarter, with net working capital increased by 13 million in the quarter and 37 million mid-year. This is mainly due to project milestones to be invoiced on completion of parts of the Dutch EG39 project. During the quarter, we've invested 25 million in mainly fixed assets and operations and hardware and software development. Mid-year, the investments amounted to 42 million. Fixed assets and operations relate to our Australian project, which are financed through our asset finance agreement. In the quarter, available cash rose to 192 million, up from 137 million in the second quarter of 2025. Our financing position, expressed as our net interest-bearing debt, has increased to approximately 243 million. Main drivers are translation impacts on our Euro-denominated bond of 9 million and an increase in our asset finance of 7 million. We continue to have a healthy leverage ratio of 1.89 at the end of the quarter with cash bank closing at 137 million. With that, I'd like to hand it back over to Lewis.

Thank you, Simon. To conclude our presentation, I'd like to address our financial outlook for 2026. We are reaffirming our revenue guidance for the year of 750 to 800 million while continuing to closely monitor project schedules and global political developments, particularly in the Middle East, that may continue to impact order and delivery timelines. As noted earlier, we are increasing EBITDA guidance for the year from 14 to 16 percent to 15 to 17 percent. Overall, our ongoing focus on disciplined execution positions us well to navigate the remainder of the year. To summarize our interim report today, we are pleased with our progress at mid-year. We've achieved a material increase in profitability leading to increased full-year EBITDA guidance. And our strategic restructuring of the North American business commenced in Q1 is showing results with strong new business intake and increased backlog to drive growth. With that, I'd like to open things up to questions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any written questions or closing comments.

Well, thank you. Thank you for your time. And we'll close the session at this time. Thank you.