Welcome to the Addnode Group Q3 presentation. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to the CEO, Johan Andersson, and CFO, Lotta Jarleryd. Please go ahead. Hello, and welcome to Addnode's presentation of the Q3 report. I'm CEO Johan Andersson, and with me, I have Lotta Jarleryd, CFO of Addnode Group as well. Good morning. For you who have missed it, it's actually Lotta's last interim report for Addnode Group. So this will be the big finale. So with that, I would like to start with our agenda. We'll walk you through the Q3 2023, talk a little bit short about our sustainability agenda, and then we'll move over to Q&A. In the attached presentation that we'll walk through, you'll find an appendix as well with our acquisitions, our shareholders, and our share performance for the last year. And, of course, you will find more material on our website as well, addnodegroup.com. So Addnode Group, as you know, we provide digital solutions for sustainable future. We generate sustainable value growth by acquiring new businesses and actively support our subsidiaries to drive organic growth. The companies in Addnode Group, we provide digital solutions for sustainable design and product lifecycle management, management of real estate and facilities, and public administration. Looking at rolling twelve-month net sales over SEK 7 billion, and 69% is what we address as recurring revenue. With that as a short introduction to Addnode Group, let's move on to Q3. The headline for Q3, and we said, weaker USA figures cloud cloudy outlook. Looking at net sales for the third quarter of 2023, it increased to SEK 1.8 billion, representing a growth of 11%. Acquired growth amounted to 16%, and organic growth was negative in the quarter. EBITDA, adjusted for the restructuring cost, amounted to SEK 137 million. The negative growth in the quarter and lower earnings related to weaker demand from the construction industry and lower sales of Autodesk three-year agreements in the Design Management division. This was most evident in the USA market. In addition, the comparative figures for the division were high, following a record-breaking sales in the third quarter of 2022. The Product Lifecycle Management and Process Management division reported organic growth in the quarter, and both division also delivered improved EBITDA, adjusted for the restructuring cost. Cash flow from operating activities was negative in the quarter, primarily due to lower, and a temporary increase in working capital tied up. With that as an introduction to the Q3, I would like to hand over to our CFO, Lotta Jarleryd. Thank you, Johan. I would like to start by sharing a few more details on net sales. These graphs set out the breakdown on net sales from three different perspectives. In the first graph, we present net sales for the third quarter over the last five years. It is evident that we have experienced considerable growth the last two years. The current quarter total SEK 1.18 billion, as Johan said, corresponding to total growth of 11%. Recurring revenue demonstrates an increase of 8% compared to previous year. Organic growth over recurring revenue was negative, following the lower sales of three-year agreements. Recurring revenue continued, however, to constitute a stable foundation in our business model, representing a portion of 71% of net sales. The demand for our service offering grew by 14% total in this quarter. Our consulting revenue derives from both services related to our software offering and the customer-specific solutions. 5% constituted organic growth. In the third graph to the right, we have set out a breakdown on net sales by geography. Please note that this quarter is a milestone in the Addnode Group international, internationalization journey. For the first quarter ever, Sweden is not our largest market. USA has passed Sweden after the acquisitions of Microdesk, Team D3, and a few small bolt-on acquisitions for PLM division. Back to you, Johan. Thank you, Lotta. Addnode, as you know, we are three divisions, and we will walk you through the three different divisions more in detail. So looking at Design Management, headlines, weaker U.S. market and high comp. So what do we mean by that? Net sales increased by 8% to SEK 1 billion, roughly, in the third quarter. Organic growth was, however, negative. Adjusted for currency effects, organic growth was -21%. EBITDA decreased to SEK 57 million, and the EBITDA margin declined to 5.4%. The division's operations in digital solutions for design, BIM, and product data, which are conducted under the company name Symetri, began to note weaker demand for Autodesk solutions during the second quarter of 2023, particularly from customers in the construction industry in the U.S. market. This trend continued in the third quarter and has resulted in longer sales cycles and significantly lower sales of three-year agreements than in the same period last year, both in terms of new sales and with respect to renewed volumes. However, the comparative figures for the division are high following record-breaking sale of three-year agreements in the third quarter of 2022, mainly driven by demand in the USA and the U.K. With these market conditions, competition in the U.S. market has increased, resulting in downward margin pressure. In order to adapt the cost structure, the employee headcount in the U.S. operation has been reduced. The operation of Team D3, which was acquired in July 2023, which mainly has manufacturing customers in the USA, also noted certain market sluggishness and lower sales of three-year agreements. But the Nordic operational Symetri performed in line with last year, and UK had a solid performance. The number of customers and the annual value of the underlying contract base for Symetri, which is the basis for future contract renewals, are continuing to increase. We still see great potential for selling Symetri's proprietary software to the growing customer base. The two other companies in the division, SWG and Tribia, which offer proprietary software for facility management and for construction and infrastructure projects, displayed a stable performance. So with that, looking at Product Lifecycle Management, we had a stronger business performance and acted out on their previously announced restructure measures in the quarter. The division reported net sales of SEK almost 500 million, represented a growth of 23%, a very strong growth. Organic growth was 20%, and if we adjust for currency, the organic growth was 10%. EBITDA, adjusted for restructuring cost of SEK 5 million, was SEK 48 million, and that corresponded to adjusted EBITDA margin of 9.9%. Market conditions in Germany, the U.K., and the U.S.A. were stable in the quarter, while demand in the Nordic was still weaker. Organic growth was part attributable to a couple of large license deals for PLM systems in Germany and the U.K. The trend of customers increasingly demanding time to need leasing licenses instead of the previous license purchases, with perpetual right of use continued. There's a move to more recurring revenues. As previously reported, restructure measures are ongoing in the division to increase profitability by adapting the organization and cost structure. Estimated yearly cost saving is still around SEK 40 million and will have full effect from Q1 2024. As previously communicated, the cost for implementation will be SEK 20 million. Of those SEK 20 million, SEK 10 million was recognized in the second quarter of 2023, SEK 5 million has been recognized in the third quarter, and the remaining SEK 5 million will be recognized in the fourth quarter of 2023. So going to number three, Process Management, which continued to have a profitable organic growth in Q3, so the trend is going on. Process Management division increased net sales to SEK 280 million. It's a growth of 7%. EBITDA increased to SEK 53 million, and the EBITDA margin was 18.9%. Municipalities and public authorities continued to show some restraint in terms of demand for the division's consulting offering was good, especially for services related to customer-specific solutions, where we do tailor-made solution and delivery systems for our customers. It's not a specific consulting offering. This investment in the product offering. We have good and well-established relationships with the large public sector customer base. This frequently presents opportunities for recurring sales or the expansion of current assignments. The division's businesses are well positioned in public sector tenders, owing to their attractive digital solutions, in-depth experience, and very good references. So with that on the divisions, I would like to hand over to Lotta Jarleryd. Thank you, Johan. I would like to continue with an overview of the consolidated cash flow. The operating cash flow in the third quarter was -SEK 139 million. Previous year, the operating cash flow was positive and very strong SEK 89 million. The comparative figures were high, following record-breaking sales of three-year agreements in the third quarter of 2022. Before that, the third quarter has historically been a weak quarter in terms of operating cash flow. The operating cash flow has been negative several times, for example, in 2021, 2020, and 2018. The lower cash flow was mainly attributable to lower operating profit and temporary increase in working capital tied up. Please now note, however, that the net working capital is still negative SEK 495 million. The changes in invoicing and payment procedures for the three-year agreements introduced by Symetri's partner, Autodesk, at the end of March 2023, had a limited effect on the operating cash flow. The reason for this was that the volume of three-year agreements was low in the quarter, but also that a number of customers decided to pay for the full three-year agreement on a one-off basis, despite having the option to spread payments over three years under the new model. Investing activities in the third quarter amounted to SEK 373 million. As you have mentioned, we closed the acquisition of Team D3 in the beginning of the third quarter. The net outbound cash flow from that acquisition was SEK 254.54 million. The remaining portion of the investing activities comprise earnout payments to sellers for acquisitions made previous years and development of proprietary software. Financing activities included SEK 14 million relating to repurchase of 180,000 own B shares on Nasdaq Stockholm, in accordance with the mandate from the 2023 AGM. The purpose of the repurchase was to enable delivery of shares related to completion of Addnode Group's long-term share-based incentive plans. The remaining portion mainly related to leasing. The acquisition of Team D3 was financed through our revolving credit facility. To be able to pay the initial purchase price consideration on time on July third, the loan was drawn from the credit facility already on June thirtieth, which is why the drawdown of the credit facility is not reflected in this quarter, but rather in the nine-month period ending next September thirtieth. Back to you, Johan. Oh, it's me again. So I would like to proceed with a few comments on the consolidated balance sheet. So we continue to operate, supported by a resilient balance sheet, which is an important foundation for our continued growth, organically and through acquisitions. Changes in the balance sheet from December 31, 2022 until the end of September 2023, predominantly derive from the 3 acquisitions we have executed during the period. Following the customary purchase price allocation exercises, goodwill and other intangible assets have increased by over SEK 500 million in total. Our business model enable us to operate with a negative net working capital, and we continue to do so at -SEK 495 million. Provisions, taxes, and other debt include a future earn out payments depending on the financial performance of the acquired companies, amounting to about SEK 480 million, as well as other liabilities to sellers of SEK 53 million. Net debt increased by SEK 0.6 billion to SEK 1.1 billion during 2023 as we continue to execute acquisitions. Net debt to rolling twelve-month EBITDA was 1.4. Lastly, I would also like to mention that Addnode Group now holds 1,210,000 own B shares. As already mentioned, we repurchased 180,000 class B shares this summer following the board of directors decision in June. Now it's back to you, Johan. Yes, thank you, Lotta. As we start our new presentation, we provide technology for a sustainable future. This is supported, of course, by our sustainability agenda. Our biggest contribution to a more sustainable society is the digital solutions we, we provide to our customers, so they can help their customers to make more sustainable buildings, infrastructure, products, and services through creating a more sustainable society. So what do we actually do for our customers? We have three examples here in the report that you can read more about on our website as well. I would like to introduce these three case studies that shows how our digital solution supports our Sustainable Development Goals. Looking to the left, example one is from Tribia in the Design Management division. It's a project management tool for documentation and coordination. Tribia has supported Peab, the construction company, with the project management tool, Interaxo, to ensure quality and documentation in the development of the Tåsenhjemmet Nursing Home in Norway, who is built in solid wood. One benefit of using Interaxo is that Peab may reduce the risk of mistakes and misunderstandings that can lead to design problems and waste during the construction process. Looking at in the middle, you find a strong example from Technia in the product life cycle management division about optimizing energy use in electric vehicles. Technia has delivered a modeling and simulation solution to McMurtry, one of motorsport's leading electric car manufacturers. These advanced solutions will allow McMurtry to better optimize the efficiency and energy use of its cars. And Technia's experience and solutions for more commercial vehicle applications are also transferred. Example three is from Stamford in the process management division. It's about more efficient port logistics that helps to reduce idling on the quayside. Stamford has implemented a notification system for the harbor of Halmstad's container operations. This has resulted in a significant increase in resource efficiency, both for the port and for the freight companies. It also helps with planning and prediction of workloads and transportation, shortening the idle time of trucks, and thereby reducing the amount of CO2 emissions from the port operations. And like I mentioned, you will find a full version of these cases at the Addnode Group website. Let's see. So before we go to question- and- answer, just to remind you about Addnode Group, what we believe ourselves as an investment. The structurally underlying demand for the digital solutions as offered by our companies extends beyond and across economic cycles. It's driven by customers' need for digitalization, automation, urbanization, and sustainability. However, the current economic situation is dominated by uncertainty and restraint among several of our customers. Addnode Group strategy is to, with a sound risk-taking, capitalize on these trends by continuously acquiring new businesses and actively supporting our subsidiaries to generate sustainable value growth and drive organic earnings. During 2023, we have carried out acquisitions and cost reductions that have provided Addnode Group with an even better position for achieving profitable growth when the economic climate stabilizes and recovers. Addnode Group's good financial position that Lotta mentioned means that we can continue to invest and execute on our acquisition strategy. And with that, I would like to hand over to Q&A, and we are open for questions. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Daniel Thorsson from ABG Sundal Collier. Please go ahead. Yes, thank you very much. Good morning, Johan and Lotta. I start off with a question in Design Management here, and I'm a bit curious where you are in the process of addressing costs. I guess that it is difficult to even see close to a full quarter effect here, given that you end Team D3 at first of July, for example. So, so I guess the EBIT margin has maybe kind of bottomed out here in Q3, even though sales may, may be negative for another quarter or so. Is that, is that the right, right way to think about it? I think with the cost, what we have done in the Q3 is that it is roughly 30 persons in the U.S. operations who have left. So all costs really, and the U.S., as you know, has a different type of. It is a different thing of doing cost reduction in Sweden than in the U.S. So that is already addressed, and that is part of the Q3 results. So you will see nothing in a cost way with regards to that going forward. And that means that we will have a lower cost base when entering Q4 related to that. We are very hesitant to bring on new people, and actually more of a hiring freeze in the organization in total. But we don't see that we will do more of a big restructuring cost program right now because there, there is business ahead of us, and, so no, no more planned according to that. So if the business is as we believe it will be, it will be a little bit tougher the coming period, and then hopefully move forward, you will see no more big cost reduction. But of course, we will work with costs. That's the answer I can give on that, if that addresses your question. Absolutely, that's very clear. And then how many people are you in total in the U.S. today after Team D3? Just to get the feeling of how large share the 30 persons are, roughly. Roughly 500. Okay. Excellent. And then, on Team D3 as well here. In Q3, did Team D3 perform relatively as you expected or weaker than expected when you announced and closed the deal in the early summer? In this specific quarter, it was weaker than we expected. We had more of a linear approach over the year, and that was affected part of the market, but also about becoming part of Addnode Group. We probably know, you know, when an entrepreneur-led company, even though it's bigger, becomes part of a listed company, there are some adaptations that needs to be made, and those, then the management probably spends too much. They need to do it, but they spend more time on the integration rather than sales, so that probably has an effect as well. So long term, our view on Team D3 hasn't changed. In the specific quarter, we were hoping that would they, they would have done better. Okay, I see. That's, that's very clear. On PLM here, the strong organic growth of 10%, despite that you actually address cost base, is pretty much in line with what Dassault Systèmes said in their Q3 just a few days ago, that we see some return on larger orders, et cetera, which you mentioned here in Germany and UK as well. But looking at their guidance, they're guiding for relatively flat growth in Q4, so down to 0% again. Is that how we should view that market, or do you see anything else out there? We still see there are the things, there is deals to be made, but we will not guide for a 10% organic growth going forward. If we are able to have an organic growth, then we are okay with that. So we probably- Yeah. We don't do any guidance, but we- Yeah We're not seeing that it's still, you know, we have the German market, and there are some things- Yeah to discuss, and then we'll see what happens. But it's, it's like we showed in Q4, Q3, it's still possible to do deals. Mm. But don't expect that we will do 10% organic growth going forward. If we do that, I'm happy, but we are not planning for it. Yeah, I see. That, that makes sense. I jump back to the queue and let someone else ask questions. The next question comes from Daniel Djurberg from Handelsbanken. Please go ahead. Thank you, operator, and good morning, Johan and Lotta. Thanks for taking the question here. I was just wanted to address the cash flow initially, on the change in working capital, SEK -258, and we obviously had expected to see a negative working capital on, on the changes seen in the payments, in the Design Management side... Can you just comment though, how much, if it's possible to give any ballpark, how much is, you know, also from the underlying squeeze in the DSO to the DPO, in these types of, you know, market where people tend to be focusing very much on cash flow, and also if there are part of this that will be one time adjustments, from these changes, or if it will continue to hamper the working capital here for a couple of quarters more? Thanks. The first question was about the DSO. We don't see big changes in that compared to last year. We know, however, that the payment pattern in the U.S. is a little bit slower than in Europe, but we haven't seen any big changes yet. The other question was about the three-year deals? Yep. Yeah. And what has happened is that on the U.S. market, there you can see the new patterns. So to say that the payments are divided over three years. On the other hand, we had very low sales of three-year deals in this quarter. But in Europe, we see another pattern, and that is that the customers continue to pay upfront, even though we don't have to pay the suppliers over three years- Mm-hmm over three years. So these patterns sort of evens out the effect. Okay. May I also ask a little bit, you mentioned the U.S. market on Design Management, that I think you talked about a little bit tougher competition, if I hear you correctly. If you can comment a little bit on if it's in a specific segment, or if, and also if it impacts your pricing strategy for 2024, that you need to be cautious on pricing in this inflationary environment. No, I think this is what's related to Q3 and what we've seen, and that affected the margins there. And then where normally, what happened is that you have one competitor who goes just for price. We don't. We tend to think that we sell value to our customers. We provide our own technology, we provide our services, and also the Autodesk platform. And then we had one customer who were pushing quite heavily on the price in the U.S. market, on the construction side, and that is something that we have seen that we are able to meet better here in the Q4. So I would say that, no, it will not affect sort of the long-term business and the total business. It was something that was related to the U.K., U.S. market construction here in Q2 and Q3. It's not something that we see will have that sort of effect on the total business. In that respect, it was something that was sort of disturbed the pattern here. Perfect. And finally, if I may, a little bit on, you mentioned that the number of customers and the annual value of the underlying contract base in Design Management was increasing. But how much of that comes from acquisition? Is it if you would compare apples with apples here? So, yes, it also comes from acquisition, but it's also organic, so it's both organic and acq. So the sort of the existing customer base that you had, if you put the D3 acquisition aside- Yeah you still have the same pattern. Yeah, I actually write underlying contract. yeah, as you said. And that will be important with regards to our, you know, with the revenue recognition principle. So that's a- Yeah, of course. Yeah, that's good. Is it possible to give any, you know, ballpark percentage or number there, low single-digit percentage or numbers of these number of customers and value? With that, you think about new customers or? No, no. Yeah, on the change, year-over-year change, or quarter-over-quarter or something. I'll-- No, we have the, we are in a pro... As we- the reason why we don't want to give you any g- actual number is that, as you mentioned, we have recently acquired a U.K.-U.S. operations. Yeah. We feel certain that we can give a statement on this, but before we give any data, we would like to see a couple of quarters with the U.S. operations as well, so we feel comfortable about that. We feel comfortable- Yeah about stating it, but to be honest, we need to sort of drive it a couple quarters so we can see that it actually is on the exact numbers. So. Perfect. I, I understand. Looking forward. Thank you so much, and good luck in Q4. Thank you. The next question comes from Erik Larsson from SEB. Please go ahead. Thank you, operator. Good morning. Hope you're good. I have two questions, follow-ups, and on this last topic here. I didn't fully understand the comment you made regarding the underlying contract base and design. So just to clarify, do you mean that the number of licenses are growing, but the mix of three-year deals makes the recognized sales volume lower? Is that what you mean, basically, or? Yes and no. What we mean is that, yes, the number of customers are growing and the value of the annualized contract base is growing. So that means that, yes, we have a renewal of three-year deals coming up, looking for, yes, so it's, it's a mix. And it also, then you have the mix over the year as well. So that means that depending on where the one-year deals are being renewed as well, you have that composite, that part of the composition as well. So what we're saying is that if you annualize the value of all the Autodesk contracts, we can see that the value of that is growing, and- All right. The number of customers. All right. Okay, perfect. Thank you. And then on D3, I tried to calculate backwards here, and it seems like they did, like, around 0% margin for Q3, and you, you commented on the performance in general. But- Would you say that this weaker than expected performance is it normal, or is it more specific factors like the, the three-year deals? And you mentioned integration, is that sort of the, the bulk of the, the reason you think for the performance? It's a mix. Like I said, there are some seasonality over the year to be. That's part of it, it's obvious. So, and then, also, there are some three-year deals. They also are sold, volume of three-year deals were higher for them last year, so that's also part of the mix. And the third part of the mix is that related to integration, meaning that the owners and the sellers has been heavily involved as part of making the transaction happen, and they need to spend some time on integration. And if they haven't spent that time, they would actually be now promoting and doing the sales. So it's a mix. All right. But, so. Yeah. Okay, perfect. That was all of my questions, so thank you. Thank you. Should we put one question aside that we have from the mail, Lotta? Yes. It's from the studio, mailbag. You were beating expectations in the PLM division quite good on sales. Could you give some more color related to the larger license deals in Germany and the UK? It's like we described. There have been, we've done some bigger license deals in the UK and German market, and they all also related to both life science and also to EV companies. And there were classical licenses when they're buying numerous licenses because they are expanding their businesses. These customers that we've been working for quite some time, so that we are expanding the sort of the engagement with them. Next question. Could you perhaps give some more color on the EBITDA margin in the baseline division, the drop we saw? How much of this related to a weaker market, and how much from a dilution effect from EIT, D3, and Microdesk? I think they are both connected because the market being slower, that's affecting both, predominantly Microdesk and Team D3 in the U.S., and that leads to lower markets. Because if we are selling less, that sort of drops through the P&L. So I think they are both related in that sense. Follow-up question there. Considering Team D3's exposure more towards more factoring and processing industry customers, how is the demand holding up there? It's better compared to Microdesk. As you said, it's regarding their end customer group are manufacturing companies of a diverse nature in the US market. So, and this seems to be a better demand picture there for Team D3. And the last question. The three-year contracts are obviously down year on year from tough comparable last year. I guess we should expect more one-year contracts rather than three due to the macro. But could this boost your revenue going forward from one-year contracts being more expensive, et cetera? What will happen is that... I think there's two ways of addressing that. There are no sort of previously, if you go back a year ago, there were some discounts on the three-year deals. And those discounts on the sales price is not there anymore, so it's sort of the same, same for one year and three years compared to that. But what will happen if we lower the volume of three-year deals right now, that means a year from now, we will have a higher portion of renewals because the one-year deals will then be renewed. If we have sold a one-year deal now, it will take three years from now to renew that. That goes back to our revenue recognition principle. So based on that, the sort of flip side of selling less three-year deals right now is that a year from now, we will sell more compared to having sold the three-year deals. So you will have, like a buildup of a sales model, similar type. Okay. That was the last question from the s tudio. Yeah. Any more questions from the audience? The next question comes from Fredrik Nilsson from Redeye. Please go ahead. Hi. One question that you haven't touched upon already, and it's about Process Management. Mm-hmm. In the last quarter, you mentioned a lower level of procurements, and now you mentioned some restraint. I mean, you have had quite strong growth and margin in that division for- quite a long time. Should we expect a slower growth rate going forward, given what you say about the market? I think what we're saying is that the overall market will probably have some effect on budget restraints that's coming out there. It's always there. Looking at ourselves, we still believe that we can have a growth in that business, but it's probably tougher to generate that growth, because we probably need to alter a little bit more of a bid, but it, there is a market that starts up. What we are coming in thing is that we are coming from a backdrop last year when we are able to generate 10% organic growth in this division. I don't think that is feasible the coming year, but we will still be able to have the organic growth, but it will not be 10%. Okay. That's, that's clear. Thank you very much. That's all from me. Thank you. There are no further phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments. Thank you. As I started out, you will hear me next time. You will unfortunately not hear Lotta because this was the final one. So I would like to end up with thanking Lotta for all her efforts during these years. Thank you, Johan. Thank you.