Good morning, everyone, and welcome to our Clavister Q2 interim report presentation today. My name is Kate Linwood, and with me is our CEO, John Vestberg, and our CFO, David Nordström. We will start today with presenting the Q2 report, and after, we will have a Q&A session. Please feel free to put your questions in the Q&A box, and also raise your hand at the end of the session if you would like to ask your questions directly. With that, I'd like to hand over to you, John, to start the presentation. Thank you very much, Kate, and welcome everyone to Clavister's Q2 report on. Happy to see all of you in the meeting. It will be a pleasure to guide you through the latest update from Clavister. Starting off, as usual, I'd like to just provide a summary, a rough summary of the quarter. The three key takeaways that I'd like to convey from our second quarter was obviously a very strong order growth, which we're super happy to report on. We continue to reduce our OpEx or operating costs, and as a consequence of those, we see a strongly improved operational cash flow, which is obviously what we've been striving for for a long time. Delving in a little bit more on the actual business. So if you recall, we have a base business consisting of our Next-Gen Firewall products and our Next-Gen Firewall business and our Identity and Access Management business. In both of those businesses, we saw strong trajectory in this quarter. But even more positive is that we're adding to that also trajectory and positive growth in our 5G security business. In our defense business, one of the key takeaways or key wins from the quarter was a design win. We announced this already in the spring with the European branch of General Dynamics, General Dynamics European Land Systems, and I'll get back to that in a short while. Looking at the order intake, strong growth, as mentioned. We grew our order intake with 43% year-on-year, so obviously, we're super happy to see those numbers coming out. The annual recurring revenue metric, which we introduced last quarter, also saw growth with 14%. So we're happy to see that our base of software licenses keep stacking up and keep fueling revenues for future periods. In the quarter, we saw a quite strong tilt towards longer-term projects, which means that we are securing revenue generation for future periods. However, the tilt towards, you know, longer term projects also means that the footprint in terms of revenue recognition in the quarter was a bit modest, so the growth in that sales came in at around 8%. And David will guide you through this in more detail. We spoke about OpEx, and we continue to reduce our operating costs, and in this quarter, we saw a reduction of 10%. So this is obviously the consequences, the result of this strategic program that we initiated last year. All in all, this takes us to another positive EBITDA quarter and actually a very important milestone for Clavister. This is the fourth quarter in a row, basically a full year of positive EBITDA, which we will celebrate for sure. From a cash flow perspective, this also means that we're demonstrating positive cash flow, operational cash flow before working capital changes. If we then move on to our, one of our base businesses, the firewall business, on the screen, you see a nice stack of, modernized Clavister products that we've been upgrading and, and modernizing over the past year. We've seen in the quarter a sales growth. We've seen positive trajectory across the board in, I would say, most of the or all of the geographical regions we are present in. In terms of use cases or customer groups, the areas where we see most traction is within the so-called mission-critical applications. In other words, customers with strong demand for cybersecurity, protecting, you know, mission-critical use cases. In terms of our ambition level, however, we would like to see more. We believe that we have a product set today which is highly competitive. We believe that we operate, or we know that we operate in a very hot market. So, all of you has been in product sales or product in a product company, knows that there is no secret recipe or no magic silver bullet to sell. The only thing we can do and we will do is to continuously fine-tune, adjust, test our ways of working until we find the recipe that works best for Clavister. Nonetheless, we're demonstrating growth, but our ambitions are higher, to be clear. One of the key events in the quarter was an extension with one of our key customers, International Workplace Group or IWG. For those of you who don't know IWG, they are the biggest workplace provider in the world, or managed office provider. They provide seats or workplaces for more than 8 million people or 8 million individuals across the globe. Clavister products are deployed in over 4,000 locations across the globe, and we're now extending this contract with them to a minimum value of SEK 23 million over three years.... Another interesting customer win in the quarter on a more local or regional arena was the Swedish Hockey League. We're working closely with a niche partner, Bluecom, that have secured an interesting deal whereby the Swedish Hockey League is deploying Clavister products in all the Swedish SHL arenas to provide cybersecurity, obviously. Moving over to our Identity and Access Management business, and I think the headline we decided for stable IAM business set for expansion really gives you the summary of our IAM business. For this year, and specifically for the quarter, the focus has been to really make sure that we maintain the position we have as a market leader. And I would say that the Clavister IAM business run through the subsidiary, PhenixID, is really a market leader in the Nordics, specifically in Sweden. Of course, we need to grow this business as well, and we need to solidify this position, and that has really been the focus for the quarter. I think we've been able to do that. We've not only been able to build growth and drive growth, but also expanding the team, building a somewhat larger sales and marketing team and a delivery team to meet the demands we're seeing from not only Swedish customers, but, you know, public sector customers across the entire Nordics. Some of the key deals in the quarter came from valued partners who were working with, you know, esteemed partners such as Tietoevry, Atea, and others, and saw quite significant deals from those type of partners in the quarter. We were also able to extend a significant deal with a... We can't disclose the name, unfortunately, but a Swedish public agency within the financial sector, a very important reference case for us. With that said, again, the business we're running in the IAM field is mainly in Sweden or in the Nordics. What we've been building over the past six months is really a groundwork as well to expand the IAM business outside of, of Sweden. To be clear, we will be following our geographical strategy, so we focus on the Nordics, we focus on the German-speaking region. We have a partner network and a distributor network that are happy to pick up the IAM products also outside of Sweden. So we see that the investment or the marginal cost of expanding this business is slim for us, with a huge upside, given the, you know, full proprietary software IPR that Clavister holds in this area. If we then move over to our 5G security business, again, a headline which I think is really relevant in this area, "Growing business, but lumpy." If we zoom out and look at the macro perspective, there has been a slim, only seven 5G Standalone deployments in the world globally, in the first half year of 2023. This is clearly below expectations from all, you know, market analysts, and our understanding is that the investment sentiment from the operators are really, you know, really limited, really pushed down by the harsh financial markets currently. Nonetheless, the good point is that for us, this was a quarter that was, you know, quite good or really good from a 5G perspective. We were able to demonstrate growth, and what we keep hearing is, you know, increased pipeline and increased appetite from the operator customers we're talking to. One of the key events from this quarter was an expansion with the work we're doing with Three UK. So this is the operator Three, one of the biggest operators in U.K. We have already a quite sizable deployment with Three UK, and what we're doing with them now is an extension and an upgrade, whereby Clavister is now commissioned to do the full upgrade of their entire security posture in their 5G network and bringing them to the latest Clavister product version. As that product upgrade continues, we will definitely see software license orders coming along as well. So all in all, even though the sort of macro perspective on 5G is a bit, you know, bit bearish at the moment, we still maintain a positive outlook, and we have to accept the fact, however, that it is a lumpy business. Over to our defense business, "Robust demand generation," which I think is a suitable headline as well. We did not demonstrate any significant new orders, concrete orders in the quarter, but we're seeing a very robust and a growing pipeline. With regards to our collaboration with BAE Systems, one of our primary partners in this area, we have an ongoing configuration and design project whereby we're sort of collaborating on future platform deployments. This is the work that's been going on for a while, and it's, you know, progressing positively. Aside BAE, we then obviously won a key design win in the quarter, and this was with General Dynamics, the European branch, and I'd like to provide you a little bit more details on what that means for us. So in essence, this is a journey that in many ways are similar to what we've been doing with BAE Systems over the past years, starting with proof of concepts, collaborations, trials, demonstrating the viability of our technology, which subsequently has moved into a more formalized collaboration, which then eventually led to the design win that we were now able to announce. What General Dynamics have made is a new vehicle architecture called NEVA. This is basically a new digitalized architecture where they fit various kind of software capabilities. It could be autonomy, remote control, communication, and cybersecurity. And the positive thing, obviously, for us, is that after this long period of evaluation, they finally decided to go with Clavister for their cybersecurity posture. And if you look closely, this is how they announced the collaboration. This is one of their vehicles, where they are publicly announcing Clavister as part of their Spanish cybersecurity capabilities. In terms of business potential, then, with General Dynamics, what does it mean? Well, obviously, they are a large corporation. They have a number of platforms. There are a couple of platforms of extra importance to us right now. One of them is the ASCOD vehicle being produced in Spain. This is a family of tracked combat vehicles or infantry fighting vehicles on the same manner, the same type of vehicles as the CV90 from BAE Systems or the Lynx vehicle from Rheinmetall. There are around 1,000 vehicles in operation, mainly across Spain, U.K., and Austria. One of the business opportunities at hand for Clavister would include the so-called midlife upgrade, whereby these thousand vehicles from various time epochs in the past, you know, they need upgrades, and when those upgrades happen, the new Neva digital architecture will be implemented. So that's one of the business opportunities. The second one is a new program that has been announced. It has been commenced by the Spanish Army to build 2,000 new vehicles to replace an existing older vehicle. This is a production that is aimed to start next year, so quite a substantial opportunity. I would like to highlight, though, that these are opportunities. A design win is not a contract per se, it's not a committed order. But again, following the analogy with BAE Systems, we're seeing the same type of journey. The second type of vehicle in their platform is the Piranha vehicle. This is basically also an infantry fighting vehicle, but wheeled base. This one has a much larger deployment base. We're looking at 11,000 vehicles in operation in many, many countries across the globe. Some operators include Sweden and Denmark. Again, there is a midlife upgrade opportunity for us, and there is also a new program. This program is run by a consortium, including General Dynamics, including Indra, and a number of other defense contractors. The scope of that program is minimum 348, to be precise, but with an upside of 1,000 vehicles. So all in all, a substantial opportunity for Clavister. I presented this slide or this picture some time ago, but given the progress we've now been having with, in our defense business, I think it's time for an update. So basically, what we're trying to convey in this picture is the way we are able to scale our business in the defense area through the partnerships we have built and that we continue to build. So again, through a partner like BAE Systems, we have design wins, which then resulted in integration contracts with specifically the CV90 product. Then there are a number of defense programs being run by the individual countries, individual ministries of defense across the globe. We have already deployed the Clavister products in the Norwegian Army and in the Dutch Army. As you've been following media and you know, the publications from BAE Systems, you all know that they are on a winning streak. There are many prospective contracts and many existing contracts that they have won as well. Slovakia being one, Czech Republic being one. They recently finished testing in Brazil, and I think most of you saw the news from the recent visit from Zelensky with the Swedish government, where BAE Systems will likely produce CV90s in Ukraine as well. All in all, a quite massive prospective base for them, and we have obviously the opportunity to be part of several of those prospects. We see that same type of scalability or scaling the business than with General Dynamics. So the NEVA design is the important key there and the various prospects that would follow from that design. Again, replicating this type of business in other key defense contractors as well. That's our daily job right now. So with that, I'm happy to leave the word to David for some key metric development. Yes. Thank you, John. So you will be recognizing this picture from the Q1 presentation, looking at, first, the order intake trend. As you know, we have had a declining trend for several consecutive quarters. We're very happy to break that and come out with a 43% order intake growth within Q2. And this is something that we also indicated before, that the order intake trend, the decline of that that we've seen for some time, has been mainly associated with the fact that we changed business model end of 2021, where we typically shorter contracts, but with greater net sales impact and better margins for us. And now we see that that trend of declining order intake is... stopped, and order intake is again growing, which is very, very positive for us. Growth, as John has been saying, comes across the entire business, but most significantly from the IWG frame agreement, which gives one year of order intake for that, a one-year order of roughly SEK 8 million, larger order within from Nokia. But stability in order intake growth in the entire Clavister Group. Net sales, the positive net sales trajectory continues, so we see a continued growth. And we'll get back to that. The order intake growth of 43% does not fully correlate with net sales growth. That is due to sales mix, and we'll talk a little bit more about that when we get there. Margins on a good trend. We are growing our gross margins also in Q2. So we are having a good margin stability due to lots of software in the sales mix, is the primary explanation for that. Then adjusted EBITDA on a trailing twelve months. Here we see very clear improvements of our structured work to continuously improve our profitability. So I think this trend is very important for us, showing that we are able to grow our business and also increase our profitability while growing. Bit of a deep dive in certain financial metrics, starting with order intake. As said, a growth of 43%. It is driven by underlying business growth and also attributed to two larger contracts with IWG and Nokia within the quarter. Net sales growth of 7.6%, and if we adjust for FX, growth is roughly 6%. As you know, the Swedish krona has been in a downward slope for quite some time, and as we have a lot of our sales in, well, SEK is a dominating currency, but lots of our sales is in euros and are not... And significant sales is also in U.S. dollars, and that has a positive impact on net sales. Then the large delta between order intake growth and net sales growth, it is related to sales mix, really. One example is the Nokia contract. Very positive for us, but that rollout will start after Q2, so there is no net sales impact whatsoever from that contract in Q2, for example. But it sets a good foundation of net sales growth going forward, and we have a belief that we will be able to sell more, also software contracts related to that order in coming periods together with Nokia. ARR grew with 14%, now up at 130 million SEK, meaning that a large proportion of our sales is on an annual recurring basis, which is very important for us and in line with our strategy to grow that. Selling margins at 83.8%, a big increase from Q2 last year. Q2 last year was very hardware intensive as we rolled out many contracts in the new business model, and hence also delivered much of our new hardware, which was quite new at that period, which had an impact on gross margins in Q2. As we talked about in Q1, we have been very successful also in Q2 in selling our new subscription-based contracts also on old hardware platforms. So we are migrating customers to better recurring revenue contracts. They are better for customers, they are better for Clavister, and we don't have to switch hardware, which is very positive for a customer, and it's very good from a margin perspective for Clavister. OpEx we have non-recurring costs of SEK 1 million in Q2 and 3.6 in the corresponding period. So adjusted OpEx decreased with 10% and is related to mainly the effects of the cost optimization program that we have been running for quite some time. So we're glad to see that we can scale the business while also pushing our costs downwards. This translates in a EBITDA improvement of SEK 13.5 million, from SEK -10.1 million to SEK +3.4 million. And we have EBITDA support coming from, I mean, all aspects, really, of the P&L. We have net sales growth, we have a good growing margins, and we keep costs under control, which has a good impact on EBITDA. And the corresponding impact, you will see that on EBIT as well, and results of the financial items also. The financial items, I think this is safe to say that this is a challenge when we Clavister has an insignificant level of debt. We have a EUR 20 million loan with EIB, which is in euros. So as interest rates are increasing, so is the impact on Clavister from that loan also. And of course, since the loan is in euros, we need to revalue that to correspond to the FX effect, which also has an impact. Looking at what is the cash impact here? SEK 3.2 million. So the majority here, SEK 17 million, has no cash impact. It is currency revaluations and long-term interest that will be paid when the entire loan is due, which will be in several years from now. But I think it's still important to see that, financial impact or financial net that has a cash flow impact has increased from SEK 1.1 million to SEK 3.2 million, and that is due to increased interest rates. So this is something that we're monitoring closely. Some other points more on balance sheet and cash flow impact. So CapEx investments have increased a bit, primarily driven not by increased costs in the tech organization, but rather that we have less maintenance in the period and more development work, so we capitalize more. But the cost base is quite comparable, so it is high degree of development. Amortizations have increased, so and then why? Well, the primary explanation here is that if we go back, so 3 years ago, Clavister switched from amortizing CapEx investments over 3 years, and we're doing that over 5 years, meaning that we have a gradual buildup of amortizations who are now leveling out on a new, somewhat higher level as a consequence. So this is accounting-driven, and it. That's the absolutely primary explanation. Cash flow. As you know, we're looking at cash flow from operating activities before working capital changes and after. So before working capital changes, we see that the substantial improvement of EBITDA translates to a corresponding improvement of cash flow, so from -11 to +0.5. So the underlying cash flow trend in Clavister is positive, our increased profitability within the business translates to increased cash flow in the business also. Important, but balance sheet changes was challenging for us in the quarter, but the main explanation here is prepayments for inbound shipments of hardware. We are paying in advance for having those hardwares being produced and then shipped to us, which means that we bind more in inventory, but we secure a delivery capacity going forward, which is very important for us. We don't expect the same level of negative impact on the balance sheet going forward, but it has been a challenge in Q2. We also have increased accounts receivables and a decrease of accounts payable in the period. So these are three negative effects from a cash flow perspective, which has a burden on the balance sheet cash flows in the period, but we expect that to ease as we go forward. So the cash position, even though the operating cash flow is improved significantly, the change in cash position is -SEK 20 million in the period. If we look at our number of FTEs, you see that we have reduced that with 20 FTEs compared to the same period last year. It is due to the cost minimization program, where we try to do more with less people. That has had an impact on external consultants who are some more compared to before the cost optimization program, but that is also coming down a bit from 16 to 15. We're trying to work to find the appropriate balance, and I think it's safe to expect that the number of external consultants will drop a bit as we go forward, and the number of FTE might increase somewhat as we find appropriate mix between our own staff and consultants. John, do you want to mention a couple of words regarding the outlook? Yes, absolutely. Thank you, David. So, I mean, essentially, we maintain the same outlook as we've been having for the past quarters. So what we're seeing is an increase in sales growth. We're on that track already, so it's our continuation expectation there. We see a lower OpEx expectation, of course, and those two factors together, of course, they will, taken together, yield, you know, improvement in both EBITDA and, as a consequence, full-year positive EBITDA. We still maintain the ambition to reach positive operational cash flow in the second half of this year. And from the long-term perspective, being able to reach a 20% average growth is still our ambition. So with that said, we're leaving over for the Q&A session, so Kate will be happy to moderate your questions. So yeah, thank you very much, John and David, for your insights, and now it's time for the Q&A session. Yeah, you can see here some instructions because this platform is also new, new to you. So either you can raise your hand if you want to ask a question directly to us, it can also be in Swedish, if you feel more comfortable speaking Swedish, or as mentioned, you can also ask questions through the Q&A box. So, yeah, please feel free to ask anything you like. We have already got a few questions, so let's dive into the first one. So cash flow and cash position, do you see that as a problem? I think there are several elements to that question. One is we see an underlying improvement where we burn... We continue to burn less and less cash in our operation with it, which is positive. So from that perspective, the trend is right, and in line with our plan. But of course, we bind cash in the period in the balance sheet, but we expect that to ease going forward. And as we say in the report as well, that we have an adequate cash position at the moment, but we're also investigating several good activities that will strengthen our cash position going forward. So I think that's what we can say at this stage. I hope that answered that question. John, do you wanna add anything? No, I think that's on spot. Cash position for now is safe. Going forward, we're exploring different, you know, opportunities. But as the underlying business is growing and our cash burn is improving, we see a number of really, you know, positive tools at our hand. But, you know, we're happy to get back to that when it's due time. ... Okay, thanks for that. So next question is: you report strong EBITDA improvements. What is the main driver? Should I answer that? Yeah. I think we went through that in the presentation as well, but let's repeat it. It is really the product of our strategic work to improve Clavister. I mean, we have better support from our margins, driven by growth, but also our shift towards a subscription-based business model, where we earn more of our contract base. I mean, that's one important driver. It is cost reductions that as a consequence of our cost minimization program. So yeah, these things, growth, better margins, and cost reductions. These are the three main drivers of our EBITDA improvement. Okay, then the next question is: can you elaborate on the major loan repayments, renewals, especially the deferred tax payments? Any news since the last quarterly report on that? Well, we can say a couple of things. One is, the tax debt is something that we are looking into with the three-year repayment plans to land that debt on a good way. I think we have informed this community a couple of Q reports back that we applied for a three-year repayment plan of one of the tax debt as a test balloon, and we got the three-year repayment plan for that. And as we progress in time here, we will keep applying for these types of repayment plans. And we're quite confident at our ability to gain that, as we're already in that and repaying the debt that we have according to such a repayment plan. So that's the aim there. Then we have a good dialogue with EIB to find a mutual way forward, how to repay the EIB loan on terms that are good for Clavister and are good for EIB. That discussion is ongoing, and I think we can get back to the investor community when we have more news to share there, but it's a good dialogue. Okay. Yeah, thank you for elaborating on that. Next question is moving into the 5G security business. So it's common... It's good to see growth in the 5G security business and a nice announcement about Three UK. You express yourself cautious about the 5G security business, though. So what is your view on the future in this area? Mm-hmm. I think we can start with, you know, the Three UK deal, which for us, demonstrates that the technology is very viable. There is a demand for it, and this is one of the early 5G deployments in the world that has matured to the level where, you know, cybersecurity is a given in such a network. But again, I mean, the harsh financial markets and the sort of macro situation has really put a, you know, a buffer, a lid on the major investments from the operators. So, for us, we are confident that this is a timing matter. It's not a technology fit, it's not a matter of needs from the operators. It's basically an investment timing. I think it's important to mention that, and I'm not sure if we've been clear on this fact before, the technology stack that Clavister has is common across all our business areas, which means that our marginal cost to drive our 5G security business is, you know, more or less zero. We maintain the same development efforts, we maintain the same maintenance, we maintain the same support levels, as we do for all of our other business. So, we're profitable in this business area. That's important to understand. And we maintain the positive outlook, but we are absolutely, you know, aware of the lumpiness, and, you know, we see quarters without orders, we see quarters with big orders. My personal view is that this will continue for, you know, foreseeable time until we see, you know, different sentiments on the market in terms of investment capabilities. Okay, so yeah, with that, we don't have any other further questions, but then I would like to round off with asking you, John, so what are you most proud of from the last quarter? Yeah, I mean, obviously, that we've been able to move from a, you know, declining order intake position to now a strong order intake growth, and that type of growth did not only come from, you know, a few selected orders, but that we saw growth across the entire board. That's really what I'm happy at. Great. And David, for you, what are your highlights? I think a highlight for me is, you know, we set out some quite long time ago a plan to gradually, well, not making small adjustments, small improvements, or but continuous to do that, to drive a more profitable Clavister. And I think we're seeing evidence like, you know, strongly improved cash flow from the operations, improved EBITDA, that, you know, the cumulative effects of these strategic initiatives to land in a better, more profitable growing Clavister; they're yielding results. So I think, you know, we are progressing with the plan to improve the company. I'm glad to see that several metrics are continuing to point in the right direction. That we're taking steps, and then we improve, and we take further steps. I think it's... that's my highlight. Perfect. So yeah, with that, thank you very much for your insights and sharing that with us. Thank you to all attendees for being here with us today, and a recording of this webinar will shortly be available on our website. And with that, I say thank you and have a great day. Bye- Thank you. -everyone.