Welcome to the Karnov Group Q1 2023 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 star five on their telephone keypad. I will hand the conference over to CEO Pontus Bodelsson and Interim CFO Leif Mårtensson. Please go ahead. Welcome everyone to Karnov Group's earnings conference, where we will present the outcome of Q1, 2023. Please go to slide 2. I am Pontus Bodelsson, President and CEO of the company. With me, I have our Interim CFO, Leif Mårtensson, and our Head of Investor Relations, Erik Berggren. Leif and I will present the outcome of the quarter using a few slides, and then we'll open up for questions. With that said, let's get started with the presentation. Please go to slide 3. Karnov Group is now a European player within the legal information solutions market with offerings in six countries. We have a clear strategy of growing in Europe and macro trends such as increased regulations, more complex legislation, and a growing demand for legal research and compliance solutions speak in our favor. During Q1, net sales grew to SEK 614 million. The organic growth was 6% coming from Region North. Our positive sales development is thanks to increased online sales as we have continued to enhance the customer value and launch new products on our markets. The adjusted EBITA margin was 23% in Q1, which is slightly lower than the pro forma margin for Q1 2022, including Region South. We have filled vacancies in Region North to invest in our organization for future customer value. Our financial target is still valid, and we now have a new base margin to work from. Thanks to a strong operating cash flow, our leverage was at 3.4x EBITDA last 12 months at the end of March. Leif will talk more about the financial performance later in this presentation. Let's move over to slide four. Our performance in Q1 proves the continuous value enrichments we bring to our customers. Having completed the large invoicing season in both our segments, we are pleased that the customer satisfaction is on a high level and that the overall churn has been low. I earlier spoke a bit about macro trends creating business opportunities for Karnov. Legal professionals have an increasing need of assistance to serve their customers. That we are close to our customers to offer the solutions that solve their challenges of today and making their opportunities of tomorrow come true. All Karnov development is customer-centric, and I believe that the key to success in our market is a combination of premium content and efficient workflow tools. Karnov is in a great position having deep premium content while also having the technical depth to distribute it efficiently. AI-supported services will be an increasingly important asset in the lawyer's toolbox. We will be there to help our customers. To pursue our European growth strategy, we have an ambitious M&A agenda. The M&A strategy is divided into 3 types of acquisitions. Number 1, geographical expansion. Number 2, vertical expansion, such as within environmental health and safety and tax and accounting. Number 3, technology bolt-ons, where we either strengthen the technical backend or bring customer value in the front end. We're looking forward to continuing to drive growth and innovation across our business and keep our eyes open for future opportunities. Please go to slide 5. I will now comment a little on our segments, starting first with Region North. Region North continues to have a positive development. The organic growth is driven by our stable development within our legal core offerings, including additional customers. The EHS businesses and DIBkunnskap contributes positively to the organic growth as they continue to perform well in new sales with limited churn. Alexandra Åquist, who has been the CEO of Norstedts Juridik the past 3 years, has had a positive commercial impact on our business with a strong focus on customer centricity. She has now been appointed CEO, Region North, and I'm certain she will excel in this new position to the benefit of our customers in the region. We are pleased with the performance of the features launched the past few years in Region North. We believe tools for improved accessibility and improved workflow are important assets of ours, and they contribute to the growth in the region. Our municipality solution is becoming an increasingly important tool for civil servants in municipalities. Our focus onwards is to continue to enhance the solution. Our case guides on the platform, which are practical handbooks, are appreciated among our customers. We will continue to stay close to the market to capture these opportunities in both Denmark and Sweden. Turning the page to slide six. Region South has now been part of the Karnov family for five months. All progress in line with expectations in the segment. Both net sales and earnings development is stable. From a cultural point of view, I am pleased that we work well together, having a common vision of providing premium content to support legal professionals in Europe. The integration in Region South is ongoing. Guillaume Deroubaix has now been appointed CEO of the region. During Q1, we've rolled out the first part of our synergies plan, and the very first small synergies have been realized. As earlier announced, our intention is to harvest synergies of EUR 7.5 million, with full effect starting at the end of 2024, and synergies of total of EUR 10 million with full effect starting at the end of 2026. Costs to achieve these synergies are estimated to amount to EUR 24 million. We progress with a merger onto one common tech platform in Region South. Our Spanish tech team is experienced in merging content onto a common platform, having onboarded Lamy Liaisons to the tech platform a few years back. Already now, we have started selling cross-organizational in Spain. We have also launched the first commonly developed product. During the quarter, the development within the e-learning area has been positive in Region South, and especially in our French business, Lamy Liaisons. Turning the page to slide 7. Legal tech progresses rapidly. Generative AI has had great traction following the public launch of ChatGPT at the end of last year. Tools will become important for legal professionals in the future. By leveraging AI, Karnov can improve the customer experience and improve internal efficiency. For instance, AI can enhance customer value through analysis of large volumes of data and identifying patterns and trends, and more easily provide lawyers with recommendations for relevant legal documents based on needs. In Region South, we have several AI-based tools for improved workflow. We are now doing exploratory testing of AI in Region North. In addition to improving the customer experience, AI can also boost Karnov's internal efficiency. By automating repetitive tasks, such as data entry or document review, AI can help free up staff to focus on higher level tasks and improve overall productivity. We believe legal tech will play an increasingly important role in assisting legal professionals with the complexity of legislation. We are present in this space investing in solutions to the future benefit of our customers. Please go to slide 8. To continue our customer-centric focus while pursuing future European growth, we have composed a new management team in operation from the end of March. As I mentioned before, we have appointed Alexandra Åquist and Guillaume Deroubaix as regional CEOs in Region North and Region South. To be even closer to the customers in Region North, we have now a similar organization in Region North as in Region South with sales-focused country managers in Denmark and Sweden. With these organizational changes, we will be in an even better shape to fulfill our European growth. The new structure will allow us to have a view of the bigger picture while at the same time staying close to customers. Please go to slide 9. I will now hand over the floor to our Interim CFO Leif Mårtensson, who will tell us more about the financial results on Q1. Thank you, Pontus. Let's start by switching to page 10. We're satisfied to continue on a strong growth trajectory. In Q1, net sales increased to SEK 614 million, which is an increase of SEK 43 million compared to pro forma Q1 numbers, including the pro forma historical performance of Region South. The organic growth in Region North was 5.8% with a positive currency effect of 2.6% in the quarter. Region South had stable net sales development in line with our expectations. Adjusted for currency effects, the underlying performance was similar to previous years. Next slide, please. Slide 11. Adjusted EBITDA increased by 4% in Q1 to SEK 140 million. This corresponds to an adjusted EBITDA margin of 22.9%, which is a lower group margin than historically due to the acquisition of Region South. The earnings capacity in Region North is still very strong, with an adjusted EBITDA of SEK 120 million, corresponding to a margin of 43% in Q1. Region South had an adjusted EBITDA of SEK 36 million and a margin of 11.2%. Group total item affecting comparability was SEK 29 million in Q1. Mainly related to the integration of Region South with some smaller transactional costs that came from 2022. Our earnings in Region North are on a high level, and we have been able to defend the margin despite high inflation. The ambition and focus in Region South is to harvest the planned synergies and to increase the margins. Please move on to slide 12. Here we're looking at this split between online and offline, in Region North, and we continue to grow sales by 13% compared to last year. We have a slightly different structure in South with more offline sales than we have in North. Moving to slide 13. Subscription-based sales increased during Q1. As previously announced, Region South has a similar subscription-based sales as Karnov, hence, the acquisition does not have any major effect on this ratio. The subscription-based sales generates low churn and a strong cash flow, which I will come back to shortly. Moving to slide 14. Region North performs well on top line, and we're happy with the outcome of Q1. Net sales was SEK 278 million, organic growth was 5.8%, and currency effects 2.6%. The growth is mainly driven by online sales. We continue to strengthen our market position among municipalities and the public sector in general. Adjusted EBITA was SEK 120 million, slightly higher than last year. The adjusted EBITA margin was 43.4%, a slight decline mainly explained by filled vacancies for future customer value and increased depreciation from capitalized development. Moving on to slide 15 on Region South. Net sales in Region South increased by SEK 20 million compared to pro forma Q1 last year. The increase is more or less all due to currency effects. The underlying performance is stable as predicted. There is a good traction in the e-learning area. Adjusted EBITA improved by 23%, and the margin improved to 11.2% in Q1. The margin improvement is driven mainly by a lower personnel cost and currency effects. Moving to slide 16, looking at a new segment group functions. The group functions are a part of the group which takes responsibility for group-wide tasks. For instance, group management, investor relations, and group finance functions. Costs in Q1 were SEK 18 million, compared to SEK 12 million in the previous year. The increase is due to recruitment to manage the larger group and Well, we have doubled in size since last year. Moving to slide 17. Karnov Group has a very strong cash generation. Both our segments have now completed invoicing season, and we're pleased with the adjusted operating cash flow in the quarter, which enables us to improve our leverage. In Q1, adjusting operating cash flow was SEK 210 million, which is an improvement of SEK 53 million compared to the previous year. At the end of March, we had a strong cash balance of SEK 770 million that will enable us to invest in the integration of Region South and of course, keep us monitoring the opportunities of additional M&A activities. The leverage at the end of Q1 was 3.4. Back to you, Pontus. Thank you, Leif. Please switch to slide 18. I just want to conclude this presentation by once again presenting the highlights of Q1. Karnov Group has delivered a solid financial performance in Q1 with increased organic growth in Region North and stable development in Region South. We will continue to focus on meeting our customer needs and efficiency demands. Our ambition is to provide the highest quality to the best possible user experience that effectively supports their workflow. In parallel, we will continue to review the market landscape to identify future M&A opportunities. We believe legal tech will play an increasingly important role in assisting legal professionals with the complexity of legislation. We are present in this space, investing in solutions to the future benefit of our customers. Please switch to slide 21. By this, I'll end our presentation, and we are now ready to take questions. I'll hand over the conference again to our host. 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 Predrag Savinovic from Carnegie. Please go ahead. Thank you very much, operator. Good morning, Karnov team. First question is, just on a slightly stronger sales development. Sometimes you get, you know, one-off orders from the offline business. Do you have any such orders in this quarter? Good morning. Well, the question is deeply relevant as we last quarter commented on exactly that. This time, there's no such specific order or specific product we can point at. There are several products in the North performing very well. It's more a general growth, so to say. Okay. Perfect. One could say organic growth overall somewhat better than what the market may have expected. Would you say that this is a representative figure for how you expect 2023 to pan out? I mean, given what you also said in the conference call comments on you have renegotiated most of the contracts at this stage. Should we extrapolate this basically going forward? Well, we still stick to our financial targets. Well, yes, we had a good start of 2023, that's for sure. No dark clouds in the clouds in the horizon, we hope for the best. Okay. That's very clear. There is no organic growth figure for Region South in Q1 as it should be. Could you comment a bit on what the like for like comparable organic growth is year-over-year? I mean, if you can make a comparison on the growth pace now compared to when you acquired it and so on. South is performing in line with expectations, and it's flat, year on year so far. Okay. Thank you. Then in terms of the cash flow profile South versus North, is there any color you can give there for this quarter? Basically, South is a little bit later in renewing and has a better spread across the year, so it doesn't have the same cash effects or cash seasonality as we have in North. It's a little bit more flattened out. The fact that they have a slightly lower online means that the cash generation is more dependent on sales. They have the same positive cash flow as we have in North, basically. Slightly lower. Okay. Okay. My final question, I think to you, Pontus. You have spoken a bit about AI during this call. I respect this is quite a tough topic to penetrate at this stage, but this is also a question we receive from investors and the impact on JUNO platform going forward due to AI. A debate on whether this is a risk or opportunity. I guess you can argue both ways. I mean, how certain platforms might replace what you do, tie law tech to case outcomes, et cetera, on the one hand, on the other hand, the positive impact that you alluded to, Pontus. I'm curious if you could debate a little bit on both sides of this question, the pros and cons and the risks as well as you see it. Of course, it's a deeply interesting development that we see. It's of course also easy to overestimate the importance of trends and so on. I do believe that AI is not such a trend to be taken into consideration going forward. We see specifically two ways of this. One way is, of course, that we try to help our customers to become even more efficient. That's what we do all the time. I see that this is a unique opportunity to do that even more going forward, thanks to AI. That's one important incentive, of course. In doing that, it's important to have sort of a history. As you know, we've been around for 200 years, and that's a quite unique combination of being around for 200 years at one hand, on the other hand trying to be innovative and develop new services, in this case, based on AI. It is important to have that historic heritage because we do have a lot of documents that we could base the AI services on. That matters actually in some cases, especially when it come to trying to help our customers in analyzing older judgments, so to say. That's one part, how we try to help our customers being more efficient. There are several opportunities in doing that. We have already seen in the Region South that they have been really innovative and developed some services already launched in Region South based on AI. They have actually been in the forefront in our Group in the South, especially Spain, and especially LA LEY, which is one of the Spanish companies. The other part of the possibilities going forward is definitely also making our own company even more efficient and helping us with internal processes becoming more efficient. There we can find several things and several angles of that. For the time being, we are doing quite some innovative work and also, as I said, already launched product in the South. In the Region North, we are also exploring new possibilities how to go forward with this. I'm quite sure legal tech started some years ago, but now it's really taking off. It's going to be an interesting journey. Whether it's a threat or an opportunity, I'm perfectly sure this is an opportunity. Definitely so, also for Karnov. Okay. Thank you very much. Thanks. The next question comes from Daniel Ovin from Nordea. Please go ahead. Yes. Good morning, Pontus Bodelsson and Leif Mårtensson, and thank you for taking my questions. The first question is on the sales development in Region South. I calculate there that if you exclude effects, it should actually have been down slightly, about 0.4% year-over-year. You also mention in the report here that the churn in legal South is a bit higher than you see in Region North. I just wonder, do you think this is a effect of the acquisition and some clients leaving? Do you expect the growth rate through the rest of the year to be higher than organically down a few%? That's the first questions. Thank you. Well, as we've said before, our integration and merger in South, both in Spain and France, isn't in the short term being a growth strategy, actually. We can see, though, that the growth in Region South is approximately 2% year-on-year. In general, that is, not specifically our companies. So it's slightly lower than in Region North. They have been focusing, of course, in Spain on starting to harvest synergies, doing the merger, integration and so on. One of the most important parts we are talking and working with is customer centricity. There is, of course, an opportunity for our competitors to be hard on us in this during this period. Therefore, one of the most important parts we are working with is customer centricity and staying close to them. We haven't seen any big losses yet, and I don't foresee that either, just thanks to the fact that we are in parallel with the integration work, working hard to stay close to the customers. On the opposite, I'd say that we have started to see small steps in cross-selling, so to say, between our two Spanish companies, LA LEY and Aranzadi. Now this spring, we are launching a total new product being developed together over the borders, and I mean by that together with Aranzadi and LA LEY. There's also one example of one big, really big customer now at one of our Spanish company now being a good customer at the other company in Spain. They are starting to work together, they are starting to work customer-centric, and then we'll have to constantly focus on the customers, not only being inward-looking and doing an ever so good integration. We will have to also focus on the market at the same time. It sounds like on how you talk about this that it's actually losing a bit of market share here as the growth here is a bit lower than the market general, and that's mainly related to being focused on the integration work at the moment. Is that how we should interpret it? I'd say on the contrary, more or less, because I think we are deeply engaged in the market and doing that. I'd say that we are of course focused on harvesting those synergies, and it's tempting to watch those EUR 10 million that will be coming soon in synergies. Not to forget the customers. We see that the newly launched services are doing good. I'm not worried. I'm focused on the market at the moment, and I think they are delivering in Spain. Okay. Great. All right. The next question is also on South then, and that's on this adjusted EBITDA margin uplift of 1.3 percentage points. You mention here less personnel and also some FX effect here. You also commented that you already have seen some small synergies. Maybe can you elaborate a bit more on this 1.3 percentage points year-over-year? What is it related to? How much is personnel? How much is FX? Is there already any synergies to talk about in that 1.3 percentage point uplift? That's the second question. Thank you. The SEK 1.3 is more or less half related to personnel and half related to currency, roughly. When it comes to the synergies, the financial impact of the synergies in Q1 is very limited, but it's an important first step that we start to get operational on these synergies, that they actually start happening. So far, I mean, you make changes to agreements, et cetera, and it will take some time before you actually can see it in the P&L. Okay. Great. It's an important milestone. Yeah. Yeah. I would like to add that we are constantly working and improving the plan for the synergies, how to harvest them. We haven't seen anything yet that would limit the synergies to something lower than what we have sort of looking forward to with those €10 million. On the contrary, there are small seeds that we can see that hopefully will help us even further. Mm. Let me come back to that later on, please. Yes. All right. Just one final question here also, and that's on the organic growth in Region North. Was up 5.8, and then it was up 10% year-over-year in Q4. Also then you had some offline business in Q4, and I think you by then said it was supporting by 2-3 percentage points. That still mean a bit of a slowdown in Region North. Is there anything explaining this? Is this 5.8, is that the kind of level that you are looking to? Is that a reasonable level to assume for the rest of the year, so to speak? That's the last question. Yeah. We have our financial targets, and we will stick to them. Six percent is above, so we are quite happy. There are also products coming on still in Denmark. We have a fairly new product called Online Library that is doing really good. We have a totally new product in Sweden called Rättsområdesanalyser, ROA, who's really appreciated with our customers and doing good in Q1. On top of that, we have a strong performance by DIBkunnskap in Norway. I'd like to mention the fact that the DIB during last year launched an IFRS service in Sweden, and that has really taken off, really appreciated by new customers in Sweden. There are sort of new things happening. Again, as you commented on, there's no one-off like we had in Q3 and Q4 last year. It's more a promising new products in general. Yeah. On top of that, we have to add as well, you remember our revenue model. We sell in Q1 a 12 months contract, so the revenue will be spread out over 12 months. It's not that you have an instant effect on your revenue when sales goes up or down. Yeah. Okay. Perfect. That's great. Thank you very much for answering my questions. Thank you. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. All right. The question is if you can discuss and provide examples of how our proprietary data, that, and how that could lead to superior results, what a new entrant applying AI to public data would do. Yeah. Without giving into details really in depth, I would like to mention one of our products doing just that, and that is one of our Spanish products, Jurimetría. That's worth looking into, applying earlier historical data to look forward. I'd like to re-recommend you to dig into that. It's a product from La Ley in Spain called Jurimetría. That's just one example of that. Another question is about the common tech platform in Region South. Could you elaborate on what the cost is expected for the common tech platform and the timeframe, and when we plan to be done with that? Well, there's general cost to achieve in Region South of EUR 24 million. The tech platform is a part of that, of course. We have a tight deadline, or at least a fixed deadline of 24 months TSA, from when we started by the 1st of December. By the 1st of December 2025, it will be ready and done. 4. Sorry, four. Having said that, of course, we plan to be ready earlier than that, but that is a deadline. All right. Another question from the chat is if you could discuss your assets in tax and accounting and how we intend to grow within the tax and accounting segment. Yeah, we are currently actually working on a strategy, I would much like to present that later on. However, it's an important part, especially in Denmark and of course through DIBkunnskap also in Norway. We are doing good, of course, as I said in Norway with DIBkunnskap. In Denmark, it's also an important part, and we will come back later on how to develop that even further. It's a bit too early. Okay. As a last question from the chat about artificial intelligence, if you could provide your perspective on artificial intelligence role in the legal information markets, if we view artificial intelligence not only as an opportunity for growth and efficiencies, but also as potential threat? If we could provide an insight, for example, of how we've already observed AI-driven competition in the market. Yeah. That's of course a really interesting but also difficult question. We can see that there are, especially in the States, being services launched that actually can help lawyers already as of today. They are having, as you know, a different law system in the States. Nevertheless, it could also be done in the Nordics and in Region South. You can of course discuss whether there will be no use for human beings in the legal tech industry, legal industry going forward. I'm quite convinced that is not the case. It will take many, many years until we have digital justice. It'll take many, many years. Of course, it could help us doing a lot of work that takes hours and hours and maybe days today to make it in just a couple of hours. Because there are already today, for example, due diligence work, possibilities of minimizing today time-consuming tasks into something less costly. There are also services as of today handling agreements in very specific ways that is very time-consuming. Actually, later this summer, we will in Region South launch a service taking care of documents and agreements, doing it in a more efficient way. That's just a few possibilities going forward. However, let me be clear, I'm quite certain that the use of human beings in our industry will still be of great importance, of course. It's law is about society and people. Nevertheless, it could be improved and definitely more efficient than today. Good. No more questions from the chat. There are no more questions at this time, I hand the conference back to the speakers for any closing comments. Okay. Thank you very much for listening and also for your questions. We will disclose our Q2 report on the 17th of August, so we hope to hear from you then, if not earlier. Thank you very much. Enjoy the spring.