Hi, and welcome to today's webcast with Pagero. Today, we have the CEO, Bengt Nilsson, with us presenting. My name is Martin Westerlund, and I work for Finwire. After the presentation, there will be a Q&A session, so if you have any questions for Bengt, please use the form that is located to the right. With that said, I'll give the stage, Bengt. Please go ahead. Thank you very much. Welcome to this interim report presentation. I'll try to inform you what has happened in previous quarter. This is the third quarter after our IPO, and we are following so-called delayed plan we put into place and presented and committed to for the journey between last year and 2025. I will take you through this report, and of course, you can download it and read it when you want, so to speak. We are continuing our efforts to build the world's largest open business network. The whole idea behind this is that we want to automate the communication between the ERP or the business systems, the buyers, the sellers, the governments, the banks, and we will use roaming partners to do that and also get logistics provider into the network. This means that we wanna help business of all sizes, and this is important. We don't do this for the large ones only. We do it also for the local bakery. Everybody's gonna be able to tap into our network to find partners that they can trade with, trading parties, as we call it, and this will enable much easier access to information, much easier access to buyers, much easier access to sellers. Also, it provide means for governments to have a fair and just and in real-time reporting related to VAT. When we started this journey, we talked a lot about automation. Automation is the reason why you should do this. The way of taking away unnecessary cost in the supply chain, in the connection between buyers in the network, sellers in the network, and everybody else that's involved to make that the ERP systems or the businesses will use real data, accurate data to perform what they are supposed to be used for. Sorry. We have decided that we are not gonna build applications that are competing with our partners. We are not doing so. Our partner program is growing every day, and our partners are providing their software to connect to the network to use the Pagero platform for their operations. Compliance, though, is really driving the business at the moment. Every government in this world has decided and seen that if we can automate tax reporting, we will also get a more loyal taxpayer base. We will also get the VAT gap down. That is the reason for why this is happening. There are also other things in the structure that is changing. That is KYC reporting. That is, the Data Privacy Act. Everything that is happening around the world today is sort of making this harder and harder to not do the right thing in the network. To do that in the right way, you need to do it in a structured way, and you need to be able to send everything digital all the way back and forth between buyers and sellers. We are providing that service, and we see a tremendous growth in that business at the moment. People can ask themselves maybe in these days that what is happening? Are we back into a recession? Yeah, maybe we are or maybe not. I'm not the one to judge that. You can say this is a must-have business, which means that what we are providing to the market is a product that they need to have. If they wanna do business in Turkey, if they wanna do business in India, if they wanna do business, I can, you know, take country by country, Latin America. In the future, countries like Japan, if they need to do it, they need to do it digitally, and we are providing that service. The market is enormous, and the market is growing, and we are predicting a growth the coming five years that will be really, really strong all over the planet. We are not alone to do this, so this is not something we have sort of made up. We are also providing a service that is helping the ESG. We can help in the reporting to ESG. We can also help when it comes to lowering the usage of paper, of course. We wanna take away all the paper from operations in the supply chain. If we do that, we will save a lot of CO2, and of course, that will reduce the emissions in the world, which is a good thing. This is totally for free. I will say that this doesn't cost anything to do this, so we should all do this and be proud about it. We are today all over the world. We have a headquarters here in Gothenburg, Sweden. We have 30 offices. Most of those offices are sales offices. Some of them are also now being added with implementation services or project leading for being able to do that closer to the customers. We have dealt the operation into seven regions, so we can sort of work efficiently all over the globe in local languages. We have local language support in many of these countries in the world, so it's easy for the customers to access us. They can talk to us. We can help them. Support is included in our service. We also see that the offices are also helping us to be more aligned and more, we could say flexible when it comes to changes in the local environment. There are a lot of local changes when it comes to taxes. It's not sort of a fixed way of doing it. The way it changes is that some countries have this year changed their numbers and the tax and how it's gonna be done four times, and we need to be on our toes to be able to do those changes. We are having a world where we have both what we call mature markets. That is markets that are developing accordingly with a large organization. We just sort of supporting all the major things. We also have countries that are we would call it investment markets. This is sort of our exploratory market where we believe that we need to have to be able to support the world in the future. We are over 700 employees today, and we have 80,000 paying customers. I would say this is very stable. Our customers are from the local bakery to the very high-end tier one companies of this world. We have a scalable SaaS model, and that means the recurrent revenue is important for us. It's gone down a little bit, and it will vary around 90%. It was in this first half year 89%. The gross margin that we have was 87%, and the customer churn was very low. It lowered down from 2.9 to 2.2%, which make us having what we call a CLV/CAC that is very high, 18.1. That means that $1 invested in marketing gives $18 back, and that is a good number. We're very proud to see that this develops all over the planet. Q1 net sales growth was 46%. Out of those, 17% were organic. ARR grow with 49%, or that was 19% organic. Customer base growth was 46%, and transaction volume growth was 17%. Customer churn, as I mentioned before, was 2.2%, and our EBITDA margin in the total group was 33.8%. We took all the cost for the acquisition that we tried to do in England that we said no to out of reasons that we said that the price would probably be too high for us to be able to challenge the other bidder, and we have taken that cost in the quarter. Adjusted EBITDA was -22%. That's important to understand. We are seeking, when it comes to acquisition, good acquisitions that we can sort of have a plan for. We did a thorough study, and we believe that this acquisition that we plan to do would have made sense for us from an industrial point of view and also from efficient point of view. We had a threshold sort of that we didn't wanna go over, that is the reason. We are continuing now to look at other prospects, so to speak, in this business, and we will do so for the next coming quarters. See what that turns out in the next coming quarters. Highlights, if you look at the full first half of the year, it was 49% net sales growth, 20% was organic. We can say that was pretty good. We have an ARR growth that we are proud about, 49%, where 19% was organic. We had 46% customer base growth, 23% transaction volume growth, and this is of course really important. This is without Gosocket. From next quarter, we will include Gosocket in the comparable numbers, because we have then only organic growth, if we don't do any acquisition. Customer churn 2.2%, and adjusted EBITDA margin more than 15.8%. We think that the first half of this year has gone more or less, I would say, according to plan. We have acquired quite a lot of signed agreements with other. If you take the Fortune 500 companies, over 50 of them are using more or less our Pagero Network in their operations. That have been in industry like automotive, and we have strengthened our presence and also in the IT and the healthcare segment. These are deals that we have done a lot of them in Europe, but also a lot in North America and also some partly in Asia. Truly global business expanding will roll into the second half of the year and will also help us grow transactions further. ARR 527.6 million at the moment. We all know that we have a plan for 2025 of SEK 1.5 million, SEK 1,500 million I mean, and that is, we are on that plan. We are on that track. We believe that, if we continue this way, we will achieve our goals for the plan that we laid in three quarters back. Gosocket Latam acquisition adds roughly SEK 104 million into the ARR. Model is robust. We see organic growth at healthy numbers, and we see also scalable customer acquisitions that is sort of continuing to grow the usage of the services that we have in the Pagero Network. As I mentioned before, 50 of global Fortune 500 companies are using Pagero, and we have 12 in the healthcare segment, we have 11 in the technology segment, and 6 in the industrial segment. We will see this growing. Of course, it is important for us to be perceived, and not only perceived, but also being a Fortune 500 supplier, so to speak, so we can really get acknowledged that we can service them globally. We have sort of managed to do that in this first half of 2022. Net sales are also growing, of course, and we have an increase of 49%. We have of those where 20% was organically, and you see here in the picture here our net sales are developing. If you compare with Q2 2021, Q2 2022, you have 17% growth was organically and 46% in total. If you look at the first half, it's 20%, organically and 49% in total. Yeah, I think we don't need to mention anything more or talk about that anymore. If we talk about profitability, I mean, we have come into the situation now in the world that everybody has now started to focus on profits, and of course, we also focus on profits. We have today 89% of our business, of the total net sales we do, have an EBITDA margin of 34%. It all fits in the rule of forty model, where our percentage is 52. I really want you to dig into this picture. I want you to try to see that you feel comfortable with it, because Nordics, we are a healthy, profitable business in the Nordic countries. In the DACH countries, we have a healthy, profitable business. In the LATAM countries, Latin America, we have a healthy, profitable business. We are at the same time investing in the Nordics, DACH, and LATAM to grow that market further, to improve EBITDA margins. We are investing in new countries in LATAM. We are investing in new sales in the DACH world, and we're investing also in new product lines in Nordics, for instance, in the payment segment that are now being launched in the market. We will see further growth and improved EBITDA margin in the established market. When we come to investment markets, we are investing. Sales are growing with 55% in this period, the first half. We see good growth in USA. We see good growth in U.K. We see good growth in UAE, and I'm talking about the Saudi Arabia part that we are running from UAE. Sorry, it should be Saudi Arabia. We are also investing in Italy, Portugal, Ireland, and many other places. We will see during the second half of this year some of these markets are getting close to breakeven situation. After a while, we can sort of move them over to established market instead of being investment market. We will be more granular in the future when it comes to this part of the reporting. I really want you to really get the whole picture that if we are not investing in these investment markets, we will not be a supplier to the global ones in the aspect of one connection global reach. That is the big plan here, to really be able to tap into our network and really being able to connect any country of this planet, and there are 195, and be able to be a compliant supplier of invoices, orders, or whatever business messages there are into these markets. We think that are pretty proud about where we have reached this far in the project. We are turning this forward, of course. EBITDA margin adjusted 44.2. Half 2022, that's -8%. The reason, as I pointed out before, was the cost, the hit of SEK 16.9 million from the parties that helped us to investigate and dig into the target we had for acquisition for the quarter. We said no. It's not easy to say no. We all know that. That's the most difficult thing. We think that was in the insight, that was the best thing for us to do. We are sorry for the loss, but we learned a lot and we will probably have some usage of that going forward. I don't think I have to mention anything more about that. You see it yourself. Growing customer base, we are taking away inactive customers that are non-paying from the network. This is a clean database. We had a growth between H1 2021 to H1 2022 of 46%, which is good. We have this 82,000 customers that are using this actively. We predict, of course, that this growth will continue going forward. Strong underlying growth in existing customers. We see a lot of our existing customers are buying more. We see the transaction volumes are growing with 23% from first half 2021 to first half 2022. What are they doing? Yeah, they are buying more countries in the world, of course, that they are operating in. They are buying more message types that are operating with, invoices, orders, et cetera, transportation messages that I talked about before. Of course, they are adding number of services that they can use connected to the platform. It's important to understand, we are on a growth path. We are on a path to deliver, but we are delivering according to a plan, and we are building a global network where everybody can access totally open. They can tap in their applications. They can use the network's data in the way they want. They can do it securely. They can do it 24/7. They can get access to help in the local language. They can also, if of course we supply it, but today we are supplying the most important ones. They can also be sure that we take all the measures that is possible to keep this data system up and running 24/7, New Year's Eve, Christmas Day, whatever religious holiday you have, and there will be people being able to serve. This is sort of the basis of building this network. Scalable, of course, and we see, of course, technical things that we are going to solve going forward. We will have regional support in some of our applications going forward, which means that we can run both data and process data on a regional basis to keep track of that. We think this DPO, the data protection thing, will be increased. We think that there will be a lot of other rules within connected to GDPR, and we are seeing that that is being followed, helping our customers to do that in a prudent and in a correct way. M&A, I talked about it. We acquired Sri Lanka in March 2022 to be able to increase our R&D resources. Probably some of you have been reading about the problems in the country that has arisen for quite a while now. I've been operating in Sri Lanka since 1996. I know there has been trouble all the time, so this will be sort of also something we are handling. The people are doing a great job there, and we are really investing further in the country. We think that was still a very good thing to do to get that under the wings of Pagero. We are continuing to develop that operation, and we have very loyal and good people there, and we know that there's a lot of talent in the country that we want to use going forward. As I mentioned before, we withdraw from the bidding process in the Tungsten Corporation company in England. We are, when it comes to M&A, not so that we have now stopped or anything like that, but we don't do many. We do very selected acquisitions, and we will communicate to you when we have something new when it comes to that arena. Regulatory highlights, this is important to understand. This is driving the business. We have expanded this year with three new countries in South America. Panama is one. Dominican Republic is another one, and so on. We are one of the most. I would say we are the ones that are supporting most countries in Latin America. We are the largest ones. We are now connecting this seamlessly into the platform of the whole network that we have, which will make it possible for all our customers to use the network for the Latin American market, as part of the Pagero Network. Denmark is passing new acts, new laws, that it will be more. I'm sorry for the. This is pointing at Poland here. That is not Denmark. It should be Denmark, as you know. They are passing new electronic laws to really see to it that the people go electronically. We foresee that this will happen in Sweden, and it's happening already in Finland. We foresee that this will happen all over the world. Poland has also e-invoicing in January 2024 for the country for VAT reasons, of course. India, actually, the e-invoicing mandate scope extends all the time. Japan, as I mentioned before, they have decided to have a Peppol infrastructure, and we have already connected the platform to the Peppol infrastructure of Japan. We will be present going forward, we will sort of build a local operation in the Japanese market to be able to support all the multinationals that are operating both outside of Japan, but of course, also Japanese companies working only in Japan. Yes. Development so far in Q2, as you maybe have read, we had a loan that we sort of negotiated in relationship to the acquisition in England. We paid first all our outstanding debts to the bank we're working with, and then we borrowed SEK 750 million in a frame of SEK 1.5 billion that we can use. As we don't needed those SEK 750 million, we repaid SEK 450 million in beginning of July. You should know that. Financially, we are very strong. We have roughly around SEK 500 million in the bank, and we have a facility to use if we need to, so to speak. Yeah, that is all I had to say. Please, questions. Thank you very much for that presentation, Bengt, and now we'll jump into the Q&A part of this section. Given the strong margin in established markets and with the growth seemingly being around the same level between established and non-established markets, what are you thinking in terms of continuing to invest in new markets versus going profitable? Okay. If we look at it is very simple. I think that the one supplier that really can cater for solution for companies that are coming from the German-speaking part of the world and from U.S. will be the leading vendors of, in the field that we are in. We are investing in North America, we are investing in mature markets like Germany, and that will secure the future of the company. We are also investing, as you see, in Africa, we're investing in South America, we're investing in Poland, we're investing in Japan, we invest in Australia and New Zealand. This will take some time in some of these countries until they are totally mature. Some of them will go quicker. I foresee that U.S. and U.K. will go quicker, coming into the. I wouldn't call it maybe mature, but they're coming into to profitable numbers going forward, depending on how much we invest, and we stop investing. As you know, 50% of the world market is in U.S. when it comes to IT. It's more of a decision, how much can we choose, so to speak. But it is important for us to become a serious player in U.S., for instance. We have invested together with Microsoft in a project where we have tested a network solution for the North American market, and within a concept that is supported by Federal Reserve. We are doing these investments because we believe that the world will go digital totally, and we're gonna be one of the players there. To give you a very, very good answer, I can't. We will be more specific in Q3 and Q4 when it comes to some of these markets, that I can promise. Have you noticed any slowdown in customer transaction activity since we are approaching a recession? Yeah. We are approaching a recession, everybody says. It's like a little bit, you know, you scream, "The wolf is here," and after a while, you really believe that the wolf is here. We haven't seen that the wolf is here. We haven't seen it at all. We see that there are sectors that haven't really come back since the pandemic situation we had, and especially aviation industry. Otherwise, I wouldn't say that we see a general slowdown. We don't. We should be very specific when it comes to our selling of our products. We have a product that I characterize as have-to-have product, as I said in the past. That is a product that will sell even in very hard recession time because it's a need to have it. Thank you. Do you have any issues with your operations in Sri Lanka, given the current instability over there? As I spoke to you before, what has happened in Sri Lanka to address it is that a lot of people are working from home, and we have been able to resolve situations like electricity, you know, stuff like that because they use the internet. The instability there will of course over time, hopefully be improved. We have no problems with people doing their work and doing the job they are doing. We are aware about it. We sort of are having a tight look at it all the time. I would say that Sri Lanka has unfortunately been unstable since 1996 or even before that. The people deserve a better leadership than they have had. We're gonna continue to invest in that. We don't regret it at all. There are good things coming out of it. Should we expect elevated financial expenses also in Q3, given the loans still existing to an extent in July and today? No. It will vary a little bit in the quarters when we decide to put in cost. I mean, everybody knows that the cost of labor and the turnover of labor has increased in the IT industry. That is a concern. We have had a little bit higher cost there than we had sort of anticipated. Recruitment is more costly than it was in the past, and so on. We are doing things to try to mitigate that. You know, we are no stronger than the product and the people we have, and the product is the people. They are making the product, so to speak. We have some things we are looking at to address that, but that's more on the revenue side, I would say. When will we start seeing some of the investment markets approach profitability? I think I have sort of answered that a little bit before, but let's say that to reiterate what I said, we will be more specific on some of these markets in Q3 and Q4, and we are seeing that. To be very precise and be a bit more careful then, in 2023, you will see some of them turn over to profitability. Thank you. Have you seen any headwinds on organic growth from the softening macroeconomic backdrop? Not that I can specifically point out, no. Thank you. How should we think about your investment ambitions and OpEx for the coming quarters, and when should we realistically expect breakeven EBITDA to be achieved? You mean the total company? Is that what it meant? Yeah. We haven't predicted that more than what we said in our plan when we did the IPO, and that was in 2025, we would achieve an EBITDA level of 20%. If you look at our mature markets, we are well above that. If we start getting some of these larger investment markets over there, we will achieve that going forward. We haven't really communicated anything about that. We ought to be careful. We are also, which I should mention, investing in product lines that are just starting to sell also in the market, like the payment stuff for the Nordics, where we have the P27 project, which means that the payments we need to change here in the coming quarter or the coming year. That will also improve, of course, profitability. We are investing money in that at the moment, and we will continue to do that. Thank you. Pagero will be an approved Peppol service provider in Japan. Could you elaborate on that, please? Yeah. We have been working with Peppol, and we are the largest Peppol provider as a network in the world. As the Japanese Digital Agency decided to be a Peppol authority, that means that they decide who can sort of be certified for the Japanese market, and decided to go Peppol. We have asked for permission to become such a provider, and we have sort of provided them with the necessary credentials, and we have become such a provider. The step after that is that we will start launching the project and parallel with that, build an organization on the ground in Japan. In Japanese soil. We have quite a few guys in the organization that have experience from Japan, especially the IT industry there. We believe that will be good investment going forward. Thank you. Could you talk about the level of risk that's associated with Pagero's business operations? Yeah. I mean, there is always risk in all businesses in this world. I would say that the risk of our operation is that it is very limited. I mean, as I said before, this is something you need to have. If you don't have it, you cannot operate at all. You can't even send a single invoice over time. So that's one reason why it's pretty safe and stable. We see that also our growth was good through the pandemic, even if some customers got in fierce trouble. We had a good growth during the last couple of years, and we are seeing a good growth going forward. I say, and there are very many countries that need to go on this track to solve their financial problems when it comes to VAT, to the indirect taxes, or direct taxes, I mean. I would say no to that question. Okay. Thank you. Denmark introduces national legal requirements for e-invoicing. How does that affect Pagero? We are well established in the Danish market as a supplier, and we have a lot of both large and smaller customers in Denmark that are using our network for global reach. We know that Denmark is a country which is sort of on the digitalization path. They are doing a good job, so we are supporting the Danish changes that are in the market, in the platform. We will be a supplier in Denmark going forward, or are suppliers. We will continue to do that. It will grow transaction volumes, definitely. How much? I don't know. It will do its job. Its job, so to speak. Thank you. Earlier this year, we saw the PC gaming company Embracer Group took in Saudi investors at a large premium compared to the share price. Could it be an option for Pagero to take similar action to further strengthen their balance sheet? At the moment, we have no problem with our balance sheet. Absolutely not. We don't intend to create that either. I mean, whoever wants to buy shares, we welcome in the company, but we have no such plans at the moment to do anything in that direction. Okay. Thank you. One last question. Is there something that you're looking forward to for the remainder of the year? Yeah. I'm looking forward to every day in this business. It's a fun business. It's a business that is growing every day. I mean, growth, it's not easy, but we have had a continuous growth for many, many years now, and the numbers are good, which means that we are creating, you know, a lot of new revenue streams that are recurrent every year. Over time, that makes profit, of course. I foresee that some of our investment markets will do good deals going forward in this autumn here. I also foresee that some of our I know already, I would say, that some of the customers we have will go live, that have been working on here in the last 6, 7 months here this year to get their whole act sort of together, and that will produce increased revenue going forward. I'm optimistic for the company in the next coming. Yeah, as long as I can foresee, so to speak. Okay. A big thank you to you, Bengt, for presenting today and answering our questions. Yeah. A big thanks to all of you who have followed today's webcast with Pagero. I hope you have a great rest of the day, and thank you and goodbye. Thank you, everybody.