Welcome to Vitec Software Group Q2 2024 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to CEO, Olle Bäckman, and IR Patrik Fransson. Please go ahead. This call is being recorded. Your line is muted. Welcome to Vitec Software Group Q2 2024 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to CEO, Olle Bäckman, and IR Patrik Fransson. Please go ahead. Thank you, and a warm welcome to everyone on this call, where we will cover the report that we reported earlier this morning. I'm Patrik Fransson, head of Investor Relations, and with me is our CEO, Olle Bäckman. As always, we will start with a brief overview of Vitec as a whole, and then followed by an update of the Q2 and H1. And after that, we will open up for questions. So with that, I hand over to you, Olle. Okay, thanks, Patrik, and very welcome to the presentation. Sorry for the delay in the beginning there. But as Patrik said, we will always start with a brief overview of the group and always with the customer perspective here. So we have our close to 25,000 customers that we're serving. We will go into the 40 business units that we have. We're still in 11 countries, so no change there. And these 11 countries are made up of our five home markets, which is the four Nordic countries and the Netherlands, and the rest of the countries are connected to one or two of the companies within those home markets. Pro forma sales are by the last of June up to nearly SEK 3.2 billion. 86% recurring revenue is something that we're very proud of, and to my aid, I have nearly 1,550 colleagues by now. Strategy chain as well here, no changes, and you can read this from left to right or right to left, depending on where you want to start. But if we start with the values, of course, products, keep it simple, and trust and transparency over to brand promise, which is a very important part of what we do, which is to be a reliable both supplier, of course, but also a reliable employer. So we invest in products, and we invest in people today in order to be relevant for tomorrow. Business concept, of course, being a providing standardized niche business-critical softwares, and the objective is still to be a profitable growth company. If we do all these things right, we will help in striving towards our vision, which is to shape a wiser and more sustainable future. Then talking about growth, growth can come from different parts, and if we start with the business units, which is always at the center and the core of our operations, we have a decentralized organization. They have all the resources they need, and then we support them from the group perspective, so they grow the organic growth there from the business units. Of course, then fueled by the common business model, with a high degree of recurring revenue and with mission-critical software, and usually they are also market leaders in their niches. And then on top of that, of course, we add acquisitions, and basically, the criteria that we are looking for is to find small Vitecs all over, so we buy ourselves over and over again. So we look at verticality, established and profitable, you own your own IP, the proprietary software, and also, of course, a high degree of recurring revenue, as characteristics. And then just a few words on the acquisitions year to date. So we have made 3 so far this year, 2 within the reporting period. That's LDC in the Netherlands and the BidTheatre in Sweden, in January and June, actually, and then just earlier this week, actually, Taxiteknik, also a Swedish company. So we will add that in the Q3 numbers. So we're up to 3 for the full year, this so far. Just looking at last year, the 6 acquisitions, and you can see also the distribution there. We had 2 Dutch, 2 Finnish, 2 Swedish, and then with a variety of smaller bolt-ons and larger acquisitions like Enova. And looking at verticals, this is another way of displaying it. You can see the bubbles here are basically the size of the vertical. We have some 20-plus verticals that these 40 business units are spread across. And you can see the biggest ones are by now property management, energy, but they're quite evenly distributed as well here, and this is a great way of showing the low risk or the risk distribution within Vitec. So we have 40 business units, we have loads of markets, and we have 40 verticals nearly. The latest acquisitions, of course, LDC, that's a small part here in Labor and Mobility, and BidTheatre, it's a part of the media bubble there. This is a bit another way of showing business units that you are used to. Just a few comments here. Even though we have made three acquisitions, we are actually at a fewer business units year to date than we were when we started, but that is due to the fact that we have done some mergers across. When we see that, it's a good idea on both from a product and development perspective, but also on the customer perspective and how we can approach the market. So, Nice and WIMS, two Norwegian business units, are now what we call Vitec Forsikring, Norwegian, so they're insurance market in Norway and Denmark. And then DL Systems, which was a smaller bolt-on, which has been merged into Actor SmartBook. This is also the way we look at the M&A landscape, so the distribution of the sizes of companies out there when we look for them. They basically match our own portfolio pretty well. Organization, same here. No immediate changes. We have the business units, which are at the core here, the 41s, and they are ours, helped by the VPOs, which is our way of dealing with the day-to-day business and supporting them in their growth. And then, of course, we have some common group functions also here to support them. You may have seen the press release that we have recruited a new CFO, Mr. Peter Lidström. He will start on the first of September, and then Sara Nilsson, our current CFO, she will stay on and be assuming a role of head of group reporting and controlling, and I'm very happy that Sara will continue with us. She's done a great job and but also looking forward to welcoming Peter on the team. Talking about teams, sharing knowledge is a very important part of the value of being part of the Vitec group for a smaller company. So we have a lot of sharing forums, where we have a common culture, concepts for sharing best practices. We have different vertical clusters, where business units that are addressing the same market can talk and exchange ideas, and this is really-... A very good way of fostering and then cross-fertilizing ideas and experiences across the group. So very happy to have the opportunity for new business units to tap into the knowledge base of nearly 40 other peers. Moving over to the numbers. The second quarter net sales was up to SEK 880 million, an increase of 22%. Recurring revenue, which is what we really strive to increase, was up 27%. I will get back to a bit on the distribution there with, of course, Enova coming in really strong in that quarter, adding a lot of that growth. EBIT margin increased by 17%, and then the margin is at 30% compared to 31% last year. It's also a bit due to the mix of the income for the quarter. And if we look at the first half year, because we have a long-term interest in everything we do, so we think that the longer the time period, the better it is to evaluate what... how we're doing. So for the first half year, sales is up 20%, EBIT margin, EBITDA margin up 18%, and then the operating profit is up some 22%. And here also, the cash flow is really strong, on the first half of the year, up 37% to SEK 783 million. A lot of our cash flow comes in the first quarter, and then because of the prepayment model that we have and really like. Net sales, more compared to, to by quarter, or over the years, we have a compounded growth over the last 10 years of 22%, so basically, we're keeping up the pace. The EBITDA margin, also a bit flattish this quarter, but I will get back a bit on that, but, at a healthy level of 30%. We can move over to this page here. We can see the allocation of the, or the distribution between the recurring revenue. W e have two types of recurring revenue. We have the traditional subscription-based, which is the light blue there in, in, at the base, which is the SaaS fees, the maintenance fees, the hosting fees, and then that is growing at a really nice pace, and it's a very stable, stable part. Then we have transaction-based revenues, which is basically value-adding services towards our customers, such as text messaging. It could be maps, it could be kickbacks on payments or spare parts or things like that, that we have had all along. W hen we added Enova in last year, that really increased a lot because they have a fantastic value add to their customers in the way that we can take the excess capacity of the energy that they are having and make bids on the balancing market in the Netherlands. And that, as you see in this quarter, that really took off huge and fueled that increase. And basically, all of the increase apart, they are... The rest is growing along with the organic growth, I should say, so it's still growing the other part as well. But, Enova really had a fantastic quarter here. It's also a bit on the seasonality. In the summertime, there's a lot more renewable energy sources into the energy mix, and the more renewable resources demands more balancing power, and balancing power, that's what we sell for our customers. So, our customers had a great quarter because this is a revenue share model we share with them. There's always some part of it that goes back to us, which we are very happy for, of course, but it is a bit lower margin than the traditional subscription kind of revenue, of course, because there's really high margins when you have your own software. So that's also an explanation on the fact that the margin for the quarter was basically 1% lower than last year, because this high volume has a bit lower gross margin component to it. But nevertheless, it is good money for our customers, it's good money for us, and at a very low risk to that. Organic growth is also something that we're really proud of, and that we see, and we're keeping up the pace. You can see the FX part there is going down a bit, roughly 2% on the quarter, but we're keeping up near 10% organic growth in the subscription-based revenues, which we are really proud of. And this chart tells basically the same thing. So all in all, total sales is a growth of 9%. You take it by way, 2% FX, so that's 7%, but that's a mix of all the different revenue streams. But you can see up there, 12% growth in the subscription-based recurring revenue, take out 2% of FX, so that's a 10% organic growth, and that's a number that we're really happy and satisfied with.... Diversification of sales, we mentioned that across the different markets, it's quite evenly dispersed, and we also have a great breakdown of the revenue in terms of customers, great customer distribution. There, the 10 largest one is just 7%, and the other 25,000 nearly covers the rest. And this is a bit of a sum up of the quarter. Steady customer development, strong continued additional sales, like we mentioned earlier. New sales is still a bit hard, but we really have a good upsell and, and additional sales to the existing customers. We're still not seeing a lot of churn or anything like that, so, pretty well. And then we added another three acquisitions, year to date. So with that said, we're opening it up for questions. [Operator's Instructions]. The next question comes from Daniel Thorsson, from ABG Sundal Collier. Please go ahead. Yes. Hi, thank you very much, Olle and Patrik. A follow-up question on you elaborating on the margin in Enova here in the quarter. You, you made it really helpful for us, but just to understand it a little bit more, revenues were up quite a lot year-over-year in Q2, according to my understanding at least, and the lower margin is a result of more transaction revenues, obviously. But how, how should we think about the level? I remember 1.5 years ago, you said that the margin in Enova was higher than the Vitec Group margin, and I guess that in this quarter it must be a bit lower. So what were kind of the ups and the downs in the last 1-2 years in terms of profitability in Enova, please? Well, the profitability in absolute terms is of course up, due to the model, and we are making money on every euro that we sell. But a lot of some of the volume here is when you activate energy. Basically, when you sell energy or balancing services, it's like an insurance that you will be there if needed. And of course, the insurance premium there, we have a decent margin on. And then if the energy is activated, so if they actually call on the energy, then our customers also have a direct cost related to that. So then they will have a larger share of that revenue going through, so we have a lower margin on activated energy, and that is usually activated also during the summer period. Yeah. No, I understand the dynamics. Just to give us an example, what could be the margin in a quarter like this versus what margin did we have in Q4 or Q1 for Enova? Just to understand the volatility between quarters for Enova, please. Well, we don't comment on individual business units, but they are, like we said when we did the first information and introduction, they are in line with the rest of the group, and they still are on a full year basis. So but it will be a bit up and down, but yeah. I see now. That's good. Okay, I see. That's fair. And then, secondly, regarding those transaction-driven recurring revenues, also, when you acquired BidTheatre here in June, I expect those revenues to be quite a lot of transaction-driven as well, and this will change the whole group mix to be more transaction-driven over time. Do you have any plan to convert those revenues into more subscription-based, or should we get used to a high share of transaction? Well, for the business units that we have today, largely, and like I said, almost all the business units have some component of transaction-based, and that is something that we actually encourage because it is value-adding, and you take a larger share of wallet from the customer, and you become a more important vendor to them. So we really like that. Then, of course, Enova and BidTheatre have models that has basically shifted, so that very low part of their income is subscription-based, and a large part is that. And for those two units, we should get used to that because that's part of their business model. But then when I look at other companies, if you look at LDC or Taxiteknik, that we also bought this year, they are exactly like all the others, with a more standardized 85%-90% of, of a subscription-based period. So, I wouldn't go so far as saying that, this is something that we actively look for, but, it's just an evolution of software companies, and how, how they take on more, part of, of their customers', potential, offerings. Yeah, I see. That's helpful. And then just the final question: How do you see salary inflation versus price increases playing out in the rest of 2024? Yeah, well, both of them are basically done by now. So we have increased the year's pricing, and the salary negotiations have been done already. And they are basically on par with each other, so they are roughly in the 4% range. Excellent. Thank you very much. The next question comes from Christian Binder from Redeye. Please go ahead. Hi, and thanks so much for taking my questions. First one would be, I wonder if you could elaborate on the consolidation of some of your business units. A t first glance, it might seem like it's a little bit contradictory to your philosophy of decentralization. Can you just elaborate a little bit more on when you think it's appropriate to, for example, merge different business units? Yeah, of course. That has been something that we've been doing for forever. If you take the largest one and the oldest one we have, which is Fastighets in Sweden, that's actually seven business units, but that has merged together, but that's over a 35-year period, so it's not that visible perhaps anymore. But when we do so, either when they are strict bolt-ons, and then we have that in the cards to begin with, and that was the case with both Entry Event and DL Systems. So those were add-on acquisitions to Actor SmartBook. So that's that we did right away. And then, for the Norwegian insurance companies, WIMS and Nice, that has developed over time, and it always comes from the business units themselves. So when they see that, as time goes by and when you are going to do new product features or new upgrades, they talk, and, "Okay, we see, can we do this jointly? Can we have some economies of scale here?" And then it becomes quite natural. And also, if they are... Of course, if a business unit would be in a direct competitor or in the same market with the same kind of customer base, we always coordinate sales. And then after a while, that comes quite natural, that they see the benefits of merging. So, but we take it really slowly, and it's always from the business unit perspective, so they must want to do this. Perfect. Got it. And then, my second question would be, if I understand correctly, the sellers of Taxiteknik will retain minority ownership of the company, and, correct me if I'm wrong, but I don't think you've done that often in the past. Is this kind of a unique situation where that was what you did, or do you plan to use minorities more often in the future? We have done it a few times, but like I said, it's not that often. That's all depending on the situation. W e are very clear that we will eventually buy 100%, so it's not a long-term commitment in that case. So it is a way of handling earn-outs, I should say. So Taxiteknik is a really fast-growing company, and then it sort of makes sense in our model to share that both possibility and risk with the sellers. So we have suggested that a few times, but sometimes it fits, and sometimes not. So it will probably happen more in the future, but it's always kind of an earn-out method, because at the end of the day, we will own 100%. Perfect. That was all from my side. Thank you so much. [Operator's Instructions]. The next question comes from Daniel Lindkvist from Danske Bank. Please go ahead. Hi, guys. Just briefly on the Enova, both sales and margins. This quarter should be seen as extremely good in a historical context, I guess. So just if we could give us any guidance of any kind for the future, because there are rather large numbers in this quarter. And then also on the incremental margins, should we expect when we have these kind of quarters, that we have lower incremental margins, so the effect won't be as big? W e were expecting slightly higher incremental margins this time around, but lower volumes. So will that play against each other in the future as well, so that it won't be that dramatic on the EBITDA, or how should we think? Well, first, on the margins, we don't think it's dramatic at all, but with that high volume comes a bit lower margin, and that would be the seasonality. So we're still seeing that Enova on a full year basis have a really good margin, and then it is absolutely in line with the rest on our targets. T hat's what you should expect. And then, of course, the seasonality there, even last year, Q2 was by far the strongest one, with nearly a third of the revenue in one quarter-yearly revenue in one quarter. Followed then Q2, still a bit... Sorry, Q3, also.... also strong, and then lower in Q4, and then Q1 is sort of the least, the quarter with the least volume. So that's basically the distribution. And of course, that was last year, we're seeing the same kind of distribution this year, but b alancing markets, we are there at the hands, in the hands of bigger players than us, dominating that market, so both in terms of volume and price. But like I said before, it's a fantastic add-on, and we don't need to invest in R&D to keep up with this market. We don't need to hire a lot of people to keep up with that volume. So there's a very low risk related to it in as far as we are concerned. W e just calculated from the transactional, the quarter-over-quarter change in transactional income versus the quarter-over-quarter change in the COGS and subscription and cost and sub-supply costs. So, and from that, it seems like we just need to understand dynamic. Is there. So if you could just give us some flavor on the difference between the insurance premiums and the activated, is that some 10 percentage points in margin or something, just to get our calculations right? I f you look at the COGS and compare that quarter-over-quarter, because the rest of the transaction-based revenues that we have, they are quite stable. So basically, that would be an Enova effect. So if you calculate the COGS between the quarters, that should give you a good proxy. P erfect. I'll stop there. Congratulations, guys, on a good report, and congratulations on proving the transactional-based business being quite a success. So thank you so much. Thanks. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. Okay, well, thank you all for listening in, and thank you for the questions. And, if there's nothing further, we just want to wish everybody a good summer, and I hope you get some holiday and relax after the hectic reporting day. So thanks a lot for listening in and, bye-bye.