Welcome to Vitec Software Group Q1 2026 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 Backman and IR Patrik Fransson. Please go ahead. Thank you. Sorry for that 15 minutes of a hiccup. There were some technical issues. Anyhow, welcome to this conference call. I'm Patrik Fransson, Head of Investor Relations at Vitec Software Group, and with me in the room is our CEO, Olle Backman. As always, we will first give you a short overview of Vitec, and then followed by comments on the report released early this morning. After that, we will open up for any questions. Olle. Okay. Thank you, Patrik. Again, sorry for obviously not a Vitec Software that was used for this. Like Patrik said, always starting with a short intro on the group level and then moving over to the Q1 results. You know this picture by now, many of you, starting with the customer perspective, 27,000 customers by now. We have 49 business units. We started the year with 47, so we added two acquisitions during the Q1. We have our feet on the ground in 13 countries, and the pro forma sales is after the two latest acquisitions, up to SEK 3.9 billion, roughly. You can see the distribution of sales there across the different geographies. You can see that we have roughly 25% in Sweden, which means that, of course, we are exposed to the foreign currency fluctuations for good or bad. With me, I have nearly 1,850 colleagues by now. Moving over to also the further breakdown of this diversification. The first pie there, you saw that on the previous picture. That's the sales by market. If you break down on the business units, so no single business unit is more than 7% of the total. Also on the customer side, so the top 10 customers are not more than 7% of the group, which of course gives us a great risk distribution. Moving over to how we operate a bit. We have a business model, of course, that we work with the business units that we have. They are usually the market leaders. They do have a high degree of recurring revenue, and this is something that we continuously work upon. We further develop them through the decentralized organization. A lot of product investment focus here, and that really fuels the organic growth. We work with what we have, the 49 business units, and then we try to top up that with acquisitions each year. So far two this year. The characteristics that we look for, also very familiar by now, of course, the vertical approach to everything. We look at well-established, profitable companies that has been around for a while. They are usually the market leaders. They do have the proprietary software so that we are in control over the product development, and we do that with mainly internal resources, and they have the recurring revenue model all ready to start with. That is sort of a few of the characteristics that we are looking for. Then moving over to acquisitions for the past 12 months. Here you can see we did two during last year, Q1, Q4, and then we started off really well in Q1 this year with Dutch Autonet and Infometric AB. You can see on the pie there the various acquisitions throughout the year. For this year, it has been quite a good start, as we say, adding nearly SEK 175 million in terms of acquisitions to the growth. Sales by vertical. This is also a way of distributing the great sort of distribution across the 22 different verticals that we're in. Property management being the largest one, followed by energy, healthcare, auto, and finance. We're not at all opposed to adding a few new bubbles on this chart. When we look at these verticals, it can mean that we add another vertical or that we buy a company that further develops the existing vertical. We are quite agnostic so that we can do both ways. That means that we're not solely dependent on any single industry, single customer, or single country for that matter. Business units, this is what they look like in terms of size and the proportion of recurring revenue. You're also seeing this quite a few years by now, but it gives us a good overview of the different sizes, and this is also kind of a blueprint for the M&A pipeline, what it looks like in terms of size. The medium size is roughly SEK 50-60 million company, and that is kind of what it looks like out there. The sharing of knowledge across these business units is really the sort of superpower within Vitec. This is actually one of the most tangible things that a business unit experience when coming into a larger group like ours, the possibility to tap into the knowledge base of all the other 48 business units. Here we have some of our specialists for us. That could be everything from customer support, finance, operations, of course, a lot of focus around IT, AI, UX, sales, marketing, and so forth. This is a very appreciated and very vivid and active part of what we do and how we can cross-fertilize good ideas and really speed up development throughout the group. Of course, a few words on AI and innovation here. We always have this, at the last couple of quarters. Overall, great speed in the adoption across the group for internal purposes. Of course, we use that to increase our own internal efficiency a lot. It's also a lot of new customer applications that are being deployed month by month at an ever-increasing speed. It's really down to the deep domain knowledge and the expertise that we combined with proprietary data and all of that really strengthen the moats around the various business units. Here are some examples for the auto industry, Olyslager in the Netherlands, but they sell across the world, so they have seen some remarkable increase in usage. Just as an example, the garage owner or whomever it is, they can take just a photo of the license plate or the VIN number, and then they automatically get all the matching components for their lubricants and so forth. It also shortens the time to market so that we can really do all these matching new languages and everything else at a much higher speed, and accuracy for that matter. You can see a lot of the others, if you go to the other end with Vitec Energy, for instance. Our models there that we do help the utilities to forecast their production facilities, so that it's now 20 different AI models that we combine together to identify really complex connections and linear connections between them. That's weather data, that's consumption data, that's both on historical and so. It is a great value for our customers there and an ever-increasing scalability for that matter. Really encouraging things that are happening throughout the group here. Moving over to the numbers, some of the highlights here. Sales increased all in all by 9% to SEK 955 million. The 9%, the mix here is roughly 5% organic, there's 7% from acquisitions, and then we have a 3% FX headwind. All in all, 9%, and we are really back on track, which is something I'm very pleased with that we increased the profit levels at a higher pace than we increased the sales. If you remember correctly, I mentioned that in the Q4 report, which was something that we were less happy with, that we increased overall last year, yes, but the margin expansion didn't really follow the top line. Now we're back on track where we can increase the margins at a higher pace than we can increase the sales. 11% up on both EBIT and cash EBIT, which is our internal metric that we use, and 13% on the operating profit, and also margin increasing by one percentage point. Cash flow, always the strong Q1 here, super strong as always, but this is really something you can look for at the LTM basis. What we have in the column there is the last 12 months, SEK 1.1 billion in the total cash flow. Yeah, some of the details around that cash flow, like I said, a fairly strong quarter, perfectly in line with the previous years and really what we expect. Like I mentioned, we usually have all the cash flow come in in Q1, and then we have pretty flat for the remaining three quarters of the year. Net sales, as I mentioned, up by 9% for the quarter, up to SEK 3.9 billion there in the pro forma sales. Look at the profit levels here. I think it's really encouraging to see the last 12 months there that we're back on track to increasing margins again. Really promising. One percentage point up on the margin there on the quarter also from 25% to 26%. The cash EBIT, which is net of any activations and amortizations, so very close to the operating cash flow. Also encouraging here that we increase it by one percentage on the margin and 11% on total on the quarter-over-quarter here at the 21% compared to 20% last year. The distribution here of our recurring revenues. We had a 6% organic growth in our subscription-based, which is the source fees, the maintenance fees, and the really sort of bulk of our income. The higher blue bar there, really stable. You can see us a bit down from Q4, but that is also to be expected. We have some Q4 results where a lot of customers are sort of buying bundles, and then we recalculate them and see how much did they spend on last year. That's kind of to be expected. You can see that in the chart there. The organic growth in Q4 was 6% all through the year and then 8% in Q4, and then down to 6 again. It's kind of a normal swing there for us. Also, the transaction-based grew slightly with 3%, so that made up. On the mix there of the total is 5% for the quarter in organic growth. Like I mentioned, 3% headwind on FX, and then 7%, which we added through the acquisitions. Just to sum things up, I think it's really encouraging that we are back on track to growing both margins and in absolute terms and the margin also in percentage expansion. Fairly good cash flow, good cash conversion. We're steady at the 80% level here. Two really nice additions with Autonet from the Netherlands and Infometric from Sweden. We're really seeing some rapid AI adoptions across the organization, both internally but also in the customer application side. As you might have seen also in the full report, we have some adoptions basically on the numbers in the back there to align it with how the annual report is presented. That was something that we were asked to do, and we've done so. We also added some additional disclosures on the back here. Among other things, the cash conversion, which I just mentioned there, which is at 80%. You can see that in the charts at the back of the report. All in all, fairly happy with the quarter and the progress from across the group here. Also, like I mentioned, that we are back on the small incremental improvements in both margins in absolute terms and in terms of efficiency. With that, I think we will move over to the questions and the answers section. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Predrag Savinovic from DNB Carnegie. Please go ahead. Hi, guys. Thank you for taking my questions. I have a few. I think let's start with your comments around increasing EBITDA at a higher rate than sales. Are you expecting to see improving margins now for the rest of the quarters on a year-over-year basis for 2026 based on the growth you see now and the planned cost levels ahead? Yeah, absolutely. Because that is part of the sort of the overall financial targets that we have is that we want to improve that gradually quarter-over-quarter, or I would say rolling 12 months, because there are some seasonalities between the quarters. Q1 a bit lower, Q2, Q3 is a bit stronger usually. Yeah, on a full year basis, we are expecting it to increase. No big numbers, but a few tens of percentages all in all. Yeah, for sure, we are expecting that. Like I wrote in the report there, it's a combination of course, the organic growth in sales, but also cost control basically. Also that we were sort of starting to see some of the efficiencies of AI and other stuff really filtering through. Okay, that's very good. Could you discuss a bit more specifically on Enova for Q1 and also for the upcoming Q2, because this volatility in energy prices in the last months, is it reasonable to expect more business and some improving growth there in the short term? On the sales side there, it's always hard to predict because it is, like I say, weather dependent and also really exposed to market conditions in terms of energy prices and so forth. There was a quite slow start for the first months, then March, of course, with the war there in the Middle East. Gas prices really went through the roof and that added both volatility and price increases. Overall, the quarter was sort of fairly in line with last year. It's really hard to predict going forward given these prices. What we can say is that we have done is that we have worked a lot with the mix of the products and the offering that we have so that we have a lot more stability in the actual sort of earnings from whatever volume may come in that sense. It's super hard to predict. Usually Q2 is fairly okay, but I don't know what the weather is going to be like. Okay. Does AI make your customers move faster? Historically you've had a lot of tools and services and upgrades, but your clients weren't ready. Is this changing now for you because of the amount of mind share that it captures? Will you be able to roll out more now than you could three years ago? Not specifically for AI, but that might be a driver for customer adoption of more stuff from your portfolio. What do you think? I think that we can move a lot faster today, and certainly a lot faster than our customers. Our customers, there's a lot of dialogue that they want to feel secure and sure that they will eventually benefit from whatever gains comes from AI. At the same time, they are really sort of not moving really fast and want a lot of wait and see. They don't want a big bang because it is their processes. Yeah, over the long run, yes, they will and we can for sure keep up with the customers and actually, like I said, we can move faster than they can. At this point, it's a lot of proof of concept here. You need to show the actual value and really talk to them over gradually implementing new functionalities rather than any big bangs. Overall, not a lot of push that we can't handle or surge in demand, but everyone is curious, and they want to know that we're on top of it. We are. Okay. Very good. Thank you very much for the answers. Thanks, Predrag. The next question comes from Daniel Thorsson from ABG Sundal Collier. Please go ahead. Yes, thank you very much. I also have a follow-up question on Enova, and if I'm right, I've heard that you have said that you could export this business into other markets. Have you started to do that, and what's the plans, and is this something we will see in sales in 2026? Yes, we can and we have started it. It has been an initiative for over a year now, and the market that we're currently mostly working on is the U.K. You have to start with selling the software. We are selling our traditional energy management software to customers in the U.K., and then when you have enough volume and you have all the accreditations that is needed, then you can start selling these value-added components in terms of the grid management and participate on the balancing market. Yes, we have started since some time back and yeah, won a few customers in the U.K. on the traditional software side, and then we hope to add the grid balancing services on top of that when volumes and all the permits are there. Okay, I see. That sounds promising. Another question on your organic net recruitment plans for 2026, excluding M&A here. I guess that they could be somewhat slower than historically, given both the internal productivity you mentioned, but also perhaps a somewhat slower market and lower price increases. Is that a fair assumption? On the first part of your assumption, yes. It is. A few years ago it was on autopilot. If someone left, you need to recruit it again. If someone leaves now, then we're really challenged that, okay, can we work more efficiently? Can we do that with the resources that we have left? We are expecting, and that has basically been flat on the Q1 here, so no organic increase in staff at all for the Q1, and we're not expecting it to pick up either. For sure, we are using efficiency gains and new ways of working to be more productive in that sense. Okay, I see. That makes sense. Another question on these productivity tools, like all of the AI tools that you work with. Do you see that these providers are raising prices to the extent that it becomes, not a problem, but less efficient in terms of replacing one person with all of the different AI tools now coming because of aggressive price increases? Or is that further out in the future, you think? I think that's further out, if it comes at all. No, the licenses that we're buying and the token spend that we have, it's not huge at all at this moment. It's not anywhere near the efficiency gains in terms of productivity. Okay, I see. A final one on the private M&A market. Have you seen to any extent, any de-rating of multiples and expectations given the public valuation multiples? I think the expectations from our side has certainly de-rated. We are absolutely one of the parties here that are trying to really have fair valuations that you can live with in the long run, which we have always had. We are hoping that, not necessarily paying a lot less than we paid before because we have always been conservative, but hopefully we can be more successful instead. The private markets are moving really slow, and there's not a lot of deals that has been done. We are very active. We have a lot of discussions with potential sellers here. Yeah, of course, we're hoping to add more. We did two really great acquisitions during the Q1, I think. Really added a lot of value here to the group. Yeah, we are certainly hoping, and that others will follow the example as well. I see. Thank you very much. The next question comes from Thomas Nilsson from Nordea. Please go ahead. Thanks for taking my question. I just want to go back to the transaction-based recurring revenue, which grew by 3% in the Q1. Can you talk about your expectations for this segment for the rest of the year, and also what's included in this line besides Enova? It has, over the years, been very stable and basically growing in line with the subscription part. Roughly 50% of that volume is ordinary text messaging, mapping, third-party components, point-of-sale solutions, kickbacks, and so forth. 50% of that volume comes from a wide variety of other business units that basically has to have value-added services that we sell to our customers, which grows fairly in line with the subscription part. Then there's the two big parts. One is Enova, and the other is BidTheatre, which is programmatic buying. In that sense, we are having the customers spend on ads going through our books. That basically follows the usual patterns for ad spending basically throughout the year. In combination, those two is 50% of that volume and the other is really spread across at a very stable rate. Okay. As a final question, perhaps, if I may. Since AI can both be a changing competitive dynamic but also an opportunity, what is your overall view of how AI will affect your industry? What is the most common misconception among investors, do you feel? I think if it's a misconception among the investor community, that's to say that the incumbents like our companies and the fact that we have a lot of legacy code, and that is somehow a bad thing. I think it's quite the opposite. The legacy is a very positive and good thing because legacy is what brought us here. Legacy is what our customers are paying for right now. Legacy is what is working. So if you have vertical market software, there's a zero tolerance for failure. Everything has to work. It needs to be very specific, and there is just so much more to a software offering than just the code. On the other hand, having that legacy, of course, there has traditionally been a lot of effort that needs to put into modernizing that over time. Here, these tools are really helping companies like Vitec, so that the transition and the upgrading of our legacy software has just become so much easier and faster, and thereby cheaper as well. I think that we're in a really good spot here. Again, like I said on some of the previous questions there, we can move a lot faster than our customers at the moment. It's really adding these components at the pace where the customers want and can adopt it. That's just being out there and talking to them and proving the value. Okay. Thank you very much. The next question comes from Fredrik Nilsson from Redeye. Please go ahead. Thank you. Hi, Olle and Patrik. I want to continue on the track with AI here and connect it to acquisitions. What questions regarding AI are you asking potential acquisitions, and what kind of answers are you looking for to see that they really fit into your strategy? I don't think that the questions are necessarily that new because we've always asked questions and looked into the tech stack and see how modern is it, where are they in terms of how up to date is the actual product in that sense, then, of course, disruptions in the potential market. Like I said, we are looking for the market leaders, stable, battle-tested, proven companies. Of course, we need to look into, okay, is there any potential disruption? We have always looked for software that solves these kind of eternal needs. Will we need housing? Yes. Will we go to the bank? Yes. Will we need healthcare? Yes. Will we need education? Yes. Do we need to fix the car? Yes. We're really looking into these niches that themselves, the niche will be there, and there will be a need then for a vertical solution within them. Kind of the same questions, of course. The speed of the competitors is a bit new. Of course, we are sort of asking these questions, have there popped up anyone new since the last years and so on, and how are they selling? What are their arguments against the customers and what is your response to that, basically. Roughly the same kind of questions that we have always used, actually. Just a bit of new light on them. I think the key here is that we always look for the essential needs that really need to have software that your business processes are dependent on. That's always been the key. I think then, because it's always been a competitive environment all the way through. Very much the same, but then we added a few things, like Olle said. Really important software for the businesses. That's the key, and it's always been. I see. Great. Thanks. Could you perhaps give us a few examples of initiatives that have been shared over your internal forums that you mentioned? Yeah, I can just share a few, a really encouraging one. Usually it's like a 45-minute teams meeting. Two or three business units share, very more sort of inspirational, this is how we did it. This is what we succeeded with, or this is what we failed with. I can take an example, for instance, from the auto industry. If a support ticket comes in, now it's fully automated. A support ticket comes into the system, it can really run through all the documentation, all the previous answers and questions around that, and then it digs into the software itself, finds out whether or not it is a bug, and then comes up with a solution that we then later quality test, of course, through one of our developers. That process has really increased the pace. A lot of these BUs have already done that, and they showcased it to the others, and then they can easily either just get inspiration or they can then later on directly contact these and get a hands-on explanation on the bits and pieces of how they did it. They are very much inspirational. You can deep dive if you want to, separately. That has really picked up the pace. Another example has been where one business unit invited all the others to sit beside us digitally and see us work for a full day. This is how the processes have been worked, because they are really fully automated. They got hands-on to see how they actually work online, with customer support tickets and development and bug fixing and yeah. Really inspirational. Great. Thank you very much. That's all for me. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Erik Larsson from SEB. Please go ahead. Thank you. I have two questions. First, on the subscription revenue. It seems like some type of seasonality has emerged here with a really strong Q4 and then Q1 coming down. Could you just explain the factors here? My understanding is that it's primarily Olyslager, but any general description would be helpful. Yeah, there are basically two things there. Like I mentioned, Q4, one thing is Olyslager is one of the business units, but there are a few others as well. Customers, they buy bundles throughout the year, and that is, of course, accrued throughout the year. At the year-end, we sort of recalculate and see how is the actual spend. The actual spend usually is a lot more because customers are usually trying to lowball and have a bit lower on the spend throughout the year. That's usually a very positive thing because we're saying, "Hey, your customers are interacting a lot more with you, so that you have spent more." We get a little bit boost there in Q4 from that. The other sort of flip side of that is, of course, in Q1, we still don't have a lot of churn. It's roughly 1%-1.5%. Of course, the churn comes in at Q1. It kind of goes both ways there. It'll go in the separate ways there. No, we're not concerned that it is sequentially Q4 to Q1 a bit lower. That's just to be expected. Yeah. Perfect. Just the second question on the cash flow. You spent around SEK 676 million on acquisitions. I wanted to understand, is this specifically for Infometric and Autonet, or is it something else in there, too? It is Autonet and the Infometric, the ballpark, and then there is also a small issue there from some of the earn-outs that comes. Yeah, the absolute ballpark are those two. Okay. Yeah, because it looked a bit higher than I had expected, and obviously, I don't have the full picture here, but it implies that these two acquisitions have quite the margins. I'm just curious what you paid. They have good margins. Yeah. They are good on. I guess. It's both of them. Yeah. All right. Okay, that's all for me. Thank you. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. Okay. Thank you all for participating and listening in, and I apologize for the technical hiccup there in the beginning, but I hope you got a good picture of Vitec and the Q1, and see you in three months' time. Bye-bye.