Hi, and welcome back to our Microcap Days. My name is Markus Almerud. I am an analyst here at DNB Carnegie. I have the pleasure to have Fredrik Lundberg with me, who is Chief Executive Officer at Waystream. You will start with the presentation. I will come back afterwards with some Q&A. So over to you, Fredrik. Thank you very much. Yes, my name is Fredrik Lundberg. I have been the Chief Executive Officer for Waystream for about five years. I am going to give you a short presentation about us and where we are going. Briefly, Waystream was founded 2001. We have our HQ in Kista outside here in Stockholm. We have staff in Sweden, in China, we have staff in Germany and in India. What we do is that we sell fiber products to fiber networks. Our customers are city networks and operators. Our main market is the Nordics, but we also sell in Central Europe. We had revenues of about SEK 137 million last year, and we are listed on Nasdaq First North. We have our production here in Lund outside Sweden. In addition to that, we did our first acquisition, but I will come back to that later. So what does that mean and what do we actually do? We sell and build access switches for networks. They are placed in the basement or in these connection boxes if you live in a household. So in every multi-dwelling or apartment building, there is one access switch that connects one fiber that runs from the street into one fiber connection to each apartment. We have about 30 different type of products, running from depending on the capacity, the operator or the vendor that actually sells the fiber network. But earlier this year, we made our first acquisition of Tellus Fiber that sells optical transceivers as accessories with the ambition for us to reach a new and broader target group both by cross-selling to our existing customers, but also be able to sell to new segments like data centers and enterprise. We see a very clear strategic fit for that. So together we have the switches that is run to the fiber networks, and we have the optical transceivers and the accessories that goes. Just to be clear, optical transceivers is used in any type of server or switch. So to every fiber cable that is connected to a device, you need an optical transceivers. So there is a lot of optical transceivers and accessories and also different parts in the network. So what does it make us unique? How do we win in a competitive landscape? Our competitors are huge companies. They are called Huawei from the Chinese company. It is Nokia, it is Cisco, it is that type of companies. So how can we compete and win against them? There is a few things. We have built future-proof products that have been running. We've been building this for 20 years together with our customers who have a very high loyalty and low churn. We've been growing step by step with our customers by having future-proof products and a very friendly user interface. We develop both the hardware and the software, just like a laptop. You need the physical hardware, but you also need Windows. That is what we do. Our product, we have 30 different models, but we have one software that works with all of them. It's very easy to use for our customers. Also that we differentiate quite clearly that we produce and that we are Swedish. Our competitors are, as I mentioned, Chinese or American, and that is in the geopolitical situation as it is right now. It's quite good and there is regulations, et cetera, that helps, that promotes produced in European Union. In addition, with the Tellus acquisition, we have the flexibility and the broad product portfolio. That mix makes us successful. Who are our customers? We have historically been very strong in the city network segment. The city networks, especially in Sweden, we have the municipalities that owns the city networks to promote the broadband to make sure that every household has broadband. We also have the operators. In the beginning, we only had city networks, but over the last years, we have signed frame agreements with the largest vendors, operators in the Nordics, which is of course great with Telia, Telenor, Bahnhof, et cetera. What our customers say, GlobalConnect, which owns IP-Only, which is one of the biggest ones, it says, "Waystream demonstrates a clear commitment to quality, reliability, and sustainable production practices." That's very positive that you have one big actor like that really promotes us and shows that we are on the right path. With that in mind, what we do and how we do it is that we do the development of our products. We own everything from R&D. The R&D, sales, marketing, et cetera. But we have a very outsourced model. That makes us so we can be a slim and small company. We have the production outsourced. We have the Swedish vendor NOTE that makes the production. We have a reseller model so we can reach more customers, so we can focus on building and selling our products. That also makes it that with our growth, we have a very good operating leverage. With that operating leverage, we can see margin expansions. When we grow our business, we don't need to increase our OPEX in the same way as we're growing the revenue. That makes us more and more profitable. That's the whole idea with our business going forward, is that we are on the tipping point of really getting margin expansion. If you look on history, where have we been? If we go back since 2019 or so, we grew our business. It was quite stable with quite good growth within the city networks. What we saw was that the majority of the end customers are in the operator segment. Our goal was, if we want to grow and be able to grow rapidly going forward, we need to win in the operator segment. We started, we had a good growth, then by end of 2022, we started to sign agreements with the larger vendor. We started with Telia, then it was Telenor, et cetera, one after another. At the same time, if you look on history of our numbers, we had a profitable growth. Then by 2023 and 2024, we had a gap. We had a post-COVID. Our industry was heavily affected by people. Before that, it was household build-outs, et cetera. It was a lot of investment that affected 2023, 2024. But during those years, we really focused on cost control and reduce cost and the efficiency of our products so we could get back. In 2025, we came back to both growth, but also back to good profitability. That is the track we are now focusing on. If you look on, how has it been the first half of the year? Yes, we had a decline on revenues a little bit due to that we had very good sales numbers in the first half in 2025. But we had a positive cash flow and profitability. But we completed the acquisition. But we saw especially the growth in the operator segment. That is where we see that is important for us going forward. We also had a strategic win with another operator. The first half of the year has been boosting for future growth. Plus that we have had some issues with deliveries. We got large orders for certain models that we did not have. That has been backlogged to the second half of the year. In that sense, we have had a quite good start of the year. Let us see. But then if we look on the market outlook, how is our industry and what is happening going forward? The expansion, fiber, and internet connections to each household is, of course, super important. If you look in Europe, we are going to double the amount of households connected over the upcoming years. The market is growing, and the number of households is growing. If we dig deeper, if you start on the Nordics. In the Nordic segments, there are about 8.9 million households connected, but there is still 5.2 million that is not connected. So there is a growth potential, even though it is a fairly high penetration rate compared to especially other parts of Europe. What is interesting about the Nordic or the dynamics is that 85% of the end users are in the operator segment. We have a very strong position among the city networks, but it is still 15% of the market, and we have a low penetration rate even though we have the frame agreements, but there are a lot of potential upsides, going forward. So for us to really get the fundamental when the replacement and everything is going to happen, because you need to replace the existing 5.2 million households, every 10 years, we need to replace the old hardware, plus that there is expansion. So we see that the interest, the potential is really good in the Nordics. But we also see, of course, in the other part of Europe. If we look how does it look in the rest of Europe, the market is here, it is much, much lower penetration rate. The need is, for example, there is more connected households in Sweden than there is in Germany, and Germany is eight times as big as Sweden. So we see that the need for fiber and our type of products is definitely increasing. We also see that the geopolitical tense is, EU regulations, Europe versus China, and China and Europe and U.S. is tense. So the regulations, the worrying about, is there a problem? Do operators dare to invest and build their networks on Chinese equipment, et cetera? That is a big question that is going forward. What is our focus? What we see is that we have built them based on that we see that the market is there, we see where the foundation is. Then we have released new financial targets. We see that we will grow by 20% on a CAGR perspective. So on average, for the next five years, our ambition is to grow by 20% a year. As we have this operating leverage, we see that our EBITDA margin will step by step improve. So the target is to have above 20% EBITDA margin. Then also have +20% on return on equity. So for us, when we grow our business, the profitability will follow. That is what we are trying to say with these financial targets and give a little bit of guidance where we foresee that we are going to be over the next coming years. If we dig in, what is our focus for in the upcoming time? For us to really show and to get the growth we foresee that if we manage to increase and get the maximum out of our operator business, we definitely have a very clear path of growth, especially as the operators, as I mentioned, 85% of the end user in Nordics is within this segment. So can we get them to start replacing instead of buying from Chinese vendors to buy from us, then we would see a really good substantial start on the growth. We need to scale up our production. What we have had is that, as I mentioned earlier, we have some backlogs because operators are wanting the same type of products. So we are working right now to increase production to meet the demand. With that, we are foreseeing that we will get margin expansion in terms of that the profitability will increase, but we also are working on reducing the production cost of our products. That is something that we have been working on for a number of years and that we will foresee coming, going forward, is to make sure that we produce as efficient and as good as possible. Of course, the acquisition of Tellus will be important for us both to meet and win new customers, but also really start the cross-selling. So we get increase the wallet size per customers. Of course, grow our business in Central Europe. So why do we think Waystream is a good investment or a company to look at? We are in a structural growth market. The products, the end user, we all need internet, and we foresee that not everything can go on mobile, et cetera. The stability of fiber connect the internet line is absolutely the best. There will be the continuous fiber rollout and replacement of existing. We see that we have a very strong market position in the Nordics. With both our, the strong position with the city networks, but also the growing position we have in the operator segment gives us that we really are in a good phase. When the rollouts and the change starts, it is likely that it turns to us instead of, for example, Huawei. With increased market share, we get the bigger share of the coming investments. We also see that when we grow the business, when we grow top line, we will see good margin expansion, so we become more and more profitable. With the acquisition, we also see that we have a possibility to increase wallet size. So we earn more per sold unit and to more customers. We see that we are in a good position, and we are time to accelerate everything. But the most important for us is that we grow with a good profitability. That is shortly about Waystream and where we are. Maybe starting out with the financial talks and the 20% sales growth. In 2025, the operators accounted for 35% of sales. How do you expect this mix to change over the next, let us say, three to five years? I foresee that the operator is going to be the biggest segment for us, especially in the Nordics, where we have a very strong starting yet a strong footprint. I foresee that we will continuously grow our business quite rapidly while the city network sales, especially on the access and switch layers, so to speak, I would say it will be quite stable, I would foresee, but the main growth will come from the operators. Plus with the Tellus acquisition, we see that, but that might be a bit, but it will be the operators that rise our growth. The 35% of sales, but still 20% sales for the whole group, then implied in that is a quite strong growth in the operator segment if the city network is going to be stable. Yes, that's correct. Looking at the operators, the number of operators, you mentioned seven now, you have seven larger operators. How has that developed over the past couple of years in terms of, or since you signed Telia, basically? It's been a few per year. It takes time to win them all, and it's quite long RFQ processes. We signed the first with Telia in 2022, Telenor in 2023, and then in 2024 was a German operator, 2025 it was GlobalConnect, Finland largest operator. It's one every year or so. Our ambition is, of course, and hope is that we will continue to win the rest of them. It's not only important to have frame agreements, it's actually to get them to order and build their networks with our products. That is our main focus is to get the ones that we have frame agreements, not only to buy smaller volumes, but to increase and hopefully go 100% to our products. When they replace all, when they're in the next replacement cycle, that they will replace it with Waystream products. We'll come to the replacement in just a second. Just staying a little bit with Telia, because you signed them in 2022, and then you got your first order in the first half of this year. From Telia Sverige, yes. From Telia Sverige. Is this kind of the normal lead time that we should also expect from the others, or is Telia special in that sense? We received the first order from Telia Estonia, example, 2023. They have been purchasing for every year. Telia Sverige, it took 1,092 days, so that is quite long. I do not expect anyone else to be that long. Generally, it is because building fiber networks, it is important that it works 24/7. I mean, all day and night, 24/7 for years. Then they are really making sure that the product really works. They test them for a long period of time. Telia tested for years before they started the replace. We have not seen the same for other operators. We have GlobalConnect, we have Elisa in Finland. They have already started purchasing directly. Even though, and this was the same with Telenor, especially in Finland. We see that not all are as cautious as Telia Sverige are. From understand, Telia is also difficult customer. Once they start a purchase, it is kind of a road that will continue is the way you see it? Yes. Generally, the bigger operators are like super tankers. They are hard to change path, but when they do, it is full speed ahead. That is generally how it is with operators. They do not swap vendors often, but when they do, then it takes time to make sure that everything runs. But when they run, the volume starts coming. That is the expectations that we have, and of course, that is what we foresee in our financial targets is that operators will start buying more products off us. Looking at the installed base of access switches, maybe in the Nordics, but in Sweden in particular, you were talking about 7- 10 years of replacement cycle. What is the average age of the installed base, would you say? It's much older than we all would expect because in the operator segment, as an example, in 2020, it came out a law from PTS and the government that all mobile operators needed to replace all Huawei equipment from their mobile network, or else they would lose their ability to be a mobile operator. That meant that they need to replace new equipment in their whole mobile network. That cost them a lot of money. That has delayed the development of the broadband network. I would say that the general age is quite much higher than we would expect. A lot of product is 10, 20 years old. We foresee that the replacement cycle will soon start. Okay. Looking at the market shares of the installed base, looking at Huawei and maybe ZTE, what are the kind of market shares that they have out there, would you say, roughly? It's not public figures, but if we go back five years ago, I would foresee that Huawei had about 60%, 70% of the city network and close to 100% in the operator segment. Now we have 60%, 70% of the market share in the city network, and we are slowly increasing our market share in the operator segment. But I would foresee that they have 90% + of the market share in the operator segment still. For us, there is a lot of upside there. I guess the replacement like you were indicating, the kind of delays, the unclarity about why it hasn't been replaced, the unclarity about the forthcoming structure of the rules and what kind of regulations it's going to be. I think people are-- why investment has been delayed is that the product works. The demand, usually you want to upgrade products based on that you need more capacity, for example. If you go back 10 years, we had 2 Mb, and then you upgrade to 50 Mb, then to 100 Mb, and to 500 Mb. But the need for extreme volume, how many in this room buys 1,000 Mb in their home or 2,000 Mb? Very limited. Very few does it. So the need to upgrade hardware has been pushed forward. Instead of investing now, if you have done the write-off already, and the product works, then they delay it because it's good for their profitability. I think people have been delaying investment as much as possible, and that makes the products get older. But at one point in time, the products will die as it is active equipment, just like our computer. How often do you change phone? Maybe you want to change it two years, but you have it for five. But at one time, you need to do it. Mm-hmm. Looking at the ones that have changed, that had a Huawei switch- Are they generally changing to another provider? Yeah, in our segment is that either they continue with Huawei or they have been replacing their products with ours. That is the fundament. Either they stay or they go our ways. That is the general, especially in the Nordics, that is the path. What would you say that most people tend to, which road do most tend to take? Change or- What we've seen in the city networks segment is that most are turning their points to us. As we have been able to sign frame agreements with five out of the seven over the last couple of years, I would say that they are looking our way, definitely looking our way. Our hope is that they will, when it's time to really start the replacement, is that they do it with us. All of them have started to buy products for us, so it's not only frame agreements, that means nothing. We actually have value in them, and we're earning money and having revenues, but we foresee that the volume can be much higher than they are today. There aren't many alternatives to you right now, is there? This is either your way or yourself. Yes, in the city network segment, it is more vendors possible, but for the larger operator segment, it is fewer alternatives because they have very specific needs. Huawei has been so strong in this segment that other vendors have left. Yes, it is a few vendors. Mm-hmm. Looking at Tellus Fiber and the acquisition you made, what were the main reasons for you making that acquisition? We saw that we could increase wallet share, we could reach a new customer base with that acquisition. We also saw the potential with the cross-selling and a lot of upside. We saw that we get a very good team, good salespeople, strong customer base, and a broad product portfolio. When we combine our skillset with their skillset, we could get a lot of both new customers, but also to upsell on the existing customer base. We think it is a really good match. It will definitely support our growth journey going forward. Looking forward, any thoughts about inorganic growth, or should one expect that out of the 20%, the majority will be organic? No, we have based these figures based that it is primarily organic growth. That is how we base it. Then we can maybe sugar it with more acquisitions, but that is not our main target. It is to grow our business organically. That is the main focus for us. Mm-hmm. Fredrik, I think our time is up. Thank you very much for coming here to present for us, and thank you for listening. Thank you.