MilDef Group Aktie

It's 10:00 on this Thursday, the 16th of July, and we have a presentation of the Q2 numbers out of MilDef coming out of this morning. So welcome to this investor call with MilDef with a special focus on Q2. This quarterly call will be, as always, presented by Daniel Ljunggren, President and CEO; and Viveca Johnsson, CFO. We expect approximately 30 minutes to be sufficient for the presentation and the following Q&A. [Operator Instructions]

Also for information, we record this meeting for later publication on the MilDef website later today. So now with no further ado, please take away Daniel Ljunggren and Viveca Johnsson. And remember, to help our audience where we are in the presentation by stating the number on the slide. Please, Daniel.

Thank you, Olof, for that introduction, and a warm welcome to all of you that are here in the high peak summer period in Sweden, joining this Q2 con call for MilDef. This is the areas that we will try to cover today. We will have some highlights for the second quarter. And post that, we will have some more clarifications on the financial side, and then we will have a summary and of course, in the end, a Q&A session.

But let's start with Slide #3 then and look at the highlights for the second quarter. Q2 was a strong quarter when it comes to the delivery execution and with a high operating leverage, indicating that our investments and efforts into increased delivery capacity has now really started to pay off.

Net sales grew by 64%, purely organic and operating profit EBITA grew with almost 300%, which is, to me, a clear evidence of the operating leverage and the scalability in the business model that we have stated before. If we continue, we saw a good market momentum with continued high demand across the entire MilDef portfolio. The demand for advanced military IT solution is increasing, and we have an offering that clearly meets the requirements set by the customers. The slightly lower order intake in the second quarter compared to the same quarter last year should be seen more as a reflection of the volatility between individual quarters.

The gross margin was clearly improved here also in the second quarter. Total gross margin ended up on 51.9%, and we can compare that to 46% in the same period last year. This was an increase that was driven by a profitable sales mix in the second quarter, more specifically driven by a higher share of sales that is related to software and solution in the second quarter. And those items is bearing a higher gross margin than our traditional hardware business. The gross margin level here we saw in Q2 cannot be taken for granted as a new normal.

The gross margin will continue to vary across quarters depending on our products and customer sales mix. We also had -- when we closed the Q2, we had a record high order backlog, indicating good chances to continue our long-term net sales growth. The backlog by the end of Q2 was just above SEK 4.2 billion. And by that is we have grown the order backlog with 32.32% the last 12 months, and this is despite that we have performed a top line growth, net sales growth of 91% in the same 12 months.

Also, of course, worth highlighting is the strategic framework a very important milestone was that we secured this new 7-year strategic framework agreement with Swedish Defense Material Administration, also known as FMV. This agreement has a potential value of up to SEK 1.5 billion. And also when we signed the contract, there was a first call-off order was placed in connection with the signing. I think that this agreement will accelerate the implementation of MilDef software, the so-called OneCIS into the Swedish Armed Forces. OneCIS is today already used operational-wise in several other countries and also within the Swedish Navy.

Our investments also into additional delivery capacity are still at a high level. At the same time that we are delivering growth and improved margins, we also invest to be able to meet the future long-term customer demands. The investments we have made so far mainly consist of onboarding more coworkers and increasing our production areas. The already announced expansion of our current site here in Helsingborg, the Fortress is progressing very well. We expect that new site to be operational not later than the autumn 2027. And by that, we will double our production capacity in Helsingborg.

Also worth mentioning is that there is still some challenges in the supply chain for electronic components, both in terms of lead times and price levels. We, of course, continue to take proactive actions to secure access to the critical components. Mainly this is done through a range of activities such as the inventory buildup of critical components, close collaboration with suppliers to ensure deliveries and also a frequent dialogue with our customers regarding the price absorption of the increased prices. And finally, of course, also worth mention, going back to the volatility in the order intake.

Post Q2 here, we received our largest order to date, an order value of plus SEK 550 million, an order that consists of hardware and that we estimate deliveries during next year in 2027. And by that said, we will move over to Slide #4, which contains the key figures for Q2. And if we take it from your left hand to start with, the net sales ended up on SEK 630 million, and that is a growth compared to Q2 2025 with 64%. And that growth is pure organic and it's also an all-time high number for individual Q2.

And also next one, lower down in the P&L, the adjusted EBITA, of course, SEK 99.7 million, showing a growth of almost 300%. The adjusted EBITA margin is 15.8% and we compare that to 16.5% and of course, driven by higher sales, but also by a strong gross margin. And as I said, gross margin was strong here, 51.9% in total. And on the OpEx side, we think that this developed according to plan, increased the OpEx with 27%, excluding some nonrecurring items and some unrealized FX losses in the second quarter. Order intake is dropping down a little bit. It's dropping by 17% if we compare to Q2 2025.

This decline should not be seen as an underlying trend. It should more be seen as a reflection of the volatility we see in the defense sector between quarters. We also now, as you already know, announced this large order this week. So it could be a little bit variance from quarter-to-quarter. Book-to-bill ratio here in Q2 reached 1.2. And on a rolling 12-month basis, we have 1.4. And also finally, the free cash flow, SEK 7.4 million compared to SEK 32.7 million in Q2 2025. But I would like to zoom out here and look at the first 6 months because the cash flow on an individual quarterly basis could be a little bit up and down. But I think we have really improved the free cash flow in the first 6 months improved by SEK 208 million in absolute numbers. But of course, the free cash flow is impacted by the increased inventory level, securing critical components for delivery in the upcoming quarters here.

And by that said, I would like to leave the word over to Viveca Johnsson, who will give you some more clarifications on the numbers in Q2 and long term.

Thank you, Daniel. Let's take this to a more rolling 12 and long-term view and starting on Slide 6. We're going to do that from the top left on order intake, which is now on SEK 3.7 billion, getting closer to SEK 4 billion. And at this point, we're on a 50% growth, which is, of course, happy to see that, but it's also great to see that our backlog continues to grow and the book-to-bill ratio is on 1.4. We'll get a little bit deeper into that on the next slides here.

Net sales is continuing to develop strongly. And as Daniel mentioned, it's been strong during the second quarter and rolling 12, we are looking at north of 90%. And to deliver that 90% sales growth, we have added around 18% of employees. So we were at the end of June on 553 souls in the MilDef Universe, delivering these strong growth numbers and also increased profitability, which I will get back to in a couple of slides.

If you allow me to zoom out even further on a 5-year basis here, we have since '22, a CAGR of 41% on order intake, 38% on order backlog, which is, of course, strengthening the thesis that there is a good growth momentum in this company, even if the second quarter was slightly softer due to quarterly volatility.

We'll continue on Slide 7, the order intake growth journey, rolling 12, as I said, 3.7%. The growth accelerated with the acquisition in 2025 by Roda Computers and has now also continued. As Daniel said, in the second quarter, we had 64% growth, and that is all organic. The book-to-bill ratio is coming down slightly compared to the full year 2024, 2025, which is primarily driven by the fact that our delivery pace is increasing. We have built out capacity as we have spoken about previously, and that is now showing in the net sales figures of the second quarter.

We'll move on to the backlog and talk a bit more about what there still is to deliver here on Slide 8. So for 2026, this current year, there is another SEK 1.6 billion in the backlog. This is then before the order that was announced earlier this week. So that is coming in Q3. We'll have to wait patiently for that report.

Moving on to '27, there is another SEK 1.6 billion and -- if I'm looking at the graph on your right-hand side, that is a substantial improvement to this position compared to the year before, so where we were in 2025 at the same time. So a strong development here in the existing year and especially in the coming 2 years after this one compared then again to where we were last year. There is a slight decline in the beyond 2028, the year 3 numbers, and that is primarily due to that we had last year more of these 10-year delivery contract that is now getting closer to delivery. So that doesn't concern us in a significant way. We focus here on year 1, year 2, year 3, where we're also seeing that is where the customer would like their deliveries.

We will turn to Slide 9 to dive into the net sales and gross margin development a little bit more. We have the 91% growth on a rolling 12 basis. This we discussed already. So let's focus on the gross margin, where we are on 45.9%, rolling 12 at the end of Q2 2026. This is a growth again after the acquisition of Roda Computers. We saw that the gross margin decline given that their business model was a bit different from the other parts of the group. We are now seeing that all parts of the MilDef Group are strengthening their position, but what is especially boosting this here in Q2 is the sales mix. where we see more software and more solution and integration sales in the isolated quarter, but also in the first 6 months, they were growing well, but especially true for the second quarter of 2026.

On Slide 10, you will follow our EBITA. And for those of you who have followed us more than 2 quarters, you have heard me say this maybe 15 times already. But if we have a good top line, we normally also have a strong profitability. And this is again true. So 219% growth on a rolling 12 basis in terms of profitability. We do have in the isolated quarter in our OpEx, a one-off effects of a redundancy payment. on a program where we are now truly focusing on our defense offering and removing the bits that were more focused on other parts. This is, as I said, a one-off cost, nonrecurring, and we don't expect anything more to come, but that is also included in this EBITA number.

OpEx is also impacted by adverse FX effects during the first quarter -- sorry, the second quarter and the first 6 months, which is also driving into this. So even if the growth on profitability is fantastic, we are also growing our OpEx to support further growth going forward, and we're doing that in a much lesser scale than we're doing the top line as you will see in these numbers.

We'll turn to Slide 11 for a look on the balance sheet side of things. I said last quarter that some 25%, 26% of net sales -- sorry, of working capital in relation to net sales is not a new normal, and I still believe that this is on a lower level and can be expected to increase a couple of percentage points. We have a strong other net working capital with our accounts payable, accounts receivable in this quarter, but we also see an inventory buildup, which is also impacting our free cash flow in the isolated quarter here.

Looking at the cash flow -- free cash flow for rolling 12, we are talking about SEK 175 million. So I think we are in a good base there, even if the isolated quarter is heavily impacted here by the inventory buildup to secure deliveries for the second half of 2023. On our right-hand side, net debt in relation to EBITDA, 1.0, nice round number and also a sign of a strong balance sheet. Our sales footprint, rolling 12 numbers, we are seeing some, let's call it, 45% each in Nordics and Europe. They are comparable sizes now, and we have just shy of 10% over in North America. So even growth geographically and a strong growth development, especially in Nordics and Europe.

Daniel, do you want to summarize this?

Thank you, Viveca, for giving some more clarification on the numbers. And before we move over to the Q&A session, a short summary from my side. We saw in Q2 a very strong organic sales, 64% and I also saw a strong movement in the operating profit, almost 300%, indicating this operating leverage and scalability that we have now stated and talked about for a while. Continue to see good market momentum. We continue to see it across the entire portfolio. It's not just our traditional hardware. We also see it on the solutions side, integration side, software side with a new framework agreement with FNV. So high demand across the entire portfolio. SEK 4.2 billion in the order backlog when we closed Q2, indicating that we have a backlog supporting the long-term growth. So we are continuing to invest in our increased delivery capacity, and we have done that for a while as well.

We have never been on this high level of investments into increase production capacity. And I think we are having a really good progress right now at the moment, and we can see that in the figures here for the first 6 months as well that we have increased the level of production capacity, and then we have taken it to the new level. But that said, I'm not going to guarantee that we will never have production capacity issues again because that depends on the strong demand and a strong order intake, and we continue to all the time build out our capacity. And hopefully, we now have a new level that will work for time going forward here.

By that, we will open up the floor and we will see if we have some...

If I may ask you to go one slide further, Daniel, we are now concluding the presentation segment of the call, and we're heading into the Q&A session. And we have a lineup of questions from 3 analysts. And if you don't wish to state a verbal question, you can write it in the chat, and I will moderate it. [Operator Instructions] So now we are going into SEB's Jakob Marken and I have opened your microphone allowed it to be open. So I think that you can open it yourself. I think you've done so. Take it away, Jakob.

Yes. Perfect. So a couple of questions from my side. Firstly, on the recent FMV framework. So firstly, if you can help us try to understand how you see deliveries going under the framework time? And also, as you mentioned, the software part that was partly delivered here in Q2, is the software part done in this framework, you think? Or do you expect more softwares going forward?

Jakob, thank you very much for your question. If we try to give you some flavor on the deliveries over the 7 years contract, it's hard for us because we don't have the full picture of when the orders and the levels will be. But I know that the need from the customer is here and now. So that would probably indicate at least that we will see here an upcoming 1 to 3-year the lion's part of things coming in. I don't think that they should wait until year 5, 6 and 7. I think we will continue to work already now, and we will see the most part, I guess, on the first half of this 7-year contract.

Software-wise, that was your second question, we have some software revenues now in the Q2 numbers boosting the gross margin. But we will continue to see software revenues related to maintenance and other things related to the software there going forward as well. So absolutely, there will be more software-related revenues during this 7-year contract.

Okay. Perfect. That's very helpful. And on the software part, I mean, you did SEK 31 million in sales here in the quarter. You did SEK 16 million last year, and you also did SEK 16 million in Q1 this year. So is it fair to assume that this SEK 15 million extra is FMV related? Or how should we think about that? Just to get a feeling how boosted the gross margin is.

I would say that the extra part is related to the FMV framework agreement.

Okay. So the sort of SEK 15 million or SEK 16 million that you have been doing for the Q1 and also last year, is that a level where you expect the underlying sort of software demand to be?

I think that is kind of tricky to say. And we will, of course, try to add on more customers and things like that on the software side. So it's not going to be just FMV that is included in the software revenues. We already today cover a couple of the Nordic countries and some other NATO countries as well with the software there. So it's a different development from different customers.

Okay. And just on the OpEx side, as you mentioned, the SEK 12 million related to Norway and part of that is not defense related. Is there any other places in the organization that you see a potential or where you want to do similar actions so that we should expect a similar cost in any other quarter or in any other part of the business?

Not at the moment. Today, I think that was the final puzzle piece that was not related to defense. more related to other critical society infrastructure. So that was the final piece that didn't really fit the puzzle in the defense -- a pure defense company.

Okay. Perfect. And why didn't you adjust for the -- if you see it as a one-off here in the quarter?

Because we deemed it small enough to be taken into the running business, and this was not a large restructuring program. We thought that was the most straightforward way to handle it.

Okay. Yes. Fair enough. Fair enough. And last question from my side on the backlog, as you touched upon a bit, Viveca, on the orders beyond 2028, it's down a bit year-on-year, but it's also down quite a bit quarter-on-quarter, above SEK 50 million here. So just if you can help us understand what happened quarter-over-quarter.

I'm not sure actually, to be honest. But there is probably something that has been pulled back into '28 in the quarter since it's a decline. I would assume that is what has happened where there have been no cancellations. So that is my only outstanding explanation point that it must have been pulled closer. It's not such a large number that I have a deep dive into it, to be honest.

Thank you so much, Jakob Marken from SEB. We go to Danske Bank and Daniel Lindkvist, I believe I have opened up your mic, and I see that you just opened yours. Welcome to state your question, Daniel.

Perfect. So just -- can you hear me?

Absolutely.

Yes. Great. So just Jakob touched upon several of my questions, but just moving on then, I mean, I am one of those living with the model that is in transition from no longer getting the ROAA numbers. So could you give us some guidance on the development in the core business versus the ROAA just to help with this mitigation for the future? It seems like the normal pattern of ramp-up of volumes along the year in ROAA was not in place this year. So perhaps Q1 was a stronger quarter than Q2, and we should expect this to ramp up going ahead. So what can you say about that division?

Thank you, Daniel. Daniel, thank you for your question. As you mentioned, we have now started to not isolate reporting the ROA numbers. They are included. They have now been with the group for more than 12 months. We think it was a good idea to not exclude them, especially in the numbers. What we have done at this is showing the geographic top line net sales in a different quarter. And you can find Germany there as well. You can follow some of the development in Germany, even if that is not 100% Roda, they are also selling to other countries. But I mention too much of the numbers, I think we continue to see a good development of the Roda acquisition, good integration with Roda. And hopefully, there will be a couple of really strong growth opportunities on the German market.

Okay. Perfect. And then just on the cost side again, are there any other costs in this? Is this recruitment quarter that has recruitment costs as well?

Yes, there is recruitment cost. And as you know, Daniel, who have followed us for a long time, we are not a heavy CapEx company. We -- when we invest in our growth abilities, it's in the OpEx side. It's in people and in the facilities that has been announced, which has extended slightly and will extend further given the press release that went out on the extensions in Helsingborg. But yes, absolutely, that's recruitment cost and, of course, additional salaries that has gone into that, more the latter than the first.

Okay. Cool. And then just a technical issue then. So the one-off costs, they are then seen in the admin or are they divided through the cost items?

They are divided through the cost items depending on where the person were allocated previously.

Okay. Perfect. And then just the last one from my side. I had expected that you would tie up even more working capital in this quarter. Was there some deliveries just pushed into the other side of the quarter, and we should expect the tie-up to end up in Q3 instead? Or how should we view it?

The tie-up in inventory was more towards the latter part of Q2, which is giving us a beneficial net of AP and AR, which will not persist once we pay the AP related to the inventory buildup, of course. It's always our ambition to not tie up cash in inventory for too long. But sometimes in this strong growth phase that we are facing, we must do that. So I understand your logic that we should have tied up more, but right now, it's we're trying to balance it the best we can to secure our free cash flow and to secure our abilities to continue to grow on our own dime, so to say. But I wouldn't expect -- since it was the end of Q2 that we tied it up, so then your logic kind of holds together, I would say.

Thank you, Daniel Lindkvist with Danske Bank. We now go to Mads Brinkmann from Berenberg. Please take it away and open your mic. I see that it's still, muted. So there we go. Welcome, Mads.

I hope you can hear me. Just a few from my side. Good. Happy you can hear me. I mean, obviously, the gross margin was very, very strong. It's already been discussed in this call. I mean, let's just put things into perspective, right? I know software was very strong, but it's still very small numbers. Like to me, the biggest standout is sort of the increase in the services business or the share of sales that the services business delivered. And I know a lot of people, including myself, are wondering how we should think about the software sales and how it comes out throughout the year. But I guess, can you help us, first of all, in that gross margin number, just to dissect the sort of proprietary MilDef hardware, how that did during the quarter and whether you've made strides on selling more of that.

But also secondly, just how we should think about the phasing of service revenues throughout the year? Because I guess, very strong quarter in Q2, strong Q1, but obviously, you also won some additional orders earlier in the year. And I think I guess that's what's starting to come through. Just if you could give us an idea of the phasing of that throughout the year?

And then a second quick question on the SEK 12 million in Norway. Maybe this is a silly question, but I just want to understand the run rate of the savings of this, assuming that it is a saving and you're not essentially using that to invest further in another piece of that business. But is it essentially fair to think about the SEK 12 million as split out evenly throughout the year? And then I have another one, but we can do that after.

Right. Do you want to start with the margin, and then I'll take the Norway.

Yes, we can do that. Mads, thank you very much for your question. Gross margin-wise, I would say it's an answer with 2 phases. We have mentioned that it has been extra boosted by the software sales here in the end of Q2. But I will also say on the other side of this answer is that we are now seeing more and more improvements in the sales mix and what we have compared to the last year. We are now -- as we said already in Q1, we are increasing the contracts that we are getting from the System and Solutions business. The software, even if it's small numbers, continue to grow. So it's -- this quarter is maybe a normal high, but the underlying trend in the gross margin is on the right trend due to the demand that we see from our entire portfolio, I would say.

So it's moving more shares to come in that is not coming from just our hardware, so to say. So it's a combination of -- maybe this was a too high gross margin in Q2 and we cannot guarantee that, that will be the new normal, but the underlying trend is supporting a continued improvement of the gross margin. Hopefully, that can give you some clarification on the gross margin. And Maybe, should you give you some kind of clarification on the one-off cost here in Q2.

Just to finalize your words on the margin, I would encourage to have a look on the notes in the quarterly report where you can see the split between revenue categories and where you will also find how the solution and integration business have grown the most out of our 3 categories, and that is motivating some of the transition in the margin. In terms of...

Exactly. That was my point. Sorry.

Yes. No, perfect. In terms of Norway, the savings are not huge. There will be some immaterial levels of sales that goes away. It has been a rather low-margin business. So the savings will also be modest, if I say it like that. In these SEK 12 million, you also have some redundancy paid. So it's not just 1 month, just so you think about that. But I would say that both the sales loss from this activity and the savings are insignificant, and I wouldn't switch to the next gears in terms of analyzing that.

Fair enough. And maybe just a quick follow-up. So obviously, on the order intake, you started off Q3 very strongly with the big order to named NATO country. So very, very positive. If we just exclude that, I know it's very early in the quarter. But is there anything you could tell us? I mean, is momentum sort of continuing based on what you would have expected? Or is there anything positive or negative to call out? And then just lastly, I mean, I know it's limited what you can say, but the balance sheet continues to obviously be in a very tough position. I know net working capital might be a bit too low compared to sales. I mean that's fair. You flagged that. But I mean, yes, what are you going to do with the cash? I mean, are we going to see some kind of transaction this year? Or will you be in a position where later in the year, you can either do a higher divi or a special dividend or potentially buy back your own stock?

Thank you, Mads. When it comes to the order intake, I would say, and we have mentioned this in the call before here that still a good momentum on the market, still a high demand for advanced military IT solutions. So we feel quite comfortable with the demand going forward here, also supported by, of course, by this large order that was announced this year. So I will not put any more absolute numbers around that one, but continue to see a high demand, and that is why we also continue to invest in increased delivery capacity.

I think the next question was around what should we do with the money. Of course, we still have the M&A radar on. We are looking to see if there could be some potential targets that could be a really good fit with MilDef. Let's see when and where that transaction will happen. But of course, as you mentioned, now we have a balance sheet that is in a good health and in a good place to make a move if we want to. So now it's -- let's see what happened here in the upcoming second year, second half of this year or next year.

Thank you, Mads Brinkmann with Berenberg. We segue further on, on the international arena with Cantor Fitzgerald and Finn Kemper. You have opened your mic, please welcome Finn.

Congratulations to a fantastic quarter again. My question would be, you flagged continued electronic component pressure in the quarter. And now with DRAM and NAND spot prices moving materially higher, as we all know, how are you thinking about inventories now moving into the second half of the year? And then second part of this is to what extent can you pass through pricing contractually versus like absorbing it just in the gross margins over the coming quarters?

Finn, thank you very much for your question. As we have talked about the component issues and problems around that. I think we have shown in the first 6 months here that when it comes to the price absorbing of the increased prices around that, we have been able to move a lot of this forward to the end customer, so to say. I'm not super worried about the second half in 2026 when it comes to the critical components. I think we have secured a lot already, and that's in the inventory. More worried about if this continue long term, if we look into 2027 and also if we're going to see increased volumes, there could be a bottleneck there when it comes to getting hold of the critical components or that we get very long lead times. I think price-wise, we have shown that the pricing power is at our side and that we can price absorb a lot through the customers, so to say.

Thank you, Finn, for traveling along with MilDef. Now we have one more analyst questions coming up. It's Hugo Lisjo with DNB Carnegie.

And actually, I only have one question because all the other questions are already asked. So could you tell us something more about the order intake within Q2? Were there any other larger orders that did not surpass the SEK 250 million threshold? Or how -- could you share something about it? Was it only bread and butter orders? Or were it -- did you also see some larger orders?

Hugo, thank you very much for the question. Order intake-wise in Q2, I would say there is more or less the bread and butter business to existing customers on existing markets, no one that we haven't announced that was passing the threshold that we have for regulatory press releases. So back to your expression there, more bread and butter business in Q2.

Thank you, Hugo, and thank you, everyone. This has been a very well populated quarterly call, 50 level guests in the meeting in the middle of the summer. So thank you and many, many analysts traveling along. So thank you for the many good questions. I see no other questions in the chat. We are 40 minutes past the hour. So I think that we are in the final approach of this flight.

So I guess this concludes the Q&A session of the Q2 conference. Thanks for joining in and for your contribution. And also, please put in your calendar, the next exciting date. The Q3 report is up next on October 22, as seen on the screen below. But now with no further ado, please, Daniel, to wrap up and close the meeting.

Thank you very much for taking your time to listening into this Q2. And hopefully, you all will have a great summer, and we hopefully will see you again October 2022 when we release the Q3 report. So thank you very much, and have a great day, all of you. Bye-bye.

Thank you.

Thank you.

Well, good morning, ladies and gentlemen, and welcome to this investor call with MilDef with a special focus on MilDef's reporting on the first quarter of 2026. This quarterly call will be presented by CEO, Daniel Ljunggren; and CFO, Daniel Ljunggren. We expect approximately 30 minutes to be sufficient for this call and the Q&A. [Operator Instructions]

Also for information, we record this meeting. So now with no further ado, please take it away, Daniel Ljunggren and Viveca Johnsson. And please remember to help the audience understand where we are in the presentation by stating the number on the slide. Daniel?

Thank you very much, Olof Engvall, and warm welcome to all of you that are joining this Q1 update here for MilDef today, and we will try to remember to state the numbers on each slide. This is what we will try to cover today. We will go through some highlights for the first quarter. After that, we will deep a little bit dive into the financial numbers. And then we will also further give you an update around the Roda progress, and then we will have a short summary, and then we will open up the floor for Q&A session in the end.

But let us then start with the highlights for the first quarter here. Q1 was a record quarter in terms of order intake, indicating the strong customer demand for our products and solutions, and the demand is still very solid. This is now the second quarter in a row where we exceed the milestone of SEK 1 billion in order intake for an individual quarter. And I think to bear in mind, it's especially strong that is in a Q1 that is normally a little bit weaker quarter during the year.

It is, however, worth repeating that MilDef operates in an industry where order intake, net sales are typically volatile over individual quarters. So for this reason, as stated before, it's very important to assess MilDef's financial development in a more long-term perspective. The second one is a very strong delivery execution in Q1 here. Our investments that we've done in the past here and already started doing in the second half of 2021 has now really started to paying off in an increased delivery capacity. We already in Q1 stated that the delivery situation in the beginning of this year was clearly improved, and that is something that we now see in the net sales numbers as well that we have had a strong delivery execution in the first quarter.

We also saw a clear improvement of the margins here in Q1, as we have stated before, when we see a strong top line net sales development, the margins also increased and following in the right direction. And here in Q1, there was a good proof in the pudding for that statement with a high margin. This also, of course, relates to our scalable business model with a high share of fixed OpEx.

If we continue, we also see another positive trend in Q1 was that we saw a significant improvement of the free cash flow, the cash generation. Here in Q1 amounted to SEK 159 million compared to same quarter last year, where we had minus SEK 75 million, so a huge difference between the different quarters. And this has, of course, improved due to that we have a better margin. We have a strong growth, and we have done this without adding more working capital in the same extent.

Also worth mentioning as a highlight here in Q1 is that we have secured some strategic contracts within our new established solutions offering. So this is an offering where we mainly support our customers around system design, system engineering of tech or IT systems for military purpose. This is a support that we provide that guarantees high availability and quality for our customers throughout the full life cycle of the systems. So this contract, I would say, is also evidence of our capability to delivering turnkey-ready IT solutions to our customers and that our portfolio is not just isolated to the hardware. It's now a wider offering.

From a pure financial perspective, these contracts are mainly improving our margins, but also that the nature of this business have a less volatility over each quarter and also provides a more stable cash flow. And finally, as a highlight here in the Q1 is around our investments into additional capacity expansion, and they are still at a high level. At the same time that we are delivering this high growth rate and also improving our margins, we continue to invest to be able to meet future customer needs.

So the investments that we are doing are mainly consist of onboarding more coworkers, but we're also increasing our production areas. The latest major investments that we have announced is the extension in Helsingborg, where our current operation premises in Helsingborg, will be doubled in square meters, and that is something that we think and expect to be ready somewhere around summer next year.

And by that said, I will move over to Slide #4 and give you some of the key figures for Q1. If we start with the net sales were in Q1, SEK 708 million, and that is a strong growth, 108% if we compare year-over-year. And as I said, this all-time high net sales in the first quarter is due to our strong delivery execution. Organic-wise, the growth amounted to 41%. And M&A-wise, the contribution from the roda acquisition was 67%.

Let us then move over to the adjusted EBITA, SEK 121.6 million. That is also a very strong growth compared to last year in the same quarter. If we look at the EBITA margin here in Q1, as I said, really improved to 7.2% (sic) [ 17.2% ] compared to 4.6% in Q1 2025. Gross margin in total ended up at 44.3% if we are including the M&A from the roda acquisition, but also very pleased to see that the underlying gross margin, excluding the M&A was at the high level this quarter at 53.9%.

If we then go further down in the P&L and also look at the OpEx development, I would say it's according to plan. If we are excluding the OpEx that is coming from the M&A, the increase was around 6% year-over-year, which I think indicates a good cost control within the company. So even if we are growing net sales and order intake really strong, we still continue to have a development according to plan when it comes to the OpEx. And that takes us to the order intake, which I think is a really strong number here in the Q1 169% growth if you compare year-over-year. So this is also an all-time high for an individual quarter.

And I would say that underscores the robust demand we see for our offering on the market. And also indicate even if we have a strong growth in terms of net sales, our book-to-bill ratio is still strong, 1.5. And if we look at the last 12 months, it's 1.6. So that indicates continued growth when it comes to net sales and top line.

Finally, on the key figure slide, the free cash flow, huge delta between Q1 2025. We are improving that with SEK 234 million. It's an all-time high number for the free cash flow in an individual quarter. And it's due to, as I said before, our growth in combination with improved margins without being able to add net working capital in the same extent. That was the key figures for Q1.

Now I will move over to Slide #5, which contains the operational highlights. Just to give you a quick overlook of some other highlights that is not on the financial side. Right here and now, the construction of our new assembly space in Helsingborg is ongoing, where we're adding up to 50% more assembly area. And this is something that we expect to be ready quite in near term here before we move on to the summer vacation in 2026. So ongoing.

And as I also mentioned, the more wider decision and make a bigger expansion in Helsingborg to meet the long-term demand is now taken, and this is something that we expect to be up and running not later than fall in 2027. I mentioned this before in the highlights as well, and it's really important to do it once again, the several large system engineering contracts that we have secured here in Q1 is towards both the government side, but it's also towards the business-to-business customer really puts MilDef in a good position on this market, making sure that we are making the movement upwards in the supply or in the value chain, et cetera. So it's really strategic important contracts that we have secured here in Q1.

And finally, and I will come back to this a little bit later on, our roda progress, but it's now a milestone where we have reached the 1-year milestone together with roda in MilDef Group. But I will give you a little bit more flavor on the progress around roda later on.

With that said, I will wrap up the first session here, the highlights session, and I will leave the word over to Viveca Johnsson, our CFO, will give you some more details around the financials.

Thank you, Daniel. We will be starting on Slide 7, which is quite a busy slide, but the message is quite concentrated. It's a fast-growing defense tech company. We have an annual growth rate all the time here on 40-plus percent, which is, of course, exceeding our long-term target of 25%. We're doing that with a book-to-bill of 1.6, which is, of course, indicating a strong future as well with a backlog of just north of SEK 4 billion, and 514 employees enabling this growth and this continued journey is the main message from this slide, which will be taking us to Slide 8, where we are having a bit more of a deep dive into order intake and book-to-bill where you can see that we are on a rolling 12 basis on an order intake of roughly SEK 3.9 billion. So also here, catching up on the 4.

And you see the book-to-bill ratio remains rather stable over the last 3 comparative periods here, full year '24, full year '25 and the rolling 12. So we are continuing to adding more orders to our backlog than we are delivering out, although we did see a very strong delivery during Q1. Following that on Slide 9, we are looking into our backlog duration, where you can see the deliveries for the current year here, 2026 as well as the coming years '27, '28 and then what we have beyond that.

We do see that we have for the first year here, roughly a 20% growth in what we have already now after Q1 in the backlog for delivery in the current year. So just shy of SEK 1.9 billion for 2026, which we are counting as a strong sign and a good basis for 2026, but we also see good growth in the other period. And the small dip in the last period here is related to our previously announced contract that was going on deliveries for 10 years, which we have now started to deliver on. So that naturally goes down. It's important for us to strengthen our backlog in closer deliveries.

Further this, we're going on Slide #10. So after orders, backlog comes sales, which it also does here on Slide 10, and 84% growth on a rolling 12 basis, again, well exceeding the long-term target in growth. This picture is also showing our gross margin development, where we have on the gray line indicated the group's total gross profit margin development. And you have on the above brownish color, the MilDef without the roda acquisition. And then you have the isolated roda underneath in a more base color.

So what we are seeing in MilDef, excluding roda is a further strengthening of the gross margin, which is, well, completely in line with the communication that we have given beforehand that we see that this is roughly a level where we can be at, where all the stars are aligned, so to say. We are also seeing the roda acquisition delivering on and about the level that we were expecting at the time of acquisition with some 30-plus percentages. And that is, of course, a different business model where you have a lower gross margin, but also a lower OpEx than the other part of MilDef where you have a higher gross margin, but then also higher OpEx. It roughly evens out on EBITA level. But on the gross margin, it differs a lot.

So what could look like an indication of a declining margin is, in fact, not. It's simply a combination issue of the 2 business models here. That will be taking us to Slide 11 and EBITA with the exceptional growth of 133% on a rolling 12 basis. And as Daniel mentioned beforehand, this is yet another proof of our scalable business model where we have a strong top line, we will be having a nice contribution on that on EBITA.

And with that said, we will be focusing a little bit on our working capital and net debt position. We had a free cash flow of SEK 159 million, which is historically a very large cash flow. We have a couple of positions in our balance sheet, which individually are not really significant, but we have a quarter here where a lot of things are aligning on a very good side. So I think this should not be seen as the new normal of 25%, but it will be higher than that. So we have spoken previously around some 30%, possibly a little bit lower, but this is more where we think we are going to be long term. And this is also building on what Daniel said previously, where you have a growth journey, there will be some capital tied up in inventory, in accounts receivable just due to the heavy and quick growth. We are doing our best to balance that. But I think 25.8% is -- all the stars are correct this quarter, and we're quite happy about that, but I would like to remind you of the volatile quarters that we do have -- that you have seen historically.

Net debt, also a very good development in Q1 2026, primarily driven by the strong cash flow. Our payment terms and amortization of our debt and so on are exactly according to plan. So the further decrease in net debt is driven by a strong cash and a strong profitability over the last 12 months and then maybe particularly here in Q1. Yes, we will be rounding off the financial session with a geographic spread. And here, we see 1 year after the roda acquisition, 1 year of integration that our geographic map is looking more or less exactly as per prediction that we have a Nordic and the rest of Europe that is on the same scale.

We have in North America with primarily U.S.A. of the same size, and we have Europe and a Nordic that is in parity with each other, which is giving us a better foothold in the European markets, especially in Germany region, Central Europe region. And this is, of course, giving us a better focus area in those interesting markets, but also balancing out our geographic footprint.

I will be handing back to Daniel now on Slide 14.

Thank you very much, Viveca, for guiding us through the financial numbers and package. Now I will take over again and jump over to Slide #15, give you some update around the roda progress for Q1. This is now really a milestone we have passed when we now had roda within the MilDef Group for more than 1 year. And when we really look back in the mirror here, we can see that roda has been a strong puzzle piece into the MilDef growth journey. And it continue from the roda side with a strong order intake development, showing that the underlying demand and a good market situation on the German market as well.

And as I mentioned before, roda has been a really important part of MilDef growth, but also in the improved profitability in the last 12 months that we have been together as one. So continue to be a strong combination of the 2 companies. Integration-wise, everything goes according to plan, and I'm happy about to see that we are really proceeding in the integration phase. And also, we have talked about our ongoing investments into increasing the capacity. And that is also something that we are really doing on the German oil and also applies for Germany, where we're investing due to also a high customer demand in Germany.

And that is why what we are seeing on the German market when we look 3 to 5 years out in time, very promising outlook for the German market. There is a lot of defense ramping up that needs to be going on in Germany and that roda and MilDef has a really strong saying and a ticket around the table for being able to execute on those business opportunities that we see on the German market.

Now I will move on to Slide #17 for a short summary of today's trading update from Q1. And then I would like to start the summary where we started the full presentation by the record high order intake that is, of course, driven by high customer demand. We also saw in Q1 a strong delivery execution with impacting the net sales and also due to the scalability in the business also give a good boost for the margins in the first quarter here. And that is why the higher volume drives an improved margins. That is something that we have stated before within middle of, and that is something that has been now also an evidence here in Q1 that, that is something that is correct.

Also worth mentioning here in the summary part, the continued investment in capacity expansion. I think we have already during 2025, started this ramp-up in capacity, and we're now seeing that we are getting good paid off from that, but we also need to continue to invest at a high level to meet the more of a strong long-term demand. And also, of course, this continued investment is also supported by a record high order backlog that now exceeds SEK 4 billion. So strong order backlog, strong demand also make sure that we are investing enough to be able to take care of this situation and market needs that we have at the moment.

And by that, we are moving into the Q&A session. So let's see if we can open up the floor and Olof can give you the right to speak.

We now segue over to the Q&A segment of this presentation. [Operator Instructions] And this has been done by Mads Brinkmann with Berenberg.

Congrats on the strong quarter. Just a few quick ones from my side. I mean you already mentioned the order intake. I know you say it's lumpy. But as you also alluded to yourself, I mean, traditionally, Q1 is the weakest quarter of all and the sort of there's quite pronounced seasonality in the business. I'm just wondering whether there's any sort of particular shifts or anything that we should think about in terms of the order intake or whether we should, I mean, I guess, implicitly just get used to you guys delivering above SEK 1 billion in order intake and up to normal Q1, Q2 sort of relationship still exists.

Then on the second one, please. Just on the types of orders that you're seeing, it would be great if you could add some additional color on what sort of end customers or end products you're actually seeing essentially really moving the needle here or if it's just more of the same or if you're seeing any sort of shifts compared to the previous quarters, that would be a great help.

And then last but not least, obviously, strong free cash flow and net debt position in a very healthy space. So just wondering, I know it's only been a year since you've acquired roda, but I'm just wondering if you're essentially on the M&A side of things, if you're already ready for a bigger acquisition again, please? That would be my initial 3.

Thank you very much for that question. I would like to start and give you some flavor around the order intake and the lumpiness on that and if this is a shift or not to be able to exceed SEK 1 billion quarter-by-quarter. But of course, this is driven by a very strong underlying demand in the market and also a relevance in the offering that MilDef has on the market. I'm not sure that we will be able to meet this SEK 1 billion target of order intake for each quarter going forward because we know it's lumpy, but we also see, as I said, a strong demand on the market.

So let's see what's happened here in the continue of 2026 and around the order intake. And you also had a question around the type of orders. I would say we have mentioned this relatively new established solution business area that we have had some good success when it comes to order intake in the first quarter here. Otherwise, I would say it's the full portfolio that we have that are performing well. We are, of course, continuing to be strong on the hardware side, and that is mainly the driver behind the strong order intake here in the first quarter.

And finally, you had a question around that now when we are stretching the cash flow, we are stretching the balance sheet and coming down also in the net debt to EBITDA, our M&A activities forward. We have said this before that we are looking, we are having the radar on, but it also want to be really value-created M&As and acquisitions when we're going forward. So at the moment, we are not stressed about doing any M&A activities, but we are looking into the market. We are investing what kind of value-created acquisitions we can find on the market. So let's see what's happened here in the rest of 2026.

The next question lined up. [Operator Instructions] Thank you, Matt. The question is, can you explain why the Solutions segment is expanding right now? What do the customers order the most of at the moment? And how is it correlated to the current hardware deliveries?

Thank you, Matthew. That is a really good question. If we start with why it's expanding right now, I would say it's down to the lack of resources from our major customers, so to say. So they need support. We have said this before in this defense ramp-up in Europe that we are now seeing that is historically high numbers. The whole ecosystem needs to be able to support each other and help each other to be able to deliver in the high demand. And this is something that our end customer has really asked us to do to pick up around the Solutions segment, where we can help them to design their future IT solutions and systems out in the field. So we are already involved in the business on an early stage. That is where we can come in and help them.

And it's also a really strong enabler for us to being able to sell even more hardware because when we are designing the systems, we are more of understanding the need and what type of hardware they will have a need for in the future. So that is also give us a good insight and intel Intel and also give us a good chance to impact the customer choosing the mill of hardware in the future.

Thank you for the question. [indiscernible] we can also emphasize the fact that in this report, you can actually see the split between hardware, software and solutions integration sales. So if you deep dive into the report, you can see the difference in that area. So I have actually no more questions in the lineup and no more raised hands. I guess you have answered all the possible questions, Viveca and Daniel.

So unless somebody shuts out in the very end of this meeting, I would need to say that this concludes the Q&A session of the MilDef Q1 2026 Conference. Thanks for joining and for your contribution to the MilDef journey. Also, put a note in your calendar Q2 report is up next on July 16 in the middle of the Swedish summer. So now over to Daniel for the closing of the meeting.

Thank you very much for that, Olof, and thank you all for joining this meeting here today, and thank you for following the MilDef journey, and I hope to see you again when we are releasing the Q2 numbers. And for those of you that are already shareholders today, don't forget to that you can join the Annual General Meeting in May '21 in Helsingborg in the fortress where you can meet all of us and also hear us talk about what happened in 2025 and the beginning of '26. I wish you all a great day. Take care. See you. Bye-bye.

Well, good morning, ladies and gentlemen, and welcome to this investor call with MilDef with a special focus on MilDef's reporting on the fourth quarter and year-end 2025. This quarterly call and year-end call will be presented by Daniel Ljunggren, President and CEO; and Viveca Johnsson, CFO, MilDef Group. We expect approximately 30 minutes to be sufficient for the presentation and Q&A. 

[Operator Instructions] Also for information, we record this meeting. 

So now with no further ado, please take away, Daniel Ljunggren and Viveca Johnsson and remember to help our audience where we are in the presentation by stating the number on the slide. Take it away, Daniel.

Thank you very much, Olof, and a warm welcome to all of you that has joined this conference call here today. And if we move on to the Slide #2, this is an agenda slide showing what we will cover here today at this conference call. We will start by having some highlights for the fourth quarter and also some individual key numbers for the fourth quarter. And then we will move on, guided by Viveca here. We will move over to the financial side, covering more of the long-term financial trends within the company. And then after that, we will touch base on the Roda progress. You all know that the Roda acquisition was a transformative acquisition closed in March in 2025. So I would like to give you an update on the progress and the integration of Roda. And then in the end here, we will have a short future outlook, and then we will open up for the Q&A session. 

If we then move on to Slide #3, which contains the highlights of the fourth quarter. It's very happy to see that the fourth quarter was the strongest quarter to date in MøLof history, both in terms of order intake, net sales, and earnings, strongly and significantly supported by the acquisition by Roda that was a strong contributor, especially to the order intake here in Q4. We also saw a margin that was improved here in the fourth quarter. EBITDA reached SEK 151 million, that corresponding to an EBITDA margin of 19.3%, which is a clear improvement from Q4 2024. And I think that in some kind of way, shows the operating leverage and the scalability we have within the business when we are increasing the top lines. 

Further on, I will also highlight the continued strong underlying gross margin, excluding the M&A from Roda. This was now the fourth quarter in a row where we ended up with a gross margin above 50%. And in this fourth quarter, the exact number was 52.8%. And that's showing that I think we have an attracting offering with a good pricing power. Also worth mentioning, I'm very pleased to see that we now return to a positive cash flow in the fourth quarter, improved by 25% if we compare to Q4 in 2024. And in total number, the free cash flow ended up with SEK 60 million here in the fourth quarter. 

Further, as expected, we saw a drop in the KPI net debt to EBITDA. This is something that we have expected due to the dynamic of the acquisition of Roda. We now saw in the fourth quarter that it dropped from 2.6 to 2.0, which is quite far below our long-term target of not exceeding 2.5. And other expected movement was the drop of the net working capital compared to the last 12 months net sales that dropped from 29% to -- from 39%, sorry, to 34%. That was also an expected move driven by the increased top line and the net sales. I also will say that we are moving into 2026 with a solid order backlog -- the order backlog when we closed 2025 was SEK 2.1 billion. That is more than 80% better than we had at the same time last year. So that is building some confidence as well, going into this year. 

And in order to meet this increased demand, we are ramping up more than we have never had in this history of this company. So we are at a very high level when it comes to investments and the investments is into increased capacity. It's about getting more staff in there, production sites, and things like that, making sure that we are reaching a new level of capacity. And about capacity, also worth mentioning is that these investments that we have made during the autumn here in '25 is now starting to pay off. The delivery situation is improved in the beginning of 2026. But I also want to say that things can quickly change. So that is the view we're seeing right now, but we also want to be humble and say that things can change quickly. And I know that you all probably already know about, for example, the global situation when it comes to the memories, which now have a very high volatility, both in price and lead time, and that is something that could have potential negative consequences in the future. But here and now, I would say, starting on this year, we are in a healthy position when it comes to the delivery situation. 

And finally, the directors -- the Board of Directors has proposed a dividend of SEK 0.75 that last year was SEK 0.50 per share. And now we'll move on to Slide #4, and also speaking about investments. I just wanted to show you on the slide here, you can see a photo of our latest addition to our capabilities. Our new production site in area of Stockholm is now open for business, and it's very important milestones and sets the tone for future growth in our future defense capabilities and delivery capacity. So that was an important milestone here in the fourth quarter. 

Now I will jump over to some key figures here in the fourth quarter. Net sales, 87% growth year-over-year. As I said, an all-time high number in a single quarter. Organic growth amounted to 13%, and M&A contributed with SEK 75 million. Order intake, one new milestone for the company in the first quarter where we reached an order intake that exceeds SEK 1 billion, and that was growing 30% year-over-year. And the book-to-bill ratio in Q4 was 1.28. And if we look at the last 12 months, it's 1.57. And also what I think is a really strong number here in the fourth quarter, the operating adjusted EBITDA profit, 19.3% coming from an increased top line with a good underlying gross margin, but also good cost control, where OpEx development is according to plan. We will, of course, need to adding OpEx on this growth journey we are on, and we need to invest to be able to increase our delivery capacity even more, so this is something that we will see going on in the future where we will see some increased OpEx, but I think it will be less than what we can add on top line. 

And as I said, adjusted EBITDA was growing by more than 100% year-over-year. And I touched base on this earlier as well, very positive to see that we have returned now to a positive free cash flow in Q4, growing that by 25% year-over-year, and also worth highlighting is that we ended 2025 with a very high number of account receivables. It was more than SEK 500 million that is in the account receivables due to the strong deliveries here in Q4. 

Also want to move on to the next slide, Page #6, where we can see the business news, and this is announced press release already. So this is some kind of recap. But I would like to go through this to give you an update on what has been going on in the Q4 for MilDef. If we take it from the left, we can see that we won a contract with L3Harris. L3Harris is one of the big primes on the U.S. market. And I think that the significant importance on this contract was that the content in this order was MilDef own IP products, the 19-inch 2 product segments that we now won our biggest first order in U.S., which to me indicates that there is a strong attractive offering on the U.S. market as well, which is still the largest one when it comes to defense spending. 

The next one was an undisclosed NATO country, was a large order for MilDef reaching SEK 326 million. And then we talked about the new production facility that has now been opened in Stockholm. And the final piece here was that Roda awarded their biggest contract in that company's history by adding a contract on SEK 320 million. And since this is also a year-end report, I think it's a good time to make a summary and also make a follow-up through our -- towards our long-term financial targets and how we perform against those. If we take it from the left, we start with the growth, where we have a target of growing the company at least 25% per year. And the performance late in 2025 was strong when it comes to growth, of course, very significant, supported by the Roda acquisition, but it ended up with 70% growth of net sales. 

And if we then go further on and look into the profitability, where the target is at least 15%, we have moved the needle a little bit. We are doing 1 percentage point better than we did in 2024. We are not reaching the target here that we have. So we have a little bit more to do when it comes to the profitability. I think we had a quite slow start in the beginning of 2025. But if we look at the second half of 2025, the EBITDA is reaching more than 17%. So I think we are showing that we are on the right path when it comes to the profitability as well. 

And the capital structure also where the net debt should not exceed 2.5x EBITDA, is the target. And we have now been able to come down, as I said before, this was expected due to we're now adding on more on the Roda figures into the consolidated numbers. We were expecting this to drop, and we can now see that, that has happened as well, and we are closing '25 in a position of 2.0. And then we have the dividend policy in the end where we -- the target is to distribute 20% to 40% of the net profit. And as I said, the Board of Directors has proposed a dividend that corresponds to 24% of the net profit for payout in 2026. 

And by that, I would like to leave the word over to Viveca, who will guide you through the financial highlights and the numbers.

I will, for sure, do my best to do that. So turning to Slide #9 with those financial targets fresh in mind, we'll look at the full year accomplishments, just north of SEK 3 billion in order intake, which is a 76% growth. We have a book-to-bill ratio of 1.56, which is, of course, meaning that we're building for the future with a higher order intake growth of, as I said, 76% and a net sales growth of 70% which is adding to our backlog. We're also welcoming a number of new employees in order to ensure our growth journey. Graphically, we will see the order intake CAGR of 53% since the IPO. And we have continuously built for the future by also increasing our order backlog in a similar pace around 50%. Let's deep dive a little bit into the full year figures on Slide 10. SEK 2 billion in net sales, which is a 70% increase. SEK 64% of that is coming from our acquisition of Roda Computers. The organic growth was 6%. 

However, I want to highlight that we have divested handheld industrial segments. And the Roda sales previously made from MilDef to Roda before the acquisition is now, of course, only considered ones in the Roda part. So the underlying business of MilDef before Roda is around 20%. The same logic applied then to the order intake, 76% growth with organic growth being a mere 1% but the underlying business cleared for those structural initiatives is 14%. Profitability, which is maybe the largest progress in the group, and we're all expecting us to grow, but also profitability is growing. It's showing our scalable business model throughout the group. And I want to highlight that it is throughout the group, which includes Roda. This is also a scalable business model. We have a 15% long-term target, 13.5% in 2025, which is a full percentage point up from 2024. 

Daniel talked about the positive free cash flow in Q4, which is a strong sign. We are not catching up from the slower start of the year, and we're ending the year in a negative free cash flow position. We are gearing for growth and preparing the group to take further orders and ensuring customer deliveries with higher volumes. And with a strong growth, it will be sometimes troublesome to keep a strong free cash flow, but we are confident to build up over time as well. An illustration of what I just said with the strong order intake growth and the book-to-bill ratio, which is pegging me up for the order duration on Slide 12. which is on the left-hand side, you have the order duration split per year, and you have north of SEK 2 billion for the 2026, which is the current year then on the slide to -- sorry, on the graph to the right. And then you have 2027, '28 and beyond. 

And if we are looking at the development of the duration, we have more than 80% growth of the current year versus the position that we held at the end of 2024. And we see a good development also of the year 2, which is, of course, those 2 years that we are primarily focusing on of how much we have loaded the backlog with. So strong position in the backlog. 

We talked about the growth development. Let's take a little deeper look on gross margin development. The green line on the right-hand side on Slide 13 is showing the total group margin with the mix of Roda being further blended in the more the year goes on since it's a rolling 12 graph. And the gray one as of Q1 2025 is showing the MilDef Group, excluding Roda. And as Daniel mentioned, the margin development for the MilDef Group, excluding Roda, is a positive trend, which is following the previous communication that we are north of 50% when we're doing it properly. And as you see, that is exactly what's happening. We also see that the Roda Group has developed well since the acquisition and added on further gross margin in their business. So the downward trend here is merely a mix of the 2 business models. So each business is doing well and the mix is simply a mathematic outcome. 

EBITDA development, it speaks for itself, doesn't it a scalable business model. When we get the good volumes, we're keeping our strong margins. This is what we end up with operationally from a profit point of view. Talking about working capital is where we have the adverse effect of the growing then, if you will, which is impacting our free cash flow. We saw strong deliveries in Q4, adding on our accounts receivable. So we see a shift from inventory to accounts receivable. We are happy to see that we are showing a number here of 33.6% working capital in relation to net sales. 

We have previously talked about different volumes. But since the Roda acquisition, it is a slightly different structure of the business model's working capital consumption. And with that blend, we need to recalibrate what we think is a good level, so to say. We are striving more towards the somewhere around 30% is a good outcome. And as you can see, when we get the good volumes, we are coming closer to that. So that is a good development in Q4. We still have further activities to get closer to the 30% where we are seeing a more long-term trend or stability, if you so will. 

Net debt in relation to EBITDA. Well, we have said since the acquisition, it will take around a year to come below our long-term target after the close of Roda and after 3 quarters, we see that we are coming down to 2.6 and now after 4 quarters, 2.0. So well in line with our previous communications and our internal expectations. 

On Slide 16, I'm leaving you the sales footprint geographically, where we, since the Roda acquisition, saw a strengthening of the European business and a good size of that now on 43%, almost on par with Nordics, 46%. North America is represented by 7%. 

And with that, I will leave the word back to Daniel.

Thank you, Viveca. And I will take the opportunity to go through a little bit of the Roda progress. You know that Roda was one of transformative acquisition we did, and we were closing that in March 2025. So it has now been 10 months within the middle of ownership. And I think we saw here in Q4 solid Q4 figures, especially strong on the order intake, contributing with more than 50% of the total group's order intake in the fourth quarter. And looking at 10 months where we have had Roda in our books, they have contributed with almost SEK 1.4 billion in order intake, showing that there is a strong business and strong demand on the German market. Integration goes according to plan. 

And we also saw that Roda in Q4 won several strategic large contracts in the fourth quarter proves that Roda's strong position on the German market and a good end-user reputation. I would say I'm very positive to the Roda acquisition. And I think if we look further out in time, this will be a very important part of MilDef's growth journey going forward. So that was just a brief update on the Roda progress and how that looks.

And by that, I will jump to Slide #19, and then we will quickly jump to Slide #20, and then we will have a summary and also a future outlook. And this will be around the fundamentals for growth for MilDef. And still, we see a high demand landscape, and we think that this will remain strong for many years. We are now investing, as I said, at a very high pace, and that is because we see continued good demand going on in many years from now. So to be relevant and to be able to meet those kind of demands, we are investing in increased delivery capacity. And also on top of that, that is what we are really doing, what's in MilDef's DNA, what we have been doing since 1997, is around digitalization and connectivity. That is very -- more and more playing a very important role for the European defense capabilities, and that is exactly what hits our core business and what we have done for many, many years. 

And finally, also very important for this journey for MilDef forward is decades of trust in the defense domain. This is much of a trust business and MilDef has provided field-proven products, and we are a well-trusted supplier and partner within the defense domain. 

And by that, we will jump to Slide #21, which is the Q&A slide. So we will now open up and try to manage this Q&A session in the best way.

Thank you so much, Daniel and Viveca, for the presentation, 22 minutes past the hour. We have a first question from analyst at Kantor Finn Kemper. [Operator Instructions]. So let's see if Finn Kemper opens his microphone now and you can state your question.

Congrats on the results, especially in terms of cash generation. I have a couple of questions. Maybe first, with now Q4 showing positive free cash flow inflection and also probably improving delivery execution, what gives you the greatest confidence that the working capital pressure has peaked and that cash conversion can remain sustainably positive throughout 2026? Do you want to answer that first, and then I go my next question.

Yes, please, Finn. It's better to do that, and we remember the question, at least. As I said, very positive that we now return to positive cash flow in the fourth quarter. Looking forward into the next year, as I mentioned also, we have a very strong position in account receivables that we expect to be receiving here in 2026. But it's also coming down to what kind of order intake we will have in the future, building up even a stronger order backlog at the end of 2026. So it's tough to say exactly how the working capital or the cash flow will play out here in 2026. 

But I think in the long run, looking over a long period of time, we have been able to grow this company in a very large amount of numbers without adding any extra cash just because growing the company. We all know that growing a company is going to tie up more money. But this is, of course, something that we address very closely and work hard, both on the customer side, supplier side, internally to make sure that we are optimizing whatever we can to be able to be increasing the cash conversion rate, so to say.

So there's nothing like a guidance or something you could provide us whether you're going to be cash flow positive in 2026?

No, we will not give guidance on that.

But then looking at the current backlog profile and also with the delivery expected for 2026, how should investors think about the required level of incremental order intake over the next 12 months to support your medium growth ambitions?

The thing we can mention here is that we still see a very high demand in the market, underlying demand for the products that we are delivering is still high. Even if we have some volatility, of course, which we always have in this kind of industry over the isolated individual quarters, we continue to see a strong order intake and demand. There is now a situation in the market, I would say, where we're really starting to see the increased defense spending rippling down. We know that Miller is late cycle into this phase. 

So also top of that, that the digitalization is a very important role for the European defense companies going forward. And if you're adding all of those things together, I think that there will be a continued high demand, not only for 2026, but also future on. Also we know that they are starting to ramping up, aiming for reaching the 5% and new spending targets within NATO. A lot of countries that we are operating has already said in 2030. So there will be tons of investments made into increased defense capabilities. And of course, we think we are one of the relevant players to take a piece of that.

And maybe one last question. I was just wondering if you could elaborate a little bit on why the gross profit margin on order basically deteriorated a bit throughout the year. And in the meantime, your legacy MilDef business margin expanded. And maybe to what extent is driven by differences in cost classifications or maybe product mix rather than underlying profitability? And maybe how should investors think about the impact on this on the P&L below the gross margin line, given that EBITDA margins already appear broadly maybe comparable?

Thank you. Very good question. I think, first of all, I think what you're seeing when we're talking about the EBITDA margins for Roda in the disclosed numbers in the interim report is not really super comparable to what we have released before because they are also now bearing on the legal entity level. They are bearing integration costs. They are bearing some of management fees that we are adding on there. So it's not comparing -- the comparison has been a little bit tricky to do, I would say. From my point of view, I still see the same financial profile within Roda with a lower gross margin, but an EBITDA margin that is above or in line what MilDef has done in the past. So I'm not worried that we will see some kind of major drop there or something like that.

Thank you so much, Finn Kemper with us from Cantor Fitzgerald. Thank you for tracking MilDef for 1 out of 6 banks doing so these days. The next question comes from Hugo Lisjo with DNB Carnegie.

Some of my questions were already answered. But I'm curious about how you're thinking about costs going into 2026. In earlier calls, we have discussed the cost increase of about 10% on OpEx. But now that you have announced the production expansion in Helsingborg as well, how do we -- how should we think about the cost increases compared to those 10% we have been talking about before?

Thank you, Hugo, for the question. There will be costs, of course, when we're growing the company, that will be adding on OpEx. We are investing in things that are mainly OpEx related. We still don't see any major investments on the CapEx side. But on the OpEx side, we will see an increase in, as I said, the number of staff, et cetera, to be able to take care of the growth. We will not quantify exactly in terms of percent how we see the future when it comes to the OpEx development. But of course, we hope to see continued operating leverage when it comes to the scalability of the business and things like that. But with that said, absolutely, we need to invest. We need to ramp up to a higher delivery capacity, and that will take some of the margins away.

And also just a short question on Roda and its margins below the gross profit margin. Because you mentioned the Roda bearing more of the integration costs now. So today's margins are comparable to historically. But could you elaborate a bit on how you think about increasing Roda's margin throughout the next years?

Absolutely. Thank you, Hugo. I can start with saying if we look at the reported figures that we have announced when it's related to Roda, we can see that the gross margin 10 months into MilDef ownership is now on a level of 35%. And we know historically that Roda has been operating around 30% something. So we already now see some positive effects of that, and we will hope that we continue to be able to do that. I think that the key thing to be able to do that, it's a success with more of our own IP products and addressing that to the German market. And of course, we see opportunities for that. But it also -- it will take some time before we can see the real impact of those kind of synergies.

And the next question comes from Daniel Lindkvist with Danske Bank.

So just, I guess, the Roda was the explanation mark in this report. So let's start off with that part of the business. I just got my answer on the levels of the gross margins. But I guess for the future now, the working capital profile in Roda, is there something that we should keep in mind now that they're delivering strongly?

I would say that Roda is a little bit more carrying a character where they can add on more finished products on the inventory and be ready to shorten the lead times. They have quite maybe a little bit more of a standard solution when it comes to the products. So they are more able to -- if they see a high demand, we would be ready to maybe increase the inventory, shorten the lead times. So that could be one component into -- that could play out in the working capital.

But the lead times on accounts receivable, that's not any longer than in MilDef.

That is quite similar to what we have in MilDef, yes.

And then just for the future, how will you handle Roda? I mean now it's turning into organic instead of acquired operations. So are you still planning to report Roda separately for the future?

Good question there. And I don't think we have really a deep dive into that. So let us come back to that. We will still in Q1 need to separate Roda because we have January and February, which is a month that we didn't have in 2025. But let us be able to come back exactly how we will proceed with the Q2 report and forward, and how we will break things out or not.

And then on the gross margins in MilDef in Q4, I had estimated that they were going to be lower for the Q4 quarter. Is there anything special to keep in mind with the Q4 level?

As you mentioned, normally Q4 bears a little bit lower gross margin due to high-volume orders and things like that. But now was the fourth quarter in a row where we see underlying gross margin, a mill gross margin, so to say, that is above 50%. And I have talked about this a little bit before that we see a positive trend due to the offering, a little bit change of the product mix. We see increased software revenue. We see increased solutions revenues and things like that. So the total offering and what we are selling, I would say, is now showing for quarters in a row that it's on a positive trend and that we are able to be on the long term above this 50% gross margin target.

So there was nothing dramatic with the software level of deliveries in Q4?

No.

And then just my last question, the lease liabilities, are we now at levels that include the full of Rosersberg and the added facilities in Helsingborg, or maybe even the double facilities in Rosersberg, so just for the future?

For the isolated fourth quarter, almost in terms of the Stockholm facilities for Helsingborg, no, since that has not yet been expanded.

Thank you, gentlemen, for raising these good questions regarding the Q4 and year-end report from MilDef. We are at the final approach of this flight. I can conclude that we have been north of 80 participants in this meeting. That is also an all-time high for this quarterly call. And if you did miss the entire show, you can listen in on our website later today when this full conference will be presented on the MilDef web. So I see no more questions in the chat, and I have no more raised hands. So this concludes the Q&A session of the reporting of today. Thanks for joining. And put a note in your calendar next Q report presents itself, the Q1 report on the 23rd of April. 

Now over to Daniel to close the meeting.

Thank you very much, Olof. And I just want to have a short closing and thank you, everyone, for joining in and listening in to the conference call today, and thank you for following the MilDef journey. Take care, and bye-bye.

Okay. Good morning, ladies and gentlemen, and welcome to this investor call with MilDef this lovely morning with a special focus on MilDef's reporting on the third quarter of 2025. This quarterly call will be presented by CEO and President, Daniel Ljunggren, as we traditionally do.

We expect approximately 30 minutes to be sufficient for the presentation and Q&A. And please help me. We are very cost efficient at MilDef. So we do this over Teams, but please help me mute your mics until the Q&A. I see that many mics are open, and I try to close them as soon as I can, but please help me mute your mic until the Q&A naturally when we will open up for transparent questions.

And also, as always, in the MilDef quarterly reporting, we record this meeting for your understanding. So now please take it away, Dan Ljunggren. And remember, Daniel, to help the audience listening in over telephone to state the number of each slide going forward.

Take away, Daniel.

Thank you very much, Olof. I will try to do my best to update you on the slide numbers we are on at the current presentation. And a warm welcome to all of you for this conference call around MilDef Q3 report. So let's start.

And then before we deep dive into the financial figures for Q3 isolated and also look at the long-term financial trend for MilDef and also the future outlook, I will just give you some short overfly of the basic facts around MilDef and the MilDef universe.

We are a provider of tactical IT solution, founded in 1997. So we have almost operated in this business for 30 years. And history matters because this means much of a trust business. We are a little bit more than 4 years into our journey as a public traded company. We did an IPO in June 2021. Today, and we are very happy to that to see that we have 46,000 shareholders, which is quite much for a mid-cap company. So that is something that we are very happy about.

Today, we are around 460 employees, and we operate in 10 different countries. So what is it that MilDef are doing then? We are a tactical IT provider in the defense domain. So we are delivering into this data-driven defense capacity that is now the European defense companies and forces are building up. So we are delivering the IT backbone where the stakes are the highest. So we're delivering to all of the 3 domains within the military, the Army, the Navy and the Air and Space domain.

With that said, I think it's time to look at the highlights for the third quarter here in 2025. First of all, the order intake is at all-time high. We are more than doubling the order intake. It's plus 119%, and that is really important for MilDef to keep that fuel, and that is what's keeping the MilDef engine running. We are doubling the net sales, that is plus 116%.

We also have a strong underlying gross margin, excluding the M&A. We were expecting the gross margin in total, MilDef and roda together coming down, of course, because we know that roda of course, with a lower gross margin. But the underlying one, and this is something that we have talked about now for many quarters and also years back in time that we were aiming for reaching above 50%. And now we have a couple of quarters in a row where we are above 50%, and that is something that we are super happy about.

And I will give some extra flavor on that coming up on the future slides here. Also, we see a strong order backlog for 2026. We see that if we compare that to exact same position previous year, we can see that we have an order backlog that is 142% better than it was 1 year ago. So we are sitting in a much better position for the upcoming year here than we was 1 year ago.

In Q2, we talked about some of these moved deliveries and the most part of that has been delivered in Q3. There is some small parts in Q4 that will be delivered, but the lion part of those moved deliveries was delivered here in the third quarter. We have a couple of several contracts, one that is really of a strategic importance. I will go through them when we look at the different business news and highlights from the Q3 announced orders, but there is some really interesting and strategic importance in the orders and contracts that we have won.

Capacity ramp-up is also something that is really top of our mind, something that we are really working hard with here that we are accelerating this capacity ramp-up. It's about buildings. It's about people, it's about processes, and it's about in the long term, increase our delivery capacity.

And if we look at into the order backlog, we can see that we will have a very intensive fourth quarter as normal at MilDef, a strong finish here in the year. We have a record strong order backlog in fourth quarter that we need to deliver up on.

Now back to some of the important contracts and the business news that we saw in Q3. If we take it from your left side, you can see that FMV, the Swedish procurement agency, order a combination of MilDef's total offering. It's around the hardware as a base, but it's also on top of that, we are adding the software.

We are adding the integration services, and we're also helping them with some solutions. So that's a good story when we're talking about moving up in the value chain that we can sell the total offering, a turnkey solution to the end customer.

If we move on, we also saw that roda, our German acquisition, they won a contract with a German cybersecurity company that is called secunet, also a long-term relationship with that customer and a really important customer relationship, and we can expect to see some high volumes coming from that business in the future.

Next one, also very strategic, important contract with NATO, the NSPA. So that is also something that was our first hardware order from that, and that is something that is of strategic important character as well.

And the final one that we released before we ended Q3 was roda's biggest order ever from Bundeswehr, the German procurement agency. And that also proves the German's relevance and the roda relevance on this German market. And we have also in Q4, if we jump into that, we have -- before we are releasing this report announced just below SEK 700 million in order intake.

And I think it's also a good differentiation in type of orders. We are talking about the U.S. market. We are talking about NATO markets. We are talking about the German market. So -- and high numbers on these orders as well. So there is a high demand on the market and MilDef is really relevant in this digital arm race that is going on right now.

And final and last press release here is around our new production facility that we have now opened in Stockholm. It's 4x more than we have in the current facilities. So we are really taking this ramping up of the capacity in the right direction by adding on this new production. And as I said, yesterday, we released that roda received an order of SEK 320 million, really also contributing and building the order backlog for 2026.

Let's move on to Slide #6, and then we can see the key figures for Q3. If we start with the net sales. The positive trend for MilDef continued during the third quarter, and the net sales reached an all-time high for a single quarter. Organic growth was in the third quarter, 36% and acquisition contributed by 80%. But in total, we grew 116% in net sales.

And maybe the strongest KPI in the third quarter is the order intake. The order intake grew by 119% in total, smaller organic, but mainly driven by the acquisition part from roda. So we saw a really strong order intake from roda in the third quarter. And totally, as I said, we are growing 119% in the order intake. And this is really important for us to have this fuel for the MilDef engine, give us confidence to continue with the capacity ramp-up, give us confidence around 2026 and continue to build a bigger and stronger MilDef.

If we then look at the operating profit in this case, adjusted EBITDA that we are using our profitability targets, we saw that, that was growing 172% if we compare with the same quarter last year. So that proves the scalability in the business model. The adjusted EBITDA margin here in this Q3 ended up on 15.7% compared to 12.5% in Q3 in 2024.

I was talking about the gross margin, and that is, of course, a super important contributor to the underlying margin as well. And if we look at the gross margin, excluding M&A, it was really high. It was 53.5%. And as I said, we have talked about this transformation to north of 50% in gross margin depends on the product mix, depends on the customer mix and things like that. But we have said what we -- we have done what we said that we should do when we transform this company to a plus 50% gross margin company.

In total, we ended up on 45% if we combine MilDef and roda together, and that's expected that the gross margin will come down due to the roda character and that they are operating with a gross margin that is lower than MilDef.

Finally, the free cash flow was negative SEK 53.1 million, on the negative side and that despite the strong improvement of EBITDA, the free cash flow was negative in Q3. But I think there is a clear reason behind the negative free cash flow in the third quarter.

We are having a really estimated really high deliveries in Q4. So we have been building up inventory for being able to meet that delivery. And that is, of course, impacting the free cash flow here in the third quarter. That is something that from this delivery in the fourth quarter that we will see estimated a strong free cash flow in Q1 in 2026 instead.

With that said, I think it's time to more zoom out and look at the more long-term financial trends of MilDef and see how we have performed at, let's say, a rolling 12-month basis. If we look at those numbers, just to set the scene here for the financial summary, I would say that MilDef is a fast-growing defense tech company. We have now an order intake that is close to SEK 3 billion. We have doubling the order intake in the last 12 months.

Our order backlog is SEK 3.5 billion. That is also more than doubling that we had 12 years back in time. Our book-to-bill is still strong. We are almost at 1.8, and that is despite that we are growing the net sales the last 12 months with 48%. And we have also added employees, of course, to be able to take care of this growth. So we are today roughly 50% more people than we were 12 months ago.

So even if we look back in time and look at the order intake, for example, and go back to 2021, we can see that we are increasing order intake with a CAGR of more than 50% on a yearly basis. So this is the dynamic we're operating right now and the order backlog as well, if you look at that, also really strong development and having been increasing that with just less than 400% if we look at the order backlog. So this is the context and the market dynamics and the relevance of MilDef, I would say.

Geographically, if we split down our total revenue and take it into different geographic areas, we can see that the Nordic countries is still the strongest one, even if we expect that Europe now when we are adding roda over 12 months will become bigger than the Nordic countries. And that is also what we see here in these numbers that Europe is showing that they are really starting to pick up. They are growing 15 percentage points if we compare to 12 months back in time.

So when we close 2025, I think that we will have been transformed MilDef to a strong Nordic company that we are seeing a bigger footprint in Europe and that Europe will be -- Central Europe will be the main market for MilDef.

Back to the order intake, and I showed this picture before, but it's really important for us is, as I said, the fuel for the MilDef engine that is our future revenue, future net sales, future cash flow and also give us confidence to continue with this capacity ramp-up and adding more resources on top of everything and book-to-bill ratio almost 1.8, so continue with a strong order intake.

Backlog duration, we have, as I said, a really strong backlog of SEK 3.5 billion. If we look how this was compared to when we closed Q3 in 2024, we can see that all of the bars are much, much higher than it was 12 months ago. So that also building some confidence. And I think that the 2026 order backlog now starting to look really, really healthy. And that also gives us, as I said, confidence to continue to invest in this.

For those of you who are doing your math correctly, you can see that there has been some orders that has been moved into 2026. The order pie chart for -- and the duration for the rest of this year is not in total line what we have announced in Q2 when it was around the second half of 2025.

But this is also due to that we have been moved some of orders into 2026, and that is also around this historical ramp-up where we're now trying to calibrate our resources to be able to deliver on a new higher level, and that is also something that will, so to say, not be a spike up in the sky, something that will have some lumpiness in it, so to say. So that is what we're trying to solve and work really hard with at the moment.

Gross margin development expected to come down, of course. As I said, roda is starting here to impact in the numbers. It's very important for us that the underlying gross margin is strong at least so we can keep that. And then we will try to work with roda gross margin over time and come back again, but this is quite expected to see a drop from the high numbers that we are delivering at MilDef.

EBITDA development, we have seen that back in 12 months basis, we are growing the EBITDA with 50%. So after now a couple of quarters, we have standing still in the EBITDA development, we're now taking a big jump up again and showing the trend that is going in the right direction.

And as I said, we have an intensive fourth quarter with an expected high delivery. So that will also hopefully continue to add on this EBITDA development before we close 2025. But we can see that the scalability is there. So when the top volume -- top line volume is coming, we can see that rippling down nicely on the EBITDA growth.

Working capital and net debt to EBITDA, if we look at the net working capital, we can see in percentage of net sales, we see that the net working capital is quite similar that we had in Q2. So we are just below 40% in the net working capital.

Now as I said, we are in this phase with the inventory ramp-up to meet the high delivery demands in Q4. And we also have not really taken the full 12 months net sales of roda into these numbers. So that is also something that will positive impact this net sales of the net working capital and aiming to come down around 30% and maybe a little bit lower than that.

Net debt to EBITDA, we see expected coming down 2.9 in Q2 and now 2.6. This is something when we're now growing the EBITDA when we also get the full picture of the roda's EBITDA into the total consolidated EBITDA, we will see that this net debt will come down. So we expect this before we close 2025 to be below our long-term target of 2.5, but it's now showing that it's going in the right direction.

Short update around the roda situation here in Q3. I think that they are showing solid Q3 figures, especially strong order intake in the third quarter here. As I said before, they were announcing the biggest contract ever from Bundeswehr. That's a DLBO contract, digitalized land-based operation, a big digitalization project going in within the German Army that roda plays an important role in. So that was our largest order. So strong order intake.

Also, as I said, proves roda's strong position on the German market and that roda has a good end user reputation and that is something that we can continue to build on in the future. Germany has also announced this defense ramp-up of EUR 500 billion over the next 12 years. So I think there will be a lot of business opportunities and a lot of a great need for building their IT solutions going forward.

With all of this combined, I think that the acquisition of roda will be a very important part of MilDef's growth journey going forward. German market and roda together will be a strong contributor to MilDef's continued growth.

Future outlook. And now I am on Slide #17, growth priorities. This is something that we will focus strongly within MilDef in the upcoming 2 to 3 years, number one, that is really on top of our mind is the scaling up thing that we really need to -- a ramp-up of our capacity. We're seeing a couple of quarters in a row where we are meeting high new record levels in order intake, and that is something that will impact the business and will impact how we build up our capacity. So we need to do that in a cost-efficient way, but we need to increase our capacity in total. It's around the facilities; it's around the people and it's around the processes.

The next one is also climbing the value chain where we can take a position on the market as a prime contractor within the tactical IT solution area, where we have today an offering and a competence and a capacity to delivering turnkey solution to the customer and they are more and more asking for this kind of turnkey solution because they have no time, but they have a lot of money. So they want the industry to really help them out to make sure that they get the capacity they want out there.

And I also think that this climbing in the value chain will increase the barriers to entry. We will create a position and take a position on the market that will be really strong and will be hard for the competitor to come in and attack this position that we can take on the market. Improved margins, of course, is one of the big players as well.

Focused expansion, I think it's really important in this dynamic in this high demand landscape that we are in, that we are laser sharp in our focus around the defense domain, and we really prioritize our key customers, the big customers. We really prioritize the selected MODs and the government customers, making sure that we are super focused on finding the right solutions for them and delivering with the best quality that we can.

Final piece in this one is the resilience. Resilience is really important for our future growth because that if you want to be a relevant supplier and trusted partner within the defense industry, you also need to make sure that you are a resilient company. So you need to have your supply chain really in good order and have a resilient supply chain. You need to have cybersecurity really on top of that. You need to have an organization ready to take on higher volumes and all of these kind of things will build a more resilient MilDef in the future.

And if you see on the bottom row, you can see that something that we always will be working with is our sustainable business and responsible business due to the industry we are in, and we will keep that as a really strong areas to focus on. And also, the M&A, we have been on an M&A journey, and we still want to find good M&A that fits really good into what MilDef are doing into our core business that can help us continue with this growth journey like we did with the roda acquisition. So that is something that will continue to be on our priorities for growth going forward.

Now we will come to Slide #18, and then we can see the strong outlook for the future. I will go through what we see from our view about the future. First of all, something that really creates a dynamic on the market that there is a high demand landscape. We are seeing more and more defense spending.

We also see that they are transforming into more of a data-driven defense capacity, which also creates this digital arm race where digitalization will be probably the most important thing, how we can build this threshold so we can be strong enough to build pace.

And that is our second strong outlook for the future is the digitalization and connectivity. Some people are talking about this defense tech super cycle and it's here to stay. So what we are doing at MilDef building the IT backbone is really a relevant thing into this European defense ramp-up.

And finally, also that is really important in this defense domain. MilDef has a decade of trust in this one. We have been operating in this domain for almost 30 years, and we have a field program portfolio, and we are already today a well-trusted supplier and a partner in this domain. And that is something really important when we now see this -- all of these new opportunities coming up here in the future.

And with that said, I think it's time for the Q&A session.

Absolutely. Thank you, Daniel Ljunggren, CEO and President, MilDef Group. I have raised hand from Tom and Daniel at Danske Bank. So we'll start with Tom and make sure that you unmute your mic Tom, so we can hear your lovely voice. Tom with Pareto. Are you ready to fire away?

Yes, sir. Just a question on the delays here. It looks like you moved some SEK 180 million, SEK 200 million in terms of organic backlog into 2026. How much of that is on you versus on the customer acceptance rate here? And what sort of investments or initiatives are you taking to enable higher delivery pace here into '26?

Thank you very much, Tom. I just want to start with maybe giving some flavor on the bigger picture here. I mean we are in a historical defense ramp-up, and we are talking about this beginning of beginning for many times. And now we really see a strong demand, strong order intake that is building up a need and a situation in the delivery that we need to be able to take care of. So I think we can expect maybe some turbulence in the upcoming quarter or 2 quarters going forward.

So we have the time to find a new delivery capacity, and that is something that has been impacted, as you say, the moved -- some of the moved orders into 2026. But it's really important that we are doing this on a daily basis. We are adding on capacity. We're adding on what we need, as I say, the building, the people and the process to be able to deliver even more.

But it's not always that this kind of movements are -- it's -- that is MilDef needs to address. We also need to increase the supply chain that we are working with. We also have the end user, and the end customer sometimes is telling us to move the orders into 2026. Maybe our products are going into a bigger platform program and maybe there is a delayment of the platforms and things like that, and they don't want our things. They want to have a coordinated delivery of all things together.

And I also see that some peers in the industry is also talking about this growing pain that we are seeing right now. So I think it's a little bit naive to think that this was just going to go on a straight road to heaven. I think we will see some bump in the roads going forward. But it takes some time to calibrate the new situation and find a new higher delivery capacity.

Tom, you have another question? Tom?

Yes. Just a quick one on the sort of seasonality going into '26. Any specific high delivery quarters to expect here for the coming year? Towards similar patterns as '25 and '24?

Thank you, Tom. I think we can expect a little bit the same pattern that we have seen in the past year, so to say. Of course, now we're also moving a couple of things that will be expected to deliver in the first quarter. We had a little bit of what I'd say, a weak first half of 2025. So I expect us to be much stronger in the first half of 2026. But I also think that the biggest delivery quarter will be leaning towards the fourth quarter.

Thank you, Tom. We have a lineup of Daniel, Hugo, Finn and some questions in the chat. So I'll go to Daniel Lindqvist with Danske Bank. Please open your mic. Okay. So if Daniel is not opening his mic, we go to Hugo Lisjo with DNB Carnegie.

I heard that the distribution agreement you have with Mildef Crete ends at the beginning of 2026. Is this correct?

That is not correct. Our current distribution agreement with Mildef Crete will actually now end in April 2031. I know that some have seen this 2026, but there is a dynamic in the agreement that will prolong that agreement with automatically 5 new years. And that really kicked in 2 years ago, actually. So we have a good situation on the distributor agreement with Mildef Crete.

And just to add extra flavor on that, I mean, we have been a strong partner with Mildef Crete since back in the '90s. So agreements or not agreement, I think we have a really strong position together with Mildef Crete. So I'm not worried about that relationship or that partnership or that supplier.

Hugo, do you have more questions?

This also holds true for roda?

roda has been even having a stronger and longer relationship with Mildef Crete. So underpinning of their existing -- they have, of course, an existing distributor agreement with Mildef Crete. And I'm not going to go exactly into when that expires, but I have no worries and also with the new orders what we are seeing coming in from roda is building the relationship even stronger with Mildef Crete, and they have been partners and friends for more than 30 years. So I'm not worried that something will change.

Okay. And regarding those production capacity restraints you had in -- you have in 2025. How should we think about this looking into 2026? How much production capacity do you add?

We are, of course, trying to do this in the same pace that we are seeing order intake, et cetera, coming in. But I'm sure that we will, in upcoming 1 to 2, 3 quarters here, adding a lot of new delivery capacity on top of what we already have today. So it's hard to give an exact number how much we will increase our delivery capacity. It depends a little bit on the future order intake and things like that.

But we will absolutely add on so we can meet our long-term financial target growing 25%. So at least more than 25% of what we are doing today. Then of course, there is a limitation of everything. So if we see continued really strong order intake, then maybe we will have even in 2026, capacity issues of growing that quick.

Okay. My last question, that's regarding the gross profit margin. Organically, it was strong in this quarter. roda's gross profit margin was a bit lower than previous quarters. Would you say that this quarter's level is more of a normal level for both entities and for the group?

If you look at the roda margin, for example, in Q3, it's very similar to what they have done in the past. They have been operating around 30%, something like that, and they are doing that in the Q3 as well. So that is probably something that we can expect going forward. Of course, we will try to make -- see if we can find some opportunities to increase the roda gross margin. But what they're doing in Q3 is very similar to what they have done in the past.

If we look at the MilDef margin, we have now seen a couple of quarters in a row that we are improving. We are above 50%, and we have done this a little bit transformation to our product mix. We have more software. We have more of the solutions and integrations and also improving the gross margin. So I can expect that the classic MilDef gross margin, if we speak it like that, will continue to be above 50%.

Thank you, Hugo Lisjo with DNB Carnegie. I think we go to Finn Kemper now with Cantor Fitzgerald. I hope that you are able to open your mic on your side Finn. I see you did that. Welcome with your questions.

Congratulations to the great quarterly results, really well done. So my question...

We've lost Finn there. Do you hear us still out there?

We hear you?

Yes. Sorry. Maybe I'll ask the question again, sorry. You significantly expanded the capacity in Rosersberg and stepped up also the recruitment. So maybe you could elaborate a bit on the capacity runway and when you expect that to really reach saturation?

And maybe off that, on the flip side, how do you balance the current investment pace with the risk of potential overcapacity if order conversions slow in the following years?

Thank you very much, Finn. If we take the first question there out in Stockholm, our new facility here, we are 4x increasing our capacity here, and that is a 10-year lease contract. So of course, this will not be up and running on 4x higher capacity already here in a couple of 1, 2, 3 years, maybe it will take some time to really come into that new delivery capacity and come into that new facility. But of course, we're trying to do whatever we can to fill that with a lot of new business and things like that, and that give us the room to grow.

Your second question there, of course, we are really listening to the market. We are looking at the order intake. We are doing our evaluation and see so we don't overinvest in things. But here and now, we need to take this delivery capacity to the next level because we are seeing that the high demand is here and it's here to stay. And as I said before, this is probably 10 year out in time. So that is why we are confident in continuing to add on capacities. And then we, of course, need to follow this [ carefully ] walking into '26 and '27 and beyond.

Okay. And maybe a follow-up question. I mean you mentioned that already during your presentation, but moving towards positive free cash flow maybe in early 2026, what are the key levers you're really pulling on the working capital? So maybe improved delivery planning, supplier terms, also customer prepayments? And how sustainable is that improvement? And what is a comfortable working capital ratio maybe moving forward that you feel comfortable with?

Thank you. First of all, I would say, here in Q3, of course, that is a situation where we see a really intensive delivery quarter in fourth quarter. So for me, it's not anything unaware that we are really ramping up the inventory for making the deliveries in the fourth quarter. We are working really hard with improving and optimizing the cash flow.

And I think that we have seen some improvements in that area when we are talking about prepayment, we are talking about milestone payments, and we are talking about an end user that realize that they need to, in some kind of way, support the defense industry in this ramp-up as well. We need to be able to share some risks, and we need to be able also to get some fundings before deliveries.

So I see some kind of change in the dynamic. Exactly what will happen here in the future is hard to say. But at least they are more open to have this kind of dialogues, how we can help each other on the government side and together with the industry.

And in terms of the ratio, is it closer to 25%? Or are you comfortable with below 30% already?

I think that we can -- if we look at the history, we could be operating with 25%, but maybe we were aiming for 30% in that area would be quite doable for us going forward. It's also always a balance act between the lead times. The lead times is really important for the end customer here and now. So we also need to have a basic inventory level to be able to meet this kind of shorter lead times as well. So it's a balance act between a great cash flow, but also be able to winning the business because you have the right lead times.

Thank you, Finn from Cantor Fitzgerald for tracking us. Before we go to Tom for final questions before we have a hard close at 40 minutes past the hour, a question in the chat, you can have a look at it also, Daniel.

How are the projected gross margins for the long-term order intake '26, '27? Do we see expansion of margins as the backlog really starting to become filled? Are you taking winning orders on any margin just to fill the book? What can we expect in the future? Many questions in one.

I think we have touched base a little bit around the gross margin here and we have seen, and we have talked about where we are today and where we have been in the past and the journey we have done. And it's always hard to predict in the future there, but I expect that we can continue to improve our total gross margin. I expect that we can continue to improve the roda gross margin absolutely because they are on a little bit less level than that.

Are we talking -- are we taking orders just to win? No, we are not. We're always keeping our gross margin because we know the importance of the gross margin for the profitability going forward. So I would say we have a good pricing power in these market conditions here and now as well. There is a high demand, and we are in a relevant position. We are a trusted supplier. So that is also why we can keep the price level at the same level that we have done before. So it's not about lower our gross margin and winning order intake. It's keeping our gross margin and continuing this high demand landscape.

Thank you for that question out there in the cyberspace. Final -- very quickly, Tom, with Pareto. You have the final floor.

Yes. On the roda EBITDA margin, I know we spoke about gross margins, but what's happened to the OpEx development here in '25 because EBITDA margins are down quite significantly for the first 3 quarters. What are you expecting moving forward into '26?

Yes, that's a good question, Tom. I think it's a little bit on the side that the figures in the report are not really reflecting how roda looked before because you can see some integration costs in roda. You can see some of the depreciations around this -- around the acquisitions-related depreciations and amortizations. So I don't think it's super fair to compare it because a little bit other dynamic into this -- to the roda EBITDA margin. But for me, operational-wise, I expect them to be at the same level that we have seen in 2024.

So you should see a comeback already in '26 then?

We should do that, and we should also see only [Technical Difficulty].

And then on the jackup program with Rheinmetall and KNDS, what are your hopes there?

I mean we have always good hopes to win some future business, and we know that there are some big programs going on around in Europe and big vehicle platform programs that -- but we are trying to put us in a good position, and we are having a strong relationship with many of the big platform providers. Rheinmetall is one of those where we have an existing framework agreement through our roda company there. So hopefully, we can be a big part of that.

Sorry for the little bit hard close here, but thank you so much, everyone, 45 souls, ladies and gentlemen, 47 altogether tracking this Q3 call. Thank you for taking part of the MilDef journey and thank you for contributing to the MilDef journey. We are very excited to be back on February 5 when we disclose the year-end numbers for the full year of 2025.

So Daniel, final words from you.

Thank you very much for following the MilDef journey, and I hope to see all of you in February when we will talk about our Q4 report. Take care out there.

Thank you very much. Don't be stranger, stay in touch.

So welcome, ladies and gentlemen, to the 2025 edition of the MilDef Capital Markets Day. A warm welcome to the many good friends, owners, analysts and media in this very room. Many of you were here last year. So we're excited to see you back again. And welcome to the many of you following the MilDef Capital Markets Day 2025 on the online live broadcast on the webcast -- on our web page or on YouTube. You're also very, very welcome. It's the first time we do this live on an online feed broadcast. So it's a little bit of an excitement for us. Thank you for participating.

This is a unique opportunity to dive deeper into the MilDef universe. Traditionally, as you know, when we meet, we have 30 minutes, 40 minutes quarterly reports, one-on-ones, roadshows, investor meetings, seminars. I mean it's always too little time, and we're always rushing through it, Daniel and myself and the rest of the team. So today, all in all, we have 4 hours together in this room. The participants and the travelers on the spaceship today here with the lunch. We have 4 hours to deep dive into this universe. For those online, it's 3 hours.

And by the way, my name is Olof Engvall. I'm the Head of Investor Relations and Corporate Communication with MilDef going 4 years back. And it is my duty to tell you, ladies and gentlemen, that the emergency exit is in the very back of the room. Please make sure you know where it is. That's the closest one. You can also make life more complicated by going out there. But if you want to take that one, you can follow the signs for the emergency if the unlikely happens, of course.

So this is the second streak of our Capital Markets Day, and we have 4 hours together. We have -- the presenters of this show have, of course, spent a lot of time to make this a very valuable agenda. It is a full flight, no doubt. This fast-growing Swedish tech defense company has packed the bag, which is overloaded probably, but it's lots of value. I can already now reveal that there are no news items, which you've seen in the press release 1 hour ago, but there will be many new learnings from this event when we deep dive into the many topics that we have packed in this suitcase today. So no doubt, it's a very full brief case.

And we will talk about topics that you typically ask us about. How do we put content into a day like this? Well, we listen to you. The many questions we get from you when we meet you out there very, very often. So we will talk about the MilDef journey going a little bit back and going into the future. We will deep dive into the tech, to the solutions, to the hardware, to the software, to the integration services, the new broader MilDef that has evolved over the soon 30 years of existence. We will talk about how we sell and to whom, of course, that's very important as we go deeper into Central Europe and we go down on the DACH market, for instance.

And we will deep dive into the somewhat difficult to understand sometimes, but the fantastic deployment software, OneCIS, which we sometimes try to explain in 30 seconds to you. Today, we have 20 minutes with the actual inventor and the tech guy behind it all. And Daniel will, of course, talk about the pathway to the future and the strategies going forward on this somewhat overwhelming journey that MilDef is on. Remember, we are going to be twice the size this year than last time we did this Capital Markets Day on top line. So it's a bit of a journey. And I said that there are no news in this deck this morning, but I was excited the other day.

And you all know that SEB took us to the NASDAQ Stock Exchange, very good friends with SEB, of course, going back. And this got me a bit excited the other day when SEB pointed to 3 European defense companies saying that Chemring, Rheinmetall and MilDef, yours truly, are the hottest stocks on the defense platform on the stock exchange right now. So this, of course, and you've seen this. And since I'm an old journalist, I think this is very exciting. So thank you, SEB, for doing that. Let's see if we can live up to all these promises going forward.

Okay. Like last year, we presented the full management team at this Capital Markets Day. That's one of the big values of this day, of course, that you will have a coffee break and you will have a lunch, and you will have many interesting presentations by the corporate management team. So today, we will -- in a few seconds, I will ask them to rise up and introduce themselves. But I will also say that we miss you, Viveca. Come back. Viveca is tracking us. Our CFO, Viveca Johnsson. She is on maternity leave, and she will be back in January. So please come back in January.

We certainly miss you. So now I want the corporate management team and the extension today, the Norwegian gentleman and the German gentlemen to stand up and introduce yourself. I think that you have microphones, so you can do that. Please stand up and rise to the occasion. So the audience knows who you are. So let's do it from Magnus and then we go to the other side with Daniel.

Good morning. Magnus Hagman, Vice President, Nordics.

Good morning. Fabian Forster, Business Manager for our OneCIS product.

And Fredrik Persson, CTO and Deputy CEO at MilDef.

Frank Scholz, I'm the Managing Director, roda computer GmbH.

Karin Svalander, Chief Legal and Compliance Officer.

Martina Karlsson, Chief People Officer.

And finally, good morning, everyone. Daniel Ljunggren, CEO, MilDef.

Thank you, ladies and gentlemen. You will see much more of these -- my colleagues later on in the show. So when planning this event, and we are at the starting point now, when planning this event, we were thinking about taking you all down to the Fortress in Helsingborg. How many of you have been to the Fortress? Quite a few. The Fortress is the MilDef headquarters and main production facility in Helsingborg, where it all started some shy 30 years ago. We thought about bringing you down, but then it's easier to do it here in Stockholm. The other idea was to travel on a bus, a big bus trip together, 20 minutes up north towards Orlando.

In 2 weeks' time, we inaugurate 6,500 square meters of state-of-the-art production installation service facility. It's a totally stark workshop really. It's amazing. You will see in a few moments this building behind the scenes. And we were thinking about bringing you there for the Capital Markets Day. However, we realized there are no furnitures. And it would be funny to see you all sit on the floor. So we didn't do that. Next CMD perhaps. And talking about Daniel presenting this very momentarily. For 14 years, he has been along the journey of MilDef's growth path. When he started in 2011, MilDef turned over SEK 50 million. When we travel out of '25 this year, MilDef will be well over 40x bigger. It's been quite a journey, don't you say, Daniel.

A warm hand for our CEO and President, Daniel Ljunggren.

Thank you very much, Olof, of course, and most welcome to all of you here physically in the room, the audience and also all of you online there. And as Olof mentioned, we have a full packed agenda today. So we're trying to be as quick as possible, but get the message out there. But before I kick off, Olof mentioned the whole management team here. And as you all know, running a company is more of a team sport. So I'm really super happy to have the strong team here with me together today. And we also, on top of that, have 2 really experts when it comes to what I see as 2 critical components for MilDef further growth journey.

That's the German market and also our more and more high demand for our software, the OneCIS ones, you will really try to understand and get the true experts to explain how they see those 2 kind of components going forward. And I agree, Olof, we miss Viveca. Hello, Viveca. We'll see you in January again. So we are full management team besides Viveca. But let's start then with the MilDef universe, just to give you some overflight of the basic facts of MilDef. We will deep dive into this, of course, but we are a provider of tactical IT solution founded in 1997. And as we say here, history matters. And this because it's much of a trust business to be in this business. We have decades of trust in defense.

We have been in this area where maybe everything was just decreasing. And now that we see ramp, increased defense spending again, we are in the right position. So history matters and our trust in this industry matters. We are doing an IPO in June 2021. So we are like more than 4 years into our journey as a public traded company. We are more than 45,000 shareholders today, which I think is quite much due to that we are just a mid-cap company. And some of these shareholders I see in the room here today, of course, some of you are included in this 45,000. And we are in the company today around 500 employees, and we have presence in 10 countries.

But the other way to explain what we are in MilDef and give you that sentence and that context and give you that glance into MilDef is, of course, to say that we are a fast-growing defense tech company. We're looking at now last 12 months order intake of SEK 2.5 billion. We are doubling the order intake the last 12 months. We have all-time high record strong order backlog, SEK 3.2 billion, and that's a growth of 120% the last 12 months. And still, we have a book-to-bill ratio that is close to 1.8. So there's still some power and some room for continued growth going forward. And the last 12 months, we did a net sales growth of 25% and we have increased -- we're going to come back to that, the capacity question, but we are today 500 full-time employees, and that's an increase of more than 50% in the last 12 months.

So this is actually where we have MilDef and where we find MilDef today, fast-growing defense tech company. And just to give you a little bit more flavor on that, if we go back to 2021 and you see the progress in the order intake, we see a CAGR of 43%. Year-over-year, we have added 43% in growth in order intake. And also another KPI that is important for us, the order backlog. If we look at that development since 2021, we see a development that is more than 300%. So that is where we can find MilDef right now. And of course, this is due to the European defense ramp-up but we will come back to that later that we probably just now are at the beginning of the beginning, even if we can see this ramp-up in all of the KPIs.

I just want to also give you a breakdown of our net sales geographically wise and see what -- where do we have our strong footprint. We are based in the Nordic countries. Our home market is Sweden. That is where we have grown up and we're still doing the most of the business. We have super good relationships with the procurement agencies in Sweden, Denmark and Norway. We have -- and this is just when we have added like 4 months into the roda journey together with MilDef, we have a strong footprint in Europe. Going forward, we're seeing that the European number will go north of 50%. So we will come -- transform MilDef from being quite a strong key player on the Nordic markets to be a key player on the total European market.

So that will be a play together with roda doing that. We also have presence in North America. We have 10% of the net sales coming from North America. But I also want to underscore actually what's the headline saying here. We have the geographic footprint that is needed. I mean the total defense spending in the areas where we already have a strong footprint, I mean, we will see the steepest defense spending in terms of percentage of GDP. We will see that the closer you have the border to Russia. So that -- meaning that we have the really good relationships and the footprints that we need. So we just need to dig where we stand a little bit and doing even more in the markets and with the customers that we already have.

I also want to take the opportunity to zoom out a little bit and talk how we see the market and how we see the trends on the markets. You're all, of course, following this by -- on the newspapers and the media, on TV and things like that. So -- but this is how we see it at least. And this is also trying to explain what we see as MilDef's long-term drivers of growth in Europe. And first of all, I mean, number one is this rearming of Europe. You all have said the new NATO target spending. You know what the decision was taking in Hague in that summit just before summer here. And so that will be a super good driver for long-term growth.

And we also -- some people are talking about this defense tech cyber cycle that we now are entering into where we see more of this data-driven defense system that will be the future and that will drive a need for what we at MilDef are doing. On top of that, we also have the European autonomy. We are seeing this weak transatlantic. We know that the U.S. maybe not backing up Europe anymore. We now have -- the political have woken up in Europe and realized that we need to stand on our own legs. So the buzzword here is Buy European. And that is -- will be a game changer for the European defense industry, which MilDef is a part of, of course.

And also the final on top of that, if we're looking at the main drivers for MilDef is the technology side. There will be a rise demand for digitalization, unmanned and AI that will drive a need for what we are delivering, the right IT solution, the IT backbone. So that will also be a big driver of growth going forward for MilDef. Number 4 here is around joint procurement. That is something we see on the market now. And I think that could be a benefit for MilDef. We see, especially in the Nordic context where the countries now are coming together and trying to do coordinated requirements. Of course, they are aiming to ramping up and shorten the lead times and getting higher volumes out there.

And I think if you have been a key player and a trusted supplier in this market for many years, you are in a really good position right now. And if we also look at what they're trying to do in near term, they are buying what's already field proven, what's already have been working. MilDef has had products in Afghanistan, Mali, all over the world, and the end customer know that they will not fail. They will work. So that's exactly what the end customer wants to have right now.

And finally, number five, too long and tricky words, interchangeability and interoperability. So if we take the first one, it's about finding ad hoc standardization solution where you can increase your resilience, so you don't need to have the 110% perfect system solutions maybe. You can have something that is 90% or something that you can replace with something else that's coming from something else. So it's really important for them to make sure that in terms of building the capacity, don't get vulnerable by don't having other parts that you can take in and get the same capability. And also the interoperability that we see now where the increased number of joint operations together in the NATO context. We also have the new members in NATO, Sweden and Finland, for example, really increasing the need how they can come together and quickly start setting up their command and control and communication and things like that.

And that is something that we will talk more later on when we talk about the software and the ones. But of course, there are some key uncertainties, timing and size of the European ramp-up. Of course, we know that political decisions takes time to materialize. We have seen this long cycle of over -- everything will take a long time. So that is something that we will see going forward as well. And I don't have a better crystal ball than someone else. And maybe if we look further out in time, we don't really know how this will play out. But the political decision is taken and now let's see how it will play out. But the timing of things are quite tricky sometimes.

And we have tried to explain the timing of things. And for those of you who have been following MilDef for a while, know that what we see, this is going back to February 2022, Russian invasion of Ukraine, then the end user and the end customer was focusing a lot on the operational effect. If you were an ammunition provider in Europe, you felt this day 1. And after a while, they started to, of course, filling up the backlog at the different platform providers. We were talking about Saab and BAE and those primes. We're really getting some big orders in there for delivering of the big platforms.

And when MilDef comes into play, means that we are quite late cycle in this defense ramp-up. So we come into the picture when these kind of platforms need some kind of intelligence, when they need some tactical IT, they need their command and control system, then it's time to place the order at MilDef. And the $1 million question, I normally get is, okay, where are we right now in this kind of phases as we see it. I would say somewhere here, maybe 2.5. I mean we have seen some of the new money rippling down to MilDef. We have seen some of the new projects and programs and things like that, that is starting to impact the MilDef and increasing our order intake and our order backlog.

I think end of summer last year, we really felt that there was a change in the dynamic on the market where we're starting to see some of the money coming in from the new business. But there is still a lot of ordered platforms that has not been ordered the tactical IT on, so we're still waiting for a lot on that. And that's why I'm saying 2.5 maybe. But there will be a lot going forward in the end as well. We have priorities going forward. We have identified, of course, what we should aim and focus on, on our priorities going forward to be able to be -- not just be relevant here today, but also be relevant in the future in this industry.

So we have boiled this down into 4 different areas. We have the scaling up. I think the whole defense industry are talking about this now, how to scale up in the best way. For MilDef, we are talking about climbing in the value chain. We're also talking about focus expansion, really making sure that we have a laser-sharp focus on what we should do right now and not get too mixed up with other things. So keep the focus we have. And then we have the resilience as well. But we will go through each of this in a little bit deep dive into the ones. And if we start with the scaling up part, of course, this is what everyone is talking about in the defense industry. And for MilDef, it's, of course, empowering the workforce.

We need to retain, we need to attract. We need to onboard. We need to train people. We need to increase our capacity and capabilities within the staff we have. We, of course, need to ramp up the facility capacity. We will just in a short second here, show you a video and take you out to the reality into the state-of-the-art building that Olof mentioned before, location is Rosersberg,'s just outside Stockholm here. But we're also increasing our facility capacity down in Helsingborg. We're doing it in Wales in U.K., in Cardiff, where we have -- we have a new office in Oslo, for example, in Norway. So we are doing whatever we can to make sure that we will be relevant now and also in the future.

And that is what we're going to do. But how we're going to do it is the last 3 bullets, I would say. We need to find a smart and cost-efficient way to do this ramp up. We need to have a process excellence mindset, and we also need to use data-driven capabilities to be even more efficient. We need to see that we have the right system, IT system, how can we use AI, for example, to be more and more effective. But with that said, I think it's time to take you out into the reality and make sure that we -- you can see our state-of-the-art new building, 6,500 square meters outside Stockholm here in Rosersberg. So I'm saying a video, please.

[Presentation]

Okay. There, we have one of our important puzzle pieces in the capacity ramp-up that we are doing at MilDef today. But we also have climbing up in the value chain. We have talked about this in sometimes becoming prime contractors around the IT solution tactical IT solution area, delivering more turnkey solutions. It's about transforming MilDef from being a pure box supplier into something else, a system house in this kind of area where we can operate and sell more of just the hardware stand-alone or the software stand-alone, we can combine these 2 things or 3 things installation solution. We can be a system house of tactical IT solution, and that is what we are aiming for.

And why are we doing that? One is, of course, to increase the barriers to entry. If we're doing that, we are taking a strong position on the market, and we will be strongly and trusted partner. And we do that by adding capacity and capabilities and know-how and competence in the future, how we should do this journey. And it's also about improving the margins, of course, more larger contracts, more complex contracts will also give you a better margin in the end. And the way to do this, I think, is to deliver on the customer commitments. So we have this -- we have the customer with us in this journey transforming and moving up in the value chain. That's really important for us. If we do the things right that we have committed to, they will continue to use MilDef in a wider area as well.

Next one is around the focus expansion, and this is that we have said now we have to keep a laser sharp focus on really digging where we stand. We have a really strong customer list. We have 10 to 20 big accounts that really could be the one that's driving MilDef's growth forward and doing the big impact, so to say. So we need to be able to prioritize the key customers in this attractive geographic area. That's the most important thing for us now. So we can focus on them and we can focus and give them the best support, giving them the best solutions. So we really have this customer-focused solution. And by doing that, we will become this trusted long-term strategic supplier on the selected MODs and primes. So that will be very important for us.

And the final one is resilience, of course, maybe someone is thinking what resilience has to do with growing the company. But in our industry, that is really, really important. To be able to be trustworthy enough to get big contracts, higher volumes, we need to have a resilient MilDef. And that's about multi-location manufacturing capacity. Just a couple of years ago, we had one single manufacturing capacity in Helsingborg. Today, we have more than that. We have the U.K., we have down in Germany, for example. So we have really created a multi-location manufacturing capacity. Also, as I said, redundancy in the organization, bringing on new people, more competence, more know-how in the industry into MilDef.

And then we have our own supply chain, of course, resilience on that, how we work with that, making sure that we can have the components in right time making sure that we have dual and triple sources of most of the components. And then we have added cybersecurity as well. Of course, we're working already today really hard with the cybersecurity and trying to protect everything we can. But this is, of course, a race. So we need to continue to invest in the cybersecurity, create a resilient company, a more trustworthy company that would take on more business in the future.

But as you can see here something that we always have with us even if we prioritize these 4 areas, sustainable business. And it's not just about the climate impact and things like that. In our industry, it's much around having anticorruption, anti-bribery, know our customer. We know the end user. We know the end user of the products. So we are really becoming a responsible supplier of tactical IT. So that's really important for us to make sure that we have this ethical compass really tight calibrated and we know what kind of end users and end customers we have. It's really important for us.

And the final one, M&A. We have talked about M&A since the IPO in 2021, and we have added a couple of M&As and now latest one was a quite large acquisition in Germany. And we will continue to have the M&A radar on. We will continue to look what would be a strategic fit into MilDef, what kind of targets do we see that could be suitable for MilDef to acquire. But it's important for us to not being out there just to make acquisitions for making acquisitions. We really want to become something good. We need to find something there, 1 plus 1 is more than 2. But we will continue at least to have an M&A radar on.

Now I will do a quite quick overflow of the numbers that matters. And some of you have probably already seen this after our release of the Q2 report, but at least to give you some numbers into the rest of the day here, so to say. We were talking about the fast-growing tech company. And of course, we can take it even back to 2015, then you have seen a CAGR of 26% in growing rate. And if you take it from 2021, we can see that we have accelerated that growth and now making a CAGR of 36%. So that is where we're coming from. And as we said, we are a fast-growing tech company. And we have some proof in the pudding as well for 2025. There is some evidence in the order backlog, SEK 1.5 billion for deliveries in the second half of 2025.

And if you compare that to what we did full year in 2024, it was SEK 1.2 billion. So we will do more in the second half than we did in the full year in 2024. Of course, we have an impact from the acquisition of roda, but still that's SEK 400 million. So it's SEK 1.1 billion organic-wise. So that will be a challenge, and that is why we're feeling the growing pain sometimes, and we are steadily increasing the capacities all the time. If we look at next year, for example, we saw when we closed the Q2 that we are in a good position. We have an order backlog even if it's not the biggest one for '26, it's still 125% more than we had at the same time in 2024.

So there is a strong evidence in the backlog that we will continue to be able to grow the company. A very important KPI for us is the gross margin development, of course. Every percentage here -- percentage unit will give a big impact on the bottom row and the margins there. We have been on a good journey, I would say. We have been on the trend towards above 50%, and that's due to the customer mix and the product mix. As we said, we are moving up in the value chain. We are adding solution. We are adding software and things like that. We're also the customer mix where we are selling more directly to the government side. You can take one layer away instead of selling direct as more of a sub-supplier further down in the value chain, so to say.

So even if this is volatile quarter-by-quarter, I see that the trend is really positive. The effect that you're seeing in the second quarter there is related to the acquisition of roda, so it's expected to come down a little bit. roda is operating with a little bit lower gross margin, but they have a higher EBITDA margin than us. It's a little bit different character in their financial profile, so to say. When we look at the EBITDA development, we saw a really good trend going forward there. Now we have a little bit drop in the Q2 there. But if we look at the order backlog and if we're making sure that we're delivering what's in the order backlog for second half, I'm quite sure that we will see that the trend will continue to raise and move up towards again, so to say.

Just a deep dive also into the working capital. You can see that it has really gone up, but that's, of course, due to the acquisition of roda here in the Q1, where we have the full inventory and net working capital from the acquisition at once, but we'll have their net sales over the upcoming 12 months here, so it will -- in terms of percentage coming down. End of Q2, we said 38%, but I'm quite sure that we will come down in a range of 25% to 30%, something like that before year-end. And I think that MilDef should operate at somewhere around 25% in net working capital. That would be a suitable level for a company like MilDef.

If we look at the net debt to EBITDA, we also can see that we have the acquisition-related effect here, of course, we are moving up to 2.9. We have a long-term target to say that we should just temporarily be above 2.5, and this will come down when we now look at -- when we're closing 2025, I'm quite sure that we will come down somewhere in a range of 1.5, 1.7 maybe because when we're adding more and more from the roda acquisition, this will also come down. Also a quick overlook of the financial targets. We have quite ambitious targets, I would say, to grow this company with at least 25% per year. And we have been able to doing that as we saw in the earlier picture here. We have a CAGR since 2021 of 36%.

We have now the last 12 months, we are exactly on the target, 25%. We have the profitability target of at least EBITDA 15%. Last 12 months, we have 10.3%. So we have something more to do there. And I think when we're looking into the order backlog, as I said, if we're making those deliveries, I'm quite sure that we can come -- maybe above, but at least very close to the long-term target here for 2025. We talked about the capital structure, and we also have the dividend policy, 20% to 40% of net profit. In 2024, we did 20 -- roughly 20% dividends payout.

And now I have come to my final slide, just to wrap this first part of this up before I leave over to the next presenter here. I have the headline well positioned for further growth. And I think we will show here today that we have some evidence and proof in the pudding. We see a market situation, high demand landscape going forward. We know that MilDef has the right position. And we also have a proven track record of growing, and I think that's important as well. We know how to grow a business. We have the growth mindset on. We are ambitious forward-leading organization, and we want to become bigger and stronger, and that's really important as well.

We have been doing this for a couple of years now. So we know how we can find smart ways around to continue to grow. But also you can take with you, of course, what really will drive the market going forward. We have the increased NATO spending, 5% target. That will be a lot of new money into the defense sector. We have the Buy European as well that will be a game changer for European defense industry really having an impact. And we also have what they should spend the money on. And I think the digitalization is top of the agenda for the end users. So we will have a total bigger cake of defense spending and the piece that addressing the digitalization and addressing what we are doing at MilDef will also increase.

And in near term, of course, we have growth supported by a strong order backlog. So there we will see in the second half of 2025, we make everything we can to delivering that. And finally, also and also a cliffhanger for the next presenter here is that we have a well-established and field-proven offering and we are doing a combination that MilDef is a really trustworthy supplier on the market. And I think I have 5 seconds left. I don't really know to talk about, but quite good timing, right?

You're doing fine, Daniel.

Now it's 0.

Well done. You nailed it, don't you think? On the money. Well done.

Thank you.

So thank you, Daniel. Daniel will get back shortly, and the Q&A will be the Q&A because time is running short and we have a full flight. So the next presenter will take us behind We Armor IT, the message. We have done a flyover now with Daniel, a zoomed-out flyover. We will now zoom in. Actually, we have 30 minutes for this slot. This is the longest slot, feel no pressure, but then you packed a good suitcase. So we will go not only into the product assortment, but beyond the products and really talk about what the customers really buy from us. Fredrik Persson, CTO and Deputy CEO, MilDef Group.

Welcome back to whoever was here last year as well. I'm still Fredrik Persson, CTO here at MilDef. Yes, I just start to say how much can really happen in 1 year because standing here now 12 months after the first Capital Market Days, I was a bit worried about how much news could there be today. But as you know, the defense industry is moving faster than ever, driven by the geopolitical situation, of course, and the digitalization of battlefield. And I think MilDef is moving even faster than that.

So that's very interesting. A few things to just bring up here in that what happened last year that I would like to highlight is, of course, the acquisition of roda and we will also get Westek, as a company in, except just 150 great colleagues we got with that acquisition, we also get products that we add to our portfolio and capabilities and capacity that we now have locally in U.K. and in Germany, which I think is a real, real advantage for the future.

We have also communicated focus on defense. That meant that we integrate selected products from Handheld and capabilities from Handheld into MilDef. So we now have it integrated under a brand MilDef, and that will make our offering even better. Then we have some great success with OneCIS, our software. We won some great contracts, delivered and we have a new customer in a new country, and we have done a fantastic delivery and added a fantastic new historical capability to Swedish Marine. I will not say more about that, but Fabian will -- the star here will come later on and tell you about that one.

And then if we're moving to the system integration solution deliveries we do, we have some great contracts during the year as well. We have both business-to-business and business-to- government business. We have one contract with, for example, FMV and Kongsberg. And for me standing here, we usually say that we're moving up in value chain. We want to do more. We want to be a system house. That's really proof of we're actually doing it. It's a quality stamp for me to see that we get the trust to do that kind of business. So really, really impressive to how quick we can do this. That was yesterday, we need to deliver as well.

And together with the new facility in Rosersberg, we are actually positioned as a system integrator within the tactical IT. So I see we're moving closer to be the prime here in the Nordic countries at least. So the MilDef journey, yes, it continues, and it's going quicker than ever, that growth is something normal for us. Those minutes left here, I want to talk about what we offer. I will repeat some of the things I said last year as well, what we offer our portfolio, our hardware, software and solutions. But we also try to get behind the product why customers choose us and why they continue to come back. That's not only about technology and products.

So it's not just about delivering technology it's about business to ensure mission success from the day 1 to the last day of service. So -- and we'll not only talk about what we deliver, it's also about how we deliver it. I mentioned focus on defense, and for MilDef that means that we target and deliver to army, navy and air. That's the essence MilDef, that's where we are from. We deliver hardware, software and turnkey solutions to all 3 of those domains. We drive the digitalization. We want to enable the data-driven defense and we should act faster than the enemy, but of course, defense is big on that. We keep an eye on other domains. We have cyber, we have space and we have the total defense. There are opportunities in the future there as well, but not that big today.

Then to my trickiest slide of the day, try to explain what tactical IT is. Daniel mentioned it. He mentioned tactical IT, tactical IT provider also the backbone. So what are we actually doing? Try to do that in one slide, what are MilDef doing? If you look in the visualization here, some sharp eyes, maybe can see that that's the CV90. It could be any military platform at all. It could be land, it can be air and it can be in the sea because they are built on the same principle. We are saying system of systems. So what do we mean with system of systems. Yes, if you see the gray boxes there. System of systems are built on many subsystems.

It could be better management system, navigation system, radio systems, intercom systems and many, many more. This is just example of it. They are easy to say what they have individual, which affect what functionality they have, but they need to work together to get the full defense capability on the platform, and someone need to make sure they work together, then MilDef coming into the picture. We try to have our products in the middle there, both an IT infrastructure, and IT infrastructure normally then secure communication, take care of data processing, seamless integration, interoperability and so on. That makes sure that every subsystem works together, the right information and get where assured, you can get it out.

And the hardware is doing it in a physical way, connecting it, mature electrical connection and so, but then we need our software on top of that as well. Otherwise, we will not get an application, we don't get out information. And then on top of that, we're also delivering the workstation, the operational environment where we can consume the data, you can monitor, control the system and you can command a controlled operation. So in total, MilDef deliver backbone to make sure everything works together seamlessly over time, but itself, it's not a subsystem because it really add very, very little value itself. So therefore, we deliver backbone, not the subsystem, but the backbone is important.

And if you compare with your houses. I think most of you have a WiFi router at home. And you have a lot of connected devices. You have an alarm, you have a smart TV, you have some internet of things connected. What happens if the WiFi router goes down? Nothing works. You have some children's screaming or whatever. It's not good. But we just think about the consequences if that happens in the battlefield. The IT infrastructure is the MilDef products, if they go down, you don't see anything, you don't have any surveillance, you don't know anything, you can't use anything.

So we deliver those products where stakes are the highest and the requirements are the toughest. Just think about the consequences if we don't deliver and it doesn't work over time. So that's the context what MilDef tried to deliver because the information on the battlefield today is almost equally important as the firepower because you need to be up and running there. So this is all about delivering the full system, make it work and the end user using that system need to have trust. We need to deliver reliable solutions. So in the end, it's about delivering the right information at the right time to ensure the right decision and do it every time.

I hope you understand a little bit what we're doing by this. Then we deep dive into the portfolio. I will keep it on a high level here today because we have hundreds of products. I can stand here the whole day if we should go through that, but we try to keep it on a high level. This is how we usually present it on top level. We have hardware, we have software and we have solutions, and you also see the split. So hardware is where we come from. That's our DNA. That's what we have done for more than 25 years, delivering hardware in different -- into the context that I just described. And it's proven hardware.

Then we have the software, and that's basically OneCIS and the software that OneCIS bring into the systems. Small part, growing quick, big interest. I will say a little bit about the rock star in our portfolio. There are a lot of buzz around it. Everybody wants to know more. I will not talk about it because Fabian is here, and he will do it much, much better. And then we have our solutions. That's basically our services to our customer, where we combine our proven hardware, our proven software into a defense capability. That's where we actually create the effect at the customer.

And with the proven hardware and the proven software, we get the trust from a customer to actually doing the system integration and doing the services, who can be better than we to actually integrate our own products. If we go a little bit deeper down in the portfolio, then hardware, what is hardware? Yes, it's a really wide range of products we have. We have mobile computers, displays, computing and servers, networking, power and peripherals, a lot of different products. If we stay with mobile computers, that's where we started from. It's today much wider than it was just a few years ago. We have in the mobile computers now introduced products from the Handheld portfolio.

So here, we have everything from Android devices to digitalize the soldier, drone controllers. And with the acquisition of roda, we also have a partnership with Panasonic. So we also now have a little bit more of cut products, shorter lead times to fulfill the need in that area for our customers. And then we have -- the big part of this is still the products delivered by -- coming from our partner in Taiwan Crete, who has the ultra-rugged laptops, tablets, notebooks, is very customizable and durable and that's out to our customer that we're still going to do business.

And mobile computer here in the tactical IT environment is the -- that's the operator environment where we actually consume the data. Displays, the same thing, HMIs, that's displays, panel PCs was not a very big part of our portfolio, our sales for just a few years ago. It's going rapidly quick. There's a big increasing demand of displays. Every platform has many displays today. And we have positioned us there very well. We have -- last year, we did an asset acquisition from a small company called AVT to get in the right technology to be able to build up displays from bottom-up in-house, everything from FPGA programming and the whole way up.

And with the acquisition with roda, we now have a really, really wide range of display in our portfolio. I think it's one of the most complete portfolios in the defense industry here with rugged displays. So now we can offer displays from 6, 7, 8-inch small displays up to 65-inch video walls for visualization in command tents. So really impressive and interesting to see where it takes us. Then the rest, I mean, that's part of the IT infrastructure. There's everything needed, computer servers, networks, switches, routers. What to say about them is -- even if we sell a product or we develop one product, we always design it to fit into a bigger purpose into system. You can do that by modularization.

You can do that by have unified connectors, pin-outs, colors, just to make it look great as well, important. Yes, you have the right experience of them. So you can combine them. This is an example of our form factor 19-inch 2, combine them, put them into a rack in some cases in transit case, could be in a vehicle, could be wherever. But this makes a modular buildup, so we can actually combine the products after what's needed in each system. And the modularity also allow us to easy interchange the products over a year when we need to update the platforms.

What are the unique selling points for our hardware then? I would say it's the form factor over time. We don't just talk about long life cycles. We talk about life cycles for a platform. We need to replace our product 2, 3, 4x over a generation of a platform or vehicle. Our modular design, I talked about modularity to build our systems, but our products are also on the inside modular buildup, and that's really important. In that way, we can easily customize our product. We can do them as the customer wants. And then all of our products are designed for defense. They are long life cycles, they fulfill military standards, NATO standards, all the standards out there to easy, really be prepared to be used in that content in that places.

That was about our hardware. An extension of our portfolio there is the Westek products. We don't have one harmonized road map or portfolio yet. But just to give you an introduction, James Pickles, who is the Managing Director of Westek, is not here today, so I try to present what Westek is. Westek is a company, actually the oldest in the group, I would say. It's from 1986. So it's been here around. It's trusted in the business. So it's not a newcomer. It's based in U.K. It has all the in-house capabilities needed, design, production, they can do that full. They can take responsibility for products over time as well. They do type of products very equal, very similar to what we do. But the form factor is something else.

They are more of an industrial standard in form factor, 19-inch racks, 19-inch products, so easy to install in integration. But they're not as ultra-rugged as our products are. So a little bit different applications there. So they're not competing, no overlap. It's just complementing what we already have. And I see a big, big, big possibility with this because there's a big demand, increasing demand on high-power units. I'm talking a lot of AI. I mean, applications that need power. Here we have the Westek portfolio now that will really be integrated into MilDef, and I think that will be a great success in the MilDef here. I mean they deliver to land, air and sea as well. And their current growth shows that there are an interest.

There are possibilities. And I think getting into the MilDef on the sales using the MilDef vehicle to sell them as well. So I see a bright future there. And just the foundation here, you can see what possible customer or current customer they have, very similar to what we have as well. So they are trusted in the business. So it will be a fun journey to get them into MilDef and see what we can do with them as well. I will not talk about software. We have Fabian here, so go into solutions instead.

How do we see on solutions? Solution is when we're turning technology into defense capability. There where we have our services is project management, system engineering design and integration services. Here, we work side by side by our customers. We understand their needs, and we transform that to a solution to get the effect on the field. Of course, we integrate as much of the MilDef hardware and software we can, but we are also honest and select fit for purpose, and it can be third-party products as well, both on the hardware and software side. Otherwise, we don't can deliver the full effect. MilDef is still a small player, and there's a lot of things that we need to add that MilDef can't do.

So we do the customers need, deliver the full effect, and we take responsibility of full life cycle management there, and we can maintain it over time. So here, this is about taking responsibility. We need to offload the customer. We take full responsibility for system design. We can also enhance the defense capability by doing this and offload them with capacity. We come up in the value chain, more strategic partnership. We can be more proactive by doing this even when we develop the software or the hardware and have the products ready when they need it because we have the information, we have the strategic partnership. It will be reduced complexity for a customer.

They have one guy to go to, one person or one company taking responsibility that handle all the sub-suppliers. And they can get tailored solutions, and we try as much as we can to use our standardized products, which mean we can reduce the lead time to deliver full system. So in the end, of course, there is -- it should be a win-win situation for us and the customer. We can create this for customer at the same time, enable more sales of our hardware and software.

But then to the question I started with, what's behind the product? It's not only about what we deliver, the products, hardware, software and services. It's also about how we deliver it. So what customers are really buying. I would say it's very important to have the right technology and deliver it. It's equally important to have the right capabilities. The customer need to feel certainty and trust that we deliver in time and we deliver something that work over time. Otherwise, it doesn't matter what we have -- what products we have and what technology we have. So the combination here, capabilities and portfolio is extremely important. I can say it's 50-50 here, how to successfully get into the market. And how do we do that then?

But we have the full MilDef design house, and this is valid for hardware, software and the solutions. We have the capability here to actually customize to fulfill the customer requirements. We can do that based on our standard products, the portfolio I showed, that's the basic for it, that every single platform out there have their specific requirements that we need to take care of or specific setup, specific configuration. So each delivery almost needed to be taken care of the MilDef of designers. And there we turn the standard products into a customer-specific product, a bespoke product that actually feel that's exactly what we need, and that's the value we add here.

And it's our modular design on the inside of the product or in the software that make us able to do this in a competitive way. So in this approach, with our full responsibility and owning the process from concept to design, verification, manufacturing delivery and support and aftermarket, we have the -- we create the trust that we actually can do it, and we can ensure the fulfillment of the customer requirements. So this is really, really the unique selling point that we do that in-house. We have the experience, we have the competence to do this. And we can take -- and I can feel confident that we can take the responsibility to do this over time that the products fulfill the customer needs and will work over time.

But then it's about doing this effectively as well. It's easy to just put in a lot of people and do more and more and more, but that's not scalable. So how do we do this in an effective way? Yes, I have mentioned it, is our modular built up. I mean, we have built up -- we call it IP bank modules over time. We have been in business for more than 25 years. We have a really big technology IP bank, we can combine to create a lot of new products. And that's a prerequisite to actually have an effective design house because we don't have to be innovative and develop complex products from the ground all the time. And I would say it's the foundation of the delivery for each delivery.

So of course, we have the modular technology where we have proven building blocks, and I think that's really important. Proven building blocks means that they're already out at customer. It's building trust at new customers. And they're already proven and designed for all domains. So there's a big customer base to actually target. And then economy of scale. We don't have to sell the same product every time to get the economy of scale. As long as we are really good on reusing the building blocks, the proven building blocks, we can get the economy of scale. And that means many customers, many computers that we use the same building blocks, we get the economies of scale. We can get higher margin.

We can be more competitive in the market. And I mean, it also -- we can share all the overhead on more customers, more deliveries, and we get really competitiveness here. And then reduced time to field. In the times we live now, everything is about delivery on time, delivering as quick as possible. By doing this, we maybe don't have to do a real prototype round. We can do presales direct because it's so proven. It's already tested. We only have to change some small things and we can get out of market. So here, we can go from ID from customer demand to deliver out in the field much, much quicker than if we didn't have this big bank of modules.

And we can do it without compromising the quality and compliance because it's proven and already used modules. And then I think also it's much easier to get return on investment in our R&D because we can focus the R&D in smaller part on technology, not new products every time. So in that sense, we work very close to our customers. We get ideas of what they need next year. We can do it in the smaller modules, which we can implement in many products. So here is the thing. We say that our customers pay for most of our development, and we can just invest in the small modules in the really edge technology that we don't have in the module bank.

So I would say this is really our competitive edge towards customers because if we look on our big competitors, it's usually the big primes in Europe. They have the same capability as us. But usually, they are limited in how many customers you can have. The big primes will not sell to another big prime because they are a competitor on platform level. We can have all the big primes as customers. In that sense, we can get up in numbers, in volumes. And in the end, we can do those products much cheaper than the big primes can. And in the end, I don't understand why they shouldn't select MilDef.

So in the end, coming back to what I said, what customers really buying, why are they coming back to us? I would say, most important there, we deliver on promise and that we can do by our competence, our experience and our proven designs. We have to understand -- not only on technology, we also understand the mission where products are used. We can help the customer to select the right technology and doing that thing. I mean, deliver on promise is about integrity and integrity is actually one of our core values in our culture as well. We do what we say and we say what we do. That's important for MilDef, and that's why we are here today, I would say. That's the culture.

Then the mission-ready capability, I already mentioned it, it's proven. Our customers trust it. It's ready to go out there. And then maybe the most important in the whole MilDef, the people, people who deliver. Committed people that always do walk the extra mile. They are unafraid to challenge all the usual out there, how the big companies do. We say we are still a small company, still want to be agile, still do a little bit extra that you maybe not always get from the bigger companies. And then we are flexible technology. With that, I mean, we always find a solution. We are still a tech company. We have a lot of people with great competence and great ideas.

We always find the solution for a customer. And together with other things, that's fantastic. So here and then, I think this is why the customer come to MilDef and why they come back in the combination with our portfolio and how we can deliver it. And this is something I'm really proud of. So that's fantastic. Then in the end, I also try to change our view of it. We're talking about competitors. So what's the strategic advantage for MilDef here? Why can it be hard to get into the business? I mean, MilDef has decades of trust. We have delivered to those customers in many, many years.

The trust that we will deliver on promise that we will do these things, not just what we say. We're close to our customers, both all the time to understand the needs, what they need in the future, develop the portfolio, but we now also build up local delivery capacity. So we have sales locally to understand the need. We have engineers close to the customers, but now also a capability to develop and produce manufacture. We have a redundant supply chain. So our supply chain is not one single. We have 3, 4 different supply chains to be able to not stand falling only one. And then I think -- I need to think that, but our combination of hardware and software solutions are unique.

The combination there is that we actually can take responsibility for the backbone of the tactical IT. We feel really comfortable with doing that. And then we have the agile innovation. We are still the small company. We're still doing what customers need, but we're really good to do that in a way so we can reuse that experience and that development in many customers and share our experience and help them to get up in capability. So with that said, I would say, if this business would be easy, then it's nothing for MilDef. Complexity is actually our edge. It's not our challenge.

That keeps us in the position we are because this is not easy. So I said that, I mean, last year, I said, MilDef was founded on 3 principles. So going back to that, I'm quite proud to say that we're doing the growth we do. We still have the same focus. So it's military focus, it's digitalization, tough requirements and the ability to deliver when it truly matters. So I'm really proud to say that we grow and stay true to our core, and that's fantastic. I'm proud of what we have done and what we will do in the future. Thank you very much.

Thank you so much, Fredrik Persson, CTO and Deputy CEO. No doubt, a lot has happened in 12 months where you started since the last time we were in this room. We're 20 minutes short of a coffee break. So we know that we'll get some energy up in 20 minutes. But before that, you have followed us, some of you may be from 1997. More likely you have followed us since the IPO in 2021. And then you know perhaps that we have made 8 acquisitions over these years. MilDef has purchased 8 companies. And today, we meet 2 of those. And in 2021, we purchased a fine consultancy firm, Sysint in Norway, Oslo.

And Sysint carried a true gem of a deployment software, namely OneCIS deployment software into the MilDef Group. And here to explain the somewhat intricate story behind the unique selling points of the OneCIS story is the actual technician, the brain behind this much today sought-after software that is today not only used in Norway, but in other countries.

So before I give it all away, Fabian, I want us to give a warm applaud to Fabian Forster, the inventor.

Thank you very much, Olof, for that great introduction. I'm Fabian Forster. I'm the Business Manager for our OneCIS product, and I've been tasked with trying to explain our software in a nontechnical matter. I'll do that in about 20 minutes. To start off, we'll give a short film to introduce the product. So please run the film, Eric.

[Presentation]

Okay. So some of the challenges that we are trying to solve with our OneCIS product is that we see an increased digitalization of the battlefield. Software and complex systems are being introduced in the battlefield. This increases the IT complexity at the tactical level. And it's difficult to have subject matter experts in the first line of defense. Another thing is interoperability with allied forces. And what does interoperability mean? The word has been used many times in this presentation. It's not -- in simple terms, interoperability is the ability to work together to create a common situational awareness in the battlefield.

And to do that for the computer systems, we need to configure them according to NATO standards, and we need to follow NATO procedures. So there is no magic here. There's a lot of good standards out there that NATO has published, and we need to make sure that those computer systems are configured accordingly. Another aspect is the adaptation of new technology. Things are evolving faster and faster. And it's a hard time for the defense to adopt all this technology. And we think we have some good solutions for that. And the conflict today shows us that operational resilience is more important than ever.

We need to create computer systems that can withstand over time because conflicts can last for a long time as we can see around us. So our software, what is it? Well, it is a software for automated deployment of IT systems. It is specifically tailored for deploying in the tactical domain at the tactical edge. So we have created a software, a software framework that can automate that deployment and create an IT platform that can host those applications and services that the soldiers and war fighters need in the tactical field. In comparison to our competitors, our product is hardware and software agnostic, which means that we can integrate not only on MilDef ruggedized computers, but we can also integrate on more civilian computers.

For instance, if you're in a command post, you can use civilian computers. If you're in a main battle tank, you will use fully ruggedized computers. We give our customers this flexibility. We are also not tied to any specific battlefield management application or command and control applications. We are agnostic, so we can onboard the preferred applications that our customers would like to use for their use case. As part of the configuration, we automatically configure the system based on the classification level that they are going to use. So we'll add that security hardening to make sure that it can operate for classified military IT systems.

This open and flexible design makes it easy to reuse this IT platform or IT foundation across multiple IT systems. So our customers can use our software not only in one system, but in multiple systems. The advantage of that is that you can train your personnel, and it doesn't matter if they're working in air, sea or land, it will be the same IT foundation being reused, as Fredrik was talking about, this modular design. So once this is a module that our customers can reuse in multiple systems. So if you're in a CV90 or an MBT, it's the same IT platform. Maybe the hardware and applications are different, but the IT platform is the same.

And the gem in the solution is that we configure our services, the ones that we provide with our offering, the core services as NATO interoperable. That means that when they connect into a NATO mission network, they're able to communicate and federate with their allied partners to create that shared situational awareness. The key selling points for our products to try not be technical, is rapid and robust deployment. You don't need those subject matter experts. You can be a generalist and you can use our tool to deploy the software and configure the system. We reduce the complexity through standardization and the automation that we provide.

And through this mobility that we can help our customers create, we can help them increase operational resilience. And this is my personal opinion. With the flexible and open architecture, there is easier ways for our customers to integrate and adopt new technology, and there's less of a vendor lock-in because if you want to select another battlefield management application or another command control application, it's easy to change those products. We're not locked into any vendor on that side. And it provides a NATO fast-track interoperability for the core services, and I'll come back to that in one of our customer reference cases.

Once it started back in 2019 when we were contracted by the Norwegian Armed Forces to create, develop and maintain their tactical IT platform for their deployed mission networks and their tactical information systems. So that's when the journey started. We had our first deployment in 2021. So it is a fairly young product, but it's evolved really fast. And today, it is the foundation for their battle space management and command and control systems across all domains. We are especially proud to be here in Sweden and talk about our Swedish delivery. We have a record speed delivery.

We were contracted in late December 2024. And within 3 months, we were able to deliver a NATO interoperable command and control system onboard a couple of vessels in the Swedish Navy that joined the standing NATO Maritime Group. So that was a record speed delivery of about 3 months. We're also supporting the armed forces in Sweden with deployable mission networks so that they can deploy those NATO interoperable systems. And we provided a fast track for NATO interoperability. In these projects, we've used our OneCIS software together with hardware and system integration services delivered by MilDef. We also have 2 other countries.

We are unfortunately not able to disclose those names today, but maybe later, where we support them with their mobile deployments and mission networks. It's their foundation for their tactical IT systems. And for those -- both those nations, it has been a fast track for NATO interoperability as well as it has been for Sweden. For one of these nations, we also provide a digital twin. We provide a digital twin that can be seen as a copy of what we would see in the tactical level, but it's hosted on the data center so that the officers can do their training and they can do simulation and operational planning from their desktop computer. The environment they see is identical to what they'll see when they're deployed in the battlefield. So this is a very efficient way to do training, simulation and operational planning.

Moving forward, I think these are the 3 key elements for us. OneCIS is, as I said, a fairly young product, so we need to evolve it to support a richer ecosystem of software and hardware products. So that's a process that's going on to meet customers' demands and to be able to support even more capabilities. Evolving our products will enhance our ability to support multi-domain operations. As an example, onboarding command and control applications for the air domain would give us a better standing within the air domain, of course. So this is something that we're continuously working on.

And once our product is now beginning to mature, I think it's about time that we start expanding our marketing initiatives, targeting NATO countries and also prime system integrators because there are many huge platform deliveries, as you know, where we will not be the prime, but where we, in partnership with the bigger primes can offer a complete C4IS solution to the customers.

I will be around for the Q&A and also for the lunch. So if there's any technical questions, we can take those then. I was a bit ahead of schedule, I see. So there is a good time for coffee.

That's perfect. Nobody gets worried about if times are shorter. So thank you for an excellent presentation, Fabian Forster, the inventor behind OneCIS. Thank you for that. And just like Fabian said, he will be during the -- participating in the coffee and the lunch and the Q&A session, which will follow.

And by the way, thank you, ladies and gentlemen, following our live broadcast online on YouTube. If you have questions for the Q&A, please address them to [email protected]. You'll find my name on the web page and my e-mail address, I'm the Head of Investor Relations. So please write me questions if you want them relayed during the Q&A. In the room, were you there, raise your hand.

So we're at the halfway station of our show today. We have learned lots, and we will learn much more in the second act of this show after the coffee break. And I will now change timing a bit and say that we will be back in 20 minutes, 10:40. 10:40 is the time when we will revert into the room, and we will crash on the webcast. We will then travel into how we sell and to whom we sell, and we will make a very special field trip down south to Lichtenau and Hüllhorst in Germany to visit our recent acquisition, roda computer GmbH. So thanks for watching so far. Have a good coffee break, and I'll see you in sharp 20 minutes, 10:40.

[Break]

Ladies and gentlemen, welcome back to the Capital Markets Day hosted by MilDef 2025 edition live broadcasted from Stockholm. We're in this room with many lovely guests today and online with several hundred participants on the webcast, I've learned. So thank you, ladies and gentlemen, on the webcast for tracking along on the exciting MilDef journey, the fast-growing Swedish tech company.

We will now venture from what we sell into where we sell it and how we sell it. And you all know that we are brought up in the Swedish Nordic context, started in Helsingborg, traveled out into Sweden, traveled into the Nordics, traveled out to the U.K., U.S., and something very exciting and transformative happened in 2025 in this spring. That was when we purchased and acquired the German company, roda computer, GmbH, truly transformative acquisition that in one stroke makes MilDef almost twice the size in turnover this year. So we'll get back to that story in a few moments.

But first, we will talk about sales and marketing, and we will do it together with our Vice President, Nordics, a gentleman who arrived in this very room 1 year ago for his first working day for MilDef. Please welcome our Vice President, Nordics, former Gripen fighter pilot and Saab long-timer, Mr. Magnus Hagman. He gets an applaud, doesn't he? Yes.

Thank you, everyone. And what a year has been with the reference that Olof just made; well, it felt almost like we went supersonic over this year. And I'll try now when we go into my part of the presentation to go subsonic again to keep you all within the aircraft and not leave you on the ground.

Yes, I started 1 year ago. And with that, I came in and oversaw the Nordic business. The business that we do, you've seen this slide many times, it's the distribution of what we do. Well, it's true to the core still. Our business is based on the hardware provisions. That's where we come from. That's how we evolve our offering. Solutions, we're growing into that. And the portion of solutions will remain, maybe even grow a little bit, but that's where it sits. On the other hand, MilDef, Daniel just talked about it before, the growth path that we're on, there will be a substantial volume increase when you're making out 25% of a larger volume.

And Fabian's sharing of software represented by OneCIS, which is the nugget in our solutions suite, where we actually bring true capability and interoperability to the customers. The organization, sales and marketing, although not on the screen. So I'm overseeing Nordics, but at this presentation, I will also bring you in on the remainder of MilDef, where we are in the other parts of the world and how we address these different regions and markets. We have, as Olof shared, staff in Sweden, Norway, Finland. We have our long-standing presence, our origins here. We're engaging in Finland. We have representation there, and we're engaging in the Baltic countries.

This is where our sort of engine is for the sales organization going out into MilDef Group. With the acquisition of roda, we have reinforced our presence significantly in Northern Europe. We now have a second engine with -- from sales within the sales department of roda and growing into the Nordic -- North Europe, Western Europe and Eastern Europe through that foothold. In the United Kingdom, we have staff located in the U.K., covering the U.K. market. And then in North America, we have staff in the United States engaging in the North American markets, predominantly for the U.S.A. But of course, we need to cover Canada as well since it's an important market, part of NATO. But what has happened? I mean, we talked about 1 year.

Olof was a little bit wrong. It was my second workday at MilDef, not the first. But anyhow, no, so just what has happened in 2025, a lot. And just some notable things, looking into Nordics, some Nordic flags here, as you see, but we also have a U.K. flag. I mean, in April, we landed a refurbishment IT rugged equipment order north -- well north of SEK 100 million, followed also in April by for an undisclosed customer, provision of IT equipment through Westek, just as Westek had been part of MilDef Group. In May, we relocated and co-located our Oslo and Greater Oslo offices into one in the very center of Oslo, close to the central train station and close to the defense cluster that is in Oslo, on [indiscernible].

We had the Swedish -- former Swedish Supreme Commander, Micael Bydén, giving a speech and talking about how cross-border cooperation and regional cooperation becomes more and more important to ensure that we can -- that our governments can buy European. In June, we landed an order of significant value with Kongsberg Defence & Aerospace. The team has worked with this order for a very long time, worked closely with Kongsberg. So why is this a little extra? Because I will remain on this one just for a few seconds. And that is that it changes MilDef's position in relationship to Kongsberg and Primes. We're now part of the provision of capability of a suite of capabilities to an add defense system that Kongsberg sells on export.

And in July, we landed the first OneCIS order for the Swedish Army that came originally, as Fabian talked about, Swedish Navy in the early part of this year, but now we're going into the volume of the Swedish Armed Forces, which is the Swedish Army. And we see a volume ranging between almost SEK 140 million up to north of SEK 200 million, depending on how the Swedish Army will call off options for this contract, but more to follow. So how we build and demand, and how we sell? I think almost everything I'm going to show you now has been said by my colleagues, but repetition is key. So we do it again.

Trust, long-standing relationships, personal relationships, willing to listen, willing to be there, willing to do walk the extra mile. That's what's MilDef. That's what we're doing. And that's what actually creates the demand to continue working with MilDef. We prove and have proven over and over again that you can depend on us. We deliver what we promise and we deliver on time. Yes, it's challenging sometimes and demands might change mid-program. We do our best, and we do it in discussion with the customer. We customize to make sure that it fits both our road map and the customers' needs. Our B2B customers mentioned one, we talked about Kongsberg now added into a different modus with us than they've had in the past.

But there are several other primes that we are targeting. We -- also with the software, we will start having more in-depth discussion on how we could with our software be part of their total solution when they offer it to the customer. Tenders is not a large portion of our business today, but we still keep track of it. We need to ensure that we are up to date on what's going on. That's not only to address business, but also to gain intel, especially in markets where we are not as present as in Sweden and in the Nordic countries.

And finally, of course, marketing. There are multitudes of things that we do. We're beefing up our marketing team. We will add resources, but more important, knowledge and tasks on that marketing team, especially on the demand generation side. Our market position, not dissimilar to the previous picture I showed on presence, but we do a little bit different and we address the market a little bit different depending on which region we look at. And if I start with the Nordics and Baltics, here, we address the market with a full portfolio going straight to the end customer. We base our discussions on the long-standing relationship that we have with end users and the authorities that acquire these systems.

We take on a large responsibility in the deliveries, and we are asked to grow that responsibility. Finland and the Baltic countries, we have presence, we have business track record, but it's not on the same level currently as it is in the other Baltic -- in the other Nordic countries. Our share of wallet, if we look at the part where we -- that we could address, it's smaller in these countries, and that will be addressed going forward. For the DACH region, spelt out Germany, Austria and Switzerland, we now have a solid foothold with roda being part of MilDef Group.

MilDef has been doing business for quite some time in Northern Europe, Eastern Europe and Western Europe, sometimes through partners, sometimes on our own, but lots often in partnership with roda. The relationship with roda and MilDef goes way back, so it's evident that we have been -- it was a quite easy onboarding, I would assume. But more importantly, the relationship when it comes to sales is already there. Rest of Continental Europe, we continue to view that part of Europe as hardware business mainly, majorly done through our partners that we have out in Europe. In the United Kingdom, our operations, including sales, is predominantly centered around the provisions of our products to U.K. armed vehicles and platforms, tracked and wheeled vehicles. But as Fredrik said before, we're not limited to that.

We have examples of that we are in the ad domain in the U.K., et cetera. But now with also Westek being included into MilDef Group and that part of portfolio complementing our offering, I see options of growing further in the U.K. And last but definitely not least, North America, it's predominantly hardware sales business to business. But as I think everyone of you know, the American market is massive. And therefore, we have chosen to target B2B because we feel that, that is where we get the quickest effect on our efforts in the current landscape.

Competitiveness. Is MilDef competitive? It sure is. We see us today as kind of unique. We offer a combination of hardware, software and services into solutions. And in certain markets, I would argue that there is no one within the IT sphere that can match this. There are international players, multinational players that could do this, but they don't have the local footprint. They don't have the trust and they have the culture and knowledge to come into the relationship that we have, again, our long-standing relationship. But our offering has grown. I mean this is why we have this unique position. And the combination of what we have in our portfolio, we can sell it separately, we can sell it in smaller combinations or the full suite.

This gives us a unique position. The hardware portfolio in certain aspects, especially business-to-business, we still are -- see a preference to stick with our hardware provisions. But that's where we are selected because of product adaptations. The customer can get what they need. They can change peripherals, they can change connectors. They can change how the equipment is to actually perform. And the customization comes with that as well. And our long business track record in the Nordics and Germany gives us this position, again, reinforcing our position as unique when it comes to provision of IT solutions to armed forces.

Some of you may recall that this picture or a very -- a custom to this picture was already brought up last year. And what we're trying to say here is that we have customers and relationships on all levels. We have direct relationships with end users, with the business government authorities, but also with global primes as well as that we have partners that support us in markets where we may not have the capacity to have local presence, where we still feel that we want to be present. And many of these examples, I had a multitude of logos and had to choose a few. So if anyone in the audience feel that we should have brought something else up, it sure is on the other page that I deselected. But what are we doing and how do we prove this?

Well, we have a couple of customer references. One of -- what we have seen in media and in our press releases repeatedly coming back is the provisions of hardware to CV90. And we are doing this directly to BAE Hägglunds, but also in combination when we're providing cybersecurity to these vehicles together with our partner, Clavister. And what we are doing here is that we are providing the hardware, and they are loading it with their cybersecurity capabilities and giving these vehicles the protection they need also in this area. The units on order are exceeding 1,400 and more to come. I'm sure the CV90 is unparalleled success.

And the unfortunate events in Ukraine that has been going on or events not even war that's been ongoing for now 3 years, it's showing that CV90 is what an armed forces need in matter of mobility and protection. In the U.K., this MIV program together with Rheinmetall and BAE Systems have grown for us. We've added further capabilities, further products into this and continuing the deliveries over several years to come. One of the key elements of this is the local presence. It's approved supply chain. We're doing local manufacturing, testing and through live supports. Make U.K., like many others is here to stay. We need to be local in order to be successful.

And my final customer reference is stealing a little bit of thunder from Frank coming on the stage later, but I know that he's allowed me to use this one. And this is how we provide hardware to the German armed forces and that we are supplying the latest technology and through form-fit-function design philosophy actually put us in a very good spot with the customer. That's actually the enabler for this to happen. We see continuous deliveries of this with the possibilities for further growth in additional orders later on. But this is just one of our -- these 3 in total are just a few of many reference that we can bring forward. So finally, summary and outlook. We are focusing our engagements in regions and markets where we are established and present.

Yes. But we also need to continue to work through partners and be adaptive on where needs arise. Our total offering, bringing it to solutions and in that integration and installation is included, it allows us to provide a capability to the customer, not just a product. And with the growth in the Armed Forces demands, the time or the pace that they have to now pick up, the European industries are fighting over resources, a quick capability ramp-up. It means that we are suited to take on a larger responsibility in these programs in partnerships with the primes.

Yes, we might sometimes compete with a prime in a selective part of their portfolio where there might be a slight overlap because of that we have the full range of IT solutions. But at the same time, we are partners in many other aspects and sometimes full suppliers to these primes.

So it's a finite market, the European defense market. And we need to stay true to our core and at the same time, provide the best service that the Armed Forces should have.

Finally, reference back to Fabian's presentation, which I found was very good and not technical, Fabian. So happy for that. We will, of course, get feedback later on, so we'll see if people agree with me. But the increased interest that we see across Europe on the OneCIS platform. That's the X factor for market development.

In parts, we can address this through the provisions to prime, that in turn -- so when they win, we win. But we've also seen in the Nordic markets that we can do this ourselves. And the pace that the Armed Forces require when they want to have a fast track and get this deployment, then we need to rid ourselves of layers where the Armed Forces actually end up in a situation where they get the capability, but they get it too late.

So I'm leaving it hanging there a bit, and I think we will come back later on in other forms on the OneCIS definitely. Thank you.

Thank you so much, Magnus, and apologies for saying that you've only been in 1 year, 1 year and 1 day. So sorry for that. And also a good point, feedback, we're very, very grateful if you want to give us feedback, you can e-mail olof.engvall.mildef.com as well as you can do on the webcast to relay your questions for the coming Q&A that's really coming up quite shortly.

So now we're ready to go on in the show. [Foreign Language]

[Foreign Language], Olof. Yes. I really appreciate to be here and to present roda as a new part of the MilDef Group. So my presentation will cover the typical company presentation, but I will give you some more background of this and that and what we think what is important, what we have to send out as a message. And I will -- later on, I will give you even additional information about the situation in Germany in total, what we are faced with. And I think that could be very interesting for you.

Yes. Daniel already touched this topic. So with that acquisition, we completed the footprint in Central Europe. What you see here is that we are strong in sales in Germany with 76 percentages on sales. We always try to be more successful in other countries. But the problem was that we become more and more successful in Germany itself. So that was a blame.

But together with roda SIS, we are active in France. So directly, we are active in the Benelux, in Switzerland, in Austria, in Italy and even in Poland. Rest of Europe, 16 percentages. We add to the footprint already existing in U.K., Westek. And Westek is now not under control, but leaded by MilDef Group, and this was a reasonable and good decision.

We are operating from 2 different locations in Germany. The one with the headquarter is located in the Southwest, close to Switzerland and close to France. Here, you find the main, yes, management and other administrative departments. We just opened a new office building with 900 meters square. That means, yes, we have space and we have resources even for future ramp-up, around 50% more stuff is no problem at that location.

The second location, the roda service center, Hüllhorst, sometimes we name it the workbench is located close to [ Hanover ]. Here, we just enter into -- not just in '22, we entered in a new premises with around 3,700 square meters. And again, we can increase the workspace within that infrastructure up to 50 percentages.

In total, we bring into the group 150 employees together with Westek. Roda comes with 38 years experience, so a little younger than Westek, but older than MilDef Group itself. And last year, we had a record year with EUR 83 million in total. So I already started from the beginning, roda was active in specialized mobile computing.

Since end of the '90s, we started to work with the German Armed Forces. So there's a long history behind that. And all -- always we try to come to long-term relation based on frameworks. I will discuss and will explain later a little bit more detailed.

2012, it was a very important year because I entered the company and we expanded the company with a small electronic company, and then we changed from a distributor to a true developer and production company. That's why we had to expand in 2015, the new production site in Hüllhorst. It is important to be present somehow in France when you are operating there. So we opened a sales office in 2018. And yes, the Westek acquisition from roda at that time, so that was now 3 years before, we started 2022. And last, but not least, we were acquired by MilDef last year.

Now I come to the most important, the employees and the people in roda. I highlighted the head of the manager because we have a very strong and experienced and qualified management team in roda. This team in Lichtenau are familiar with the cooperation with MilDef over years because our business was always based on a partner cross-selling agreement. So the people were aware and familiar what's coming up after the acquisition.

That was totally different to the team in Hüllhorst because they only saw some boxes sometimes they just move and that's it. And because of the guidelines of a public trade company, it was necessary that we are only allowed that we inform them one day before and it was a surprise for them, by the way.

But the picture on the right, with the Swedish flag was made 2 days after the acquisition November last year. So what we found out over the integration time, there is a strong spirit very similar to the MilDef Group itself. So it's not easy to integrate, but we have the best basis and the best people for that.

Roda stands for quality, and this quality processes and procedures are developed together with our key customers as well with the German Armed Forces itself. So all test routines are adapted to the problems or the challenges we had in the past and were improved over years and over years.

The German Quality Inspector team is minimum 2x a week in roda to check all deliveries we sent out. Another example -- or I'll give you 4 examples for the very close relationships we have with our customers. So first of all, I want to inform you that, yes, the workstation used in the Lynx and Puma infantry vehicles are cooperated developed with a so-called big prime.

And this is something -- yes, when you do this cooperated development over years because it takes 1 year of development, then you need the proof of concept, you need the qualification and so on and so on. That brings people together. Problems are very often helpful to create a closer relationship. The next example, and this is what we do with a company called Secunet. We create the so-called Sina workstation. It's a crypto client for mobile and extreme operating condition for data communication up to top secret. This is a quasi standard in Germany for data communication in classified areas.

And we did this not only for this generation, we did this already for 3 generation over the last decade. This is even a proof of trust. Next one, even not that super highlight, but even important that we are so close, we create an obsolescence solution. So for different already more or less expired, main battle tanks Leopard in different variants, they need a monitor that is fittable in different generation of a battle tank, and we made it together at -- here, we can say it, with KNDS.

The last example, the situation table, that was driven by the soldiers themselves. We come to them and show, yes, this is our display, you can use it and display the battle management system. And say, no, we need a table with a computer with some legs. Can you do it? Yes, we can do it. Within 3 months, we had this first prototype. After half a year, so we got already the contract and last year was delivery time. So that is something, how close you can work with the end user.

Yes. Sometimes roda is familiar or popular for good and fast reselling products. Yes, we are the power seller of Panasonic toughbook in Germany. We can sell these products between 4 and 8 weeks, but this is, in most cases, for autonomous use, not platform connected. For the rest, we do -- yes, true added value. That means the most of our products we ship out are customized for specific applications. And this is very important, what we started 2012, we develop and create our own external power supplies, we consigned in 90% of all our deliveries. So roda products will be delivered dependent on the complexity within 3 and 9 months.

Yes, so what's -- so we are partnering for 12 years minimum now with MilDef, but we sold products. We don't sold systems. And now with this IT system infrastructure, there's a new approach. And we already started beginning of last year of this new thinking, and we were already successful for that. So we placed new 19-inch/2 solution from MilDef into our portfolio and we pack full infrastructure or subsystem to our customers. This is a little new approach in comparison to the past.

Yes, a good reference is we already saw this in the reference cases of Magnus, the Boxer U.K. reference. So we use some of these developed and mission-proofed products even for platforms we will use in Germany.

Yes, you know that slide, the route to market structure. I modified a little bit and put on the roda glasses. So yes, we have direct contact to the end users in Germany with Bundeswehr, the suisse -- armasuisse, the Austrian Bundeswehr and the DGA. And this is necessary. You have to understand the application of the field.

We are in contact with the big primes, starting with Secunet, Rheinmetall, Airbus, KNDS, Thales, MBDA, Hensoldt and DIEHL. And yes, for countries we are not so direct active, we use distributors, Siltec in Poland, Goma in Italy, Surcom and Benelux and RC computer in Ukraine.

And these partnerships are running now even over decades. So what is important is that is not just ordering process and forget. This is something we do for a longer time. So we have framework contracts and a framework contract covers a certain product catalog. And the duration is not a month or a year. It is several years. And these agreements are existing for the German Bundeswehr with NATO, Secunet, Rheinmetall, KNDS and Airbus.

I want to give you some more details about this framework structure because it's a key word you will hear very often. Again, it is limited in time. So for the German Armed Forces and Magnus already mentioned this contract, we have a maximum budget of around EUR 82.5 million, so over 5 years.

The extension -- or no, the duration for such a framework can be maximum 7 years. What is great here is it is not only this framework, so we have additional agreements for the technical logistics support. That means we check out the compliance for next-generation solution within the time frame of their framework.

Another thing is our service and repair contract. That means all products that are sold to the German Armed Forces run under this processed and simplified repair process procedures regarding prices and even for documentation.

So now I switch to the topic, could be interesting for you. What's going up in Germany? Yes, we are faced with a historical ramp-up in German rearmament. The European Union will support the European countries with an extra budget over the next years with EUR 150 billion. It is decided that there will be an increase in Germany up to 3.5 percentage of GDP.

So they will invest in different, we call it, megatrends. And this is close connected to Daniel's presentation. Now you will hear it with my words. So there is a continuation of the digitalization of the battlefield. The key word is software-defined defense. And yes, we talk about software, but roda, MilDef products are the carrier for this kind of software.

The use of unmanned systems in all domains, air, sea and ground. Strengthen of cyber defense capabilities, use of artificial intelligence to make processes quicker and more efficient on the battlefield and sovereignty, independent supply -- European supply chain. And here, in all megatrends, MilDef and roda are represented.

So now I challenge you with a German slide. That is something you will like. So I steal it, but I want to give you some explanation because it's not easy to understand. There is from the German MOD a financial plan for the next 3 or 5 or 3 up to 5 years. And you see, starting from 2019, it is really flat. It was 1.2, 1.3 percentage over the year.

What happened in '22 was, yes, there were attack in Russia -- not in Russia, the other direction, so in Ukraine, yes. And yes, there were an extra budget for EUR 100 billion, all newspaper worte this, and we were super excited. But what happened in '25 and extra, extra something. So now we jump to 2.4 percentages, and the idea is to jump -- to ramp up '29 to EUR 152.8 million. So the budget is already approved up to '27. This is a situation we are faced with. And I'll give you one example where the investment will go in and I can use different platforms like the Leopard, the Puma, Caracal, but Boxer is well familiar, popular in that audience, so I take it again.

And at the moment, so they are much more under contract. But in operation, in worldwide, there are 1,000 Boxer in Australia, Netherlands, U.K. and Germany, 1,000 and they are much more under contract. But for the next 7 years, the German Armed Forces ordered another 2,500, so that is massive, plus an option of another 1,000. And we are just talking about one platform. They are much more.

So my conclusion, together, with the MilDef Group, there's a lift in value chain, boost of growth. Strategic Planning. So now we create a European strategy together -- the continuous improvement. So we'll take the best things of both companies and groups and bring it to one. And yes, and we make it better and better. And there's a redundant development. So yes, for production sites, Fredrik already mentioned this. So yes, there is a strong will in the company. Money is available. So we have to do our job.

That's it. Thank you very much for your audience.

Frank Scholz, [Foreign Language] Excellent presentation. Thank you, Frank. Thank you for bringing Germany closer to Sweden. We are now at the final stage of the -- final stretch of the flight. We are soon to deploy landing gear and go into the Q&A.

[Operator Instructions] But before we do so, we will look into the future outlook together with CEO, Daniel Ljunggren.

Thank you very much, Olof. Nice to be back on stage again and really appreciate all the MilDef team presenting here today. Now we have come to the point where we should boil down everything that we have talked about here today. And we should, in some kind of way, bring forward the crystal ball and see what we see coming up here in the future.

Of course, what everyone has told today, I think we have some evidence and it's hard not to talk about the strong outlook for the future. We have heard about all different components and the growth drivers that we have seen within this industry and how we are connected to that and where we can place MilDef into that journey.

Some of the biggest one, I would say, is the high demand landscape and it's here to stay. Frank was talking about the money is there, the budget is there, it's up the MilDef to make sure that we get some pieces of it. So we will probably see this high demand landscape being here for more than 10 years out in time. So it's really a good market situation that we are in right now. And on top of that, I would say, and we have heard this tons of times today, what should they spend the money on digitalization of the battlefield, creating system of systems, building this data-driven defense capabilities, that's really important in the future here.

I joined actually event 2 days ago, had an opportunity to listen into Kongsberg from Norway, Zund from Sweden, I listened to Rheinmetall from Germany, for example, and everyone in that room was talking about just the digitalization part, how they should do the digitalization of the battlefields.

And I think that what we are doing -- what our contribution to that the IT backbone that Fredrik talked about here earlier, it's a really super important component into making that happen, the digitalization of the battlefield. So really, really strong position on the market. Someone is talking about this defense tech super cycle, there will be tons of investments into different type of technical solutions within the defense, and that is how we can build strength, so to say.

And before we join the Q&A, the final -- and maybe for me, at least the most important thing, and I think for the MilDef team as well is that MilDef is ready. MilDef is ready to make it different in the European defense race of the capabilities. We are ready to be a part of building this, what someone's saying building peace through the strength, so to say.

We have a field-proven portfolio. We are long-term trusted partner within this defense sector. So we are really motivated to make a difference in this European ramp-up. That's my final word to say that MilDef is ready to do what they need to do in this building peace through the strength.

So one could say that the only thing you need to bring from this day is to remember, MilDef is ready.

Absolutely. That's one of the key words at least to take with you, but also maybe the other two, one that is really important.

Thank you, Daniel Ljunggren. We will now go into that scary moment of the Q&As where we really don't know where we'll end up. But I know that there are many talented analysts, both sell-side and buy-side in the room, so I count on many good questions.

[Operator Instructions] I will start with you, sir. And if you have questions online, e-mail them to [email protected]. I already have a few questions for Martina and Karin and also Daniel, but we will line up first and see that everything is working here, everyone is mic'd on. So you need to stand quite close to each other. That's not going to be awkward because we're good friends.

So we'll fire away with the Q&A. And I think we'll go to the gentleman who needs a microphone for the webcast audience of 200 people to track along the questions. So state your name and your question, please.

Fredrik Lithell from Handelsbanken. Thank you for the presentations, very insightful and educational, so good to be here.

Daniel, in your presentation at the start, you talked about resilience. And there are a few extra things I would like to ask about when it comes to resilience and the financial resilience you have frameworks that runs over multiple years. What do your clients feel you need to secure on a financial level, gearing, for example? Is there any discussions on that, would be interesting?

Supply resilience, who do you get your components from? Do you work more with getting supplies from sort of near shore, if you like, a popular word? And then also expanding capacity. How do you make sure that you don't trip on that very fast run you are in now? So those 3 would be very interesting.

Thank you very much for the question. And I can start with the first one. I think it's super important to notice and remember, that, of course, they are looking to their supply chain and making sure that it's resilient in all kind of ways also in the financial part of it, of course. So that's absolutely something that we need to keep track on and make sure that we're taking care of, to have a strong balance sheet, to have some financial power, making sure that we have a strong cash flow because that is something that will be important for the customer, making sure that we could be this long-term trusted partners over many years. So it's not -- you're absolutely right, it's not just about that we have this decade of trust in defense of what we're doing, how trustworthy we are is also making sure that we have the financial position to make sure that we are delivering what they are asking.

And you have to remember me some of the other questions. You were talking about the supply chain and how we can strengthen the supply chain and how we can add more of a local supply chain into that. And I think we already today have a strong supply chain. We talked about that, that we have many sources that we can use for the same components and things like that. So I think we are in a good position already today. But of course, that is something that we need to work really hard on. We need to understand the supply chain in details, and we have people that is doing that on a daily basis, tracking down the supply chain, making sure that we don't get any shortage of components and things like that, that could be impacting future deliveries and things like that.

And there wasn't an expansion part here, the capacity ramp-up and this, I think, is some kind of headache for the whole defense industry. What kind of pace should we hold in this one? And I think in some kind of way, we need to continue and we are adding on a lot of new capacities and capabilities in terms of new people coming into the business in all areas within MilDef and I think it's -- in some kind of way, I think that we have underestimated the power and force that will come ahead of us now when a lot of countries is really starting to spending the money, we have heard a lot in the news that they should spend the money, but still this sits on their bank account, so to say, in different countries. So they have not really started to pushing out the big contracts, but I think that is something that we will see starting from end of '25 here maybe going into '26. And we need to be ready for that.

But I also have stated sometimes that we can't have like 200 people on the bench waiting for the next contract. So there needs to be a balance how we can increase the capacity. And also the increased capacity and scaling up is important for us to winning new big contracts because back to the resilience, not just the financial part, the big customers, if they're going to place the big contract at MilDef that they are, of course, looking into how should you solve this kind of big contract? What capacity do you have to really make sure that you can deliver in the end. So sometimes, we need to invest before we get the contract, invest in people, invest in facilities and then we will be ready and they will be ready to make sure that they can place the big contract because we have the capacity to take care of it.

Thank you, Fredrik, for those three questions. I will actually interlace with a question from the web. You say that you grow a lot and you need to put in more muscles. But what about recruiting of personnel? What about that resource?

So I would turn to Martina Karlsson, who is the Chief People Officer. So how do we go about our recruitments need going forward? Do we need to recruit a lot? And is it difficult to get those people in?

Thank you, Olof. Yes, we, of course, need to ramp up that as well and to add more people to the company. But I would say, yes, it's difficult. But we are sitting in a much better seat today than we did 1 year ago as a lot of people want to work for MilDef. We have good candidates coming through in our own channels today comparing to what we had 1 year ago.

It is some positions that is more difficult than others. We have system engineers that we are hiring lots of. Many of them out there in the market, they have a core on software. We need initial hardware and the understanding of software. But we find them, absolutely. We do. We have -- for the first half of the year, we had 80 new employees that started. And that was only end of Q2. I haven't counted on the Q3 analytics yet. But I know just a couple of weeks ago, we had 12 new employees standing in the entrance on Monday. So we are busy onboarding them as well. So the competence are out there, but we need a lot. So we are active.

You could say that we're building a new company almost every year. It seems like it's a new company.

Yes. A lot of new people and new energy.

You have a cool job. Thank you, Martina Karlsson, for talking about that. I have a question online as well, actually oriented. So maybe that's a mix between Frank and Daniel. Could you please discuss how roda has been selling the 19-inch/2 since 2012? Historically, how much have 19-inch/2, the MilDef traditional bespoke products? How have that contributed to roda sales? What has changed since the integration? So if you're going to try to start, since 2012, you started with 19-inch/2. How much of it has it been? And how has that evolved?

So I can express this in numbers, and so that is what I remember. So we had, I put it on the table, around EUR 300,000 up to EUR 500,000 a year with 19-inch/2. And we already -- yes, multiply this by 8, something like this going forward. And this is just more or less the beginning because we see that there's a high interest in 19-inch/2 in our territory. We were not expecting this. And now we have the full support -- sales support to doing this, yes, business much more logical that it's easier to understand why or what are the advantages of these product concepts. Yes, we are at the beginning, absolutely.

Yes. Another question from Joey Friedman online is, could you clarify roda's reseller business? Is it fair to understand that 35% of roda sales come from MilDef Crete and Panasonic toughbook resales?

No. So we have our own products in Germany. So what already touched by Fredrik is the display technologies. So all displays that are coming out from roda is a roda product. And the most important is that we combine things. And even for the things coming from Crete, there is, yes, a customization part, we can even do it by ourselves. So some things well done in roda itself as a, yes, German IP.

And while we're on roda, we have questions from owners -- Norwegian owners up in Oslo. Can you, Frank, please spend some time on the competitive landscape in your key markets? What does the typical competitor look like in Germany?

Yes, it's not a one-by-one comparison. And so my answer to this question is, at the moment, the cake is big. It is what it is. So we improve our business, and we are strong in that. And so there is no direct competitor. In some cases, we are partnering. And sometimes, we are in a competitive situation, as Magnus already explained. And so it's -- yes, there are -- we are not alone, absolutely, but we are strong in our situation in Germany, I would say, #1. And yes, we can improve it.

I'm sure you can, and that's what you're working for. I think that Hugo Lisjo, who is one of the -- together with Tom and Erik, of course, and Daniel, the best defense analyst in Sweden with the Carnegie -- or rather DNB Carnegie, sorry, for that mistake. Hugo, Lisjo, we talk almost every day. So I mean, you must have millions of questions.

Thank you the kind words, Olof. You feel quite confident about the future. But to hit your 25% growth financial target, you have to add about SEK 2 billion in order intake for deliveries in 2026. How confident do you feel about this number?

I mean, I think the -- I just take the question, I mean, just jumping into it directly. I think -- thank you very much, Hugo, for the question. I think that the SEK 2 billion is more coming from your side maybe, it's not coming from our side. It's nothing that we have said. We have stated, and I can repeat that again, that I feel quite comfortable with the long-term growth target of 25% year out in time, 3 to 5 years, something like that. And I think it will absolutely be doable organic-wise. So we don't need to mix it up with some acquisition part of it.

Of course, we need to build a strong order backlog for '26 and beyond '26 as well. Now we have like the second half of 2025 to really make sure that we are getting down all of the opportunities we see out there into the order backlog. So we can plan and make -- have some visibility for the 2026 deliveries. But I'm quite comfortable that we can meet our long-term financial target upcoming 3 to 5 years. After that, of course, it become more blurry and also the 25% will be tougher and tougher in absolute numbers, of course. But I see a bright future in the 3 to 5 years coming up from today.

You also mentioned a strong order backlog. That's in for 2025. How confident do you feel in making all these deliveries of SEK 1.5 billion in second half of '25?

As I said before, of course, it's a massive amount of deliveries that needs to be done in the second half of 2025. As I said, we did SEK 1.2 billion in full year '24, and now we're going to do SEK 1.5 billion. But we have, of course, looked really deep into what that second half looks like, and we feel quite comfortable around all of the deliveries. We have the capacities. We have the planning already done. So we feel quite comfortable around that. Of course, in this business, there's a lot of complex products, complex solutions in the end. We can run into something that we can't see today. So I'm not going to stand here and make 100% guarantee that we will deliver in everything of that.

But we also have the opportunity, as we heard Frank talking about, with a shorter lead time, for example, maybe also adding something in the second half where we can have some orders and also making the deliveries before we close 2025. So there is a mix of things there, but quite comfortable around the SEK 1.5 billion. I don't know if anyone would like to add more to that question.

Now what, I mean, yes, connecting to what I said before, we have committed to those state to our customers. So there's no -- yes, a happy calculation behind that. We need to do it both from customer view and to deliver numbers as well. So we feel confident. Even if some parties stretched, it's at maximum for the rest of the year. But then we have increased the capacity after that. So yes, it will be some tough months, but fully doable.

Okay. So my final question. You mentioned that you have employed a lot of new staff. How should we think about the cost increase going forward versus sales increase?

Of course, we will need to add OpEx and that will grow. I don't think I have said -- stated before that we have quite of a scalable business. So I think adding on this capacity and taking on the extra cost will be less than we see on the top line and the growth, and what we see could be the gross profit, so to say. So we will scale this company. But there will, of course, be money expended on the OpEx over the P&L, adding on new resources and things like that.

We need to be not just relevant here and now. We need to be relevant in 5, 10 years as well. So we need to increase and we need to make sure that we can take care of this high demand landscape in a good way, making sure that all of the capacities that were coming down our way, so to say. So adding on more people, taking care of the new people. As you can see with Martina here, we have a 20-year plan for the next potential candidates. So we have a short plan and a long-term plan.

So thank you, Hugo Lisjo. And again, DNB Carnegie is really well versed on the middle of story. If you get your hand on his reports, you will sometimes know more than Daniel and I know because Hugo is really diving into the programs in Europe. Yes, sir, Tom. Tom with Pareto, also very well versed defense analyst.

a question on your local for local sales. You mentioned a lot of your sales efforts are locally based. You're strong in Sweden and now, of course, in Germany. Can you address the Baltics from your Nordic offices? Or do you need to expand geographically to meet demand there?

Thank you for the question, Tom. Do you mind putting the sound on? I don't need to use my -- yes, good. The Baltic markets need to be seen as individual countries. We all -- in the wordings, we often lump them together, but they have 3 -- there are 3 different countries with specific needs, requirements. The volume of their economies have in the past forced them also with the Russian bear on their doorstep, forced them to have joint programs, joint views on different things. My opinion about the Baltics and how to address that is mainly through our existing footholds. But as business grow in these countries, we need to be open to localize resources as well.

But from the get-go, I don't see a requirement to have a specific localized resource in any of the 3 countries. They will be, I would argue, actually better addressed if we have resources tied into the company and up-to-date with the latest requirements in the other more strong markets in the Baltic region.

Perfect. And a question on Germany and the investment increases that you mentioned. You touched upon it in your previous answers, but we saw a bit of investment delays or procurement delays from Germany in the beginning of the year, given the large ramp-up in spending. What sort of lag are we expecting moving forward? And can we see a continued delay in terms of procurement moving forward, given the aggressive ramp-up in defense spending?

Great question. So please keep in mind that the budget was not released for a long time. And this was a big, big challenge. So I have a good example I want to highlight so that for the 25 million approvals made by the German government, we had last year, 100 million. Today, we just reached 17 million. So we expect for the last quarter a sprint. I hope that responds to your question.

Yes, definitely. Thank you.

Okay. Thank you. Before we go back to the room, I have a question that I find very important. We have 45,000 shareholders. Swedbank Robur is the #1 owner on the cap table. Many, many fine names on the top 10 list and below. And for many of those, again, especially Swedbank Robur is very important with the ESG and sustainability aspect of the responsible business of MilDef.

So I'm going to go to Karin now because last year, we made a big sort of number here on stage, talking about the ethical sales and, if I may, the responsible sales carried out by MilDef. So the question to you is really the ethical compass, all those procedures regarding what countries and customers we sell to, where are we today? Has it changed going 12 months back? Are we as diligent in responsible sales as we were last year?

Yes, for sure. And also, I would state that it's perhaps easier than ever being a Swedish and Nordic defense company to focus on our core markets, Europe, Nordics. So if anything, it would be easier today to follow our ethics.

Because we can focus on these markets that we know were grown up here and we have control because we don't need to go out on a limb somewhere else. Is that correct?

Yes. And also, we haven't before either gone out on the limbs. But now it's even, for this cloud, easier to understand that we don't lose business by having an ethical stance.

Can you give us a glimpse and remind the audience about the ethical stance? How do we work with this matter in MilDef?

Yes, for sure. So we have sort of a green list guiding us, and we put that list together from independent and global indexes that guides us with regard to in democracy -- in level of democracy and respect for human rights and also corruption. So the baseline is that all European or NATO or EU countries would be on the list, but all aren't there because some of them are too low on the indexes.

And the MEC, the MilDef Ethics Committee, who is represented in this group and this jury, so to speak?

Yes, for countries then outside the green list, we have the Ethics Council to decide on whether a business should be done or not. Of course, we have sort of a red list, which is based on embargoes and sanctions and such. But in between the red list and the green list, then it's up to the MEC, MilDef Ethics Council, to decide whether to do business or not. And I shared the MEC, and there are also the Chair of the Board of MilDef Group, also the CEO and the CTO representing the business -- the further growing business and also our quality and Sustainability Director.

Thank you. If we have no further questions on this topic or we'll go back to it, we go to the gentleman in the front row. Please state your name and your question.

[ Johansson Mike ], SEB. So regarding your software offering and perhaps if I frame it like this, when you sell your hardware, what would you say that the penetration is that you also sell software? And what sort of the potential that you see there going forward?

Good question. So this combined offering, of course, makes us a more attractive partner for both prime and also the different nations. I don't think I have any figures for that. But of course, we are a more attractive offering because we can provide a more complete solution to our customers and the primes that we work with the partners.

If I just wanted to add something there, I think it's worth mentioning also that our software, the OneCIS, is a strong enabler for selling more of the hardware where we can sell a combined solution, so to say. And it's also an enabler for getting into new markets, new countries, new customers that we maybe don't have a business today, but software can be the one that takes us into that market, and then we can come also with the hardware and also maybe the solutions offering in the end. So it's a strong year. The combination is strong. And we can -- the software is a strong enabler for more hardware.

And then second question on the new facility in Rosersberg. I think you said it's supposed to be up and running in end of Jan '26. When do you sort of expect to have the...

Two weeks from now.

Two weeks from now. Okay. But still, when do you sort of expect to have a sufficient capacity utilization at that facility? And do you expect to have a backlog that could fulfill that for 2026? Or what do you see there?

I think we need to see it like we are really ramping up, and also we'll take a little bit time to come into the new facility and make sure that we are running at full speed in that one. There will be a move from the current facility into the new one that would take some time. I know that they are also not interrupting with the current project they are working with right now. So they will try to do that in the old facility, making sure that they can deliver from that. And then they can make the move.

So this new facility is not about being up and running at day 1. It's a long-term investment MilDef is making in to be one of this, as we talked about, the primes in system house, tactical IT, also doing the integration part of things. So it's a really super important investment over time, I would say.

And perhaps maybe short term, do you expect that sort of ramp-up to have any impact on the margin side? Or what do you see there?

I think so as well. I think that is a very profitable business that we are doing there. The integration partner will have a good boost of the gross margin and also the EBITDA margin going forward. And I think also by increasing the capacity, we can also be more efficient in what we are doing. And what I hear from the project management at the site there, when you can do 4 different platforms at the same time instead of just doing one, you can save some time and you can save some money. We can be more efficient, and that could, of course, then give us the margins in the right direction.

I have a quick one from the web. I have a few from the web now to Fabian. Can you explain briefly the business model behind the OneCIS offering? Is it a recurring license-based model? What is it really? Or is that a half hour discussion?

No, no. I'll try and connect it together. Well, of course, there's a license. It can either be a perpetual license or it can be a subscription-based license. Then we have a maintenance agreement, which covers the updates and development and new functionality and capabilities of our products. And then finally, we have integration projects because all customers need either a smaller or larger adaptation where we integrate their products and their security requirements, et cetera. So there will be one or more integration projects for our customers.

Thank you. And the question coinciding with this almost is from another person in the audience. What is the -- and this is for Magnus, I think. What is the aftermarket strategy to increase their revenue stream and retain the customer long term? Aftermarket strategy.

Yes. Well, we are already retaining our customers. So what I would assume that this question drives that is how do we actually increase revenue and recurring revenue over time besides these contracts that already come. And we have today already an aftermarket offering, allowing the customers to add different services, et cetera. But I'm not going to dwell into that strategy. I'm actually going to come back to that question because it's under definition. It is an area, which has my attention.

Thank you so much. And this question is probably for Daniel. Defense stocks seem to trade negatively with peace talks progressing, and that goes every other week. Looking at spending trends in the future with current macro backdrop, would a permanent peace in Ukraine tomorrow and not a prolonged war be positive or negative for MilDef's revenue going forward?

That's a common question that we get from time to time. And first of all, I just want to say that I think we all in this room really want to have the peace and have the peace deal and have -- or at least some kind of ceasefire in Ukraine-Russia conflict. But with that said, I don't think even if we see a peace deal, I don't see that the European defense ramp up will stop. I think we will continue. We have realized that we need to stand on our own legs, and maybe a peace deal or a ceasefire maybe could increase the threat against the rest of the Nordic and European countries instead.

So I don't really see that, that will have an impact on the defense budgets going forward. We are now in this landscape where we really need to invest. We need to pay for the underinvestments that we have done for decades going back. So it's not going to stop. How long in time? Some people are talking about the full generation out in time, someone is talking about 10 years, some is talking about 5 years. I don't have more crystal ball. But at least 5 to 10 years, I would say, is my statement that we will continue even if we have a peace or not there, but we can all keep our thumb for a peace deal.

Thank you. I will now close for the online participants. I will close the Q&A send-in of questions, and we will finalize the questions in this very room. Tom, go ahead again. He needs a microphone, back in the corner. And we're about to land the bird. So only a few more minutes before we have lunch and more time to talk to my lovely colleagues. So if you have questions, prepare them now. Tom, please go ahead.

A question on replacement cycles. Have you seen any shortening of the replacement cycles, given the increase in time actually using your products? Or is that still the same if you compare to, say, 5 years ago?

Let's part you and part me, I am saying.

But we see, of course, there's a parallel ramp-up there as well. There is a lot of things that need to have effect today, then you need to update the existing platforms. Some is donated to Ukraine, for example. And under time, you're waiting for new platforms. You need to update it and keep them the same level on the digitalization. So we see that in parallel. So it's always volatile when you compare them, but we definitely see an upgrade of existing platforms as well.

But the existing replacement cycle is some 5 to 7 years, is that correct?

Yes. It depends on the products. It's yes 5 to 20 years. Yes. So very, very hard to say.

But if I'm to add to this is that as we see, I mean, Daniel showed that we're late cyclical. And it means also that the Armed forces have started to use their existing systems. I wouldn't be surprised, and we -- I see some tendencies that the programs for replacements are larger than they used to be. That's the reference I have from the past as well, I mean, the volumes. But that's partially because a larger volume of the fleet, if we talk a fleet or what you have in your total capacity, it needs actually to be up to war standards than it has in the past.

You've been able to accept that certain units have the latest and greatest capability and others are on just waiting, and they might even jump the cycle and we take them in the next leap if required. Now the discussion is how do we lift the complete fleet? So it's rather volume than actually increased cycle. But I wouldn't be surprised, and that was the sentence I started, that as the Armed Forces now start to ramp up their capability and use the systems, of course, the wear and tear will burn through.

Thank you, Tom. Ladies and gentlemen, that concludes the Q&A session for the 2025 Capital Markets Day. I will ask Daniel to stay on the stage and the rest of my lovely colleagues, give them an applaud and a warm hand and thank you for participating.

Thank you, Olof, and I'm not going to take too much of the time. I know that some of the people at least in this room is waiting for some well deserved lunch outside in this room. But I just want to take the opportunity to say thank you for the MilDef team, really good presentations, really good offering you have put into this day today. I want to say a big thank you to Olof, who is really taking the lead on this show and be really driving this in a safe and good way, so to say. So a really big thank you for contributing to this day today.

And finally, I want to say thank you to all for coming here today, listening into our story, following the MilDef journey. And I hope you -- we have some shareholders in the room as well and contributing on that side. So a great thank you to all of you. And now you will have some lunch at least here. And online, they need to take care of their own lunch, so to say.

Absolutely. Thank you so much for participating on Mildef's second -- not the first, but the second, but the first web broadcasted online show today. My name is Olof Engvall. Please reach out if you need me to facilitate and navigate you in the continued MilDef journey that you are own on as shareholders.

So take care, stay safe. Thanks for now.