With Scandinavian Astor Group on the H1 figures which were released this morning. I'm about to hand over to Wictor Billström, the CFO, just as an information. After the presentation, this is going to last around 30 minutes. You have the ability to ask questions. You can do this by either pressing the raise hand, and then we will unmute you and you can ask questions, or you can type it directly into the Q&A box, and we will take them one by one. Without further ado, Wictor, please go ahead.
Thank you. Yes, first of all, I hope you all had a great summer. As a true Swede, I never left the kingdom of Sweden, so you have to bear with me that my sun tan is as white as my shirt here for 45 minutes, but hopefully that will be okay. You will have some nice numbers to look at at least. Yes, for those who don't know me, I am CFO for Scandinavian Astor Group here since about two years now, a little more. I'm also one of the biggest shareholders in Astor. Astor in brief here, you see this picture before, and the numbers keep getting higher. That is, of course, because we are progressing in what we do in sales and in M&A.
Pro forma, I will come back more to that later, but our net sales is about SEK 460 million in 2024, full year alone. One of the most important things here, I will come back more to that later also, and I hope you will ask questions about this, but the most important thing here is that now we have an M&A coffin here or investment firepower here of more than SEK 450 million. We can definitely be very active in both the M&A space and the investments we're looking at to expand the current businesses. This is very important because in a lot of dialogues we have had, they ask if we have the resources to make acquisitions and to complete a deal in a quick fashion. Of course, now we have that. This is very important for Astor, I would say. We are now in four countries.
Market cap is roughly SEK 2 billion. Employees, we are about 200 now if you include Ammunity, but not including Nordic Shield Group here anywhere. The rest of it, by now I think locations and the shareholder base is continuing to grow, and we are happy about that to have you on board. Moving over to the business areas, we still have the Astor Tech, the Industry, and Protect. The Protect is the latest one. I hate to leave you hanging here, but Astor X, you have to bear with me that, hopefully it will come in a not distant future, but it's not ready yet to go into that. Here is a little overview if there are any new listeners here or viewers. If you don't know Astor, this is a neat overview of what we do.
As mentioned here, we have the Astor Tech business area and a few pictures on that one. The ScandiFlash, Ocellium. We have the Astor Industry with a lot of, you know, subsuppliers to the defense industry and to the industry in general. There's a lot of civilian part on their sales as well. Then we have the Astor Protect, which now includes Nordic Shield Group and in a not too distant future here also Ammunity, we hope here. It's progressing. I'll come back to that later on here. Here are some recent and coming events. Up in the left-hand corner there, you can see Astor Group. We were present at the Dalo Days. It's a big defense exhibition in Copenhagen. Down in the left-hand corner here, you can see a new, very exciting collaboration we have entered into with an Uppsala-based battery company called Alpris.
We were showcasing their batteries at Dalo Days, and we will continue to do that on the other exhibitions here we are moving to. You know, the sodium-ion batteries are very interesting because they are non-toxic, they are non-flammable, and they are made from abundant materials, so they don't need lithium and cobalt and such. It's also very interesting because it makes a lot of sense from a defense perspective because the cells can be made here in Sweden. It turns out maybe it's not a great idea to have, you know, Chinese battery cells or batteries in military vehicles or energy storage. We hope that this collaboration can mean a lot for the future here because there's a strong demand to disconnect that link with China, I would say. Very interesting. We will come back to more to that later.
Then we have to the right here in the middle, we have Nordic Shield Group. If you know these pictures already, I will come back more to that later also. Now for the first time, Astor here will, we will be present here at both Dalo Days last week and then MSPO in Poland here next week and after that DCI in London, UK. A lot of exhibitions here to show more about Astor and what we can do. Hopefully, of course, that will lead to a lot of new business here in the future. To the right there, we have Ammunity. You can see all the different ammunition they produce there to the right. We have, you know, cleared the first hurdle there when the government said yes to Astor as new owner of Ammunity. We move on. Here are some key takeaways from the second quarter report.
I made this, you know, a simple bullet picture here, but you know, some positives here. I think it was a good quarter both on sales and results. Could have been a little bit higher, but I'm coming back to that later. It was good on, you know, both operating and free cash flow are still positive. Very nice. Very good for us and for you shareholders. It was the third quarter in a row we were, you know, profitable on bottom line. We also posted our record order book by the end of the quarter. We almost had a record on order intake, but two orders just came in in the third quarter instead of the second quarter, you know. They just came in here first and second of July 2025.
We tried to get them in quarter two, obviously, but they came in Q3, so you have something to look forward to there. As I mentioned, this is very important that we, you know, we have a big M&A investment possibilities here going forward with this SEK 450 million in cash and possible debt funding for acquisitions. Another thing is that we now have almost reached our, you know, 15% EBITDA goal here on an adjusted basis on a rolling 12 months. We are very happy about that. On the negative side, of course, we had higher costs than anticipated for IFRS reporting. Of course, you reserve for that all year, but it was more costly than we expected, you know, both producing the annual report and for the first time and then with auditors demanding more money. That hurt earnings a little bit.
We had one-off costs, as you know, they are included in the adjusted figures and then some currency effects. I would say all in all, you know, all those three top bullets there on the negative, it affected the result with about SEK 3-SEK 4 million . Otherwise, that SEK 3-SEK 4 million, you know, compared to if you look at year-over-year figures, that would be, you know, affecting the net result positively with SEK 3- SEK 4 million. That's the way things happen. It's not possible to mitigate everything. We also had a little bit slightly lower sales related to the trade war during the spring here. I already touched upon these numbers here, but here they are. You can also find them in the second quarter report here. Net sales 77% up. The EBITDA and the adjusted EBITDA, of course, they are increasing by a couple of hundred percent. Orders and order book all healthy.
I will come back to more to that later. We're looking forward to a strong second half of the year here. Here are our segments in the performance in the first half of the year. You can see they are both profitable except for Astor Protect. The one business there didn't perform as strong as we hoped, but they have a lot of nice order intake now. That business, the Protect business area, we expect it to show black figures here in the future. We also have a nice effect there from our investment in Nordic Shield Group. As I mentioned, you can see the numbers are starting to, we're getting economies of scale here, the sales figures are coming up a lot. It means the results are coming up as well. We have had a nice three quarters now and we will continue on that.
I think it's good for you to know, to put in perspective also when you look, when the analysts look at Astor, they look at what kind of companies do we have in our portfolio. Of course, the pro forma numbers, we cannot present those. Those are the numbers, we have that capacity in Astor or we have that number in Astor, but it's not in the books, but it's in the pro forma. If you make this waterfall diagram here and look at, if we would have owned all the businesses, including Ammunity here that we currently have purchased, we would have had a turnover or net sales of over SEK 460 million in 2024 alone, with an EBIT margin of about 10%.
Obviously, there's a lot of, I will come back to that later as well, but there's a lot of nice M&A here that is helping the financial numbers. Here is also a pro forma about how the order book will look. If we look from left to right, you can see that we reported SEK 289 million, but if you include that SEK 85 million first and second July, and then the Ammunity order book that they have with the contract they have with the Latvian military, we are at SEK 600 million. They also have an extension with the Latvian military of SEK 400 million. That would translate into a total order book then of SEK 1 billion. Of course, we haven't completed the acquisition yet. We hope to do that in the near future.
Once we do that and if we extend the contract with the Latvian military and hopefully we can also negotiate a new one, obviously that will mean a lot for our order book going forward. A little bit more about Nordic Shield Group here. You have seen we have communicated a lot of orders lately. They have had the big orders communicated here. We have communicated orders in excess of SEK 100 million, and I think just in one month's time here. You can see on the left hand there, the corporate tree, they have three operating subsidiaries. Obviously, they are a highly profitable defense group. We are very happy to increase our holding there as we communicated this morning. They also own property. They own a property in Gotland, Sweden, Visby. They also own a property there where they produce in Cesium.
We also got some assets here in the purchase. Here to the right, I made these examples. You can see this is just an example here. If they have a turnover of SEK 100 million, they have a net margin of 25%. I would say it's going to be maybe 20%- 30%. We will see that when the numbers come through. With 30% ownership and 25% net margin, that means a net profit of SEK 7.5 million. That in turn will be reflected in Astor's operating profit every quarter. We see Nordic Shield Group as a core associate company to Astor and it's getting more and more integrated in Astor. We will present them as operating profit and it's not anything different than Saab does or anyone else. Now with the 36% ownership, obviously that number will increase.
This will be a nice icing on the cake or cherry on the top here going forward in the Astor accounts every quarter. All the, you can look at the orders we communicate related to Nordic Shield Group and make this calculation and you can understand what sort of operating contribution we will get from them every quarter. Here is a little more about what they do. They make data centers, they make security doors, for example, security vault doors for high security like nuclear facilities. What they especially do is they make these security buildings there to the right in concrete. Just last week it was released that there will be a new NATO base in Enköping, I think it was. Obviously, a few of these things I would expect need to go there.
There is a lot of demand we expect just on the domestic market, but these things are required all over Europe. They are also in these security rooms or, as you can see down there to the left hand. Moving over to Ammunity, I think a lot of you have been eager to hear more about our acquisition here in Latvia. Their main business going forward, 90%, will be military ammunition. Of course, they can move into civilian ammunition here in the future if they want to also. Currently, they are just making military ammunition. They are also making, 10% of revenue is expected to be related to 155 millimeter grenades. We are only making a very small fraction of a piece like that.
Another thing is interesting here, and that is that Ammunity, they own 50 military bunkers in Latvia, of which two are fully developed and leased to the Latvian military. There are some nice assets that came into or came with this purchase as well. The outlook for the rest of 2025 and beyond, one of the main things will be the listing here on NGM regulated, the main market there. It's coming up here later in 2025. Most costs are incurred. It means most costs are taken in the income statement. A few or a small piece might come here in the second half of the year. It's a process in late stage, I would say. We are very happy with our collaboration here with NGM. They are very supportive of Astor.
We hope that we will get a similar listing here to that that Spiltan got when they listed on NGM market, the main market there in the central parts of Stockholm, next to Svampen in Swedish. What's more to come? This is the last picture. Be ready with some questions. What's more to come in 2025? We will get a full effect from our 30% in Nordic Shield Group as of 1st of July 2025. Hopefully, we will acquire all of these 36%. It will maybe take a month before we know that. 36% in we expect to be owner of in Q4 here. We also will get full effect from the acquisition of Carbonia. It's a 100% acquisition of a very strong carbon fiber producer in Malmö, Sweden. We will get that in the books here from 1st of July.
Also, Ocellium Electronic Warfare part will start delivering regularly, we expect here. That will also make a strong contribution here to the quarter beginning 1st of July. We also expect to complete the acquisition of Ammunity, of course. Hopefully, we will also be able to communicate more about our collaboration here with the sodium-ion producer of batteries, Alpris, and further M&A, of course. All in all, if you sum this up, we expect a strong finish here to the year 2025. Thank you. Moving over to questions here.
Thank you. As a reminder, if you'd like to ask questions, you have two options. Put them into the Q&A box and I'll read them out, or you raise your hand and then I will unmute you. Let's kick off with the first questions.
Yes.
What level of margin should we expect on the order book?
That's a good question. I think we cannot communicate that too much. We have our goal of 15%. Of course, we are long-term, we are expecting to show that kind of numbers, 15% EBITDA. That's all I can say about that.
Okay, perfect. Next one is on Nordic Shield Group, paid for it.
Oh, sorry, Chris, I think I lost you a little bit there.
Could you remind everyone on the multiple you paid for Nordic Shield Group?
Yes, that's a good question. Actually, in this acquisition, the last time here, I think the multiple was roughly 8 in what we're paying now. I think it's sort of, I would say, they hadn't communicated their final numbers for Cesium when we signed the deal. If you look at it now, you know, afterwards, I would say it's maybe 4.5 when we entered the company.
Perfect. There's also a question on Astor IV live and also from beforehand via email. Can you give an update on Astor IV? When would you expect to receive first orders?
Yes, that's a great question. Obviously, we come a long way since we released that Astor IV is in a commercial stage. We come a long way and we have so many other products and so many other companies. We are not too dependent on the Astor IV. I want to say that it hasn't been any negative. We saw some recent news lately coming out of France when they were commenting about Astor IV being a great product. They need that sort of equipment. I would say all in all, it's moving on. Electronic warfare takes a lot of time. Maybe the main thing is that from Astor IV, we also developed this spin-off product, as I said many times, this Astor Eclipse. That product has already taken off here. We are working on it, and we are not as dependent on it anymore.
There is another question that we received beforehand. With heavy focus on continued M&A, how is management focused on its current group of shareholders and the fact that the share is getting diluted with every emission?
Yes, great question. That is also, you know, we have sort of, we have three ways to create the shareholder value. We have, you know, M&A that's creating shareholder value. We can make a lot of sales and generate profits from the current companies that's creating shareholder value. We can also make, you know, some corporate excellence, you know, trying to tweak and tweak there and tweak there to make the profits even higher. In the end, you know, M&A has been so successful for us. It's very important if you want to, you know, complete acquisitions, it's very important to have a big M&A coffin or a big M&A firepower because otherwise the sellers will question your ability to make these acquisitions. Now we finally have that. We have a very big M&A coffin here. Of course, that's very helpful in all the dialogues we have.
They know that we can complete the deal without anything, you know, stopping it short term, like a market fluctuation and stuff. It's very important.
There's a question related to that. Will you be able to reach your financial targets with the same share count as today?
Yes, that's a good question. Obviously, it depends on how expensive the M&A activities we do or the investments, for example, that we plan for the Latvian production. That will be visible in maybe six months or one year, and then we know more. It's too early to expand on that. One thing I can also mention is that, going forward here, once we get the EBITDA numbers up, like we have had, like we are doing now, we can also make a debt, a bond, and attract capital that way. We don't have to tap into the equity after this big emission that we made in early summer.
Next, I'll take somebody that raised their hand. Henry Vindesh, I am unmuting you right now.
Yes, great. Hi everybody. Thanks for taking my questions and thanks for the presentation. Congrats to your strong results. I have a question going into detail already. I've seen in your report the geographic sales split, and it reveals to us that it's a very large growing share of sales going to America, which I assume to be the U.S. My direct follow-up is, are your products in any way impacted by the tariff impacts that we've seen coming from the U.S.? If they are, of course, sales going to the U.S. If so, how do you pass on the tariff costs, or do you take the hit on your own? That's my first question.
Thank you, Henry. I don't know how much I can expand on that, but I would say some costs were higher here in quarter two, also related to that, but we don't expect that going forward.
All right. Maybe I need to look it up. Maybe the defense products are exempt from the tariffs.
Exactly. That's true. We don't expect that going forward.
Right. That also explains the negative FX effect, obviously. I mean, the dollar has developed, as we've seen. Next question is regarding the M&A pipeline. I think last time we spoke, you put a number out of SEK 500 million in the short-term M&A pipeline, and of course, you acquired a lot of companies in the meantime. Do you have an M&A pipeline size as of right now for us so we can have a little idea of what's in the pipeline? Maybe give a little ballpark number there.
I think our CEO, he was interviewed here quite recently in some merger magazine, but we still said, you know, we have 50 or above in an interesting company we're looking into. I would say that number is growing very quickly now. Obviously, as I said, with the M&A firepower we have, we see a lot of interest from the market to talk to us as an acquirer. It doesn't have to be that negative that, you know, there are some talks about peace, and it might mean an easier M&A process for us. I wouldn't take it at face value, just a negative. I would think of it as a more mixed bag, that question.
Okay. Thanks. Maybe regarding also your stake now, which you increased in Nordic Shield Group. You paid, I think, SEK 23 million for another 6%, giving a SEK 318 million valuation in total.
Yeah.
What sort of multiple did you pay on the extra 6? If you can say that, I mean, it's hard to, if you include the Cesium or not in the NSG last 2024 numbers. Maybe you have a little ballpark of where multiples are moving. The more you increase, maybe also directly the follow-up already. Is there any plan to go to 50%+?
Yes, yes, yes. Yes. To answer your first question there first, I would say obviously being a company on the publicly traded here, I think at some point we need to reach 50%. We, of course, can consolidate the whole group and get the top line effect, which we don't have today. That is, of course, our long-term goal. They know that as well. It's no, nothing, no hidden agenda there. Yes, with regards to the multiples, we paid, as I said, I think I got that question a little earlier. I think we paid about 8.0 now on the pro forma accounts that they have showed on multiple with the recent acquisition. That means also that the first acquisition was very cheap. It was around 4.5 in the first 30% we bought. You can say in total, it's still cheap.
Of course, it depends on how expensive the coming 14% or 15% will be. Let's see.
Great. I think that's it. Let's go through my.
Yeah.
I think that's it. Otherwise, I'll call you later if there's anything that arises. Thanks a lot.
No worries. Thank you.
Okay, then we have two more in the chat. First one on the NGM listing. Does it mean you will get into more indexes?
That's a good question. I don't think so, not indexes. It's a good question. I cannot answer that one. I think not because, you know, most indexes are market value rated and trade weighted. We are already included now in the MSCI Global Share Small Cap or the Micro Cap Index. Next up is the Small Cap there, I would say. Apart from that, I don't think so. We are already included in the investment universe for the indexes.
What are your top three highlights that you're most excited about for Scandinavian Astor Group this year?
Oh, that's a good one. I think top three, if I have to choose, I need to go up to the bullets here. Let's see. Yeah, I would say maybe, you know, it's that we have managed to make a lot of good acquisitions. I'm especially happy about this M&A investment firepower that we have. Also, that we managed to post this, you know, 15% adjusted EBITDA. You know, approximately 15%. I'm very happy about that.
So far we have no further questions. A quick reminder, you can still raise your hand or type it into the Q&A box, and we'll wait another minute or so to give you a chance to ask potential other questions. Seems to be the case, Wictor. Henry has another follow-up question. Let me quickly unmute him.
Yeah, sure.
I just noticed or sort of come to my head that you used to work at Alpris yourself. I think you warmed up some old strings there. Maybe go a little bit more into detail and explain to us how we can think of this potential collaboration. Will they be supplying the batteries for your products? If yes, for which products? In detail, I see this Ocellium symbol on the slide. Is this only for Ocellium or maybe another product group? I can think of, for example, the high security vaults that need batteries as well and some that need to be independent from China in the sourcing. Maybe as much as you can say about the potential, I would like to know what it would look like.
Yeah, sure. Of course, when I met you guys in Frankfurt there as well, we talked about this SFC Energy company that they are trying to sell to the defense, or they have a contract there with the military in Germany. I think this is a, you know, it's not, it's a similar thing, but of course it's very different chemistry or solution. It's more classic battery than the SFC Energy. I would say, of course, yeah, I managed to pull a few strings there, and they didn't think so much about the defense industry before. Of course, it's the perfect battery for Nordic conditions, with cold climates. It's very good with the sodium-ion technology. It can stand extreme cold, and it can be discharged.
It can be laying on the shelf for a couple of years without charging it, and then you can just pull it from the shelf and use it, just charge it up. It's very different to lithium because the technology there is breaking down. If you don't charge it, you need to charge it all the time. There are so many applications, it's for shooting, missiles. They have batteries, and they need to be kept in a shelf. All the vehicles they are running around with, with mostly Chinese-made batteries, and I don't think it's a good solution in the long run to do that, especially if we want to be resilient and be Europe-produced with that. I'm not in a position now to expand too much about the revenue split and such, but we are not at this stage moving into any battery production. That's for sure.
Don't worry about that. This is just a collaboration at this point. We made these test batteries, and we'll see how it turns out. We got a lot of interest for those in the Daily Days there, and we expect to show them in, of course, at the MSPO and DCI and such.
Great. Thanks.
We have two more in the chat. What kind of effect do you see with the adjustments of the 3D printer and the etching machine now that you have in that place?
Yes, that's a good question. I think we need to communicate on that separately if I say too much. Of course, we expect the inventory turnover to be quicker. We expect to make products from raw material to a finished product sell to customer in a quicker fashion with this product. It will mean that the sales can go up for Marstrum here. We're really looking forward to seeing those effects here in the coming quarters.
The last one is the stock price has been quite volatile. When do you think it will stabilize?
The share price?
Yeah.
Yeah. As I said, you know, it's not up to me to comment too much about that. I think the only thing I can say is, you know, maybe it's some turmoil with regards to peace talks and such. It's important to remember that, of course, Astor is a defense-focused group, but we also have a lot of civilian trade. We will have a good business anywhere this goes. Of course, we'd like to increase our part of military sales. That is increasing, of course, with the acquisitions we make. With Ammunity, it's, you know, it's 100% defense. It's also important to mention that, as I said, with regards to M&A, it might mean that, you know, companies are not expecting or, you know, 15x EBITDA multiples or such. It might mean a good thing for our M&A agenda.
I see no more questions. Victor, I'm handing over to—oh, there's another one. Could you expand on the water-based drone, which you are developing?
I think I lost you a little bit there. I heard, I think I understood the question with regards to the water-based drone that we see together with the toll prop there, as you can see in the picture. I think there's a lot of interest for it, of course. We hope that it brings sales here in the future. It's a little bit early for me to comment on. I think we will update on that separately when we get that kind of orders coming through.
Great. I think that was it now. Victor, some final remarks from your side?
Nothing on my side. Thank you. Good questions. Looking forward to speaking to you again here in the not-too-distant future.
Thanks, everyone, for dialing in.