Now I will hand the conference over to the speakers. Please go ahead.
Hello everyone and welcome. I'm the CEO of Addnode Group, Johan Andersson, and with me I also have Kristina Mackintosh, the CFO of Addnode Group. Together we will introduce you to our interim report for Q2, and we will also end with a Q&A. For those of you who are new to Addnode Group, I would like to inform you that our reporting currency is Swedish crowns. As you can see, the agenda for today... Before we start with the interim report, I would like to remind us all what Addnode Group is all about. Our purpose is all about digitalization for a better society. Through innovation and continuous development in close collaboration with our customers, we create digital solutions for specific needs.
The software and digital solutions that we provide help to design buildings, infrastructure, and cities, and also the products that we all use every day, like cars and all the way to life science instruments. When things have been designed and built, they need to be maintained with a lifecycle perspective, and the public sector has a responsibility for rules and regulations. Our digital solutions make all this possible. I would like to start by presenting the Q2 result on the higher altitude. All Addnode Group had a good performance in the second quarter of 2025, and EBITDA improved compared with the year earlier period. From a group perspective, the market trend was stable in the Nordic countries, the U.K., and the U.S., while the German market remains weaker.
EBITDA improved significantly to SEK 238 million compared to SEK 162 million last year, corresponding to an EBITDA margin of 16% compared to 8% last year. The increase in underlying earnings was partly strengthened by early renewals of three-year agreements in the Design Management division. EBITDA was positively impacted in an amount of SEK 70 million as customers chose to renew their Autodesk agreements earlier. These agreements would otherwise have been renewed in the third quarter. A cost-saving program has offset a weaker German market in the PLM division, and the Process Management division strengthened its EBITDA margins. A stronger SEK had a negative FX impact of approximately SEK 17 million on EBITDA in the quarter. If we adjust for the FX impact and early contract renewals, EBITDA would have amounted to SEK 184 million, corresponding to an adjusted EBITDA growth of approximately 14%.
Customers' early renewals of three-year agreements in Q2 are not expected to impact full-year earnings, meaning that all else being equal, EBITDA for the third quarter will be impacted with an amount corresponding to SEK 70 million. We have completed three new acquisitions: Genus in Norway and two asset deals in the U.S. All three acquisitions will be consolidated from July, meaning that they are not consolidated in Q2. Genus, to the left, provides a no-code platform for business-critical solutions for customers within banking, insurance, and the public sector. It is mainly used to manage complex processes where documentation, regulatory compliance, and internal governance are key requirements. Genus has net sales of SEK 165 million, with a strong EBITDA margin. It will be consolidated as part of the Design Management division. Symetri and the Design Management division have done two asset deals in the U.S.
that will strengthen our market position [audio distortion]. Thanks to our strong financial position, Addnode Group can continue executing on its long-term value-creating acquisition strategy. We still have several active acquisition processes underway, and acquisitions are an important part of our growth strategy. We are operating our business in three divisions: Design Management, Product Lifecycle Management, and Process Management. Looking at the three divisions and their performance during Q2 for net sales, gross profit, and EBITDA, at the pie chart to the left, you can see that Design Management was accounting for approximately 46% of net sales in the quarter, PLM 30%, and Process 24%. In the middle chart, you can see the share of gross profit, where Design had 54%, PLM 20%, and Process Management 26%. Looking at our EBITDA divided by divisions, to the right, you can see that the Design accounts were 64%, PLM 12%, and Process Management 24%.
With that, I would like to go over the three different divisions and the outcome for Q2. Design Management. The Design Management division's strong improvement in EBITDA was attributable to favorable sales in the U.S. and the aforementioned early renewals of three-year Autodesk agreements. EBITDA increased by 99% to SEK 171 million, and the EBITDA margin increased to 25.6% compared to 7.1% last year. EBITDA was positively impacted in an amount of SEK 70 million, as customers chose for business reasons to renew their Autodesk agreements early. These agreements would otherwise have been renewed in the third quarter of 2025. The other two companies in divisions, SWG and Trivia, delivered a stable performance compared with the year earlier period. Net sales, reported net sales, decreased by 4.5% to SEK 669 million.
Compared with the year earlier period, the transition to Autodesk's new transaction model and change to the classification of third-party agreements also impacted the comparative figures. If the same comparison had instead been based on the previous Autodesk reseller model and before reclassification of third-party agreements, currency-adjusted organic growth would have been positive and amounted to approximately 5.3%. We can also see that the integration carries on in the division. Symetri carried out its first acquisition in the U.S., Microdesk, in 2022, followed by the acquisition of Team D3 in 2023. The two companies are now merging to form Symetri U.S., thereby becoming even more competitive in the U.S. market. Division Product Lifecycle Management. The PLM division noticed a stable market trend in the Nordic countries, the U.K., and the U.S., while the German market remained challenging. Sales to the strategically important aviation and defense segment increased during the quarter.
Before reclassification of third-party agreements, the division's currency-adjusted organic growth amounted to 1%. However, reported net sales were impacted by reclassification of third-party agreements. As of the fourth quarter of 2024, sales of certain third-party agreements have been reclassified in accordance with this agent model. If this reclassification had not been implemented, the currency-adjusted organic growth would have been positive by approximately 2%. EBITDA decreased to SEK 33 million, and the EBITDA margin narrowed to 7.4%. As previously communicated, measures have been initiated in the first quarter to add organization and cost optimization to current market conditions. These measures have progressed according to plan. The restructuring cost of approximately SEK 24 million that were charged to earnings in the first quarter are deemed to generate yearly cost savings of approximately SEK 45 million. Process Management.
The Process Management division delivered yet another strong quarter with growth and an improved EBITDA margin. The division's net sales increased by 5% and EBITDA by 10%. This marks the fourth consecutive quarter in which the division's EBITDA margin improved year-on-year. EBITDA was positively impacted by price adjustments, increased operational efficiency, and contributions from acquired companies. EBITDA increased by 10% to SEK 65 million, and the EBITDA margin increased to 18.5%. The market for the division remained unchanged, with a stable demand for case management and geographic information systems for the public sector. With that, I would like to hand over to our CFO, Kristina Mackintosh.
Thank you, Johan. Yes, I'm going to take you through the consolidated cash flow for the quarter. Starting up from cash flow from operating activities in the first quarter, there was SEK 33 million compared to SEK 178 million the previous year. As you can see above, it was mainly impacted by the changes in working capital, and that is mainly related to the Design Management division. The changes were mainly related to change in payment terms for Autodesk three-year contracts. We have already communicated that earlier and also highlighted that in last quarter, that the change in payment terms, which began in 2023, meant that the three-year contracts are now paid annually during the contract term. Before 2023, they were paid upfront in advance for all the three years. Over time, the cash flow will align with the earnings much better.
I also would like to pay attention to this. The change in payment terms should not be confused with the changes of Autodesk's transaction model. Going down and looking for cash flow from investment activities, it amounted to - SEK 62 million, and that is mainly related to our investment in proprietary products and also acquisitions made during the quarter. Going down, cash flow from financing activities, SEK 148 million. That includes a dividend that was paid of SEK 154 million in May, and also a new loan of SEK 437 million that was drawn in Q2 for acquisitions, for the acquisitions that we made and completed after the quarter end, and also earnout payment after the period. We also had a small proceed for the shares in accordance with the incentive program of SEK 5 million. We also amortized loans in foreign currency of SEK 139 million.
I would like to draw your attention to the consolidated financial position here. Notice that this is the operational balance sheet and not the balance sheet that we present in the report. We continue to operate supported by a resilient balance sheet, which is important for us for our continued growth, both organically and through acquisitions. The decrease in the balance sheet from the beginning of the year is primarily driven by the currency effects. You can also see that our business model enables us to operate with a negative net working capital, and we continue to do so. It's - SEK 328 million. In the line item provision, taxes and other debts include future earnout payments depending on the financial performance of the acquired companies. As of June 30th, 2025, total earnout and other liabilities to sellers amount to SEK 458 million.
The majority is for the Microdesk and TeamD3 acquisitions in previous years. Net debt amounted to SEK 1.1 billion. We can also see going down the line that the return on capital increased to 90% from 15% in previous years. We also have a cash position of approximately SEK 730 million compared to SEK 674 million as of the end of December 2024. Of the total available facilities and the revolving credit facilities of SEK 1.6 billion, approximately SEK 700,000 million remains unutilized as of June 30th, 2025. Over to you, Johan.
Thank you, Kristina. 2025, I think it's a year when we must look beyond the business model transition in division Design Management and how we recognize sole third-party software to grasp the underlying growth. Q3 2025 will be the last quarter with net sales not being comparable year- over- year. When we started this transition, we had a clear communication that EBITDA would not be negatively affected, and it would be a good way of understanding the business progression. If we look at 2025, EBITDA was SEK 168 million, and rolling 12 months, EBITDA is SEK 904 million. It's a compounded annual growth rate of 19% on the progression of EBITDA. We are delivering on our growth strategy, combining organic growth with a value-creating acquisition strategy.
There is a good demand for the business emission-critical digital solution that we deliver to our customers in various industries, including construction, property, infrastructure, manufacturing, defense, life science, and the public sector, both in Europe and in the U.S. Our business model, with a large proportion of recurring revenue, is a source of security in more uncertain times. The economic and geopolitical situation remains uncertain and primarily affects the customer's decision-making process for major investment decisions. Looking to the future, we are confident in the ability of our companies to adapt their offerings and organizations to the demand and the economic situation in their respective markets. Before we end the presentation, I would like to remind you all of our upcoming event. We have a Capital Markets Day, actually our first as Addnode Group, September 22nd, 12:00 P.M. to 5:00 P.M. Central European Standard Time in Stockholm.
Here's a link for our registration. With that, I would like to open up for Q&A.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Erik Larsen from SEB. Please go ahead.
Thank you for taking my questions. I have a few. First off, on these last two acquisitions in Design, correct me if I'm wrong, but we haven't really seen these types of transactions before. I'm just wondering if this is a consequence of the new transaction model, which opens up more opportunities for you, or is it rather a changed strategy on your end?
Thank you, Erik, for the questions. We have done asset deals before, but you're correct that we have not done that many asset deals in Symetri. What we are doing is that the U.S. team in Symetri has had a good discussion with several parties there, and we have found an agreement with them to acquire the customer base and a few employees in that. You're correct that we haven't done much of it. I think it's driven probably by several reasons. One, we have a very strong position in the market, so people know that we are willing to expand in these areas. The guys that we are buying these from are having several operations. They are not only being Autodesk partners; they have other operations as well. I guess that probably relates to changes because we do like the changes and we think they're good for them.
If you're someone who probably doesn't like the business, it doesn't probably make sense to sell. It's a mix of factors, but I think it's a good idea to buy the business and we see a good way of expanding it as well.
Okay. Thank you. I seem to have some issues with my line, so I hope you can hear me. I have two more questions. Okay, good. Two more technical questions then. You had SEK 31 million in eliminations on EBITDA level, which stands out. Is there anything specific here?
Yes. We have some, but you're looking at comparing to the last year, same quarter. We have a little bit more of the transaction costs. We also have invested in employees. We have more employees on the group level, and we also invested in supporting the new transaction in the CSRD, implementing systems. You could see that the run rate is about SEK 2 million- 3 million. All that is related to normal run rate.
Okay. I guess we should assume somewhere along those lines, costs at this level on the central level, perhaps a bit boosted this quarter by transaction costs then.
Yes.
Okay. Thank you. Lastly, on FX, you wrote that you had a SEK 16 million negative currency impact on EBITDA. I think usually the impact is pretty immaterial, if I'm correct on that. What caused this SEK 16 million this quarter?
Repeat that question again?
I think the effect of usually, the FX effect is more immaterial to the operation, but this quarter is SEK 16 million.
Yeah. Yeah. We all know the effect is the weakened dollar, and we have a little bit of effect on the pound as well and euro. It is mainly from the dollar weakening. We normally don't disclose that information, but as it is a little bit more material, we include that as well in the report, just to make it easier to compare quarter- by- quarter.
Okay. Makes sense. Thank you. That's all from me.
Thank you, Erik.
The next question comes from Thomas Nielsen from Nordea. Please go ahead. Thomas Nielsen, your line is now unmuted. Please go ahead. The next question comes from Daniel Thorsen from ABG Sundal Collier. Please go ahead.
Yes. Thank you very much. A question on the market here. You say that some larger projects are impacted by the uncertain macro environment, and that likely culminated here in Q2. I guess looking at other companies, of course, but it still looks like you are growing quite well, underlying in both Design Management, and there is also no further decline in PLM. Where are you seeing these delayed projects mainly, geographically, but also segment-wise?
Thank you, Daniel. What we can see is that our customers, we don't sort of lose any customers. On the other hand, we seem to be growing the number of customers. We can also see that there are potentials for more things to be done by the customers, and at some point, they need to invest. It's more of a probably. We're not saying that they are not investing. We're saying that they probably would invest more if there were a more positive sort of market view. Specifically, it's related to the German market, where we can see that there's been a tough market for the last three years. It's still there. If you look specifically in geography, it's Germany where we have seen, because as you all know, probably read the papers, there have been discussions in the automotive industry and how to invest.
I think the German market is the short answer.
Okay. There is less effect of project delays in the U.S., U.K., and Nordics, it sounds like.
We've been living with this for the last two years, so it's nothing new, I shouldn't say.
I see. Technically, on the SEK 70 million positive effect on EBITDA, was that also around SEK 70 million on sales in segment Design Management as it is third-party licenses?
It's the result effect. That means that there are some direct sales costs related to that. That has been sort of taken in consideration when in the SEK 70 million.
Okay. The effect on sales.
Sales guys have commission, for example. Commission directly related to that sales has been included in that SEK 70 million.
Okay, good. The sales effect is slightly larger, but not much.
Yes.
Okay. Good. Finally, on the two carve-out acquisitions here that we heard about in the first question, can you share anything about profitability in these assets you are buying and also roughly what multiples you pay for these types of acquisitions?
Good question. We have said that they have a run rate of around SEK 52 million together, those two, SEK. That's the net sales that will sort of be reported in our books. These are asset deals. We are also saying that we are signing contracts with 14 employees. Those are the costs that we sort of take on addressing them. We already have the management team in place. We have the setup. We have the structure. We are sort of only taking over the customer contracts and those 14 personnel. You have to do your math from that as to how much that is. It will have a positive effect on the result. The only cost that we'll take over is related to the personnel, those 14 guys, compared to the SEK 52 million in net sales.
Yeah, they report according to net accounting, I assume.
Yeah, net accounting. Yeah. It's in the new transaction model, so nothing there. How do we pay? What we are saying is that from this type, we have said that we had paid down to 4x operating profit when we have been buying more of customer agreements, etc. I think we have paid up to 10 x when we are acquiring software owned by high growth, and those barriers of valuation are still valid. Here we are in the low end of it, on the fours, 4 x EBITDA.
Clear. That's all for me. Thank you.
Thank you.
The next question comes from Daniel Djurberg from Handelsbanken. Please go ahead.
Thank you. Good question. I'll speak a bit about PLM. First, you had SEK 24 million in special charge.
Daniel, it seems that your.
Daniel Jurberg, your line is unmuted. Please go ahead.
Can you hear me?
Soft.
Let me check. Can you hear me?
I can hear you very sort of in the background.
Can you hear me now?
Yes.
Sorry. My headphones seem to be not working. A question on PLM, and that would be you had some SEK 24 million in restructuring charges in Q1. You aimed for SEK 45 million in savings, but you didn't have any additional restructuring in Q2. My question is, do you plan for any more restructuring charges in the second half to receive these SEK 45 million?
No, we don't. To make this happen, we don't see that we have more restructuring charges. We have seen some effect of it here, a positive effect in Q2. We'll see more in Q3, and the full run rate we expect to see in Q4. That means that some of these 45 will be materialized in 2026.
Perfect. Thanks. A question on Design Management, if I may. You had some 43% adjusted organic growth. You're right on that. It comes from, obviously, these renewals, which is SEK 70 million plus the margin. Was it any other positive impact except for these renewals in Q2 driving this growth?
We do have, if you sort of take away those 70, there is a growth in the division. That also related to we have a sort of a strong underlying growth in the U.S. market supported by those. We also have, if you look at the ones that we don't talk that much about, SWG and Trivia also have a growth in the result compared to last year. In Europe, it's a softer one. There's a growth in the business as well. If you adjust for the 70, you will find that we are still sort of growing compared to last year in Design Management.
Yeah, that's great. If I may, also on the process, if you can comment on the Genus acquisition, early days, obviously consolidated here in July. Can you remind us about seasonality and the margin impact from Genus going forward? Thanks.
The seasonality to be expected is quite distributed over the year because this is owned by owned software. It will be distributed over the contract period. We have none of the effects that we usually discuss in Design Management. That's one thing. What probably, I think the best approximation is the one that we actually have in Design Management as of now.
Perfect. I'll leave it there. Thank you, and have a great summer and a nice report.
Thank you, Daniel.
Next question comes from Fredrik Nilsson from Redeye. Please go ahead.
Thank you. Hi. I was wondering regarding the larger authorities within Process. I mean, they have not really been investing that much in larger projects for a while. Is that mainly cyclical, or do you see a tendency of them getting more digitalized as well? What do you believe it will take for them to start investing again?
Thank you, Frederick. Several questions. If you look at for them to get started, they need more funding from the state to sort of, if you want to drive those. That means that there are pockets within the administration that are getting the funding. That means that in the world we're living today, it means that legal, defense, and those guys are the ones that are getting the money. What you called it more environmental software are not getting that much funding for growth and new things. That's the reality. We are going after the pockets as well. There are growth opportunities there, and we are driving some products there. If we want to see the biggest sort of growth, the funding needs to increase as well. Are they working on digitalization? Definitely. We are working with the customer that we have, and there are businesses to be made.
Was there one more part of the question that I forgot, Frederick?
What will it take for them to start investing again? I guess it's more money then, basically.
Yeah. The underlying is, so that's yeah, they need more funding. There are different parts of the government agency who are getting more funding. I guess it has to do with the world we're living in today. That means you will probably find more of the projects more related to defense, and we are working with them as much as we can. We are also, the Swedish police is one of our biggest customers in this area as well. If you're going to get the broader attention to the other state agencies, probably they need some more funding as well. That floats over time depending on which side the government decides to prioritize. We can support them all. Our sort of software works for all. That's agnostic in that way.
Great. Thanks. Lastly, from my side, PLM seemed to do quite well given the market conditions. I mean, is Germany somewhat stabilizing, or is it the growth in aerospace and defense that explains the decent numbers?
I think it's too early to say that Germany is out of the woods. As Germany is not growing, it means that the other parts are growing more to support the 2% growth. If we look at the Nordic, the U.K., and the U.S. market, you will find that we are growing compared to last year. There is a growth in the market there. We are trying to catch what we can. If we can find growth in the German market, it can be more. At the same time, the management teams are working great with addressing the cost base as well to make sure that we get the margins out of the business. Yes, there is growth, and we're going for that. It's not only defense and aviation. I think we are a reflection of the different business structure where we are at.
That means in the Nordic, we have a broader customer base. In the U.K., you will find that we're both towards the street manufacturing and defense. In the U.S., we don't have a strong market position. It's more depending on what type of customers we have been attracting.
Thank you very much. That's all for me.
Thank you.
Next question comes from Thomas Nilsson from Nordea. Please go ahead.
Thank you for taking my question. Process Management has delivered good organic growth this year. How do you view the medium-term growth potential for Process Management? Do you see any opportunities to expand beyond the Nordic public sector?
Thank you, Thomas. Looking at Process Management and the growth opportunities, right now, we can see that we have good, strong growth in it. I guess looking at the position where we are in Norway, we are probably growing with the market as we have a very strong position in the market. For example, looking at supporting local municipalities with software for managing infrastructure and case management systems in the public sector. In Norway, we are getting a stronger position. We are probably not expected to grow more. There are some KPIs related to our support agreements. This year, we have supported from that as well. Having said that, if we can grow this business 5% per year, sort of on average, that's good. Your other question about Sweden and Norway where we are today.
Yes, we can, but we can't probably grow all the software that we have as these software are adopted and well-suited for the different regions as well and how the public sector is operated. There are parts of the portfolio that it's probably easier to move. Everything that has to do with where things are, geographical information, for example. There are ways you handle different types of case management we can move. I think the biggest opportunity for us is that we have a very strong management team who knows how to run these types of operations, support them over time, and how to grow that. That means there's a possibility for us to acquire companies outside the Nordic and support them with the knowledge that we already have. I think that's probably a bigger growth potential over time.
Okay, thank you very much.
Thank you.
The next question comes from Michael Lasine from DNB Carnegie. Please go ahead.
Okay. Hi. A couple of questions. First of all, can you sort of clarify the underlying performance for Design Management in the quarter if we exclude the contract timing effects? Just to be clear on how that is performing.
Yes. The probably easiest way is to actually look at the EBITDA because we have a lot of things, like I said, changes in different transaction models, et cetera, and how it manages. If you look at last year, Design Management delivered an EBITDA of SEK 86 million. If you sort of 171 million, and if you deduct the SEK 70 million from this year's performance, you end up at 101%. Compared to SEK 88 million, you will find that the growth is 18%. I think that's probably a good approximation of how the underlying growth is, if that makes sense.
Yeah. I was just trying to understand the underlying performance.
Yeah, I totally understand the question.
How should we think about the seasonality going into the second half? Usually, Q2 is the weakest period, Q3 is a bit better, and Q4 is, I mean, is that the normal trend that we can expect also in Q3 and Q4? Anything that tells you anything else?
I mean, it's a question of EBITDA. Historically, and I think going forward, Q2 will still be sort of the weaker quarter in the year. I guess that's the reason why we were so transparent saying here that we are, yes, we have a strong growth in the quarter. We, as customers, have chosen early renewals for business on this quarter, SEK 70 million in EBITDA from Q3 to Q2. When you look at Q3, you should assume that there is sort of SEK 70 million, all things aside, sort of missing compared to historical patterns. That's why we're being very clear. Q2 is still probably a weaker quarter all over the year. Q3 would have been a stronger quarter if this early renewal hadn't happened, if that makes sense.
Got it. It's fair to assume an underlying improvement continuing in the second half. In Q3 specifically, we should deduct SEK 70 million from sort of the underlying EBIT that we estimate, right?
Yeah.
Okay. Another question on the operating cost for Design Management. It was roughly SEK 440 million, a bit higher than Q2 last year. Is this something that you see also from an organic basis, that cost is increasing a bit, excluding acquisitions and the FX?
I think it has to do with what we have also is that this is a sales organization. If we sell more, more commission are being paid as well, and also bonuses. I think it's more an effect of that. Let's say that we were selling less, then the bonus and commission would have been less. It's not that we have, sort of, under the structure, the cost structure has been increased. It's more that we have a sales and commission model that makes the cost go up when we sell more, and it goes down when we sell less.
Yeah, it's connected to this multi-year agreement and the contract timing, right?
If we sort of sell more, recognize more, it gets. As we have also the underlying growth, as I pointed out through the EBITDA comparison, it grows with 80%. The bonus and commission goes up. I think it's more related to that. We haven't increased that many. If you look at the number of people, for example, that we have reported, you will find that mainly the main cost is the number of people in the organization.
Thanks for that clarity. My final question is on the working capital development. It was -SEK 196 million in Q2. Was this in line with your expectations? How should we think about working capital the coming two, three quarters until you have reached the point when you have sort of annualized the payment structure from Autodesk in the first half next year?
Let me answer that. Yes, it was in line with our expectation. We see that the prepayment of the three-year contract that we're talking about ended in Q1 2023. Following the three-year cycle, the effect will have been outlined in Q1 2026. We still believe that, or we forecast that we will have product Q3 and Q4, and then normalized in Q1 2026.
Okay, thanks a lot.
Thanks, Mikael.
There are no more questions at this time. I hand the conference back to the speakers for any closing comments.
Thank you all for taking the time for this earnings call. I wish you all a good summer, and thank you.
Thank you.