Addnode Group AB (publ) ($ANODB)

Welcome to the presentation of Addnode Group's Interim Report January to March 2026. [Operator Instructions] Now I will hand the conference over to the CEO and President, Johan Andersson; and CFO, Kristina Mackintosh. Please go ahead.

Hello, everyone, and welcome to the presentation of the Addnode Group Q1 report for 2026. I'm CEO, Johan Andersson of Addnode Group. And with me, I also have Kristina Elfstrom Mackintosh, our CFO of Addnode Group. So today, we will give you an insight on Addnode Group and talk about our divisions, a little bit of acquisitions, touch upon AI, and we will end with a Q&A. So Q1 was a quarter where we improved earnings and we can see stronger cash flow. We delivered solid earnings growth. The companies acquired in 2025 performed well and combined with cost savings contributed to our favorable earnings performance. EBITDA was up 26% to SEK 274 million, and EBITDA margin increased to 17.9% from 14.9%. Earnings per share increased by 24%. We can see the increase in cash flow from operating activities increased to SEK 363 million compared to SEK 203 million in the previous quarter in 2025. We can also see an acquisition. Technia acquired a customer contract base in Germany. We continue to lay also the foundation for future earnings growth by continuing to implement AI, develop new offerings and optimize organizations. If we look at from a longer perspective that you can see in the graph to the right here, we can see that from 2025 to the rolling 12 months ending this quarter, the EBITDA has doubled from SEK 461 million to SEK 960 million. I will later walk you through Q1 by divisions, but I would like to hand over to Kristina, our CFO.

Thank you, Johan. And I'm going to take you through the net sales development from Q1 last year to Q1 this year. And we can see that net sales increased by 5% to SEK 1.531 billion, and the growth is mainly supported by acquisitions. And from the organic position, the currency adjusted organic growth amounted to minus 6% and the negative organic growth was attributable to mainly Design and PLM divisions. And in the Design division, Symetri saw a slower market in Europe and U.S. and lower share of 3-year contracts compared to the same period last year. And as we have previously communicated, 2025 last year was one of the years where there's a lot of volume -- high volume of 3-year contracts being renewed. Also, the market situation in Germany, where PLM is operating remains challenging. Looking at the acquisition, they contributed to plan and with SEK 223 million. And the integration of the new acquisitions are progressing well and the acquired businesses delivered in line with expectations. But currency movements had significant impact during the quarter and mainly the weaker U.S. dollar had a negative impact of minus SEK 61 million in the quarter. And that relies mainly in the Design division, where a majority of the U.S. dollar-denominated business resides. And we're going to have a look at the cash situation and cash flow. In Q1 2026, cash flow from operating activities improved by 79% to SEK 363 million compared to SEK 203 million last year. And this increase was mainly attributable to stronger earnings and changes -- positive changes in working capital. And this graph that we have shown in past meetings show the cash conversion over the past decade, where we calculate the cash -- free cash flow in relation to EBITDA for the rolling 12 months quarter-by-quarter. And you can see in the pink line, we have had cash conversion rate about 70% up to the time when Autodesk contract allowed us to obtain the 3-year payments upfront for all the 3 years. That changed in 2023, and now we are getting the payments yearly in advance, year-by-year. And you can also see the graph now reflects an upward trend in the most recent quarters and in line with what we have previously communicated. And also historically observed the working capital effect and the cash conversion tends to vary between quarters, and we expect such volatility to persist going forward. And we're going to have a look at the financial position also. And as of March 2026, the net debt, including leasing amounted to SEK 2.2 billion. It was also supported by around SEK 900 million in cash balance and the leverage amounted to 2.1x as a result of the recent acquisitions activity. And from the facilities we currently have, we have about SEK 800 million in available unutilized capacity. And during 2025 and now in Q1 2026, we have completed 11 acquisitions, which have resulted in a temporary increase in the leverage. And we're also going to look at the return on capital employed in next slide. And return on capital employed amounted to 14.6% as of March 2026. And the many and large acquisitions that we completed last year temporarily impacted the reported return on capital. And while the results of the acquired companies are included only from the time of acquisition, and that's, if you remember, it's SolidCAD came in by the end of October last year, FF Solutions in Brazil in the beginning of August and Genus in Norway from beginning of July. The full amount of the capital employed is added immediately at the point of acquisition. And this timing effect creates a short-term dilution of return on capital employed, which you can see in this graph. And now we're going to go into more details about the divisions. I'm going to hand back to Johan.

Thank you, Kristina. Some of you may know, we are organized in 3 divisions. We call them Design Management, Product Lifecycle Management and Process Management. And I'm going to walk you through the development in Q1 for each of our 3 divisions. Before we do that, you can see that the 2 bigger divisions, if you look at the share of EBITDA, you will find it's the Process Management and Design Management and then we also have Product Lifecycle Management. So let's start with Design Management. And before we do that, I just want to remind you that as of January 1, 2026, Tribia has been transferred from the Design Management division to the Process Management division. All the comparative figures you will see today have been restated to reflect the scenario which Tribia has already been transferred in 2025. So the numbers are like-for-like. So there are no effect on the transfer in the numbers that you can see here. With that as a start, we can see that the Design Management division's net sales increased with 7% to SEK 659 million. As Kristina mentioned earlier, the weaker U.S. dollar had a negative impact and adjusted for currency effect, organic growth was minus 12% in the division. However, EBITDA increased by 7% to SEK 158 million, and the EBITDA margin increased to 24%. The acquisitions in Canada and Brazil have developed according to plan and contributed to improved net sales and earnings. In Brazil, growth was driven by continued investment in infrastructure. And in Canada, we can see that customers continue to show renewed confidence in us as their partner. Looking at Europe, we can see that net sales in Europe and U.S. were negatively impacted by a few things. We had a lower volume of the subscriptions that was up for renewal. And out of those that were up for renewal, we can see that more customers than historically has chosen a 1-year subscription over a 3-year when they renew. And we can see that, that trend is continuing. So it means that there are still customers with us. But with regards as we explained earlier on that, as we are considered an agent, we are reporting the full value of the contract at the time of the sale. So if we sell a 3-year contract, we boost the sales. And if we sell a 1-year contract compared to having sold a 3 year before, it has a negative effect in that quarter compared to that. But it means that we are still having the same underlying business value. So that's important to have with you. We can also see that there are some geopolitical changes in the world, and we have some effect also from the market. And that has probably also affected the choices from the customers because you could imagine that in a more uncertain world, you're probably going for more for a 1-year compared to 3-year if you have the options. But the number of customers have increased in Europe and U.S. during this period. So we also have service providers globally in the division who are more focused on facility management solutions has delivered a stable earnings performance compared with the preceding year. So if we look at long term, this is a division that if you look at the graph to the right, we have moved from net sales in 2021 of around short of SEK 1 billion to the plus SEK 2 billion that we are today and we increased the profit. So the trend is long term. We can see that in this quarter, acquisitions performed really well. And as I mentioned, net sales in Europe and the U.S. are a little bit lower than we would have liked, but the results and the margins are with us. So looking at division PLM. You can see we have a decrease in net sales to SEK 420 million in the first quarter. If we adjust for currency effect, it's minus 4%. Here, we can also see that we have a trend of customers choosing subscription solutions rather than perpetual licenses. That has sort of had effect also on the top line. But the demand for PLM systems, design and simulation software and related services from strategically important segments such as aerospace and defense remains strong, and we have expanded several customer engagements, particularly in the Nordic countries. The market situation in Germany is still challenging, and there are investment decisions regarding major projects are still being approached with caution from our customers. EBITDA has increased to SEK 33 million compared to SEK 4 million last year. But those of you who were with us last year know that we had some restructuring costs last year. Those have had a positive effect, and we can see the positive of that margins going up. And if we add back the restructuring costs and compare, we can see that still that we have a growth in EBITDA of 18% compared to the comparable quarter last year in the run rate. So it's a good performance, and we can see that the cost-efficient measures taken have had an effect in the business. We have made an acquisition here in Q1. Technia acquired a customer base in Germany of the Dassault Systemes software, added 80 new customers to the 6,000 that we already have here. And net sales on that customer base is roughly around SEK 18 million, and it's something that we can add to the organization that we already have in the German part of the business of Technia. Looking at Process Management, continued their positive streak that they have for 7 quarters in a row right now. Net sales increased by 15% to SEK 466 million in net sales. EBITDA was up 27% to SEK 104 million, and EBITDA margin increased to 22.3% from 20.3%. This was the seventh consecutive quarter in which the EBITDA margin improved year-on-year. Along with good efficiency and effective cost control, margin-enhancing acquisitions such as Genus in Norway have contributed to this earnings improvement. Sales to public sector is still stable, but we can see that there is an uncertainty in the world and those larger projects that we probably did more of a couple of years ago are still being approached with some pressure. And as we mentioned earlier on, the Tribia has changed to this division and all the comparative figures have been addressed with that. And we think this is a good change. It's in line with the group strategy, and it aims to strengthen collaboration between companies focusing on the public sector and digital case management and will create conditions for further growth and efficiency improvements. It also means that division Process Management will have a stronger node in Norway with the companies Genus, Decisive and Tribia. We have touched upon acquisitions. And as we mentioned, we had a really strong year in 2025, adding at least SEK 700 million in net sales and strengthen the group. Had a good effect of that, meaning that we were able to build, for example, Symetri to be the world-leading global Autodesk partner, with presence in Europe as well as North and Latin America. We also strengthened Process Management with a strong Nordic footprint and acquisition of Genus in Norway. In Q1, we can see that the acquisition climate has been characterized by greater uncertainty in valuation discussions, mainly driven by AI concerns and a more complex macroeconomic geopolitical environment. But as I mentioned earlier on, we have made one acquisition of the customer base here in Germany. And we are still continuing to look at acquisitions. But with our -- as we did so many acquisitions in 2025 and with the uncertainty in the world, we probably will see a slower acquisition rate this year, and we expect to pick it up by the end of the year. Just to touch upon AI. AI is something that we're all talking about, something that will have an effect and is having an effect on all of us. It's an important focus area for Addnode Group. We believe it enables continued innovation. It will increase customer value and our internal efficiency. We are, as a group, focused on a few nodes around software and digital solutions for engineering, design, asset management and public sector workflows, and we think that's an important assets. Our strong customer relationships and our in-depth knowledge of the processes paired with the data created and stored in the digital solutions we provide represent a strong platform for development of new AI-based services. What is core in all our domains and the nodes that I mentioned is that we have a deep domain expertise and provide software for entire workflows. We provide mission-critical systems that are embedded with our customers. We are a trusted ecosystem partner in regulated environments. We are supported by strong partnerships with, for example, Autodesk, Bluebeam, Dassault Systemes and Esri, that means that they are able to invest in things that we are able to provide to our customers. We also embrace AI because we believe that it's something that will make us stronger in our customer value. So I believe we have a good starting point where we are. And just to give you some examples, we have -- if you look at the last, I think it's 3, 4 quarterly reports, we have presented some new AI products that just to give you a flavor of what we are talking about. And if you look at what we're presenting in this quarter is, for example, with the Inuse Connect IoT platform, one of our customers, the machine manufacturer, ALPMA has been able to increase its production efficiency, cut costs and reduce its service costs. If we look at the other example with AI simplifying and streamline inspections, then we are in Sweden, and then we have a demand that you need to do ventilation controls and report it to the local authorities and the local authorities are our customers. So with the software Vinga and ATOM, you can automate and create an end-to-end digital workflow that enables Swedish municipalities to fulfill their statutory responsibility for mandatory ventilation inspection. This has resulted in shorter lead times, lower energy consumption, improved public health. These are 2 very good examples where we can infuse existing solutions with AI to provide more value to our customers. So AI is definitely enabled for increased customer value, its innovation, efficiency. The technology which is being integrated to our customer solution internal process is an important aspect of how we create value. We, as a group, do believe in decentralization, but it means that we push through a few things to make things happen within our group. All these different companies in the group are doing a fantastic job. But what we specifically push and help each other with is to make sure that we continue to develop AI-driven customer solutions. And we are doing that by ourselves. We are doing that with our partners, and it's a constant development. An important thing is leadership and how we make these things happen because it has an effect. So we try to work together. We push it through our executive summits. We have different meetings within our divisions to make sure that we have the right leadership to make things happen. And then also on a more subject matter level, looking at development, sales, marketing, example, there are different networks within the group that goes to our group level, but also in the different divisions to push this to make this happen. And then we try to promote by showing good examples, for example, Addnode Innovations. I think this is -- we have 60 very good applicants, and now it's down to 7 in a final. And most of them are actually in production because you can see the potential in AI. We started by coding a couple of months ago, and it's already now happening. So it's a lot of things happening, and we're trying to push for it. But we are a decentralized organization that means that we have a lot of things happening in the group. So trying to sum this up, we can see that we are delivering on our growth strategy. We are combining organic growth with a value-creating acquisition strategy. If you look for a full year perspective, even though we have a quarter with lower inorganic growth. Our financial target is to grow EBITDA with 15% year-on-year. That means that we aim to continue to double EBITDA every fifth year. Since 2016, we have a compounded annual growth rate EBITDA of 19%, and we are increasing EBITDA margin. With the presence in various regions and industries where our digital solutions are mission-critical, we have built a robust business that remains strong even in a challenging economic climate dominated by geopolitical turmoil. Looking forward, growth and improved earnings will continue to originate from the development of new offerings, the implementation of AI and acquisitions. We will continue to optimize our organization as technology, market conditions and economy changes. Addnode Group has shown and will continue with the creativity, perseverance and commitment needed to generate value for both our customers and our shareholders. So with that as an introduction, we would like to open up for Q&A and questions.

[Operator Instructions] The next question comes from Erik Larsson from SEB.

Can you hear me?

Yes.

Yes. We can hear you.

Okay. Sorry for that. Great. I have a few questions. So first off, if you look at your customer base for the rest of the year, do you see fewer agreements that are up for renewal? Or was that more isolated to Q1?

What you can see is that we had here in Q1, yes, [indiscernible]. And then looking at -- we would probably see that we go back to more of a historical sort of normal activity over the year is that Q2 is usually slower. Q3, okay and Q4, better. So we will probably have seen that pattern during the year as well, what I would believe.

All right. And then I wanted to ask about the M&A contribution, which was strong here in Q1. And if you could just give some flavor if that also reflects the seasonality in like SolidCAD and FF Solutions or to what extent we could extrapolate this to Q2, for instance?

I mean it's a very good question. And yes, there's a seasonality in that because these are more -- the Q1 are to be very strong. So yes, there's definitely seasonality in that. So you cannot extrapolate it for Q2. You should probably expect more, like I mentioned, that is Q1, yes, very strong, and we are proud of that. And then we will probably see that Q1 is the slowest quarter during the year. And then Q3 will be sort of okay and Q4 will -- but that's -- we're talking about the full design here. So if you look at the guidance, as we said that we are probably around SEK 700 million plus on the run rate for the acquisition we did for in 2025 and then you compare it with a very good contribution in Q1, you'll see that we -- there's a sort of an overachievement compared to that in Q1, and that has to do with some expectation that Q1, it should be better. So there definitely is some seasonality there.

Okay. Perfect. And then the final question on cash flows. I think you talked about it a bit, but we've seen now 2 strong quarters and this normalization that you mentioned several times is currently taking place. But then historically, we have seen limited cash flows in Q2 and Q3. So the question is, should we assume that in '26 as well? Or is there still some catching up to do, so to say?

Yes. If you look at the cash flow from -- we have the strongest cash flow quarters in Q4 and Q1. And based on historical patterns, Q2 is slower and the lowest pattern in cash flow is in Q3. So we expect the same pattern going forward as well.

The next question comes from Thomas Nilsson from Nordea.

You mentioned a lower share of 3-year contracts in Q1. When it comes to the negative 12% organic growth we see in -- we saw in Design Management, how much of this 12% negative organic growth comes from a lower share of 3-year contracts in Q1?

We don't have an exact figure for that, but just to help you to give you some guidance is that we start off, and this has to do with the way the base of the business that we -- for example, the contract that was sold 1 year and 3 years ago, those are the contracts we expected to be renewed this quarter. So that means that we had a lower base that was sort of previous sold to be renewed compared to the last quarter last year. So we expected a slower net sales compared to that. So we have an effect of that, and that was expected. And then of the contracts that we renewed, the customer chosen more to go with a 1-year contract, and we expect that pattern to continue going forward. So we'll see that. The good thing is that the customers are increasing. The number of customers are increasing. So we can see that we are at least sort of flattish on the underlying customer value of the contracts if we try to sort of annualize the value of the 3-year contracts. So we are sending a signal that it's not 12% organic down. It has this effect on the -- for the [ 1 or 3-year ], and you can see the strong cash flow as well. So you will not get a sort of a full number of that, but we are saying that we are more on a flattish on the growth rate of the underlying business.

Okay. Okay. And in terms of organic growth at group level, when do you expect we will return to organic growth for the group? Will it be in the remainder of 2026?

I think best guess is that we expect that we will not, as a group, have organic growth this year. It has to do with -- if you look at it, we will always -- it's more -- also has to do with us. We will continue to protect the bottom line. You can see that, for example, we are increasing our EBITDA, and we are increasing our earnings per share with 24%. We'll have a focus on that. But I wouldn't expect us as a group to have organic growth in this year. It has to do with -- we started with this quarter. You can see that we will not be able to sort of catch up that during the year. And we are not planning -- I think we said going back to our capital markets in last autumn, we said that we expected low digital organic growth for the next year. And now we can see that there are some -- definitely the sort of the geopolitical situation and the market has not probably expected as we are -- as we expected at that time. So it's now we are probably saying that, that low sort of organic percentage growth has probably turned around to say, let's be -- strive for organic growth, but we are not planning for that.

Okay. One final question. Do you see any risk on the horizon of AI native start-ups in your business areas?

We shout-out, of course, we see risks because we also see all the opportunities by ourselves what we can do. So there -- and the next question is probably have something of that materialized? No, because there are the things that, as I mentioned, what we are -- we are very much still embedded in our systems. It's more -- we are working in regulated environment. So the sort of 2, 3 man start-ups are not relevant options for our customers to handle this. But having said that, we are also seeing what so many things that you can do. So of course, there are risks, and we try to address them as -- we address them as best as we can and we develop ourselves. So there are always risk in running a business. And within the risk also like the opportunities.

The next question comes from Daniel Thorsson from ABG Sundal Collier.

Yes. I also have a question on Design Management here in Q1. Do you think that the 1- and 3-year agreement changes here is, to some extent, explained by some AI uncertainties as well, both because customers may not know what competition and pricing may look like 2 years out, but also that they may face headcount reductions internally themselves. Is that something you hear in customer discussions?

We are not hearing that saying that, okay, this is because we are looking at AI. We're also hearing some customers saying that what do you think about changing your system? That's not an option because we're also heavily embedded in our processes and routine. For example, if you are an architect or technical consultants, all the new development that you are doing, all the historical and everything is so heavily embedded. So it's a very sort of long and painstaking process. It's like trying to change SIP for [indiscernible]. It's a lot of things. But having said that, it's quite tough to understand what is sort of normal GO things affecting business and what is AI.

No, I understand the businesses are embedded by the customers and they may not change it. But I also think that some of the customers that consider a 3-year agreement now, they may think that...

Yes. It should be.

Prices for this will be lower 2 years out or our 100 architects today may be 90 architects in 2 years because of internal efficiency and productivity. So it's better to go with 1 year now because we don't know how we will look like in 12 months' time. We haven't really heard that.

We haven't really sort of had those type of discussions saying that because of this, we are -- because I think our customers are still trying to sort of in the face of -- you are a little bit ahead of the curve compared to our customers. We have also customers saying that we want you to ensure that you are not implementing AI in our solutions because we cannot do that for regulatory. So we have all those type of discussions. And let's see, you should say ask me that question again the next quarter, and then I will sort of probably reevaluate that. But so far, we haven't had those sort of big discussions with our customers say that, you know what, we're going to decrease with X percentage of numbers so be prepared for that. I'm not saying that it's not going to happen. I'm saying that we have not had those discussions.

Okay. Cool. I understand. And then a second question here on Design Management. You answered partly to Thomas's question here on organic growth guidance for this full year. Did you refer to Design Management or on a group level? Because on the Capital Markets Day, you said that you expect low single-digit organic growth in Design Management for '26. And now you say not on a group level.

And then I think it goes with -- sorry, if we are not able to do organic growth in Design Management because it's roughly half of our business, then we're probably not going to be able to do organic growth on a group level because for PLM, for example, we have took the sort of the decision to discontinue some business to improve our profit margins. So we can't really expect to do organic growth in PLM for the full year. And if we are saying that we can't expect organic growth in Design, then the organic growth that we would hopefully be able to generate some percentage in Process, that will probably not be enough to compensate for the sort of entire group.

Yes. No, that makes sense. And then a question on Q2 here in Design Management. We know that we have a tough comp from last year. You had the positive boost from renewals before mid the year there. How should we think about kind of the magnitude in organic growth in Design in Q3? Will obviously be materially larger on the negative side compared to Q1 here, but like 20%, 25% magnitude, is that unreasonable given that you grew 50% last year?

I think that depends on what you compare with because we had a significant boost in Q2 last year of preordering of 3-year contract because that was the sort of the end of [indiscernible]. And that also means that we have less sales in Q3. So I guess it's not that easy to just answer because that depends on what base you're comparing with.

I was thinking year-over-year versus Q2 last year. I guess it will just be a large drop.

It will be a large drop, and that has to do -- it's a very good question. And I just want to remember everyone that Q2 last year was a significant boost from the preordering that meant that we had Q3 very much lower. So if you want to try to sort of address the magnitude of the changes, you need to sort of combine Q2 and Q3 last year.

Yes. That's clear. And then the final question on Process here. You had 1% organic growth in Process. So that means that either volume or pricing is negative year-over-year, which one was negative here in Q1, if you could...

I think it's volume. So we have some pricing. So -- and the pricing is that sort of -- that's probably we can do some. So I think it's a mix. But it means that depending on a little bit how we measure, we are having slightly volume negative or flattish. There's no growth in the volume to make that organic growth happen.

The next question comes from Fredrik Nilsson from Redeye.

I want to follow up on the movement from 3-year to 1-year deals in design. Have you seen a similar pattern before in more uncertain economic environment?

I think what is happening now is that, yes, we might have some uncertainty in that. But we -- I think just to be very clear, we have a move irrespective from the sort of uncertainties there that is going to 1-year contracts. And that has to do with that if we go back, for example, a couple of years ago, the customer had a discount from moving to 3 years compared to 1-year. And then it was moved to -- you can fix in the price. And now we can see that and they had still to pay upfront. And then over the year, it has moved to that irrespective if you change -- if you fix the price for 3 years, you still have to pay yearly. So the trend has been going on for the last sort of couple of years that move to 1 year. So I think the majority of what happened is that there's a push to 1-year contract within the system. And then we have an uncertainty in the sort of normal sort of market things that are going to happen. So just to add some flavor to your question. So -- and the question and the other one is that, no, we don't have any sort of a good historical comparable saying that in these times, customers choose this and that. But we are talking more from a -- it probably makes sense and I had a previous question that do you think the customer has done for them? It's hard to answer, but I also want to put out there that we have a trend moving to 1-year contract, and that will continue. Good thing is that we will be able to show more sort of less volatility in our reported earnings going forward for the same customer base if we are able to sort of increase the number of 1-year contracts, if that makes sense.

Yes, yes, that's good. And let's move on to PLM. As you mentioned, the margin increased quite a bit year-over-year. But I mean, it was still below the second half of last year. I guess there might be some seasonality, but still there seems to be a slightly lower level. Has the market worsened somewhat? Or could you help us understand the number?

No, I think what you're pushing at that Q1 is always the best quarter for Design Management, but it's also the less best quarter for PLM historically, irrespective. If you look back over the years, you will find that Q1 is probably the quarter, and that has to do with some seasonality with sales of software and deliveries of projects. They have more services within themselves. So that means that January is probably a little bit slower because you need -- there's a sort of you start up for the year, you do more projects. And in Design, you end the year in January. So there's some seasonality in that.

Okay. I mean I agree to what you're saying to some extent, but still in 2024, 2022, the margin was quite strong also in Q1. Were those quarters exceptional then you would say? Or how should I understand that you don't really see that seasonal pattern in the numbers you report, I would argue.

You have better sort of data in front of yourself than me. So -- but I don't feel that -- the question is that do we feel that we are being less efficient as we go ahead, that's not my thing. So I expect that we will be able to continue to improve earnings over the year this year compared to last year, if that's sort of the underlying question.

Yes, that's clear. And last question, regarding the capitalized work, it increased quite a bit relative to sales. Is this the level we should expect going forward? Or was there something special in the quarter?

The special in the quarter is that we now have our company in Norway, Genus, who are providing own proprietary software, which have capitalized in the Q1. We didn't have that in the past. So that you can expect and that has not been depreciated or amortized over time yet. So for the companies that are providing own products and solutions, we will expect more capitalized R&D being put in the numbers.

The next question comes from Mikael Laseen from DNB Carnegie.

I had a few questions. And the first one is on Design Management and how Autodesk's increased focus on new sales versus renewals are affecting your business.

That's a good question. The short answer is that we don't have the full analysis of that. It's -- the things that you mentioned is that from February, so it's the first month of the Autodesk year, there are the sort of the incentives are slightly changed so that they are pushing for moving from more from the back end to new sales. And it's a little bit too early to say that because we have only had that process for 2 months. And so we don't have any sort of a good analysis of that. But basically, what they're trying like everybody else is trying to promote new sales over sort of renewal and taking care of existing customer base. We are getting sort of incentivized for both, but in the new model, more on the new sales. So it's a little bit too early to do any bigger analysis of that. But basically, if we sell less, we probably will get less margin on that. That's the sort of expansion. And the margin that means that in an agency model, that's our net sales.

Yes. Okay. But you haven't seen any dramatic effects so far in Q2 then?

No, not yet. But -- so I would argue strongly advise you to ask me that question again in the next quarter, and then we will see because then we will have been able to go through a full sort of Autodesk quarter and then into next quarter, and then we will be able to see how this pans out.

Okay. Can you then give us some sort of background to the dynamics in new sales versus renewals for Design segment, how that works today? And yes, so we can sort of understand the potential changes if there are any.

I think you have to look at it by market by market. If you look at what we can see here in -- if you look at Europe and U.S., right now, we can see new sales were irrespective of it, it's a little bit slower. And new sales means that either we are selling new sort of seats could be to existing systems and modules or selling new models coming out of the new software. So it's a mix of that. But then also if you look at the dynamics, you can see that, for example, in Brazil, we have a strong growth, and that is supported by all the infrastructure investments being made. And so that we have a strong position there. Canada, we have a very strong position as well. So we can see that's growing well. What we've been struggling shortly has been in Europe and U.S. of new sales this quarter. I don't know if that was sort of your underlying question, please ask again, I probably...

Yes. But just thinking about -- I mean, the renewal rate is, I guess, pretty high historic customer base renewal. And so it's just -- you will still get a fair amount of, I mean, revenue on that, but it's sort of a bit more towards new sales, so you get rewarded more for pushing more new sales is what's going on?

Definitely yes. The short answer is yes, we will sort of compared to a year ago, we will get sort of more percentage-wise margins, so to speak, on new sales compared to renewal of existing customer base.

Yes. Got it. And -- all right. So are you seeing any pressure on pricing here in the Design segment or volumes or partner economics in general and the underlying changes apart for this push for new sales?

If you're talking about pricing -- are we talking about pricing to customers?

Yes, I guess so. And you guys check with Autodesk.

Yes. Pricing to customer, we haven't seen that sort of pressure on that. We can see that we have sort of a normal more of a KPI level price increases. That's sort of in the system. With regards to the message is that if we continue to do our work, we will sort of get our -- still our share of the cake in the same level. And that goes back to your question, how has that panned out with sort of promoting more new sales compared to historical. We haven't seen how that pan out, but that's the message still, and we are going for that. So still they are pushing for the channel, and we have still some more work to do so.

Okay. Got it. And I was also thinking about -- so in general, the underlying trend for this type of [ CAD, EO, OC ] players is I mean to bundle more and sell more complete packages, I guess. Do you also benefit from that selling more to the customer base, upselling, cross-selling? So how do you work with that?

That's what you mentioned, yes, as these products are becoming more and more sort of adding more value to a customer, it also means that they are more complex to address with the customers. So that means that we, as a partner are investing more, having invested more in our service capabilities to be able to address that value for our customer. So that means that it has been beneficial for us as a bigger part or the biggest partner, for example, for Autodesk and one of the biggest, Dassault. So that we have the capabilities to bring out sort of the full platform. So it's -- that's definitely a trend. So we believe that compared to other partners, we have an upside on that. So definitely. So that means that we are investing in people. Most of the people that are working with us, they have a history from the industry by themselves. They have been architects, technical consultants, been working in process industries and et cetera. So we sort of -- we would like to claim that we understand the processes that the software is about to be supported. So that's very important for us. So we believe that's something that will have a -- having a positive impact on us.

That's good clarity. And maybe if I may, a question on what you mentioned in the comment in the report that you talked about new offerings. Can you talk to us about what that means?

I think new offerings for us is both that what we are trying to -- some of the examples I mentioned here in the report today, we are able to bring some new IoT offerings to the market, helping our customers getting more productive within the maintenance. We are also been able to have sort of existing offerings, combine them, infuse them with AI and provide more value to our customers. Those are -- those types of -- we are probably not the type of company that's going to sort of greenfield investment of a sort of major investments. So we are probably good at making things even better as we are. And we can also see that our product development is becoming more and more efficient by ourselves. So we are probably hoping that we -- and we're also working with our partners to bring new products into the market as well. So it's not the product. It's a lot of products that we're constantly developing to bring up to the customers. So as part of more of an evolving rather than revolution.

The next question comes from Daniel Djurberg from Handelsbanken.

Most questions asked, obviously, but I have a question coming back to -- you talked a little bit about the pricing trends with Autodesk and Dassault. Can you say something more on that like-for-like magnitude and also if we saw the full impact in Q1? And also if there has been any changes with regards to Autodesk, if they -- given the changes from renewals versus new sales and so on, as they take a larger share of these price increases themselves than in the past?

Okay. The first question, which can say anything about prices. And just to be clear, on the last one, I didn't sort of fully understand the question, last part of it.

Neither did, I guess. The first question then.

Yes. And about pricing, we can see that our expectancy is not that we are going to go like a 5%, 10% price increase in the [ press ]. It's more like do we -- can we expect to do 2%, 3% price increase. And then we -- on the sort of existing one, that's probably more what we can go for to expect in this environment.

Yes. May I ask you also since it is now Autodesk doing the invoicing themselves, and do you have easier to get the price increases through since it's Autodesk doing this and you will just go with the flow here, I guess.

Yes. No, I think the good thing is that we live in a world where we have sort of the help of Autodesk to keep the price up. Historically, when we were more of a direct sales organization, there was a competition on the price pressure. So with this new sort of agency model, it's easy to keep the overall prices up in the market from that perspective. And yes, we can see that because we see the invoices that goes to the customers. And we send the quote to the customers. So we definitely see the end value. So we know sort of the end value to the customer more as we are the one sending the quote to them. And when they say yes to the quote, they get an invoice from Autodesk.

Okay. I understand. Another question, if I may. You talked twice, I think, in the call that you see a number of clients that has increased in EMEA and North Americas in Design, I think.

Yes, a number of customers.

Yes, a number of customers. Is this also excluding the acquisition of SolidCAD and FF Solutions?

Yes.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

No. Yes. Thank you for all the good questions and taking the time to talk about Addnode Group. So thank you.