Clavister Holding AB (publ.) (CLAV) Earnings Call Transcript & Summary

So good morning, everyone. Welcome to Clavister's Q2 Interim Report Presentation. My name is Kate Linwood, and I will be your host for today's webinar. And joining me today are John Vestberg, our CEO; and David Nordstrom, our CFO. So we will begin with an overview of the Q2 report. John will share key business insights, and David will walk us through the financial details. And after the presentation, we will open the session for questions and answers. So please feel free to submit your questions you have throughout the presentation in the Q&A box that you can find on the top right. And then we will answer the questions after. So, yes, with that, I would like to hand over to you, John.

Thank you very much, Kate, and again, welcome. Our second quarter for the year and starting with what we see as the key highlights of the quarter. I think it's quite clear that we will rank the net sales growth in the quarter as one of the absolute key highlights. So it is a record high growth. But as important is, of course, that we have been able to convert that growth into an improved profitability, which we'll, of course, come back to. Even so, we have as well our substantial order backlog with us and the sales pipeline, which is really extensive and that brings us a lot of visibility for the future. But starting with the growth and the profitability. So this quarter, again, we saw a record 63% net sales growth. So clearly a milestone for Clavister. That resulted in a net sales of SEK 89 million, so a quarterly high there. If we look at the underlying drivers for this growth, the majority of it comes from increased defense deliveries. So we are rapidly increasing our conversion in terms of deliveries to our defense customers, defense projects. This includes the large Norwegian Defense Material Administration (sic) [ Norwegian Defense Material Agency ] contract that we won in the first quarter this year. So that project is now up in full swing. We're delivering on it. And as a reminder, that contract runs for approximately 24 months. If we look at our gross margin, as a reminder, our target has been for a long while to have a gross margin around 80%. You might remember that we've also communicated that in periods of high growth, we've typically seen a negative impact on gross margin coming mainly from hardware-intensive deliveries in periods of high growth. This quarter is actually a nice exception to that. We have definitely a lot of hardware-intensive deliveries to the defense sector, but we have been able to see a really sound product mix, which balances hardware-intensive deliveries with software-only deliveries on a level that still makes the gross margin not only robust, but a few percentage points above our set target. If we then look further down the P&L, this growth has been able to flow down through the P&L, resulting in that all our other profit metrics, EBITDA, EBIT and even net profit has seen a very, very strong improvement, turning some of them from negative numbers to relatively strong numbers. If we look at the EBITDA margin, the adjusted EBITDA margin, that is actually reaching a 30% margin, a new record again. So it's a bit of a record quarter. The adjustments in the quarter is quite limited, so adjusted and the reported EBITDA is fairly accurate. If we move ahead then to the order backlog, you've seen when you've been following us that we've subsequently and incrementally building quite a strong order backlog. So at the end of this quarter, our order backlog amounted to SEK 642 million. So that's obviously a big ramp-up from the SEK 375 million last year. With this order backlog, the visibility is according to the current project plans, roughly SEK 226 million out of that backlog is expected to be delivered in the next 12 months period. So that clearly gives us a very good long-term visibility for the future, and that allows us to plan ahead, do proper resource allotments and procurement and delivery planning, but also being able to comfortably invest in both sales and delivery capacity to fuel further growth. If we look at the order intake individually in the quarter, it was somewhat lower than the comparison quarter. Main reason for this is that in the second quarter of last year, we had a number of multiyear contracts that were recorded as order intake then. We didn't see such multiyear contracts this period, which is a clear reason for that. If we, on the other hand, look at the trailing 12 months, the order intake is SEK 503 million. So a bit more representative measure if we look at the swing that can actually happen between the quarters. I'd like to have David walk us through this slide, which is a bit more on the working capital and the financing part.

Yes. And I just saw from -- thanks, John. And I saw from the chat the comment that there seems to be a problem with the sounds with some attendees not hearing anything. So if I talk a little bit now, it would be good to get some feedback from some in the audience just knowing do you actually hearing what we're saying or do we have an issue here? So sorry for that, but I think it would be getting that seems to be working.

Yes. Maybe we can have a quick -- can we turn the mics off very quickly? We need to just take a quick break. [Break]

Okay. So am I -- do we have sound now? So you are hearing me. Perfect. Great. So sorry for the bit of technical issues, but it's not due to our products, but other products. So as long as it starts, that's fine. Okay. So let's look at earnings and what impact this has on working capital and what we're doing. So if we start firstly looking at the cash flows from operations are increasing strongly before working capital changes. We are -- so there's clearly a growing profitability in our business, pushing cash flows before working capital changes from SEK 4 million to SEK 23 million. So as a starting point, this is very sound, and we have not seen these levels in Clavister before. However, this generates then impact on working capital. This growth means that we are binding more cash in our business. And a key reason for this is while we have partially there is more business versus larger end customers, which in itself means that we're binding more cash in accounts receivables. That's one reason. The second reason is, of course, the large project with the Norwegian Armed Forces. This follows milestone payments. And as you know, this contract started with work from our part early February. The first payment milestone comes during this autumn, meaning so far, yes, this project is very important in driving the P&L. But this -- so far, it doesn't convert into cash. That cash conversion, that starts in the autumn with a first payment of a bit above SEK 60 million. So that's, I think, a very important takeaway that we will be seeing larger cash flow fluctuations in Clavister than we have seen before. That's, of course, consequences of partially a much higher growth that in itself as in all companies, have impacts on working capital, but also large projects like BAE, but especially the Norwegian Armed Forces creates increasing fluctuations. To handle that, we have done a -- continued to develop our relationship with our commercial bank, Swedbank, raising the commercial debt from previously -- well, it was SEK 100 million, but the first down payment of this 5-year loan was done in end of Q2, taking it to SEK 90 million. We then borrowed an additional SEK 40 million. With those SEK 40 million, SEK 26 million of that has been used to now during this quarter, fully repay the tax deferrals we have been having since COVID. Those would have been repaid within the coming 12 months, but we have done it now. But with a bank loan that we do repay over 5 years instead. Reasons for that is this gives a better visibility in liquidity. It gives us the ability to sit with a somewhat higher cash position to balance working capital fluctuations, which we deem to be larger due to the reasons I just mentioned. So I think this is a positive change for us. Then I think also, which I think is important is to take a step back and look, okay, where were we 1 year ago? Well, a year ago, we were sitting with a large debt with EIB, which we were working hard to find a way to repay, which we have done. We did not have a commercial bank relationship, which was important to put in place because we saw the potential of the business moving in this growth trajectory. And in order to handle that, we needed to build those commercial banking relationships, which we have built. We sat with much larger tax deferrals. They are now being fully repaid. Then there is only one item left in the balance sheet that we have the ambition to handle, which is the old convertible loan of SEK 10 million with Norrlandsfonden. That matures in May '27. And an ambition here is to after May '27, if things goes according to our plan, would be to sit with the commercial loan with Swedbank but nothing else with then having fully done the balance sheet cleanup that we set up to do. So I think these were the things I wish to mention here. Yes. And then, of course, we need to.

So again, sorry for the technical problems, but let's continue. If we then make a bit of an insight into our 2 business areas, if you like, starting with the civilian business. The civilian business is Clavister's core business and historical business, if you like. In the headline here, we also phrase it that, that business has multiple growth avenues, which is definitely true. If we look at one of the important metrics in our civilian sales is annual recurring revenue. So we saw growth of our contracts contract values with around 5% this quarter. The civilian business is almost exclusively a recurring revenue business. So not only is it a stable core, but also an important recurring business for Clavister. The civilian business builds on a few things. It, first of all, builds on a very broad customer base. This is clearly different from the defense business, which is more oriented towards fewer and larger accounts, whereas in the civilian business, we're looking at thousands and even 10 thousands of deployments to a broad customer base. Still, even though the customers are a bit smaller, we're still getting the benefit from long-standing relationships. The types of products and solutions that Clavister is deploying with the civilian customers are still infrastructure products that have a long longevity. They are highly integrated in our customers' networks. So as a consequence, they become quite sticky. So the relationships we have are typically 5-plus years, even much longer than that. I think this is important. There might be some misunderstanding that a subscription-based model is also very easy to sort of interrupt and terminate from a customer's point of view. Contractually, yes, but the type of integration and the type of relationships we're building are much, much longer. So clearly, this gives us a lot of predictability and stability in the underlying base business. What drives this market? Well, I think this is clear for everyone, the rising cyber threats, the regulations and the geopolitical situation that in turn drives the entirely -- entire digital sovereignty requirements in EU. That drives a lot of demand on cybersecurity and an increasing demand on specifically European cybersecurity. We're still not seeing the peak, and we're only in the beginning of that demand on European sovereignty, but the discussion both within the political layers and decision-makers at our customers have moved from curiosity around digital sovereignty to decision-making criteria. Still early days, but the trend is extremely clear. Where would the growth in the civilian business come from? Well, of course, from new customers, that's clear. But keep in mind that Clavister has been building a broader and broader product portfolio over the years. So we see a lot of cross-sell, upsell opportunities also with existing customers. So that's important to keep in mind that with the big installed base we have, there is a reasonable opportunity to improve or saturate those installations as well with additional products. One of the sectors or verticals that I would like to highlight specifically is the energy sector. So that is the fastest-growing cybersecurity vertical in the European Union right now. For obvious reasons, I mean, cyberattacks are clearly targeted to the energy sector to a large extent. Our products have a very nice fit to that sector. And we're sitting already with large customer references, both in Germany, including LEAG, for instance, one of the top energy producer in Germany, but also many of the regional and even local energy providers throughout Germany and Sweden. So this is a good sector for Clavister to be in. Another one would be the even larger public sector, the public administration, local, regional and nationwide governments. We are slowly but surely building a position in that sector as well. All in all, this has led up to quite a significant pipeline. We have a partner model. As a reminder, we're selling through partners. We are attracting more and more partners, more scalable partners as well. The flip side of that coin is, of course, and we talked about this before, the larger type of customers, the larger type of partners also implicitly creates longer lead times. There are longer sales cycles. The deals are more complex. They are larger. They require more pilots, more proof of concepts and so forth. So we will see and continue to see quarterly variability on the civilian sales, but we are very confident in the pipeline that we've built and continue to build up. Switching over then to Defense. Strong -- again, strong growth in the quarter. So that's clear. And the underlying driver is, of course, the increased deliveries. We talked earlier about the ambition for Clavister to become integrated as a technology in various type of defense platforms. And in this case, a defense platform would be, for instance, the BAE Systems CV90 vehicle. So could be different type of vehicles, could be different type of utilities, could be different type of weapon systems. Our ambition is to sit with 10 defense platform integrations by the end of next year, by the end of 2027, commercially integrated, that is integration that gives us substantial revenue. Up to this point, including Q2, we've built integrated commercial integrations with actually 6 defense platforms. I think this is important to mention as a lot of the public communication that we have been able to do is mostly centered around the CV90 platform. But there are 5 other platforms. Some of them are in the early days of production, early days of volumes. So you won't see them impacting our deliveries and net sales in the recent quarters or in the next near quarters, but they sit there with a lot of potential to scale up. And again, we're integrated so -- and commercially integrated. So we're not starting from a proof-of-concept situation. Talking about the CV90 platform. Obviously, it continues to create a lot of scaling opportunities for us. And I think it's sort of no secret that the entire market is talking about the potential Nordic Edition. And as a reminder, the Nordic Edition is a multi-nation procurement program where a number of Northern European states are planning to procure a significant amount of CV90s. Naturally, we look forward to see more details on that. And at this point, we're only referring to BAE's public information about volumes and due dates and so forth. But clearly, we have a strong wish, desire to be included in that deal as well. Coming back to the Norwegian Defense Material Administration (sic) [ Norwegian Defense Material Agency ] contract. Again, as a repetition, SEK 280 million. That has been extended in the quarter by a SEK 40 million order for options. Those options are mainly related to something which in defense is referred to as NATO FMN, Federated Mission Networking. So this is essentially a requirement or a standard rather where the Clavister solution that is being developed and delivered to the Norwegian Army is interoperable with all other NATO countries operations. So a super important capability in the system. From a relationship perspective, I think this is also a good sign that the relationship with the Norwegian Defense Forces is really developing well. Worth highlighting as well, what we're delivering to defense is still standardized products. And we have been talking about this in other forums, but I think it's well worth repeating that the software and the products that we include in these defense platforms are the very same capabilities, the very same software that would sit in a civilian municipality, an energy company or even the small SMB customer, if you like. So we avoid at almost at all cost, bespoke development for a single customer. So we reap the benefit of having a technology stack that is shared across all our customers, all our verticals. That's not unique, but it's very, very commercial feasible, if I may. With that, leaving back to David to talk us through the finances.

Thank you. Yes, [indiscernible] okay. So we start, as always, with order intake and order book. And as John alluded to in the beginning, order intake in Q2 is a bit on the weak side. But as we've also said before and by looking at the graph, order intake in Clavister is something that fluctuates heavily between periods and Q2 is no exception. We saw a record high order intake in Q1, sitting now with a bit of a lower order intake in Q2. I don't think one should read too much into that number. There are natural fluctuations between kind of when do large contracts land, in which periods are we taking multiyear contracts, and there is a natural fluctuation to this. And I would expect order intake volumes to bounce upwards in coming quarters again. That's what we can see historically. I think more important is to talk about the trend line, which keeps pushing upwards and the order book sitting now at SEK 642 million. That gives a lot of visibility together with our ARR base, which means that it is much easier to plan how we build up and invest in growing the company going forward. So I think that's the key takeaway. And just mentioning, I mean, we have -- John talked a little bit about Nordic Edition, the possibility to land that would obviously be something that will continuously to grow the order book and give increased visibility going forward. So that's clearly an opportunity to work with coming quarters. Net sales-wise, here, the fluctuations in the order book translates into something much more smooth -- we see that we, for some time, have been able to keep bending the growth trajectory upwards. And in this quarter, clearly landing in our strongest growth quarter so far with 63% growth. And it is civilian sector coming in with the stability in the base, a high degree of recurring contracts that -- and this has been a very important part of the strategy when we set out several years ago to say, let's ensure that the civilian base is a foundation from where we can grow with large projects. And I think we're proving that. Then the civilian base, we will grow it faster. We will talk more about that, but it acts exactly as the foundation we have designed it to be and with defense really delivering high growth from a base of stability, and that leads to these numbers. So I think that's important to state. Here, the mix between civilian and defense sales. I would say that what we're seeing here is more or less what we alluded to in Q1. We still reiterate that have higher growth expectations from the defense side in the near quarters. We said it in Q1, and we're saying it again in Q2, expect a stability in the civilian business. I think we're seeing a growing pipeline. As an example, and this was not a large order, but a very important order that we managed to win in Q2, as an example, one of the major energy suppliers in the Nordics as a new customer in Q2. That took a year. We now landed with a foothold together with also which was part of the strategy or is part, landing larger national resellers. That was one of the first deals we did with one of these major resellers in Sweden versus this type of customers. So by focusing on large customers in the energy verticals, we build valuable relationships we can scale and we build business together with large resellers, which can scale not only that account, but a larger subset of larger customers in that vertical and adjacent verticals. So this is important. It takes time, but I think we're also yielding results. So we avoid making very firm commitments and guiding around what to expect from civilian business, other than saying you should expect stability and you should expect Clavister to keep working on building these end customer and large partner pipeline and relationships. And I think we're doing that and recruiting quite a lot to the team to also deliver on that. ARR-wise, well, there is an underlying -- and I realize I'm repeating myself when I said there's an underlying stability in the business because it is. We are keeping customers. We're growing the value of the contract base. However, of course, the speed with which we add new customers, new larger resellers will need to increase, of course. But the work to go there is being done. And I think we can, thanks to also the performance in defense, keep having a long-term view of what's done here to keep building something with a good thought in, okay, where are we heading and allow ourselves to be long term in how we execute that. But there is a growing ARR base that supports us going forward. Profitability-wise, I think here in the defense area, we are really balancing within defense to ensure a good order -- good profitability in the gross margin. We have growing deliveries to, for example, BAE with very expensive hardware, diluting the margin a bit from our target of 80%. But on the other hand, we see the Norwegian Armed Forces with a pure software delivery. These 2 balances each other very well. And the defense and the civilian business being then growth-wise, a bit on the low side. I mean that's the case, meaning then that we have less dilution on the margin from hardware deliveries, meaning that there's a strong margin support also coming from the civilian sector, leading to a very strong gross margin. This also translates to very large gross profit increases, I mean, in terms of -- in absolute numbers as well. So this then fuels profitability further down in the P&L. So if we look at that, we see -- if we just switch slides and look at sorry, first starting with OpEx that we have an OpEx increase of 20% in Q2, roughly in line with Q1, where there were a bit larger one-offs. We're sitting with the one-offs in Q2 as well. So if you adjust for them, underlying OpEx growth sits around roughly 15%, meaning that we're investing quite a lot in increasing capacity. The key growth driver in cost here is the buildup of the development capacity to deliver the software and building the software needed for the Norwegian delivery. That's the one single thing that drives costs mostly, but also investments in sales and marketing or other kind of larger cost drivers. We have been saying, and I saw a question in the chat about that, so I can answer this -- that specific question here, what to expect around profitability? Well, this growth is fueling EBITDA, reaching EBITDA -- adjusted EBITDA margins around 30%, highest we have demonstrated so far. We're reaching an EBIT of 17%. That also the highest we've seen so far. And I get quite a lot of questions and John as well about what to expect regarding the EBIT margin. Well, our intention is to be EBIT-wise, margin-wise in 10% to 15% EBIT margin, not trying to optimize profitability, but rather say, we need profitable growth, profitable growth for us in the range of 10% to 15%. We believe that, that's enough to handle our working capital needs, our general cash needs in the business, but let's not work hard to be above that for now. Let's rather reinvest these profits, these cash flows into growing the business further. So that's what we're aiming for. And of course, glad to see that the company is net result positive for the second consecutive quarter. We have now seeing here clear improvements, and they are operationally driven. So that's, of course, very important for the long-term stability of the Clavister case. So I stop there.

Thank you, David. So before leaving for Q&A, a bit of a summary and our outlook. So I think we can clearly state that when we're now moving into the second half of 2026, we have with us a very strong order backlog. I know that provides visibility. We have the profitability that allows us to invest in not only delivery capacity, but also further sales and marketing capacity to fuel further and future growth. From the pipeline we're building and the type of partners and customers we're attracting, I believe it's fair to say that we have a strengthened market position as well, a strengthened brand in the market. If we look at the priorities, clearly, we need to continue to execute successfully on the contracts that we have won already. David mentioned already that naturally, we want more from the civilian side. So we need to accelerate the civilian business and continue to scale the defense business. So nothing magic really, but those are our clear priorities. And again, to repeat myself a little bit, still worth to remember that the technology we're building is not bespoke software to individual customers. It is a shared product, shared portfolio concept where standardized products are being supplied to all our verticals and all our types of businesses. That's super important to create leverage. Looking at the planning ambitions, we remain with the ones we had in the previous quarter, namely we should be able to grow faster than the general cybersecurity market. We should be able to meet our 80% gross margin target. There might be fluctuations, of course, but still, in general, 80% target. And coming back to the EBIT question, we should be definitely reinvesting a significant part of the cash flows we're generating into further growth and capturing larger market shares. With that, Kate, over to you and Q&A.

Yes. Thank you very much for you both sharing your insights. We already have many questions come in, but please share them now as well. We'll pick them up as they come in. Let's -- so yes, from a -- let's first look at different business areas. I would say let's first look at the civilian business. So we have a question. When can we expect ARR growth to pick up again? Please outline what the plans are for refocusing the civilian business and the repositioning in the coming quarters?

I can start and you can fill in, David. One -- if we look at the sort of the -- and this has to be a bit of a memory lane, unfortunately, so bear with me. When we when we did a larger overhaul of our commercial strategy back in 2021, I believe, we did a few things. One was the shift towards a recurring revenue model, subscription-based licensing, building a possibility for our sales teams to rather chase new opportunities rather than working with existing customers only and chasing our own tail, if you like. The other main change we did to the strategy was to focus, focus on our geographical targets, moving from a position where in the past, Clavister had been spreading itself way too thin with limited sales resources in not only many countries, even many -- and that's ambitious, of course, but being a super small company at that time, that didn't bear fruit, obviously. And the other -- so the change was basically consolidating back to Europe, reaping the benefits of the increased focus on European technology and so forth and focusing on a fewer countries, building a critical mass in those before we start expanding to other countries. And the final and perhaps most important in the end change came from understanding who is our ideal type of customer. And we were also in the past, very scattered and fragmented in that area. So we tried to sell basically to everyone who wanted to buy cybersecurity. That's neat. But in reality, we didn't sort of spearhead into customers where we could really become the most relevant supplier for those markets. So what we did essentially was taking a step back, looking at what are the type of customers, the type of verticals where Clavister as a supplier with our technology would be the best fit, representing the best ideal customers, if you like. And our conclusion was that within the so-called mission-critical type of environments being public administration, energy, defense and so forth, that's where you have the biggest impact from cybersecurity attacks. You have fairly large budgets to invest in cybersecurity and the requirements on certain tech and definitely the requirements on European suppliers is important. So that was a shift, and that is a shift that we're still living. So keep in mind that the historical customer base represents a wide type of customer groups. You have your local hamburger chain or local hairdresser, but you also have the large enterprise customers in there. Nothing wrong with any of those. But in order for us to scale the civilian business, we need to be represented on a set of verticals where we are the experts, we are the most viable supplier. We have the best technology and so forth. And we believe that the sectors we are focusing on really represent that. So that's a bit of a memory lane on why are we seeing a civilian market that is slowly, you could say, picking up, but picking up. But even more important, the quality of the opportunities, the quality of the pipeline is on levels that Clavister historically were not able to see given that sort of defocus that we had at that time. So that's just to give a bit of sort of the context here. How long it will take to convert that pipeline and an increased pipeline to opportunities that -- or to deals that will hit the P&L, I will actually refrain to answer that. It will become a bit naive for me if I would state a date, to be honest. But I mean, there is super clear ambitions from management, from sales teams. There's a high activity level. And again, the pipeline is increasing. So as always, with sales, it's a numbers game. What you fill in the pipeline is what you get out at the end of the day. So we have a lot of confidence in an improved civilian sales as well, but I won't give you a date.

Okay. Thanks very much, John, for the elaboration and the detailed explanation on the civilian business. I think it's always good to elaborate more in detail on that. We do have one more question regarding our customers on the civilian side. You mentioned that on the civilian side, the customer relationship is typically 5 years plus. When you lose a customer, what is typically the reason? Did they move to them as a supplier or simply decide that you not need the technology? Do you have any further insights on that?

Yes, absolutely. I think I've never encountered a situation where a customer leaves us because they don't need the type of technology that -- well, it might have happened, but it's a bit unheard of. One of the situations which is it's impossible for us to mitigate is when a customer becomes acquired or forms part of a larger group and there is a group decision that yes, we are a large corporate, we are a Cisco house or we are a Palo Alto house and everyone has to fall in order and change their equipment to the group standard that we've seen in some cases. Other than that, what we typically see and this is -- it's also part of sort of the dynamics in our civilian business that, yes, it takes time to build those type of really large opportunities and the semi-large opportunities. But Clavister is -- and I think you could ask all of our customers and get sort of a resounding answer on that one. Clavister is the type of customer that when we're in, we're building a super strong relationship with the customer. And we're not only invoicing the customer for 5 years or 10 years. We're actively building a relationship with them. We're expanding with them. We've become, yes, a bit I wouldn't call it marketing bull**, but a bit slimy, we become the trusted adviser to the customer. And that's true for many of our civilian customers. They need some convincing to take on a smaller brand and a fairly unknown brand, at least if you compare with the big U.S. ones. But once they pass that hurdle, they sit with us for a very long time. And the products -- and you've seen the statistics, the products are super stable. They keep on running for many, many years. Naturally, if there is a hardware as part of our delivery, there will be a point in time when hardware grows old and needs to be replaced. In many cases, that serves as a trade-up potential, selling newer products to them. But at those points in time, naturally, we can be subject to a competition, of course. And yes, if we in the worst case, if we're not competitive at that time, yes, we could be replaced. But otherwise, we sit with long-term relations. I don't know, David, if you would like to complement.

Yes. I mean I agree, and I think you can add 2 more scenarios that are -- they are equally a growth opportunity for us, but they also represent a risk. Senior changes -- I mean, a new CIO, that's a point of entry for us. That's us have we won many, many important customers that CIOs that we have relationships with before moved to now another company, the company where they were, keep us, but we get an entry point at a new company. But of course, that also represents a risk that a new CIO might have his or her views on preferred vendors, and that represents a risk of getting replaced. So that's, I would say, the key risk. And of course, especially with smaller and midsized customers, they are very -- they listen to a high degree to what their integrator, their partner is selling to them. And would they, for whatever reason, change to a new retailer, a new partner from where they buy IT services, that might also represent a risk that, that partner is not a Clavister partner and would replace Clavister with something else. So that -- but that, of course, goes in both ways. So these are typical risks. Not that -- it's much more rare that somebody uses our products and one day finally says, no, I don't want this. I want something else. That is not the typical scenario where we lose a customer.

Great. Thanks for both elaborating on and sharing your insights in the civilian business. I think it's good to spend some time there. We usually spend also a lot of time on defense. And with that, let's sidetrack into questions around defense as we have got a lot as well around that. Starting off with the Nordic Edition. When can we expect the Nordic Edition order to be announced? And what is a realistic base case scenario in terms of numbers of vehicles and order size for Clavister?

I think as I mentioned, I would like to avoid speculating on that because at the end of the day, we are a sub-supplier to, in this case, to BAE Systems. It's their prerogative. It's their time line that governs everything. So I would say the best answer is really to look at the public communication from BAE and the latest news from the market screening there, if you like. So we can only state that we are integrated. We have, of course, good expectation to be included, but timing, volumes, everything that has to be announced when/if it comes.

And next question around defense platforms is how many defense platforms were you at the end of the financial year '25 and in Q1 '26?