Fjord Defence Group ASA ($DFENS)

Good morning, and welcome to Fjord Defence Group's ASA presentation for the first quarter of 2026. It will be me, Jon Asbjørn Bø as the CEO; and Øyvind Mølmann as CFO. We will conduct this presentation. In February in '26, we completed the acquisition of Scanfiber Composites, as we announced we were buying in Q4 '25. We've done the substantial offering for shareholders that were not a part of the previous private placement of NOK 25 million. The company recorded a record-high order book at the year-end in '25, and we have still been growing that throughout the first quarter. If we look at the pro forma numbers of the group on the defence side, and we include Frydenbø Milpro, which we have acquired, we have a revenue of about NOK 80 million with a 15% EBITDA margin. We expect further growth throughout the next years. And one of the big things now is we are really trying to prepare the companies to meet the higher demand. If we look at the general assembly, we elected a new Board with a new Chairperson, Niels Ihloff, and we also have Emilie Mehl as a Board member. And Ketil Skorstad was reelected. So we are on track to do exactly what we were planning to do. As mentioned, we have acquired a new company, Frydenbø Milpro. That is a company that are offering small RIBs and boats for the defence market and especially success in Norway and in Sweden. And we do think that is a very good and strong addition to the already 2 companies that we have in the group. They are specialized in boats less than 10 meters and are led by CEO, Trond Underhaug, which have 30 years of marine sector experience and also led the company since they were doing that for Frydenbø Milpro, and I guess it was about 2014. They have a large customer base, and they have a very, very strong growth over the last years, but they always have made money, which is important for us to meet our requirements. If we are looking at Fjord Defence AS, so I have to say now I can really talk about a customer, not just an OEM, which we are required to do when we put out press releases. We have supplied and are a supplier for the Leopard that for the anti-drone system and the short-distance defence of the Leopard. And we have now supplied to Norway and are under contract for several other customers. If we look at Fjord Defence AS as a whole, we can see that we have moved into new building where we have the possibility to increase the revenue up to 6 to 10x more for the capacity. We have successfully recruited my replacement. We have built up a U.S. Head of Business Development, a new one and additional logistics and procurement and assembly people. So we have done quite a lot to prepare for the coming years. When we look at Scanfiber, we have together with previous owner and as also the CEO of the company, recruited a new CEO because the one we have today, he wanted to work a little bit less. And we have got a hold of a man called Peter Bertelsen, which has more than 20 years experience in defence ballistic protection. We are really, really satisfied with that. We have recruited one more salesperson in the organization and are working on building up also an international sales team. At the last, what we are doing at the moment is to prepare the production facilities for the ramp-up as we expect will be coming from '27 and onwards. An important part, we told when we bought the company, inside the facility today with smaller investments, we can double the revenue, and we are on the way to doing that with smaller investments. If we look more close on Frydenbø Milpro, I would say this is a very exciting company in Norway, which are an integrator for boats below 10 meters. And they are working with the customers to provide exactly what they need for the different missions. They have a good customer relationship. They have strong supplier chain and they have a very, very strong financial performance. So we are very happy that we can integrate Frydenbø Milpro AS into our family, and we see strong connections with the other companies we have also, both on expanding the customer base and also some other small technical things. Then I will leave the floor to Øyvind Mølmann, our CFO.

Thank you, Jon Asbjørn. Good morning, everybody. So we have, as usual, prepared pro forma financials going back in time in order to show the organic development in the companies we have acquired. And as you can see here, we already have demonstrated a very strong growth in the revenue part with a compounded average growth rate of 50% from 2022 to 2025 and accordingly, 100% growth rate from -- regarding the EBITDA. You see the turnover at end of 2025 here stops at NOK 335 million, while on the right-hand side, the first quarter this year is showing NOK 340 million. So there is a growth from '25 to first quarter. And we will also see that on the next slide here regarding the order book. We have NOK 300 million in year-to-go order book. And if you add that to the NOK 80 million we have in the first quarter this year in turnover, you already are at NOK 380 million in turnover for 2026. And there is more. There will be more order intake than the current NOK 300 million for the year-to-go. So that underpins the estimate we have given and guiding for this year's turnover from NOK 420 million to NOK 450 million as we expect for the current 3 entities we own. But overall, we are very satisfied with this order book, NOK 300 million year to go and then NOK 95 million for next year, NOK 140 million for 2028 and the years after and a total of NOK 535 million. What we see in general is that the order book tends to be -- it's growing and it's becoming with a longer tail. So that reduces the risk for future turnover in the group. And I think that will be a development that continues. Okay. So then into the details for the first quarter. There is a growth year-on-year on the Defence segment, as you can see from Q1 '25 with NOK 76 million and up to NOK 80 million, a growth of 6%. This can vary from quarter-to-quarter, as we have mentioned previously, but you will see that -- if you consider the Defence segment totally, there is less variation than in each of the companies. For instance, if you look at the contribution margin, you will have 36% in '25, 37% this year, while if you consider each company, there are great variations. So we will, going forward, be focusing on the Defence segment as a total. And that goes without saying when we add company after company after company. So that would be the case. And as we have mentioned before, legacy becomes less and less significant in the total. I would like to focus on the rightmost column here, which is showing still for the group, the adjusted EBITDA of NOK 7.2 million, having added back unrealized loss at NOK 6.7 million for the Capsol shares, not any cash effect and also NOK 4.2 million in transaction costs in the first quarter, of which NOK 0.5 million is related to a case we abandoned for this year, and the rest of it is, of course, linked to the acquisition of Scanfiber Composites. It is important to understand that down to EBITDA, the elements are cash elements. While if we go further down to the EBIT, you have non-cash elements, which is the NOK 14.4 million amortization for the multi-client library that has got no cash effect, but we have tax deductibility for it. And then it's NOK 7.3 million in PPA amortizations linked to the previous acquisitions for Scanfiber and for Fjord Defence, of course, no cash effect and no tax effect. So I would say these are merely for information purposes without any heavy economical consequence, no cash consequence of this. So please focus on the EBITA line, in particular, for the Defence segment, showing earnings of NOK 12.5 million in the first quarter this year. So with that, I leave it back to you, Jon Asbjørn.

Yes, please. Yes. So to summarize it, if we first look at our compounding strategy that we defined in June last year, we think we are on a good way to meet what we set up to do with a revenue scenario of NOK 2 billion in 3 years. We have successfully acquired 3 companies on a group level. And all these companies are meeting all the requirements. It is the revenue side between NOK 100 million to NOK 1 billion, the profitability of plus/minus 15%, have clear organic growth potential, all 3 companies. They have no distinct products that are required for a technologically breakthrough to succeed. And all 3 companies have a strong management. And foremost also important, we have also said that this should be watered in for existing shareholders. And I think that we have proven after we did Fjord Defence AS that via Scanfiber and also now with Frydenbø Milpro that we are also focusing on that part for the shareholders. So to sum up, we expect a good growth for the Defence segment, especially after 2026. And we have an all-time record on the order backlog. And as we are required to announce when we are announcing a new purchase of a company that we already are in strategic dialogue with our new potential company to buy. So I do think we are on track with what we say. We have focused both on the buy and the build, and there have been a lot of focus on the build, but we also managed to do the buy side, meeting our requirements. So I think in the future, we will focus now on making the organization strong enough to existing growth, both on the buy side and also on the build side. And with this, I would like to thank you for listening for our first quarter presentation. Thank you very much.