STRONGPOINT ASA (STRO) April 2026 Capital Markets Day Transcript

Good morning and welcome to this Q1 presentation by Strongpoint. My name is Jakob Tverabak and I'm the CEO of Strongpoint. With me to present the Q1 results today I have Marius Drevelin, our group CFO. In today's session I will share highlights from the first quarter. I will provide a short overview of StrongPoint, in particular for the convenience of those less familiar with us. And I will then move on to explain some of our exciting customer success stories from this quarter. Then handing over to Marius for his review of our financials for Q1. And then I'll come back in again, rounding off this session with our view for StrongPoint going forward. So highlights, we had a flat first quarter compared to same quarter last year. Revenue was 342 million Norwegian kroners in this quarter. Recurring revenue in the quarter grew by 3% on a 12-month rolling basis. and EBITDA reported in Q1 was 10 million nok, which is the same as Q1 last year. Cash flow from operations was minus 9 million this quarter versus plus 8 million last year, principally driven from changes in working capital. With regards to customer success stories I'm going to talk more about. The first one is Iceland Foods in the UK. The second one is the leading Norwegian grocery retailer, Norgus Gripen. And then also some exciting automation projects in the UK. But first, a little bit about Strongpoint. So Strongpoint is a technology company focused on serving grocery retailers. efficiency saving software and products. We have an annual revenue of about 1.4 billion Norwegian kroners with around 30% of that being recurring. Now more than 80% of our revenue comes from grocery retailers and we have around 500 employees across Europe and our software solutions are developed principally in house with our own development team. In short, StrongPoint's purpose is to make grocery retailers more efficient and sustainable. So what about our technology solutions more concretely then? Well, we help grocery retailers tackle five operational challenges, five key operational challenges while unlocking strategic opportunities from scaling e-commerce and digitizing the store to using AI to reduce theft in store. So firstly we have e-commerce. We, at Strongpoint, have an end-to-end e-commerce platform that is truly world-class. We provide everything a grocery retailer needs for e-commerce, from software to pick, pack and process online orders to last-mile solutions. We are in particular proud of our proprietary order-picking solution. We dare to say the world's most efficient in-store picking solution that is getting traction with some of the world's most esteemed grocery retailers, including in this quarter. Additionally, we provide other picking and last-mile solutions aimed to ensuring the highest level of efficiency and profitability for grocers in a sustainable manner. Secondly, theft and shrink. We have multiple anti-theft solutions, many of which are AI-powered. This includes Vennsafe, Select and Collect, AI-powered scaling weights, and AI-powered theft detection self-checkout. Thirdly, Store efficiency. We provide a proprietary self-checkout solution. Shopflow Logistics, our proprietary SaaS-based inventory, order and task management solution. AI-powered age verification and AI-powered shelf monitoring with Vusion. Fourthly, we provide pricing and promotions. We have a digital solution for pricing and promotions. As a proud partner of Vusion, which is the leader in store digitization and the world's largest producer of electronic shelf labels. And fifthly, handling cash. Still, even with low single-digit percentage of cash usage in Norway and Sweden, the sheer volume of transactions in grocery stores means that cash needs to be handled efficiently. This is also evident with our recently announced agreement with Norgesgruppen this quarter, the largest grocery retailer in Norway. We're enabling grocery retailers to handle their cash more efficiently in general through our CashGuard solutions. And furthermore, we are developing CashGuard Connect, a unique closed-loop cash management solution that makes cash handling as easy as handling cash payments. And we'll talk more about that a little bit later in this presentation. So that was about our technology solutions. Now, where and how do we operate? We have nine core markets in which we focus on. These markets are the Nordic region, the Baltics, Spain, the UK, and Ireland, as shown here on the map. These are countries where we have our own teams on the ground managing the entire value chain, from sales to installation to service and support. And why is that? Well, we believe that we can build deeper customer relations, customer intimacy, and seize a larger share of revenue from the technology spend of our customers. Customer intimacy is extremely important at Strongpoint. It's through those deepening relationships with grocery retailers that over time allows us to become a trusted partner. However, we're not only limited to nine countries. We today already serve grocery retailers in over 20 countries with the support from our partner network. and specifically with our award-winning order picking solution we're showcasing our ability to serve customers well beyond our nine core countries beyond customers in our home markets we serve customers with the order picking solution in in new zealand cyprus iceland to mention a few This is a very important part of our strategy forward, building ever more recurring revenue base with our order picking solution across the world. Now coming back to the first quarter and success stories, I want to point out three of the success stories with customers we had this quarter. Firstly is Iceland Foods. Iceland Foods is one of the UK's best-known grocery retailers and have been part of the British grocery market for more than 50 years. Since starting in 1970, the business has grown into a nationwide retailer with close to 1,000 stores, around 30,000 employees and an annual turnover of more than 55 billion Norwegian kroners. One of its claims to fame is that it was the first grocery retailer in the UK to launch a nationwide online shopping service, which was introduced in 1999. This is not a first-comer for e-commerce. And hence we are also then extremely proud to have announced that we, well, that Iceland foods have chosen strongpoint for all their e-commerce picking operations the project is beginning now with a planned proof of value phase with a broader rollout to follow subject to satisfactory results of the proof of value phase which we really of course believe in that another leading grocery retailer like iceland food has chosen strongpoint is just another proof of the fact that we truly believe that our order-picking solution is world-class. So very, very pleased with that. Secondly, Norgusgruppen, the largest grocery retailer in Norway, and one of our most long-standing customers, is set to replace a portion of their already installed base of cash cards and VEDSAFE solutions. We are extremely proud of these two agreements. CashGuard and Ventsip are examples of some of our most tried and tested proprietary solutions. It also demonstrates that even these are well-known and well-used solutions. They are still highly relevant to our customers. That Norway's largest grocery retailer is continuing to trust and invest in our solutions means that our solutions today remain integral to their operations. It is also a reminder that even in a country that is a poster child of cashless society, grocery retailers continue to recognize the efficiency and other benefits from using cash management solutions and thirdly and lastly to to mention in this aspect is auto store we have had multiple auto store automation projects in the uk this quarter in the quarter we've been asked to build three auto store automation solutions for retailers in the uk two of these are for auto stores more compact solutions called pio and one is for the traditional larger auto store solution the largest of these three is to design and build an auto store and associated automation solutions for a global e-commerce retailer based in the UK these new contracts demonstrate our UK's business continued transformation from its shop fitting routes into providing a wide variety of high-tech automation services and the spillover effects of our focus now from the highlights with customers onward to some strategic projects. Firstly, our order picking partnership with the UK's second largest grocery retailer, Sainsbury's. As we have previously shared, the first Sainsbury's stores with our order picking solution went live in Q3 2024. At the end of Q1 This year our solution remains live in a double-digit number of stores. Admittedly, the rollout is taking longer than we anticipated, and there is some additional work needed from both us as a technology supplier and from Sainsbury's as the customer. But our operational teams are working closely together in the stores to ensure that the solution is getting worked at, tested, new features and development to the solution gets into place, so that we can continue to work healthy A few weeks ago, I joined our operations team in store, starting at 5 a.m. in the morning, to follow Sainsbury's e-commerce operations firsthand and to see how our solution is being used in the live store environment. It was valuable to see up close how our teams and Sainsbury's teams are working together day-to-day, identifying issues, testing improvements, and making progress, just as a true partner. Then, regarding CashGuard Connect. So first of all, CashGuard Connect is a fully closed loop cash management solution as illustrated on this picture. This means that end consumers are able to pay with cash at manned or unmanned tills and a grocery retailer will never have to touch the banknotes again. Banknotes are automatically transported directly from the till to the back-office safe and to the cash-in transit provider. This means a lot more efficient cash handling and operational efficiency for the grocery retailer and for the staff and customers increased safety. However, this is still a solution that is under development. It is not a finalized solution and we are still working on preparing a solution that is ripe for large-scale manufacturing. Furthermore, we have previously announced that a local partner company, Hart Automation, went into bankruptcy proceedings. Hart provided expertise on the solution in its early stages and has the majority stake in our local joint venture. The bankruptcy proceedings have taken or created more delays to the project than we anticipated, but we have and are taken legal steps to ensure that we maintain the rights for the solution. These proceedings are still ongoing, but we expect them to be finalized in the second quarter just now. And with that, I will hand over to Marius, our CFO, to share more details on our financial performance. Marius?

Thank you, Jacob. I will now go through the key financials for the first quarter of this year. Starting with revenue, and as we have already touched upon, the Q1 revenue remained stable at $342 million. We had 17% growth in our international operations, led by the UK, with year-on-year growth of 93%. This includes solid growth in autostore projects and Vusion ESL installations, as well as 33% growth in shop fitting. We are pleased with the positive development in the UK, and especially with the signs of recovery within shop fitting. However, in Q1, we also had revenue declines in the Baltics, Norway and Sweden, offsetting the UK increase. In the Baltics, we had a decline of 35% due to fewer self-checkout rollouts. And in the Nordics, there was a decline of 21% due to fewer ESL rollouts. so overall the revenue came out flat versus last year which with all the global uncertainties we are observing we believe is a respectable outcome continue on to recurring revenue 12 months rolling this increased by three percent year on year to 384 million and comparing to q4 2025 it remained flat. As we explained and talked about in the last quarter, the recurring revenue from our former ESL partner will diminish in 2026. In Q1, the effect on the 12 months rolling recurring revenue was a reduction of 8 million, impacting license revenue and service revenue. However, we also had higher growth in other service agreements relating to CashGuard, Bensafe and Self-Checkout, resulting in the overall growth of 3%. If we move on to EBITDA, this was 10 million in Q1 this year, the same as for Q1 last year. And this is driven by the same development we talked about with revenue improvement in profitability in the UK stemming from the 93% revenue increase on the other hand offset by reduced profitability in the Baltics and the Nordics we continue to expect fluctuations between the quarters but from an overall perspective over the last two years as we can see here we are gradually improving. So these were the key drivers of the EBITDA for the quarter. Now let's look at the cash flow movements. We started the year with 99 million in cash and ended Q1 with 68 million, a reduction of 31 million. This includes a positive contribution from the operating result of 10 million and several components reducing the cash for the quarter. I will revert to the working capital increase shortly. We had capex of 7 million which mainly relates to our cash card connect project in Spain and our own post solution in the Baltics. Other cash outflows include premises payment under IFRS 16 of 7 million interest payments of 4 million and other prepayments of 11 million now let's move further into the key components of the working capital development overall for the year working capital increased by 7 million to 100 million at the end of q1 this includes an increase in accounts receivable of 20 million mainly due to the higher activity that we are observing in the uk now this increase was to a large extent offset by a reduction in inventory driven by a reduction in grocery lockers and the shop fitting inventory to conclude we will look at the development in net interest bearing debt during the first quarter the net interest bearing debt increased from 61 million to 91 million corresponding to the development in cash that I just covered and as we have drawn up our available credit facilities the disposable funds were the same as the cash position with 68 million finally the equity ratio remained stable at 46 percent well above our equity covenant of 30 percent with this I will hand it back to Jacob for some final remarks.

Thank you, Marius. I would like to start by reiterating that we do not provide short-term guidance. But what I can say is that our journey towards stable and sustainable profitability will not be linear. In a near term, we will see both opportunities to capture as well as challenges to address. Looking further ahead, we expect grocery retailers to continue investing and increasing their investment in technology. This is encouraging for Strongpoint. Our focus remains on building and maintaining customer intimacy and earning the trust of grocery retailers as we bring our broad portfolio solutions to the market we continue to target international growth particularly through our global SaaS e-commerce opportunities and at the same time we recognize the importance of revitalizing our traditional Nordic and Baltic markets both areas will be important for us in the future development to conclude the continued interest in our solution portfolio together with the trust of our partners and customers that they place in us gives me confidence in strongpoints long-term potential. Our ambition remains the same as earlier stated, healthy revenue growth and an EBITDA margin above 10%. We have already now in Q1 delivered a 11% EBITDA margin in our traditional home turf markets, Nordics and Baltics. And this provides certainly to me an indication of what is achievable, provided an international scale-up of our business. As for the next presentation, we have our Q2 2026 presentation on July 10. For any questions related to investor relations, please do contact Marius directly. His contact details are shown on the screen and, of course, on our webpage. I would also like to invite you all to our annual general meeting, which will be held online at 10 o'clock today via an audio cast following our usual Q&A audio session at 11. For both the annual general meeting and the Q&A, you can email questions to the investor at strongpoint.com if you would like to. With that, thank you so much.