Operator: Welcome to the HMS Networks Q2 presentation for 2026. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to CEO Staffan Dahlström and CFO Joakim Nideborn. Please go ahead.

Staffan Dahlström: Thank you, operator. Good morning, everybody. Welcome to HMS Networks, quarter two 2026. Sunny day in Halmstad, where I'm sitting, and Joakim is sitting a bit further north of Malmo. I hope the sun is shining there as well. Sun is also shining in our numbers. We are very happy to present this quarter two report. I start with a quick business update, then Joakim will do a detailed summary of the financial numbers, we end up with a Q&A at the end. A few highlights. If you look on our net sales, good growth, organic growth 12%. We're happy with that. In total, backed by M&A and some favorable currency, +18%. Strong currency and a good quarter. Net sales SEK 991 million. We are not really at SEK 1,000 million yet, the coming quarters we'll get there. Order intake are a solid organic 15% and totally 20%, but we are not really seeing pre-orders. In quarter one, we saw some pre-orders, mainly relating to the acquisition we made for this Molex business. Now we feel that there's a good balance between order intake and net sales. Fantastic development on our profits. EBITDA SEK 266 million, growth from, what is it? 59% from last year. An EBITDA margin stronger than our goal of 25%, 26.8%. We're very happy with that. Also very happy to see a fantastic cash flow for operations, SEK 334 million. This really helps us in also how we leverage and how we deal with our debt situation. Joakim will talk about that. Strong EPS, we're happy about the numbers. A few business highlights. As we said, good record quarter, we also see that the growth is coming from all our big markets, it's broad based. We're very happy to see a 35% order growth in APAC. Very good. The two major things driving this is our data center automation business. Why we say data center automation is that, as you know, we are not really part of the computing inside the data center. However, we see more and more that our customers, directly and indirectly, are involved in this data center expansions. These are huge facilities, these large buildings require power, cooling, automation, other things. We see that this is also driving our industrial automation companies growth to deliver automation equipment into these huge facilities. We also have a good position with semiconductor OEMs. These are the companies who make the semiconductor machines and responsible for the process. Of course, AI is driving the semiconductor market, and we also start to see a lot of good orders from our semiconductor OEM customers. We see as the flip side of that coin is also increased lead times and prices for memory, especially memory, but also other components, semiconductor components. PCB is starting to have longer lead times, increased pricing. We are trying to mitigate that as everybody else in this industry. It's a hot market. We see that also in the lead times. During the quarter, we also made a, we call it strategic minority investment in a small Swedish AI company called Ekkono. They are really good in making machine learning technology. This is not large language models that are cloud connected. This is embedded machine learning. That's another way of doing AI. Our ambition is to work with them and also use their technology to embed in our products to make sure that our customers can both use the communication side of this, but also do some light AI functionality within their OEM devices. We are very happy to receive the EcoVadis gold medal here in June. EcoVadis is a very big organization looking for environmental and sustainability aspects of a company, but also going beyond CO2. It's also about ethics and governance and responsible sourcing. It fits very well into our strategy. We are in the category of large companies, together with Schneider Electric and Bosch, to receive gold medal, which means that we are top 5% of all customers, all companies here. We are very proud of that. That really shows that we are doing the right things in our sustainability work. With that short introduction of the business, I would like to hand over to Joakim to talk about the numbers.

Joakim Nideborn: All right. Thanks a lot, Staffan. Let's get going with the order intake. As you've seen and Staffan also talked about, we see a little bit of a change compared to Q1 that we are not really seeing these pre-orders anymore, these long orders, customers placing deliveries throughout the year. We talked about in Q1 that we had about SEK 130 million for these long orders. If you adjust for that, I say we are just seeing the same pace more or less that we've been seeing in the first quarter as well. Good solid growth here, 15% growth in Q2 and 12% year-to-date on the organic side. We actually see a lot of good demand, pretty broad on all our markets growing well. What's a little bit surprising and very positive is that APAC is leading out the growth, 35%, and also EMEA going quite well with 15%. Of course, the comparable Q2 2025 wasn't our best quarter, so it's in one way a simple comparable there. It's good also to see that APAC and EMEA is showing the way on the order side. On the division side, we have to note that the I&T division is continuing to perform very well. We have now an organic growth of about 20% for four straight quarters. I think we've been talking about this, that it was expected that we were going to see a rebalance in I&T. I think Staffan and I have been mistaken a little bit on the timing. We thought we would see this more in 2025, a bit earlier, but now we've been seeing it for some time that we are coming back strong in the I&T division. Also Staffan mentioned it as well, that the main driver is data center investments throughout the value chain in different ways. We're coming in with our products, same price as we always sell, but to various new applications for us. That was a solid quarter on the order side. On the net sales side, very similar numbers, SEK 991 million. Organic growth of some 12% here as well. You see we're closing in on the SEK 1 billion mark, slowly but safely growing. Of course, the Q4 and Q1 solid order intake has been supporting now the sales in Q2. We have, as you know, for 2025, we didn't see the best growth in the first half, and now we're back to double-digit growth for the third straight quarter here. That's also good to see that it's coming back solid. Book to bill happened to be a straight one. I think that's pretty much what we can expect from the future as well. Somewhere around the 1.0 in book to bill. Here was a bit of a different mix on the geographies. Americas came in strong with a very good start of the year on the order side and a 28% organic growth in sales. Talking about the different divisions, I think starting with IDS, the largest division with 46% of the profits and a big gearing towards the American market. I think we're quite happy to see over time, you see the bottom graph, we added also the EBITDA margin history since the first quarter 2025, when we made a split into the new divisions. We see here that we have kind of established the business on a good operating margin level that is slightly above the 25% in the quarter, 27.5%. It's a pretty good lift from where we started out when we established this division in the beginning of 2025. That's very good to see. Also here we have some product launches and both within remote access and network switches. That will be good, important steps for the future growth until 2030. The business plan we have with the strategy until 2030, these will be key aspects of building that growth. Also here, kind of a broad-based demand, good development in all regions. Nothing that sticks out. Yeah, good solid performance in IDS. We go to I&T. You see a bit of a different development here on the order side compared to Q1. This is where we had a majority of these pre-buying orders related to the Molex acquisition, where some customers secured more or less the full year deliveries with orders in Q1. I think we're quite happy to see that we get SEK 38 million of orders for Molex in Q2. We didn't really expect that to be as good. On sales side, I think we've seen that more stable, that deliveries will pace out in time pretty much as we see here. That's what we expect, at least. We must also mention, again, we talked about the fourth consecutive quarter with over 20% growth in orders and very happy with the development obviously in I&T. Also here you see a strong development on the EBITDA margin, now above 30%, and we've been around that level now for three quarters. This is maybe where we've been seeing the largest demand from semiconductors and data center investments. That has been driving gateway business for us. You'll see that when we talk about the margin soon. That this is also one of the reasons the gross margin has been strong for us. We have new industries. Here we have also solid development with a 7% organic growth in orders, 11% on sales. Also here not meeting the best Q2, but it's solid business. We know that we're struggling in the end markets within the vehicle communication that is selling a lot into the automotive market, which is obviously not the best, especially not in Europe. I think that is somewhat met up from a good quarter from building automation business, despite the slowdown in the Middle East, which is a very important strategic market for the building automation business. I think with everything going on in the world, if we can develop like this in this division, I think we need to be fairly happy. The margins, it's a bit of a smaller division, so margins can vary a bit up and down. Now this quarter was a little bit softer. You see on the graph, it's been bumping up and down a little bit between the quarters. I think don't read in too much about that slightly lower profitability. About the profitability then. We do an EBITDA of SEK 266 million, a new record result for us and 26.8% EBITDA margin, 27% year to date. It's also good to see that we can keep this level above our targets of the 25%. Maybe the main contributor, except for volume, is the pretty good gross margin of 63.8%, which came in a little bit stronger than what we expected ourselves here. The comparable of 61.8% is towards the Q2 level last year, which was tough from the tariff situation, where we saw pretty high tariff costs in the beginning, where those tariff wars kind of escalated, especially between the U.S. and China. Now the situation is much more stable, and we have not yet gotten any tariffs back. That is something we are working on at the moment and hope to be able to be successful with that. We'll come back to report on how that turns out. Otherwise, I mentioned also the strong gateway business from I&T that is supporting the margins here as well, and that's maybe where we had a little bit of a positive surprise on the margin side. We know going forward, Staffan mentioned it as well, that we see now continued longer lead times, especially on memories, but also some other components. Also price increases are starting to take off. We've been seeing some already in year to date. However, for us, it's kind of been offset by having inventories. Going forward, we will not be able to supply by our own inventory. We're dependent on new deliveries, then we will see a price increase that is coming. I think we can have a bit of a margin pressure from this level in the second half. Nothing dramatic, we will, of course, monitor the situation and maybe do adjustments if it's needed. I think we can expect a slightly lower gross margin for the second half. On the OpEx side, we have been stepping up the investment pace a little bit, both in R&D and in strengthening the organization overall. We see an organic increase of 9% and a bit of a step-up as well compared to Q1. I think we have gotten in the most decrease of the run rate so far this year. I believe we'll see something similar to this level going forward for the second half of the year as well. I think the run rate in Q2 is probably quite representable of what we will see. As communicated before, we have also increased R&D investments, you see that also in the capitalized R&D, which is increasing a bit, now we're at SEK 27 million in Q2, similar level as in Q1 and similar expectations for the coming quarters as well. I do also want to mention that we have a positive EBITDA impact of SEK 6 million, which is related to a divestment of a subsidiary. We're selling off the sales entity of PEAK-System France that we acquired in 2024. We're selling that to the managing director that will run it in a way taking in a bit more special products that we do not normally do in the group. We feel it's better to treat this as a distributor. On very good terms, we're happy to continue this collaboration for the future. The earnings per share, SEK 3.65. Nothing super interesting happening here. We have a slightly higher estimated tax, which is explained in the slightly lower EPS compared to the previous quarter, even if the EBITDA was on similar levels. I also want to make a couple of comments on the cash flow from operating activities, which was by far a record with SEK 334 million. We have a couple of things that is supporting us of a one-time effect here. We did have pretty high receivables going out of Q1, that is now flowing in. We were reducing working capital a little bit and getting a SEK 53 million positive effect from the working capital reduction. Also, inventories are down a little bit. I think going forward, given what we said on the component side, on the memory side, we do believe that we will have to tie up a little bit more inventories. We would be happy to tie up a bit more inventories when it comes to memories. It's not so easy to do that given the allocation that is going on. We'll do our best to increase and secure the demand on the memory side for the coming year or so. That's the plan for the second half. Otherwise, for the year, also solid cash flow from operation of SEK 584 million, a pretty big improvement compared to previous year. Let me also stop on looking at the net debts, where we have SEK 2.26 billion in net debt going out in a quarter. Small increase, actually, compared to Q1, explained by the dividend that's gone out in Q2 with SEK 241 million. We also made a final payment of the PEAK acquisition that impacted this a little bit. We're managing to come down to 1.74 net debt through EBITDA multiplier when it comes to the pre-IFRS 16 level, which is a small improvement compared to Q1. Given the legacy of the last year or so, I think we're quite happy to be on that level. We're now focusing on some continued M&A things. With the new division structure, I think we're on good level in the divisions, having good dialogues going. I'm quite happy to see that. We also managed to reduce the interest cost, both, of course, from the lower leverage as such, but also from better terms in the new bank agreement that we signed around New Year. That's good to see. For me, it's just left to kind of summarize what we said for the second quarter. I'll try to do this quickly. As you've seen, solid organic growth, pretty much driven from all markets. New record net sales of SEK 991 million. The two larger divisions are both on double-digit organic growth, both when it comes to orders and sales. Again, data center investments are the main driving factor for the growth. When it comes to profitability, we have also record profitability, record cash flow, very happy with the cash conversion here, and looking good for the future, even if we know the third point here, that we will have, it is still a bit uncertain macro, and we know that we will see these long lead times and slightly higher cost for memories. We just want to flag we're doing all that we can to mitigate the situation, but there might be some disturbance during the second half of the year. With that, I'd like to hand over to the operator for any questions we have.

Operator: If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Jesper Stugemo from Handelsbanken. Please go ahead.

Jesper Stugemo: Yes. Hello, Staffan and Joakim. I hope you can hear me.

Staffan Dahlström: Yes.

Joakim Nideborn: Yes.

Jesper Stugemo: Yeah, okay, great. Could you just help me understand how we should think about the strong margin improvement? You mentioned it here on the call, but the margin is quite strong despite the higher investments. Is this mainly driven from volumes and pricing and tailwinds from the gross margin, the mix, or is it that the cost initiatives are still lagging here and you expect more to come in H2?

Joakim Nideborn: Maybe I can start with that. I guess you're referring to the EBITDA margin with the question.

Jesper Stugemo: Yeah.

Joakim Nideborn: Yeah, if we take the different parts, obviously the gross margin improvement is helping that a bit. I think with that said, we've been on this operating margin level now for a couple of quarters, so it's not only that. I think what we see is the simple answer is like this, the top line is growing faster than the cost. Now you saw we had a 9% organic increase on the cost side. I think we are investing in the organization as we would like to do. I wouldn't say that there's a lot of things lagging on that side. Then it's not given that the growth would be forever double-digit organically. I think that is right now we have a good pacing on top line versus cost. As I mentioned, I think we have at least for 2026, we have set the organization we believe we need for the rest of the year and taking the main investments that we need for the rest of the year. I don't think you will see a higher pace for 2026. We need to be able to absorb the things that we add as well.

Jesper Stugemo: Okay, great. Thank you for that. How sustainable is the current strength in data centers and semiconductors, you think? How much of the demand is project driven versus temporary?

Staffan Dahlström: Maybe I can take that. If we try to zoom out a bit, it's clear that we are not involved in the compute, these servers and the IT environment. That's not our business. We see more and more that we have three different things that first of all, our industrial automation customers, like the Rockwell Automation and Schneider Electric, they are selling quite much automation equipment to these facilities for cooling and power and all these things in there, especially our division I&T is coming in where we are embedded inside their things that they sell to the data centers. That's one pillar. The second pillar is that we have our own system integrators that are involved in this integration of systems inside these big facilities. There we mainly sell the division IDS through the American, mainly system integrators, where we sell gateway switches, and these are more the things that they realize when they do these kinds of things. "Oh, wait a minute, we have the wrong protocols between these two machines. Let's buy 50 HMS gateways to solve this problem." That's the second pillar. The third pillar is what Joakim mentioned about the semiconductor, where we have a good business with the OEMs in semiconductor, the machine builders, and of course, AI, the compute side drives all these investments in semiconductor fabs, and there our customers is supplying the machines. All these three different pillars are indirect to the data centers, but we see quite clearly that they are driven outside the data center momentum. Now we see how long will this momentum continue? Right now we see enormous investments, especially in the U.S., about these facilities. It will not continue forever, I'm quite sure, but right now we don't see that it's slowing down. There seem to be a lot of investments, and we see that this Magnificent Seven with Meta and Google, and they all invest heavily in this. I think we are floating behind because all these automation investments related to data centers, and we see this as a continued trend for quite some time, we think.

Jesper Stugemo: Thank you for that. How large is semi and AI data centers verticals for you think?

Staffan Dahlström: I know you asked that, and we don't know. As I say, we are supplying our standard products to our normal customers, and for them, part of their business is data centers. We don't have full transparency, and we don't have trustworthy data that can say how much is our market share and how much of that our business, because it comes as a portion of our regular business. We don't really have good data on that.

Jesper Stugemo: Okay, I see. Thank you for that. I jump back in line, and I wish you a good summer.

Staffan Dahlström: Thanks, Jesper. Thank you.

Operator: As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Viktor Högberg from Danske Bank. Please go ahead.

Viktor Högberg: Good morning. You said that the gross margin was elevated now in Q2, partly on mix. What do you expect ahead? Could you quantify the step change in the second half in gross margin so that we don't extrapolate the Q2 level too much? That's the first question.

Joakim Nideborn: Maybe I'll start with that one. I think what we see is, as you said, it's a little bit elevated from the mix. We also expect now to have maybe a bit of headwind from the semiconductor increase. I think, let's say maybe it's a percentage point elevated due to extraordinary mix in the quarter, and then maybe we could have another percentage point impact, something like that from the semis. I would expect us to be still north of 62, but not necessarily north of 63. That's the best guess we can do at the moment.

Viktor Högberg: Okay. Thank you. Could you maybe describe the pacing during the quarter, over the individual months, over the markets and the segments? That would be helpful as well.

Joakim Nideborn: That was a lot of details. I don't think we're going to go into all that. What we can say is that we've had a slightly lower, slightly weaker May, and well then, a better start and a better finish to the quarter.

Viktor Högberg: Okay, thank you. Last one, you talked a bit about it on 2026, but just an update on the product development efforts, which you talked more in detail at the CMD. Is it going where you want it to in terms of the deliverables and also CapEx and costs involved? 2026 seems to be on track. What about the rest of the planning period?

Joakim Nideborn: Do you want to take that one, Staffan, or should I?

Staffan Dahlström: Maybe I can talk about the cost side. Well, I can start just talking. We are happy to see that we are releasing new product generations. We just released a fantastic product line from Intesis, NT7000, which we believe is a fantastic product line for Ethernet switches. We released the new generation of Ewon products, and later this year we have a big Anybus release. I think we are seeing good progress on the product releases. I think the question was also how we see about the cost related to that, Joakim.

Joakim Nideborn: Yeah, I think we've been keeping the plans that we've set pretty well. If anything, I don't want to promise too much here, but we see actually we're coming out slightly better than planned on this I&T project, where we've been able to have massive gains using AI tools for the coding. We were actually doing more than what we had planned to do in the same time frame. Which I guess is also maybe part of the explanation that we're managing to grow top line quicker than the cost side. That we've been a little bit more efficient here than we thought. I think that's positive. Otherwise, I think we're keeping the plans. As I said before, the run rate that you see right now, both in terms of activation of R&D cost and on the cost, I think that's pretty much what we expect to be at for the rest of the year.

Viktor Högberg: Thank you.

Staffan Dahlström: Thanks, Viktor.

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

Staffan Dahlström: All right. Thank you very much. I must say that we are very happy. If we look back two years ago, we did two big acquisitions, Red Lion in North America mainly, and the PEAK-System in Germany, two years, well, one and a half, two years ago. We formed a new organization one and a half year ago to make sure we take advantage of these new capabilities we had. We released our new strategy at the Capital Markets Day last fall, and we're seeing good progress here. We have a fairly good market as well, but I must say I'm very happy to see that things are falling into the right places and the organic development is going really well. We're happy with the quarter two, and at least for me, I will celebrate with an extra ice cream today, and I hope you have a good opportunity to do the same. I would like to say a big thank you from myself and from Joakim, and wish you all a nice summer, and look forward to hearing from you during the coming quarter. Thank you and goodbye.