4C Group (4C) ABGSC Investor Days summary

Business overview and market positioning

• Focuses on defense technology, providing software for training and exercise management to armed forces globally.

• Operates in Sweden, UK, US, and Australia, supporting six NATO nations and over 250 military exercises annually.

• Main product, Exonaut, orchestrates training and readiness, not a simulation or learning tool.

• Customers are shifting from perpetual licenses to subscription models, increasing long-term predictability.

• Recent wins include contracts with US, Swedish, and Canadian defense organizations.

Financial performance and outlook

• Experiences high seasonality, with stronger performance in Q3 and Q4, and softer Q1 and Q2.

• Order intake and backlog have reached record highs, with a growing pipeline and increased interest.

• Largest order book and backlog ever, with SEK 285 million in contract assets and SEK 364 million in order backlog.

• 2023 order intake exceeded SEK 500 million, mostly from defense software.

• Cost base reduced by SEK 40 million over 12 months, focusing on core defense business.

Industry trends and strategic shifts

• Defense spending is rising globally due to geopolitical tensions, driving demand for readiness and training solutions.

• Customers now demand data-driven assessment of military capabilities and exercise outcomes.

• Shift in defense procurement from replenishing supplies to building force readiness and conducting large-scale exercises.

• Anticipates increased activity and larger exercises in 2027-2028, with current growth in demand already visible.

• Reallocation of resources from resilience to defense, with future reinvestment planned in sales, AI, and engineering.